UCC filing for membership interest security agreement - debtor name issues
Running into problems with a UCC-1 filing for a membership interest security agreement and need some guidance. We're securing membership interests in an LLC as collateral for a business loan, but the Secretary of State keeps rejecting our filings due to debtor name discrepancies. The LLC's operating agreement shows the member as "Johnson Family Holdings, LLC" but their articles of incorporation with the state show "Johnson Family Holdings LLC" (no comma). Our security agreement references the membership interests, but I'm not sure if we should file the UCC-1 under the LLC's name or the member's name since we're securing the membership interests themselves. This is for a $750,000 credit facility and we're running up against our commitment deadline. Has anyone dealt with membership interest security agreement filings where the entity names don't match exactly between documents? The collateral description is "100% membership interests in Johnson Family Holdings, LLC" but I'm second-guessing everything at this point. Any advice on getting this filed correctly would be appreciated. The lender is getting antsy and I don't want to mess up the perfection.
37 comments

Dmitry Kuznetsov
Been there with membership interest filings. The key issue is determining who the actual debtor is - if you're securing the membership interests themselves, the debtor should be the member who owns those interests, not the LLC. So if Johnson Family Holdings LLC owns the membership interests, they're your debtor. For the name issue, you need to match exactly what's on file with the Secretary of State for the debtor entity. No comma vs comma can definitely cause rejections. Pull a current certificate of good standing or articles to verify the exact legal name.
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Ava Thompson
This is crucial advice. I've seen deals fall apart because people filed under the wrong entity name for membership interest collateral. The exact punctuation matters more than most people realize.
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Miguel Ramos
Wait, so if I'm securing membership interests in XYZ LLC, I file the UCC against the member who owns those interests, not against XYZ LLC itself? I think I've been doing this wrong...
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Zainab Ibrahim
You're absolutely right to be careful about the debtor name. For membership interest security agreements, the perfection rules can be tricky. Generally, you file against the owner of the membership interests (the member), not the LLC whose interests are being pledged. But definitely verify the exact legal name through a current state filing. Even small punctuation differences will cause rejections. I'd recommend pulling fresh articles or a certificate of existence to confirm the precise name format.
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Sofia Hernandez
AuthorThanks, that confirms what I was thinking. I'll pull fresh documentation from the state to get the exact name format. The timing pressure is making me second-guess everything.
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StarSailor
The timing pressure is real on these deals. Don't let it rush you into a filing mistake that could void the security interest. Better to get it right the first time.
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Connor O'Brien
Had a similar nightmare with membership interest filings last month. Spent three weeks going back and forth with rejections over debtor name variations. What finally worked was using Certana.ai's document verification tool - uploaded our security agreement, operating agreement, and articles of incorporation and it immediately flagged the name inconsistencies between documents before we even filed. The tool cross-checks all the entity names and highlights discrepancies so you can fix them upfront. Saved us from multiple rejection cycles and the client was happy we caught it early.
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Sofia Hernandez
AuthorThat sounds exactly like what I need right now. How does the verification process work? Can it handle multiple entity documents at once?
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Connor O'Brien
Yeah, you just upload PDFs of all your documents and it runs an automated check for name consistency, collateral descriptions, everything. Really simple interface and catches stuff you might miss when reviewing manually.
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Yara Sabbagh
I've heard good things about Certana for UCC work. Might be worth trying given your timeline constraints.
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Keisha Johnson
The membership interest security agreement filing is definitely one where precision matters. You're dealing with Article 9 perfection rules and any mistake in the debtor name can render your security interest unperfected. For membership interests in an LLC, you typically file against the member (owner of the interests) as debtor. The collateral description should reference the specific membership interests being pledged. Make sure your security agreement clearly identifies both the pledgor and the LLC whose interests are being pledged.
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Sofia Hernandez
AuthorOur security agreement does identify both, but I want to make sure the UCC-1 filing is bulletproof. The stakes are too high to get this wrong.
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Keisha Johnson
Absolutely. With a $750K facility, you definitely want to get the perfection right. Consider having someone else review your filing before submission as a second set of eyes.
