Protect Your UCC Priority with ABCs of Post-Closing Due Diligence

After funding a deal and filing a UCC Financing Statement, it's critical  to keep an eye out for post-closing events that could jeopardize your ability collect. CLAS suggests following the ABCs of post-closing due diligence to protect your priority for the life of your loan.

Always Perform a Search to Reflect

A search to reflect is a great way to catch UCC filing mistakes before it's too late. Sometimes referred to as a post-filing verification search, the value of a search to reflect is twofold. First, the search will confirm that the filing office made no errors when indexing your document and second, it will verify your lien position relative to other creditors.

Be Mindful of Changes in the Public Record

It is important to monitor for changes in the public record that could affect your position to collect. Debtor monitoring programs perform regularly scheduled UCC and/or corporate database searches and alert you to any important changes such as unauthorized terminations, new UCC or tax lien filings, changes in corporate status, mergers, name changes, etc.

Carefully Track UCC Lapse Dates

To maintain a healthy UCC portfolio you must carefully track UCC lapse dates and file timely Continuation Statements when a debtor's financial obligation extends beyond five years. It is important to manage this process meticulously, as a lapsed UCC filing ceases to be effective and can open the door for a junior creditor to move into a first-priority position.

CLAS CAN HELP! 

From easy-to-order online searches to reflect, to low-cost UCC and Corporate monitoring and automated Continuation Alerts, CLAS Information Services offers a full suite of post-closing solutions to help you preserve your priority position and minimize your risk for loss. Contact CLAS today for a free consultation! 800.952.5696 | connect@clasinfo.com

California Bill Seeks to Change Statement of Information Due Dates

In early 2015, California Assemblymember Cheryl R. Brown introduced Assembly Bill 871 (AB-871), which seeks to change the filing period for when business entities in California file their annual report, known in California as a Statement of Information. 

Currently, Statement of Information due dates are tied to the entity’s date of formation. Under existing California law, all Corporations and Limited Liability Companies must file an initial Statement of Information within 90 days after the filing of its original articles and periodic updates are due annually for corporations and biennially for limited liability companies, before the end of their anniversary month.

AB-871 proposes a switch to a fixed date model that would align California Statement of Information due dates with the federal tax filing deadlines based on entity type. AB-871 would require that:

·         All For Profit Corporations file their Statement of Information annually, by March 15

·         All Limited Liability Companies file their Statement of Information biennially, by April 15

·         All Nonprofit Corporations file their Statement of Information annually, by May 15

The bill’s author and other supporters suggest that standardizing the Statement of Information filing dates would eliminate confusion businesses face as to when Statements are due, thereby increasing compliance.

In April 2015, the Assembly Committee on Banking and Finance passed AB-871 by a vote of 11-0 and referred the bill to the Assembly Committee on Appropriations. There are no new votes scheduled for AB-871, but the California Society of Enrolled Agents (CSEA) who is sponsoring the bill indicates they expect the bill to begin moving again soon.

Do you support a switch to a fixed date filing schedule for Statements of Information in California? Leave a comment with your thoughts! 

March 2016 State Holidays and Office Closures

State Holidays and Office Closures

Please note state filing offices occasionally make last-minute changes to their holiday closing schedules. We will update this list as we become aware of any such changes.

Date	State(s)	Holiday
Monday, March 1	VT	Town Meeting Day
Thursday, March 17	MA (Suffolk County)	Evacuation Day
Friday, March 25	CT, DE, IN, KY, LA, NC, ND, NJ, NM, TN, TX	Good Friday
Friday, March 25	HI	Kuhio Day
Monday, March 28	AK	Steward's Day
Thursday, March 31	CA CLAS will be open	Cesar Chavez Day

CLAS Information Services understands that your job doesn't stop just because a state filing office is closed. Our online DIY Search™ and UCC eZFILE® systems provide users with anytime, anywhere access to perform UCC and lien searches, print online images and prepare UCC filings for submission as soon as the state resumes operations. Want to learn more? Contact CLAS at 800.952.5696 or click here to request a free system demo!

