Risk Management Blog

A UCC Financing Statement must properly identify the debtor in order for the UCC to perfect a security interest and provide priority protection for the secured party. To satisfy this requirement, a secured party must complete their Financing Statement using the debtor’s legal name.

In general, secured parties understand the importance of properly naming the debtor on their UCC Financing Statements and try hard to comply. Sometimes though, they try a little too hard and include additional information, such as “dba” names (ex. ABC Trucking, Inc. dba Truck World) in an attempt to more clearly identify their debtor.

By structuring their debtor names to include a trade name, secured parties are actually failing to file under the entities legal name. Every entity has a single legal name, which is the name listed on their organizing paperwork (articles of Incorporation/Organization etc.) A trade name is merely another name under which the entity may do business, sort of like a business alias.

Under the Uniform Commercial Code, filing under a trade name alone is not sufficient to perfect a security interest; a UCC Financing Statement must list the legal name. A secured party is free to file under the legal name and the trade name, if they wish. A better way to file in these cases is to list the entity’s legal name as the primary debtor and list the trade name as an additional debtor, omitting the “dba” notation from the beginning of the name (ex. Debtor 1: ABC Trucking, Inc., Debtor 2: Truck World)

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