![]() ![]() One standard search logic rule is 503.1.2: “No distinction is made between upper and lower case letters.” This means the debtor’s name could be entered as ABC COMPANY INC or ABC Company Inc, and both are acceptable.Īnother rule addresses punctuation: 503.1.3 (b) “Punctuation marks and accents are disregarded. In 2015, International Association of Commercial Administrators (IACA) released the revised Model Administrative Rules, which include a specific section frequently referred to as “standard search logic.” ![]() Search logic is created, determined & managed through an algorithm and varies by state filing office. Standard Search Logic is the holy grail of determining whether a filing is seriously misleading. If a search for the Financing Statement, using the Standard Search Logic in the UCC filing office, fails to reveal the Financing Statement, the filing is considered seriously misleading, and thus, unperfected. What Makes the Name Seriously Misleading? If it’s determined the Financing Statement is seriously misleading, the security interest can be deemed unperfected and priority can be lost. Failing to identify the debtor by its name as it appears on the public organic record could result in the filing being seriously misleading. Compliance with Article 9 & Seriously MisleadingĪs mentioned above, strict compliance with Article 9 of the Uniform Commercial Code is imperative. Recently, one creditor suffered the consequences of an inadvertently added space, after a noise word, in their debtor’s name, and the creditor’s security interest was unperfected. (1)… if the debtor is a registered organization, or the collateral is held in a trust that is a registered organization, only if the financing statement provides the name that is stated to be the registered organization’s name on the public organic record of most recently filed with or issued or enacted by the registered organization’s jurisdiction of organization which purports to state, amend, or restate the registered organization’s name Two seemingly small issues, right? Wrong.Īrticle 9-102(71) clearly defines a registered organization and Article 9-503(1) clearly states the debtor’s name must be identified as it appears on the public organic record.Ī financing statement sufficiently provides the name of the debtor: Double Bubble, Toil & Trouble: When Space & Noise Impact UCC FilingsĪs we prepare and review UCC filings, clients frequently ask us, “Does an extra space in my customer’s registered name really matter?” and “Does it matter whether I identify my customer as LLC if their registered name appears as L.L.C.?” ![]()
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