Risk Management Blog

Could you use a refresher on UCC filing rules? You’re in luck! This week, we welcome guest author, attorney, Bennett L. Cohen to the blog! Read on for the first installment in his three-part blog series detailing the basic filing rules under Revised Article 9 of the Uniform Commercial Code.

A Review of the Basic Filing Rules: UCC Financing Statements
It is vitally important that UCC filers understand and observe the basic UCC filing rules under the Uniform Commercial Code (the “Code”) described herein. Obviously, these rules do not constitute all of the Code’s filing rules, but they are essential rules to know regarding the filing of UCC Financing Statements:

Filing UCC Prior to Closing
A secured party may pre-file its UCC filing against a debtor prior to the closing of the financing transaction if the debtor authorizes such pre-filing in writing. Otherwise, the debtor’s signing of a security agreement is deemed by the Code to be the debtor’s automatic authorization to the secured party to file a UCC filing covering the collateral described in the security agreement.

Place to file UCC Financing Statements
Excluding UCC fixture filings (which must be filed in the county where the fixtures are located, and more specifically in the office where real estate mortgages are recorded), the following basic rules apply depending on the type of debtor:

• Registered organizations (such as corporations, limited liability companies and limited partnerships) – file in the state where the registered organization was formed (most states have designated the secretary of state or another central filing office as the office to file against a registered organization).
• Individual debtors – file in the state where the individual debtor maintains his or her principal residence (caution where an individual debtor has a second home in another state). In most states, filings against individuals are filed in the central filing office of the state of primary residence.
• Foreign debtors that are located in a foreign country without a public filing system in such country are deemed under the Code to be located in Washington, D.C. and filing for such foreign debtors would be in Washington, D.C.

Trade Names
Under the Code, filing against a trade name (assumed name) of the debtor is ineffective. Moreover, the debtor’s legal name in the UCC filing should never include the trade name (e.g., ABC Corp. d/b/a Sully’s Plumbing) as that could render the UCC filing ineffective depending on whether the filing office’s search logic would pick up that UCC filing when searching the exact legal name (ABC Corp.). If a lender insists on filing against a trade name despite its ineffectiveness, it should file against only the exact legal name in the first debtor box in the UCC Form, and against only the trade name in the second debtor box.

About the Author
Bennett L. Cohen is a partner in the law firm of Cohen, Salk & Huvard, P.C. in Northbrook, Illinois, a Chicago suburb. Bennett regularly represents banks, commercial finance companies, insurance companies and other institutional lenders in the structuring, documentation and closing of commercial financing transactions, including asset-based loans, commercial loans, commercial real estate mortgage and construction loans, mezzanine loans, leveraged acquisitions, equipment lease loans and factoring transactions. Bennett is a member of the American Bar Association and serves on the ABA Committee on Commercial Financial Services and the ABA Subcommittees on Secured Lending, Loan Documentation and the Uniform Commercial Code. Bennett can be contacted at bcohen@cshlegal.com.

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