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UCC & Corporate Due Diligence

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California Governor signs Assembly Bill 1858: Individual Debtor Name Safe Harbor

UCC, Legislation, Due Diligence, Revised Article 9

Debtor Name Safe HarborFor those managing personal property transactions in California, it is important to understand and be prepared for recent legislation that has been passed to provide a safe harbor for proper entry of individual debtor names when filing and searching for UCC Financing Statements.

Effective January 1, 2015, California will join the majority of states in adopting legislation which governs the proper name identification of individuals. This is commonly referred to as the ‘Alternative A’ or the ‘Only If’ approach.

Unlike business entities, where the name must be the same as what is reflected in the organic document (typically the Articles and Amendments), Assembly Bill 1858 provides rules for the valid individual debtor name, which states that the debtor’s name on the UCC will be sufficient ONLY IF the name provided is the exact name on the driver’s license or a California Identification Card.

New Individual Debtor Name Guidelines – Driver’s License

When qualifying a debtor, be sure to follow these tips to ensure proper entry of individual debtor names on your UCC Financing Statement and/or search requests.

  1. Insert the exact name on the Driver’s License or California ID card of your debtor onto the UCC.
  2. Ask the party(ies) if this is the most current ID provided.
  3. Ask if the name may have changed since the ID was issued.
  4. Have the party(ies) sign a declaration that there have been no changes.
  5. If there have been changes, include both the name on the ID and the current name used on your UCC filings and search request.




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