UCC debtor definition confusion - who exactly counts as the debtor?

This is correct. I've seen so many filings get rejected because people confuse the borrower with the debtor. The debtor is always the one with ownership rights in the collateral.

So even though the LLC is the primary obligor on the loan, I should list the subsidiary as debtor since they own the equipment? That seems counterintuitive but I guess it makes sense legally.

Good point. I'll double-check the purchase agreement and any title documents. The loan docs might not tell the whole story about actual ownership.

This is why I always ask for copies of the purchase invoices and any equipment titles before filing. Can't trust just the loan paperwork.

That sounds helpful. How does the verification tool work exactly? Does it compare the names across all the documents?

Yeah, you just upload PDFs of your loan agreement, UCC-1, and any other relevant docs. It flags inconsistencies in debtor names and entity information. Really straightforward to use.

I've been doing UCC filings for 15 years and never heard of this tool. Might be worth checking out though - debtor name mistakes are expensive to fix later.

Oh no, I hadn't considered that possibility. How do I figure out if I need multiple filings? This is getting more complicated than I thought.

You need to analyze the exact nature of each entity's rights in the collateral. If the LLC only has a guarantee with no property rights, one filing with the subsidiary as debtor should be sufficient.

Exactly. The key is determining who has 'rights in the collateral' under UCC Article 9. Guarantors without property rights typically don't need to be listed as debtors.

This is so important. Even something like 'Inc.' vs 'Incorporated' can cause problems. Always use the exact name from the state filing.

I'll definitely verify the exact legal names in the state corporate records. Thanks for the reminder about how picky the system is about exact name matches.

If the individual partner owns the collateral personally, they should be the debtor. Partnership borrowing doesn't change who owns the collateral for UCC purposes.

That's what I was thinking, but wanted to make sure. These multi-entity deals always make me nervous about getting the debtor identification wrong.

That's a great way to think about it. If the subsidiary would need to sign off on termination, then they should be the debtor on the original filing.

I never thought about it that way but it makes perfect sense. The entity with the power to terminate the lien is the one with rights in the collateral.

Good suggestion. I'll look for any specific security agreement language that identifies the grantor. That should clear up any ambiguity.

The security agreement is key. Sometimes it's separate from the main loan agreement and has more specific language about who's granting rights in the collateral.

That's a good point about audit trail. I should make sure I can clearly document why I chose the particular debtor name for the filing.

Auditors love to see clear reasoning for debtor identification decisions. Keep notes about your analysis in the loan file.

Two people have mentioned this tool now. Sounds like it might be worth trying for this filing. Better to catch issues before submitting than after rejection.

Definitely worth it. The tool is really easy to use - just upload PDFs and it does the cross-checking automatically. Much faster than manual document comparison.

Thanks everyone for the advice. Sounds like the consensus is the subsidiary should be the debtor since they own the equipment. I'll double-check the exact legal name and get this filed.

Good luck with the filing! These multi-entity deals can be tricky but you seem to have a good handle on it now.