Entity Documents
This document generally governs the management and operations of an LLC.
Operating Agreement
This type of trust can generally be amended or revoked by the grantor.
Revocable
List one benefit of an operating agreement.
•Shielding LLC members from liability.
•Establishing clarity.
•Providing room for customization.
Averting default rules.
Collateral is ___________.
Property pledged to secure a loan.
True or False: Are corporate bylaws typically filed with the Secretary of State?
No, these are not publicly available, you have to request these from the Borrower.
This document is filed with the state to create an LLC.
Articles of Organization
Which document may be used instead of a full Trust Agreement under state law?
Certification of Trust
List two benefits of an operating agreement.
•Shielding LLC members from liability.
•Establishing clarity.
•Providing room for customization.
Averting default rules.
For real estate in Indiana, Kentucky or Ohio, in whose office is a mortgage generally recorded?
County Clerk/Recorder's Office
Title Insurance protects the bank, the borrower, or both?
Both
A Certificate of Good Standing verifies: ____________.
The entity is active and in good standing with the state.
Who signs loan documents on behalf of a trust?
Trustees
What two things should you do if the LLC does not have an operating agreement?
•Discuss benefits of having an Operating Agreement
•Offer our sample Operating Agreement form
Where is a UCC-1 financing statement filed for assets of a business?
With the secretary of state’s office in the state where the debtor is incorporated or organized.
This ownership percentage generally triggers a guarantor requirement under Loan Policy.
20%
This document is filed with the state to create a corporation.
Articles of Incorporation
What additional document is required under Loan Policy if we are accepting a Certification of Trust instead of the full Trust Agreement?
The portion of the Trust Agreement that lists the current trustees.
These are the owners of an LLC.
Members
Where is a UCC-1 financing statement filed for assets of an individual?
With the secretary of state’s office in the state where the debtor lives.
To properly perfect a security interest in a motor vehicle, the title lien should be filed where?
KY - County Clerk
IN - BMV
OH - County Clerk of Courts
The Articles of Organization for an LLC should list a ______ purpose for why the LLC was formed.
General
What requirement is most typically missing on a Certification of Trust that is required under Kentucky law?
The Trustee's address
What are the three most important things from the Bank's perspective that should be included in an operating agreement?
•Portion of members’ ownership, often expressed as ownership percentages
•Tells us what members will need to serve as a Guarantor under Loan Policy: Those that own over 20%
•For loans over $1,000,000: If they own more than 20% of the Borrower or any Guarantor
•Powers and duties of managers and members: Tells us if the LLC is manager-managed or member-managed and who has the power to sign the Loan Documents, and what their signature block should look like.
•Transfer provisions: Tells us what happens to the ownership interest if a married couple has an LLC and get divorced, or if a member passes away.
For all business assets, the UCC-1 financing statement should generally use: ___________.
The exact legal name of the debtor.
To perfect a security interest in a large ship, a mortgage should be filed where?
With the United States Coast Guard