Free printable security agreement causing UCC filing problems

This happened to us last year! We used a template that had the debtor as 'ABC Construction LLC' but the secretary of state records showed 'ABC Construction, LLC' with the comma. Filed a UCC-3 amendment immediately when we caught it.

Wait, does punctuation really matter that much? I thought as long as the main company name was right you'd be okay...

Unfortunately yes, punctuation absolutely matters. Courts have ruled that even missing commas can make a UCC filing seriously misleading. Better safe than sorry with these things.

We're in Ohio. The original filing was accepted by the SOS office, so I'm hoping that means we're not completely screwed. Just need to get the name corrected ASAP.

Ohio is pretty strict about debtor names. If the SOS accepted it, that's good, but you definitely want to amend sooner rather than later. I've seen lenders lose priority because of name issues.

Never heard of that but sounds useful. Does it work with existing filings or just new ones you're preparing?

Both! You can upload your existing security agreement and compare it against your filed UCC-1 to spot discrepancies. Really helpful for catching these template-related errors before they become bigger problems.

That actually sounds perfect for my situation. I'll check it out - thanks for the suggestion!

Totally agree but sometimes small lenders are trying to keep costs down. Still, you're right that it's penny wise and pound foolish.

Can't you just use the same debtor name format that other creditors use when they file? Like do a UCC search and copy their naming convention?

That's not reliable because other filers might have made the same mistake. You need to go back to the official organizational documents filed with the state.

What do you mean about collateral descriptions? I thought as long as you describe the equipment specifically it's okay?

It depends on the type of collateral and your state's requirements. Some states want very specific descriptions, others allow more general language. Templates usually use one-size-fits-all language that might not be optimal.

Some states are getting better about this but it's still mostly on the filer to get it right. The burden is on us to make sure everything matches.

I heard some of the newer filing systems do have better validation but not all states have upgraded yet.

After-acquired property clauses are definitely something where you want precise language. Generic templates usually don't cover the nuances there.

What's after-acquired property? Is that something I should be worried about in my security agreements?

It's collateral that the debtor acquires after signing the security agreement. If you want your lien to cover future equipment purchases, you need specific language for that.

How does that work exactly? Do you have to pay per document or is it a subscription thing?

I'm not sure about their pricing structure, but the value is definitely there when you consider the cost of fixing filing mistakes. Much cheaper than having to deal with priority disputes later.

Exactly! I've seen deals where the security agreement covers inventory but the UCC-1 only lists equipment. Creates gaps in your security interest.

That's a good point about document consistency. I never really thought about how the security agreement language needs to match the UCC filing exactly.

You're right, I'm going to get the amendment filed this week. Better to fix it now than deal with problems down the road.

Smart move. The peace of mind alone is worth the filing fee.

And document everything about why you're making the amendment. Good to have a paper trail showing you acted quickly to correct the issue.