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Risk Management Blog

UCC & Corporate Due Diligence

Resource Guide for Legal and Financial Professionals

UCC Searching in Delaware

UCC, Due Diligence, Tips

As we’ve discussed before, all UCCs are not created equal. Some states have online access to their UCCs with broad-based search logic, and others go by the strictest letter of RA9; Delaware falls into the latter category. delawareThe problem with this is that Delaware is an exact-name state, meaning that not only are UCCs indexed exactly as the name is typed into the debtor box on the UCC, but when you perform a certified search with the DE SOS (and that’s the only option they give you) you are only getting search results for the exact name you entered. Yes, certain noise words and corporate endings are dropped, but Delaware search logic means that if you search the name “ABC Company,” you’re not going to get any results for “ABC Company, a Delaware Corporation.” This is important information to keep in mind when you’re filing a UCC as well; if you’re filing a UCC and enter the debtor name as “ABC Company, dba DEF LLC,” that’s exactly how the Secretary of State will index that filing.

The other issue is that since Delaware requires that you run a UCC search through an agent (they publish a current list of agents on their website), it’ll be dumb luck whether you’ll get one that will search and provide name variations. Because the folks processing the searches tend to each process a little differently depending on how long they’ve been in the industry and with whom they trained, the processes might even be different within the same company from person to person. The bottom line is, if you want name variations, just make sure you ask when you place your search request with someone; some provide them with all searches, some will charge an additional fee to provide them, and some won’t provide them at all. It’s important to know into which category your service provider falls to ensure you’re not missing any important liens when you’re performing your due diligence.

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