Articles of Incorporation: Not Just for Name Verification

Articles of Incorporation: Not Just for Name Verification

Do you know that if your customer changes their name you must amend your UCC filing or your security is jeopardized? Did you know Articles of Incorporation are required to verify an entity’s legal name and to verify jurisdiction?

Per Section 9-507(c) of the UCC, the secured party has four months to amend a UCC filing when the debtor’s name changes. If the secured party does not amend the UCC filing, the filing is not effective to perfect a security interest in collateral acquired by the debtor before or within four months after the change.

Best Practice

Make sure your Security Agreement requires your debtor advise you of any changes to their name, address or organizational structure. It is your responsibility, as the secured party, to ensure the UCC filing is updated and contains the correct information.

You can also utilize resources like our Corporate Monitoring, which will alert you when the State Corporation Division reports a change in your customer’s corporate profile along with decision making information to keep the UCC Financing Statement in compliance with Article 9-507(c).

Articles of Incorporation are not only required under UCC Article 9 to verify the entity legal name, but must also be used to verify jurisdiction.

In this example, the state of Texas is reporting the entity as a Foreign Limited Partnership organized in Delaware. However, if you review the Articles, you will discover the LP is actually organized in California. If the documentation had not been reviewed, the UCC would have been filed in the wrong jurisdiction, consequently there would be no security interest.


Secured Transaction Takeaway: Always review all documents carefully!

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