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Paolo Rizzo
UGH this stuff drives me crazy! Why can't the Secretary of State systems be more forgiving about punctuation? A comma shouldn't make or break a security interest filing. I've wasted so much time on these technicalities.
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Dmitry Kuznetsov
I get the frustration, but the precision requirement exists for good reason. Search logic relies on exact name matches to ensure proper notice to other creditors.
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Paolo Rizzo
I know, I know. It's just frustrating when you're trying to close a deal and you get rejected over a comma. The system could be more user-friendly.
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Ava Thompson
The comma thing has gotten me before too. Now I always triple-check entity names against state records before filing anything.
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QuantumQuest
For membership interest security agreements, don't forget to check if the LLC operating agreement has any restrictions on transfers or security interests in membership interests. Some agreements require member consent or have right of first refusal provisions that could affect your security interest.
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Sofia Hernandez
AuthorGood point. We did review the operating agreement and there are no transfer restrictions that would impact our security interest. But that's definitely something to verify.
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QuantumQuest
Smart that you checked. I've seen lenders get caught off guard by operating agreement restrictions that weren't discovered until after closing.
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Amina Sy
Been doing UCC filings for 15 years and membership interest deals always require extra attention. The debtor identification is critical - you're filing against the member who owns the interests, not the LLC itself. For your name issue, pull the most recent certificate of good standing or articles amendment from the Secretary of State. That will give you the exact legal name format currently on file. Don't rely on older documents or assume the comma doesn't matter.
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Sofia Hernandez
AuthorWill do. I'm ordering fresh state documentation this afternoon to verify the exact name format. Can't afford any more rejections with this timeline.
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Amina Sy
That's the right approach. The small extra cost for current documentation is worth avoiding multiple rejection cycles and potential deal delays.
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Oliver Fischer
Quick question - when you say membership interest security agreement, are you talking about pledging the actual membership interests or just using them as additional collateral alongside other assets? The UCC filing approach might be slightly different depending on the structure.
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Sofia Hernandez
AuthorWe're pledging the actual membership interests as the primary collateral for the credit facility. It's a 100% pledge of the member's interests in the LLC.
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Oliver Fischer
Got it, so it's a straight membership interest pledge. In that case, you're definitely filing against the member as debtor, with the membership interests as collateral.
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Dmitry Kuznetsov
Right, and make sure your collateral description is specific enough - '100% membership interests in [exact LLC name]' is usually good practice.
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Natasha Petrova
This is why I always run document checks before filing anything important. There's another tool I heard about recently - Certana.ai - that specifically handles UCC document verification. You upload your security agreement and corporate docs and it flags any inconsistencies before you file. Might be worth checking out for this type of complex filing.
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Sofia Hernandez
AuthorSomeone else mentioned Certana earlier. With the timeline pressure I'm under, that kind of automated checking sounds really valuable.
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Natasha Petrova
Yeah, especially for membership interest deals where you're cross-referencing multiple entity documents. The automated verification can catch things you might miss when you're rushed.
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Javier Morales
Just to add one more consideration - make sure your membership interest security agreement specifically grants the security interest in the membership interests and not just the distributions or other rights. The language should be clear that you're securing the actual membership interests themselves.
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Sofia Hernandez
AuthorOur security agreement does specifically grant a security interest in the membership interests themselves, not just distributions. That language was carefully drafted.
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Javier Morales
Perfect. That's the key distinction for proper perfection of membership interest collateral.
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Emma Davis
Update us when you get this resolved! I'm dealing with a similar membership interest security agreement filing next month and would love to know how the exact name verification process works out for you.
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Sofia Hernandez
AuthorWill do. I'm getting the updated state documentation tomorrow and plan to use one of the verification tools mentioned here before refiling. Fingers crossed!
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Zainab Ibrahim
Good luck! The membership interest filings can be tricky but you're taking the right steps to get it done correctly.
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Connor O'Brien
Definitely try the Certana verification if you can. It really does help catch these name discrepancy issues before they become filing rejections.
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