Filing Under Article 9 of the Uniform Commercial Code

The Department of State can neither provide legal advice nor any hard-and-fast rules that will govern all filing situations; however, some general guidelines regarding filings include the following:

Under Revised Article 9, the responsibility for determining the proper place of filing for both original financing statements and any associated secondary filings rests with the filer.

Governing State Law

In many cases (but not in all cases), the law of the jurisdiction in which the debtor is "located" will govern perfection and priority issues. The filer should consult Part 3 of Article 9 to determine whether the laws of New York State, or the laws of some other state, govern perfection and priority issues for the filer's transaction.

The responsibility for determining whether the laws of New York State, or the laws of some other state, govern perfection and priority of security interests rests with the filer.

The following discussion applies in situations in which the laws of New York State govern perfection and priority.

Original Financing Statement (UCC1)

Section 9-501 governs place of filing. Subsection (a) (1) provides that the office in which to file a financing statement to perfect the security interest or agricultural lien is the office designated for the filing or recording of a record of a mortgage on the related real property (This is the office of the county clerk or New York City Register.) if (1) the collateral is as-extracted collateral or timber to be cut or (2) the financing statement is filed as a fixture filing and the collateral is goods that are or are to become fixtures or (3) the collateral is a cooperative interest. Subsection (a) (2) provides that the office in which to file a financing statement to perfect a security interest is the office of the Secretary of State in all other cases. Pursuant to subsection (b) a fixture filing for a transmitting utility would also be filed with the Secretary of State.

Amendment, Assignment, Continuation, & Termination (UCC3)

It is the responsibility of the filer to determine which of the following may best meet the needs of his or her individual situation. (1) In the case of an original financing statement that was filed in the office of a county clerk (or the office of the New York City Register) that only provided for collateral that would properly be filed in that office under Article 9, that office is the proper place for filing an amendment, assignment, continuation, or termination statement. (2) In the case of an original financing statement filed with the Department of State that only provided for collateral that would properly be filed with the Department of State under Article 9, the proper place for filing an amendment, assignment, continuation, or termination statement is the Department of State. (3) In the case of an original financing statement that was properly filed in both the office of a county clerk (or the office of the New York City Register) and with the Department of State that provided for collateral that would be filed with both offices under Article 9 (for example, a fixture filing with other general collateral), the secured party should file an amendment, assignment, continuation, or termination statement with both offices.

Exact Name of Debtor Required for UCC Filings

Article 9 of the Uniform Commercial Code requires a financing statement to include the name of the debtor. It is important to set forth the exact legal name of the debtor in any filings that are made. Financing statements are indexed under the name of the debtor, and persons wishing to find filed financing statements search for them under the debtor's name.

Subsections (b) and (c) of Section 9-506 of Article 9 provide the following:

(b) Financing statement seriously misleading. Except as otherwise provided in subsection (c), a financing statement that fails sufficiently to provide the name of the debtor in accordance with Section 9-503(a) is seriously misleading.

(c) Financing statement not seriously misleading. If a search of the records of the filing office under the debtor's correct name, using the filing office's standard search logic, if any, would disclose a financing statement that fails sufficiently to provide the name of the debtor in accordance with Section 9-503(a), the name provided does not make the financing statement seriously misleading.

The Department of State's standard search logic under Article 9 will return the exact name of the debtor requested. Failure to set forth the exact name of the debtor in a financing statement may result in the name's not being returned by a search request under the exact name. A financing statement may not be effective in those cases.

Section 9-503 of Article 9 regarding debtor name provides the following:

Section 9-503. Name of Debtor and Secured Party.

(a) Sufficiency of debtor's name. A Financing statement sufficiently provides the name of the debtor:

(1) if the debtor is a registered organization, only if the financing statement provides the name of the debtor indicated on the public record of the debtor's jurisdiction of organization which shows the debtor to have been organized;
(2) if the debtor is a decedent's estate, only if the financing statement provides the name of the decedent and indicates that the debtor is an estate;
(3) if the debtor is a trust or a trustee acting with respect to property held in trust, only if the financing statement:

(A) provides the name specified for the trust in its organic documents of, if no name is specified, provides the name of the settlor and additional information sufficient to distinguish the debtor from other trusts having one or more of the same settlors; and
(B) indicates, in the debtor's name or otherwise, that the debtor is a trust or is a trustee acting with respect to property held in trust; and

(4) in other cases:

(A) if the debtor has a name, only if it provides the individual or organizational name of the debtor; and
(B) if the debtor does not have a name, only if it provides the names of the partners, members, associates, or other persons comprising the debtor.

(b) Additional debtor-related information. A financing statement that provides the name of the debtor in accordance with subsection (a) is not rendered ineffective by the absence of:

(1) a trade name or other name of the debtor; or
(2) unless required under subsection (a) (4) (B), name of partners, members, associates, or other persons comprising the debtor.

(c) Debtor's trade name insufficient. A financing statement that provides only the debtor's trade name does not sufficiently provide the name of the debtor.

