Summertime is arguably the best time of the year. Warm weather. Long-awaited family vacations. Extended daylight. And unique to this summer, as of July 1, 2013, in most states, we have substantial amendments (the 2010 Amendments) to the Uniform Commercial Code (UCC) to digest (maybe even under an umbrella on the beach). The 2010 Amendments are intended to clarify existing law, especially with respect to how certain types of debtors are named in financing statements. As of July 3, 2013, 44 states and the District of Columbia had enacted the 2010 Amendments. A chart at the end of the article indicates which jurisdictions have and have not adopted the 2010 Amendments.

This article provides an overview of the UCC rules governing proper debtor-naming conventions in financing statements for organizations (both registered and unregistered) and individuals after taking into account the relevant changes made by the 2010 Amendments.

Location, Location, Location

Before addressing debtor-naming issues, it is important to understand the foundational issue of the debtor’s “location” as defined in the UCC. Under the UCC, it is the jurisdiction of a given debtor’s location that is applicable to that debtor, and financing statement filings and searches must be done in that jurisdiction.

A debtor that is a “registered organization” is located in the jurisdiction where it is incorporated or organized. A registered organization is an organization formed or organized by the filing of a “public organic record” with, or the issuance of a public organic record by, a state or the United States. Registered organizations generally include corporations, limited partnerships and limited liability companies. Note that a general partnership is not considered a registered organization under the UCC. “Public organic record” is a new definition that is included in the 2010 Amendments, and it means a record available to the public and consisting of the record initially filed with or issued by a state or the United States to form or organize an organization (and any publicly filed record that amends or restates the original record).

A debtor that is an unregistered organization (including a general partnership) is located in the jurisdiction of its place of business (if it has only one place of business) or of its chief executive office (if it has multiple places of business).

Note, however, that with respect to non-U.S. organizations (whether they qualify as registered organizations or not), the rules governing the location of such organizations are complex and are beyond the scope of this article.

A debtor that is an individual is located at the place of his or her principal residence. Best practices dictate that if an individual debtor maintains residences in multiple jurisdictions and it is unclear which one is the “principal residence,” a lender should proceed under the assumption that the debtor’s location could be any of such jurisdictions.

A Word About Search Logic

Although it is beyond the scope of this article to describe in detail the various types of search logic used by different jurisdictions in connection with their UCC records, a quick overview is necessary. UCC records are indexed and thereby searched by the applicable filing office according to the name of the debtor. These searches are done electronically using the specific search logic adopted by the relevant jurisdiction and have little margin for error. This means that even a minor mistake in a debtor’s name on a financing statement could cause that financing statement to be missed during a search that is conducted based on the correct debtor name. Under the UCC, the failure to provide the correct name of the debtor on a financing statement is deemed to render the financing statement “seriously misleading” (a UCC term of art) and thus ineffective to perfect a secured party’s security interest in the collateral detailed therein. The one exception to this rule is that if the filing office’s standard search logic actually does find a financing statement that incorrectly represents the debtor’s name, such financing statement, despite its errors, would not be deemed to be seriously misleading based on the incorrect name. Needless to say, every effort should be made to ensure that the debtor name on a financing statement is absolutely correct so as to avoid any reliance on this narrow (and unpredictable) exception.

Debtor Names

Registered Organizations

Debtor naming conventions are most straightforward when the debtor is a registered organization. The debtor name on the financing statement must reflect the name set forth in such organization’s public organic record most recently filed with its state of organization or incorporation.

Prior to the enactment of the 2010 Amendments, a financing statement properly identified a business debtor “only if the financing statement provides the name of the debtor indicated on the public record [emphasis added] of the debtor’s jurisdiction of organization which shows the debtor to have been organized.” Exactly what constitutes “on the public record” is ambiguous and open to different interpretations. For example, prior to the enactment of the 2010 Amendments, a certificate of good standing or a published index of domestic corporations were considered by some to be reliable “public records” that reflected debtor names. The concept of “public organic record” was added in the 2010 Amendments to eliminate this vagueness. A public organic record is typically the certificate of formation, articles of organization, certificate of incorporation or similar charter document that is maintained in the public record in the applicable jurisdiction.

With respect to a debtor that is a registered organization, the pre-2010 Amendments financing statement form generally required the inclusion of the debtor’s type of organization, jurisdiction of organization and organizational identification number (or an indication that the debtor does not have one). The 2010 Amendments eliminate these disclosure requirements, and the new financing statement form, which no longer has these information fields, should be used starting July 1, 2013, in jurisdictions that have adopted the 2010 Amendments.

Unregistered Organizations

The 2010 Amendments did not make any substantive changes regarding debtor naming conventions or requirements for unregistered organizations. If the debtor is an unregistered organization that has a name, that name should be used in the financing statement. All possible sources evidencing the debtor’s name, such as government records and filings, tax returns, etc., should be reviewed to confirm the debtor’s name; if more than one name is used, the financing statement should reflect all such names as additional debtors. However, for an unregistered organization that does not have a name, the financing statement should include the names of all of the partners, members, associates or other persons comprising the debtor. The naming conventions (and location rules) for these entities and persons follow the rules for registered organizations, unregistered organizations and individual debtors discussed herein.

