Capitol Lien - Items filtered by date: October 2017
Monday, 27 November 2017 00:00

End of Year Updates

State Closures:
12/22/17 Christmas Holiday: Illinois, Michigan, South Carolina
12/25/17 Christmas Day: All States
12/26/17 Day After Christmas: Florida, Georgia, Kansas, Maine, North Carolina, Oklahoma, South Carolina, South Dakota, & Tennessee
12/27/17 Christmas Holiday: North Carolina 
1/1/18 New Year’s Day: All States 
1/2/18 New Year’s Holiday: Tennessee 
1/12/18 Lee-Jackson Day: Virginia 
1/15/18 Martin Luther King Day: All States 
1/19/18 Robert E. Lee Day: Florida 

 

Jurisdictional Updates:
North Carolina: House Bill 228 (Session Law 2017-23) signed by the governor and effective June 2 postponed for five (5) months until December 1, 2017 the implementation of the new Assumed Business Name Act law enacted by Session Law 2016-100. Register of Deeds offices will upload assumed name information to a searchable online statewide database for assumed names to be maintained by the Secretary of State.
Minnesota: The Secretary of State reminded all Minnesota LLCs formed prior to August 1, 2015 that they will become subject to Chapter 322C beginning January 1, 2018 as Chapter 322 B is repealed.  In 2014 the legislature enacted the Revised Uniform LLC Act which took effect August 1, 2015 & enabled existing LLCs to elect to be governed under the new act or to remain under the prior LLC law Chapter 322B until January 1, 2018.  Customers with LLCs formed prior to August 1, 2015 should review LLC operating agreements for compliance with internal governance requirements under Chapter 322C.
Oregon: Starting January 1, principle place of business & officer/director/member/manager information will be REQUIRED when entities file their articles; there will no longer be an option to wait until filing their first annual report. The old forms will NOT be accepted after the first of the year.  
South Carolina: Appraisal Management Licenses
All appraisal management companies registered in South Carolina must obtain an appraisal management company license with the Department of Labor, Licensing & Regulations. Registration must be completed no later than February 1, 2018. 
Indiana: Senate Bill 443, effective January 1, 2018, enacts the Uniform Business Organizations Code & the Uniform Business Organization Transactions Act, governing various issues, including filings with the Secretary of State, names, registered agents, foreign entities, administrative dissolution, fees, mergers, interest exchanges, conversions & domestications for all business entity types.
Published in Jurisdiction Updates
Monday, 13 November 2017 00:00

If the Debtor's Name Changes

A proper financing statement must provide the name of the debtor, and there are fairly strict requirements for the sufficiency of the debtor’s name.  (See UCC§§ 9-502& 9-503.)  If the debtor’s name changes such that the name on the financing statement no longer matches the debtor’s name closely enough to avoid being seriously misleading when measured after the name change, the effect of the financing statement is limited.
A financing statement that previously sufficiently provided the name of the debtor but that would be seriously misleading if measured after the name change still provides the secured party with two things:  continued perfection for collateral acquired before the name change and a four-month opportunity to amend the financing statement to provide the debtor’s new name and extend the effect of the financing statement.  (See § 9-507(c).)
A security interest perfected by a proper financing statement remains perfected despite the debtor’s name change with respect to assets of the debtor as of the date of the name change or acquired within four months thereafter.  (See § 9-507(c)(1).)  Practically, it will be important to have a detailed and current collateral list, to have some evidence regarding what assets the debtor had and when those assets were acquired.  Imagine a credit transaction,shortly after the name change, where a competing party gives value to the debtor and the debtor grants a new security interest.  The new secured party obtains a UCC search report using the debtor’s new name, which report does not reveal the existing filing using the debtor’s old name.  Having taken on too much debt, the debtor promptly defaults, and the new secured party takes possession of the debtor’s assets.  You want to recover your collateral from the competing secured party.  Among other things, you will need to prove which assets are your collateral, hence the need for a detailed and current collateral list.  Fortunately, the UCC allows for continuing perfection and priority, at least in certain collateral, despite the name change. 
Within four months after the name change, a secured party can amend its financing statement to provide the debtor’s new name and preserve the perfection and priority, despite the name change, even in assets of the debtor acquired more than four months after the name change.  (See § 9-507(c)(2).)  A “late” amendment – that is, one filed more than four months after the name change – would work like an amendment adding a debtor; it would provide perfection and priority only from the date of the amendment.
There is good reason to include a term in your agreement that requires a debtor to notify you immediately if the debtor changes its name.  Prudence also suggests periodic monitoring, in case the debtor fails to notify you.  And, in any case, there is good reason to act promptly if you learn of a debtor name change.
NOT INTENDED TO PROVIDE LEGAL, ACCOUNTING OR OTHER PROFESSIONAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.
Published in UCC