(d) Representative capacity. Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the sufficiency of a financing statement.

The Department of State assumes no responsibility for determining whether the debtor's name complies with the requirements of Section 9-503 of the Uniform Commercial Code or for the correct spelling of a name. The Department will enter the name of the debtor exactly as it is set forth in the "Debtor's Name" section of the financing statement (e.g., in item "1" of the UCC Financing Statement Form UCC1), including what may appear to be titles, designations, extraneous information, and typographical errors. It is the filer's responsibility to provide the correct name of the debtor in the "Debtor's Name" section of the financing statement.

For example, if the debtor is a corporation formed under the laws of New York and if the name of the debtor, as it appears on the records of the New York State Department of State, is "ABC Manufacturing Corp.," the name should be set forth in the "Debtor's Name" section of a financing statement (e.g., in item "1a" of the UCC Financing Statement Form UCC1) exactly as "ABC Manufacturing Corp." and only as "ABC Manufacturing Corp." Some common errors when setting forth the organization's name in the "Debtor's Name" section of a financing statement include the addition of trade names, the addition of descriptive or extraneous information, abbreviating words, or failing to provide the complete name. Some examples of common errors include providing the following in the "Debtor's Name" section of the financing statement:

a) ABC Manufacturing Corp. d/b/a Albany Tools
b) ABC Manufacturing Corp. (a New York Corporation)
c) ABC Manufacturing
d) ABC Mfg. Corp.
e) ABC Manufacturing Corp. a division of XYZ Enterprises, Inc.
f) ABC Manufacturing Corp. a/k/a John J. Smith
g) John J. Smith d/b/a ABC Manufacturing Corp.

NOTE: In the case of a debtor that is an organization, the financing statement must indicate the type of organization (e.g., corporation, partnership, LLC, etc.) and the jurisdiction of organization. However, as indicated in example "b" above, this information should not be included in the "Debtor's Name" section of the financing statement. This information should be given in some other place in the financing statement (e.g., in lines "1e" and "1f" of the UCC Financing Statement Form UCC1).

If you wish to include a trade name of a debtor in a financing statement, it is suggested that the trade name be set forth as a separate debtor (e.g., provide the debtor's legal name as the name of the debtor in line 1a of the UCC1 Form, and provide the debtor's trade name as an additional debtor in line 2a of the UCC1 Form). Provide all required information (i.e., debtor's mailing address, designation of the debtor as an organization, designation of the type of organization, and designation of the jurisdiction of organization) for both the debtor's legal name and the debtor's trade name.

In the case of an individual, the name set forth should be the correct name and only the correct name. You should not include titles or other similar designations. For example, if the name of the debtor is John J. Smith, the name should be set forth in the "Debtor's Name" section of a financing statement (e.g., in item "1b" of the Financing Statement Form UCC1) exactly as John J. Smith and only John J. Smith. Some common errors when setting forth the individual's name in the "Debtor's Name" section of the financing statement include the addition of titles, trade names and also-known-as designations, and the addition of descriptive or extraneous information. Some examples of common errors include providing the following in the "Debtor's Name" section of the financing statement:

a) Mr. John J. Smith
b) John Smith
c) John J. Smith, Esq.
d) John J. Smith, M.D.
e) John J. Smith, C.P.A.
f) John J. Smith (debtor in possession)
g) John J. Smith d/b/a ABC Manufacturing Corp.
h) John J. Smith a/k/a Jon J. Smith

Again, if you wish to include an individual's trade name or an also-known-as designation, it is suggested that the trade name or also-known-as designation be set forth as a separate debtor (e.g., provide the debtor's correct name as the name of the debtor in line 1b of the UCC1 Form, and provide the debtor's other name as an additional debtor name in line 2 of the UCC1 Form). You must also include a complete mailing address for both names in both items. (NOTE: In the case of a debtor that is an individual, the last name of the debtor must be identified.)

It is recommended that all filings be accomplished using the UCC Forms.

Uniform Commercial Code Filing Requirements

Legislation revising Article 9 of the Uniform Commercial Code was signed into law as Chapter 84 of the Laws of 2001 and became effective July 1, 2001.

Filers should be aware that Article 9 requires financing statements and other UCC records to include more information regarding the debtor than was previously required. For example:

  • It is incumbent on the filer to ensure that the correct legal name of the debtor and the mailing address of the debtor are provided in the filing;
  • The filing must indicate whether the debtor is an individual or an organization;
  • If the debtor is an individual, the filing must identify the debtor's last name; and
  • If the debtor is an organization, the filing must provide both the debtor's type of organization and jurisdiction of organization.

It should be stressed that under Article 9 a filing office may refuse to accept a record for filing only for certain specified reasons. The fact that a record is accepted for filing does not necessarily mean that the filing is effective for the purpose intended by the filer. The filer is solely responsible for determining the proper office in which to file and for determining that the record to be filed contains the information necessary to make the record effective to accomplish the filer's purpose.

You may wish to seek guidance from your own attorney regarding Article 9 and its requirements.