Compared to the security agreement the requirements of the financing
statement are more complex. Under the revised Code there are now two
classes of required information.
Information that is required in order for the financing statement to
Information that the filing office requires to accept the UCC-1 for
There are only three
items of information required in the financing statement to be valid.
The debtor’s name,
the name of the secured party and an indication of the collateral.
Take notice that I did not write a description of the collateral.
Section 9-504(2) allows for an “all assets” or “all personal
property” description of collateral even if the collateral is
limited. The only requirement is that the debtor authorizes the
description of collateral.
The debtor’s name
requirement is generally the same as before with the exception that
the use of a trade name (d/b/a) is neither necessary or sufficient.
9-503(b)(1) &(c). Thus, if dealing with proprietorships the
individual’s name is used; partnerships, the name of the partnership
and organizations the name of the organization as evidenced in public
records (such as articles of incorporation). 9-503(a).
The same would hold
true for the secured party although Comment Two found in 9-506 says,
“an error in the name of the secured party will not be seriously
misleading”. This would suggest that the name of the secured party
is not a valid requirement of a financing statement. (I suggest you
discuss this section with your company attorney).
The second requirement
is as my British friends say a “sticky wicket”. This is because
one will have to investigate the requirements of each filing office
where they intend to file.
Other changes: Signatures of the debtor and
secured party or no longer required; The majority of states will
centralize all filings to one central filing office with the exception
of fixture filings and filings involving timber to be cut. These
filings will probably still be filed at the county level. (It will be
necessary to confirm this with each state, as requirements will vary).
Special rules apply if the debtor is a transmitting utility. See
One of the most
important things to keep in mind is that not all states have adopted
the revised Code as of July 1, 2001. Several states elected to wait
until 2002 to adopt the Code. In that case the old rules will apply if
filing in that particular state.
In the next column we
will discuss where to file and the new types of collateral that can be
filed against under revised Article Nine.
I wish you well.
CONTAINED IN THIS ARTICLE IS NOT PROVIDED AS LEGAL ADVICE BUT FOR
INFORMATIONAL PURPOSES ONLY. LEGAL ADVICE SHOULD BE OBTAINED FROM A
LICENSED ATTORNEY PREFERABLY BOARD CERTIFIED IN THE SUBJECT OF LAW YOU
ARE SEEKING ADVICE.