Lessons Learned - Lesson One: Get The Name Right On The Financing Statement

One of the most common mistakes made by secured parties is registering their security using an incorrect name for the debtor. If the name of the debtor is wrong when security is registered, then subject to very few exceptions, the lessor’s or secured party’s security interest is unperfected, and in an insolvency the secured party will lose its security in the asset to all secured creditors properly perfected.

Further complicating the issue, the debtor’s French name must also be included in the financing statement, if the debtor uses a French name in its articles. This rule is strictly enforced, and is the most common reason that secured parties’ interests become unperfected. Note that in western provinces, French names need not be included.