February 2016 State Holidays and Office Closures

State Holidays and Office Closures

Please note state filing offices occasionally make last-minute changes to their holiday closing schedules. We will update this list as we become aware of any such changes.

Date	State(s)	Holiday
Tuesday, February 9	LA	Mardi Gras
Friday, February 12	CT, IL, MO	Lincoln's Birthday
Monday, February 15	AK, AL, AR, AZ, CA CO, CT, DC, HI, ID IL, MA, MD, ME, MI MN, MO, MS, MT ND, NE, NH, NJ, NV NY, OH, OK, OR, PA SC, SD, TN, TX, UT VA, VT, WA, WV, WY CLAS will also be closed	President's Day

CLAS Information Services understands that your job doesn't stop just because a state filing office is closed. Our online DIY Search™ and UCC eZFILE® systems provide users with anytime, anywhere access to perform UCC and lien searches, print online images and prepare UCC filings for submission as soon as the state resumes operations. Want to learn more? Contact CLAS at 800.952.5696 or click here to request a free system demo!

Top Tax Lien Searching Questions - Answered!

Tax lien searching can be confusing. There are a lot of variables to consider and CLAS Information Services has found that our clients have questions. Here are answers to our most commonly asked questions on tax lien searching:

Why Should I Search for Tax Liens? 

Before funding a deal, it is important for a lender to know about an applicant's existing financial obligations, especially those that could represent a competing claim. Federal Tax Liens and State Tax Liens are a factor in determining priority of claims and can jeopardize a lender's ability to collect in the event of a debtor bankruptcy.

Additionally, Federal and State tax liens are nonconsensual liens, meaning there is no agreement between the lienholder and the taxpayer. In fact, a tax lien can be filed without the taxpayer even knowing about it, so a Federal and State tax lien search may be the only way for a lender to learn about a tax lien before it's too late.

Where Do I Search for Tax Liens?

A taxpayer's primary address determines in which state a tax lien would be filed, but each state independently decides what filing office(s) in their jurisdiction will administer tax lien records.

Some states elect to have tax liens filed at the state level (i.e. Secretary of State or equivalent) while others accept tax liens at a county-level filing office such as County Recorder or even at a court. In some states, the filing office further depends on whether the taxpayer is an individual or a business. 

Do Name Variations Matter in Tax Lien Searching?

When a Secured Party files a UCC Financing Statement, it must list the debtor names according to strict Uniform Commercial Code rules or the filing will be not effective to perfect its security interest.

Government agencies are not held to the same strict standard when filing tax liens. In many cases, tax liens maintain priority even if the lien lists a variation of the taxpayer's legal name - so it is important to be sure your tax lien search will report tax liens filed under similar names.

For help in ordering a tax lien search, contact CLAS Information Services today! For over 35 years, CLAS has been helping financial institutions, title companies, attorneys and others coordinate due diligence search efforts and close transactions with confidence. 800.952.5696 | connect@clasinfo.com

January 2016 State Holidays and Office Closures

State Holidays and Office Closures

Please note state filing offices occasionally make last-minute changes to their holiday closing schedules. We will update this list as we become aware of any such changes.

Date	State(s)	Holiday
Friday, January 1	All States CLAS will be closed	New Year's Day
Monday, January 18	All States CLAS will be closed	Martin Luther King Jr. Day (name varies by state)

CLAS Information Services understands that your job doesn't stop just because a state filing office is closed. Our online DIY Search™ and UCC eZFILE® systems provide users with anytime, anywhere access to perform UCC and lien searches, print online images and prepare UCC filings for submission as soon as the state resumes operations. Want to learn more? Contact Kacy Flowers at 800.952.5696 ext. 123 or connect@clasinfo.com.

Happy Holidays from CLAS!