Individual Debtors

The most significant changes made by the 2010 Amendments with respect to debtor naming relate to individual debtor names. Under the UCC without regard to the 2010 Amendments, a financing statement would sufficiently provide the name of an individual debtor if it listed the “name of the debtor,” but the UCC provided little guidance as to what constituted the debtor’s name. The 2010 Amendments represent an effort to provide such guidance. Under the 2010 Amendments, two alternative approaches, commonly known as Alternative A, the “only if” approach, and Alternative B, the “safe harbor” approach, were formulated. Of the 45 jurisdictions that had enacted the 2010 Amendments as of July 3, 2013, the vast majority, including the District of Columbia, Florida, Illinois, Massachusetts and Texas, chose Alternative A, while only a handful, including Delaware, chose Alternative B. A chart at the end of the article shows which of the jurisdictions that have adopted the 2010 Amendments chose Alternative A and which chose Alternative B.

Alternative A – The “Only If” Approach

Alternative A, or the “only if” approach, requires the name of an individual debtor to be the name set forth on such individual’s unexpired driver’s license issued by the Department of Motor Vehicles or equivalent agency of the state where the debtor is located (the Driver’s License Name). This requirement dictates strict compliance so that, even if there is a naming error on the driver’s license, such error should be replicated on the financing statement. If the individual has been issued multiple driver’s licenses in the same jurisdiction, the most recently issued one controls. A driver’s license issued by a state other than the one where the debtor is located may not be relied upon for determining the Driver’s License Name.

For example, Michael John Smith, an individual, lives in Illinois and grants a security interest to a lender, who promptly files a financing statement naming “Michael John Smith” as the debtor after verifying the name on his unexpired Illinois driver’s license. The financing statement is still effective even if Michael’s actual name (as set forth on his birth certificate, passport, tax return or other record) is Michael Jon Smith. If the lender filed against “Michael J. Smith” or “Michael Jon Smith,” the financing statement would only be effective under Alternative A if the Illinois search logic would, despite the variance from the Driver’s License Name, retrieve this financing statement, thereby fitting within the exception noted in the previous search logic discussion. However, it would be ill advised to deviate in any way from the debtor’s Driver’s License Name in an Alternative A jurisdiction. Note that financing statement forms provide separate boxes for an individual debtor’s surname, first personal name, additional names/initials and suffix. These boxes must be completed accurately regardless of how the debtor’s name is ordered on a driver’s license.

If an individual located in an Alternative A jurisdiction does not have a driver’s license issued by that jurisdiction, or the license is expired, the financing statement must be filed against “the individual name of the debtor” or the “debtor’s surname and first personal name.” The UCC does not define the “individual name of the debtor” or what elements constitute a debtor’s surname and first personal name, nor does it clarify the difference between the two. However, the official comments to Section 9-503 suggest that a court interpreting the sufficiency of a debtor’s individual name should refer to any non-UCC law concerning proper name identification, keeping in mind that name interpretation in other contexts might not be applicable to a UCC-related dispute. The official comments also suggest that a court should give effect to the directive in Section 1-103(a)(1) that the UCC “must be liberally construed and applied to promote its underlying purposes and policies.” Best practice dictates that, when in an Alternative A jurisdiction and there is no unexpired driver’s license available from which to determine the Driver’s License Name, the secured party should include as additional debtors on its financing statement all iterations of a debtor’s name, including those reflected on any official documents that can be obtained (including expired or out-of-state driver’s licenses, birth certificate, passport and recent tax returns).

Alternative B – the “Safe Harbor” Approach

Under Alternative B, or the “safe harbor” approach, a financing statement is effective if filed against the individual debtor’s (a) Driver’s License Name (if any), (b) “individual name,” or (c) “surname and first personal name” (see previous discussion regarding issues relating to the lack of clarity in the UCC with respect to what is meant by “individual name” and “surname and first personal name”). Unlike the regimen under Alternative A, each of these debtor-naming conventions is deemed equal under Alternative B. Using the example above, a financing statement identifying the debtor as “Michael John Smith,” “Michael Jon Smith” or “Michael Smith” would be sufficient under Alternative B since these names represent Michael’s Driver’s License Name, his “individual name” (as reflected on the documents referred to in the example), and his “surname and first personal name,” respectively.

This article is intended to provide a broad overview of debtor-naming conventions and how they were changed by the 2010 Amendments. Prior to filing a financing statement or conducting a search, the laws of the jurisdiction of the debtor’s location should be carefully reviewed, because they vary from state to state, and some states have not adopted the 2010 Amendments. Additional issues arise if a debtor changes its name or its location after the filing of the original financing statement against that debtor, and it is beyond the scope of this article to address those issues.

Click here to view table.


In California, the 2010 Amendments bill is pending in the legislature and, assuming it is passed, will not become effective until July 1, 2014. The pending bill does not contemplate changing the individual debtor-naming convention from the vague “name of the debtor” standard under the current UCC. However, those monitoring the legislative process expect that one of the alternatives will be adopted and added to the bill before it becomes law.

A 2010-Amendments-related bill (which adopts Alternative A) has been introduced but not passed in New York.