UCC lien on accounts receivable - debtor name mismatch causing rejection
Been trying to perfect our security interest in client's accounts receivable for 3 weeks now and getting nowhere fast. Filed UCC-1 showing ABC Manufacturing LLC as debtor but SOS keeps rejecting because their charter shows ABC Manufacturing, LLC (with comma). Legal says it's the same entity but filing office doesn't care. This is a $2.8M credit facility and we're approaching our commitment deadline. Has anyone dealt with this exact comma issue on accounts receivable collateral? The collateral description reads 'all accounts, chattel paper, instruments, and general intangibles' but wondering if we need to be more specific for A/R. Client has about $400K in outstanding receivables at any given time and we can't afford to have an unperfected lien. What's the best practice here - refile with exact charter name or try to argue with SOS?
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Zoe Walker
Ugh the comma thing is SO frustrating but you absolutely have to match the charter exactly. I learned this the hard way on a construction equipment deal last year. SOS systems are automated now and they flag any punctuation differences as mismatches. Your security interest isn't perfected until that UCC-1 is accepted and filed.
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Elijah Brown
•This is exactly right. The debtor name has to be identical to what appears on the organizational documents. Even something as small as Inc. vs Incorporated will cause rejection.
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Maria Gonzalez
•Wait really? I thought there was some leeway for minor punctuation differences. This is making me nervous about our recent filings...
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Natalie Chen
Refile immediately with the exact charter name including the comma. Don't waste time arguing with SOS - they won't budge on this. Your collateral description looks fine for accounts receivable. Make sure you're searching against the correct debtor name too when you do your UCC searches.
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Ryan Kim
•Thanks, that's what I was afraid of. Going to refile today with ABC Manufacturing, LLC. Just frustrating when you think you've done everything right.
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Santiago Martinez
•At least you caught it now rather than during a default situation. I've seen deals where lenders thought they were secured and found out during enforcement that their UCC was invalid due to name issues.
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Samantha Johnson
Had this exact problem 6 months ago on an inventory and accounts receivable deal. After fighting with manual searches and charter comparisons for days, I discovered Certana.ai's document verification tool. You literally just upload your charter and UCC-1 PDFs and it instantly flags any debtor name mismatches. Saved me from filing incorrectly again. Would have caught your comma issue immediately.
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Ryan Kim
•Never heard of that but sounds like it could save a lot of headaches. Is it easy to use?
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Samantha Johnson
•Super simple - just drag and drop your documents and it cross-checks everything automatically. Wish I'd known about it earlier, would have saved me from multiple refiling fees.
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Nick Kravitz
•Interesting, going to check this out. Manual document comparison is such a pain and you always miss something.
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Hannah White
Your collateral description should be fine for A/R but make sure the debtor actually has accounts receivable to attach to. Some manufacturing companies do mostly cash business. Also consider whether you need to file in multiple states if they have customers nationwide.
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Ryan Kim
•Good point about the cash business but this client definitely has substantial receivables. They invoice net 30 terms to distributors.
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Michael Green
•Multi-state filings can get complicated. Usually you file where the debtor is organized but accounts receivable can have different rules depending on the jurisdiction.
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Mateo Silva
THE COMMA ISSUE IS RIDICULOUS!!! I've had THREE deals delayed because of punctuation differences. SOS offices used to have common sense but now everything is automated and stupid. Your lawyer should have caught this before filing - that's basic due diligence.
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Victoria Jones
•I feel your frustration but the rules are the rules. At least automated systems are consistent, even if they seem overly strict.
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Mateo Silva
•Consistent doesn't mean reasonable. We're talking about a COMMA affecting a multi-million dollar security interest. The system is broken.
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Cameron Black
Make sure when you refile that you also update your UCC search to use the correct debtor name. You want to make sure there aren't other liens ahead of you. Also verify the client's legal name hasn't changed recently - sometimes companies amend their articles without telling lenders.
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Ryan Kim
•Good reminder about the search. Will run a new one with the comma version before refiling.
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Jessica Nguyen
•This happened to us where the company had amended their name 6 months prior but nobody updated our files. Always worth double-checking current status.
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Isaiah Thompson
Been doing UCC filings for 15 years and the debtor name rules just keep getting stricter. But honestly it's better this way - removes ambiguity about which entity you're actually filing against. Better to be precise upfront than deal with priority disputes later.
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Ruby Garcia
•That's a good perspective. I guess consistency in enforcement is better than subjective interpretations by different filing offices.
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Alexander Evans
•Still frustrating though when you're working under tight deadlines and something this minor can derail the whole process.
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Evelyn Martinez
Just went through similar situation last month. Used one of those document checking services and it caught 3 different name issues across our UCC package before we filed. Saved us from multiple rejections and refiling fees. The automated cross-checking really does work better than manual review.
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Benjamin Carter
•Which service did you use? We're always looking for ways to streamline our UCC process.
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Evelyn Martinez
•Certana.ai - they have a specific UCC document verification workflow that checks charter against UCC forms. Pretty straightforward to use.
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Maya Lewis
Your accounts receivable collateral description looks standard. Just make sure you understand what you're getting - A/R can be tricky to collect on if the debtor's customers dispute invoices or claim setoff rights. Might want to get debtor representations about the quality of their receivables.
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Ryan Kim
•Thanks, we did get reps about no disputed receivables over $10K. Client seems to have good customer relationships.
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Isaac Wright
•Smart to get those reps in writing. A/R financing can go sideways quickly if the underlying invoices are problematic.
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Lucy Taylor
At least your collateral description is solid. I see so many UCC filings with vague or incomplete collateral descriptions that won't hold up in bankruptcy. 'All accounts' is much better than 'accounts receivable' which some courts have found too narrow.
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Connor Murphy
•Really? I thought 'accounts receivable' was the standard term. Why is 'all accounts' better?
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Lucy Taylor
•UCC Article 9 defines 'accounts' more broadly than just traditional A/R. Covers things like license fees, royalties, other payment obligations. Gives you better coverage.
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KhalilStar
•This is why I always use the broadest possible collateral descriptions. You never know what assets the debtor might have that could fit under your security interest.
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