How lenders check liens and judgments before funding a business
Check five sets of records: UCC filings, federal tax liens, judgment liens, lawsuits and bankruptcy. Each is filed somewhere different. UCC filings sit in the state where the business was formed, federal tax liens in the office its state designates, judgment liens wherever its state keeps them, lawsuits with each court, and federal cases and bankruptcies in PACER.
Updated
Start with the state record
Every other search depends on the business's exact legal name and the state it was formed in. Pull its Secretary of State record first: legal name, status, state of formation, registered agent and officers.
The name lenders must file under is the one on the business's most recent filing with its home state that sets or changes its name (UCC § 9-503(a)(1)), so a recent name change matters. Read how business verification works.
Where each record is filed
- UCC filings
- In the central filing office of the state where the business was formed (UCC § 9-307(e), § 9-501(a)(2)). They show the lenders and lessors that claim its assets.
- Federal tax liens
- In the one office the taxpayer's state designates (26 U.S.C. § 6323(f)). A corporation or partnership resides at its principal executive office, which isn't always its main place of business, so this can be a different state from the UCC search. The IRS notes that many states designate the Secretary of State.
- Judgment liens
- Where depends on the state. In California, a notice of judgment lien filed with the Secretary of State creates a lien on personal property. In Florida, a judgment lien certificate filed with the Department of State does (Fla. Stat. § 55.202).
- Lawsuits
- With the court where each case was filed. State and county courts keep their own dockets, so search the courts where the business operates.
- Federal cases and bankruptcy
- In PACER, which covers federal appellate, district and bankruptcy courts. It needs an account, and its Case Locator searches nationwide.
The search, step by step
- 1
Confirm the business
Pull its Secretary of State record and note the exact legal name and the state it was formed in. Every other search depends on both.
- 2
Search UCC filings
Search that name in the state of formation, and separate active filings from lapsed and terminated ones.
- 3
Check federal tax liens
Search the office the state designates for federal tax liens, in the state of the business's principal executive office.
- 4
Check judgment liens
Search the judgment lien records the state keeps, such as California's and Florida's registries.
- 5
Search the courts
Search the state and county courts where the business operates, and PACER for federal cases and bankruptcy.
- 6
Note what you couldn't search
Record any source that was down or not covered, so a gap is never read as a clean result.
What these searches can miss
- A search under a trade name or a misspelled name can miss filings made under the legal name. Read how to check UCC liens for the name rules.
- A business formed in one state and run from another needs searches in both.
- A filing or a lawsuit can appear after you fund.
- A debt that was never filed doesn't appear in any public record.
Keep checking after you fund
New filings, lawsuits and state record changes can appear at any point in the term. With business monitoring, Entitylight re-checks a business on your schedule, from daily to every 30 days, and alerts you when something new appears.
What Entitylight covers
One Entitylight lookup returns the Secretary of State record in 48 states and DC, UCC filings in 31 states and DC, and lawsuits in Miami-Dade County, Broward County and New York State courts, with a status for every source.
Check federal tax liens, state judgment lien records, other courts and PACER at their own sources.
Sources
- UCC § 9-307, Location of debtor (Cornell LII)
- UCC § 9-501, Filing office (Cornell LII)
- UCC § 9-503, Name of debtor and secured party (Cornell LII)
- 26 U.S.C. § 6323, Validity and priority of federal tax liens (Cornell LII)
- Internal Revenue Manual 5.12.7, Notice of lien preparation and filing (IRS)
- Judgment liens (California Secretary of State)
- Fla. Stat. § 55.202, Judgment liens on personal property
- Fla. Stat. § 55.204, Duration of judgment liens
- Find a case (PACER), US Courts
- PACER Case Locator
Questions about lien and judgment searches
Is a UCC search enough before funding?
No. A UCC search shows financing statements. Tax liens, judgment liens, lawsuits and bankruptcies are filed elsewhere and need their own searches.
Where are federal tax liens against a business filed?
In the office its state designates, in the state of its principal executive office (26 U.S.C. § 6323(f)). The IRS notes that many states designate the Secretary of State for corporations, partnerships and other entities.
How do I search federal lawsuits and bankruptcies?
Through PACER, which covers federal appellate, district and bankruptcy courts. It needs an account, and its Case Locator searches nationwide.
How long does a Florida judgment lien last?
Five years from filing. One second lien can be filed in the six months before or after the first lapses, and it lasts five years and can't be renewed (Fla. Stat. § 55.204).
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