Legal Due Diligence for Business Buyers: Public-Record Searches, What a Finding Changes, and Who Clears It
Which public-record searches a buyer can order after the LOI, what each record shows and does not show, what a finding can change, and who usually clears it.
By Alex Lubyansky, Managing Partner. Statutes checked 2026-10-05. Updated October 5, 2026.
Direct answer
Public-record legal due diligence reads the records that public offices and courts keep about a seller and its assets. Under the official text of UCC Article 9, a filing office keeps each filed record for public inspection and indexes an initial financing statement by the debtor's name. PACER provides electronic public access to federal court records. Under 26 U.S.C. 6323(f), a notice of federal tax lien on personal property is filed in one office within the state, as designated by the laws of that state. If the state has not designated one office, the notice is filed with the clerk of the United States district court. This page covers where these records are kept and what each one shows.
An LOI is permission to look under the hood. Nothing more.
Where this page fits
This page covers public-record searches only. Read the M&A due diligence process guide for the whole diligence process.
Use the national due diligence checklist for the item list by category.
Use the post-LOI checklist for the first 48 hours if the LOI is already signed.
Search types: where each record is kept, what it shows, and what it does not show
Each row names a search, the office or system that holds the record, what the search shows, and what it does not show. Where this page does not state a rule, the cell says so.
| Search type | Where it is filed or kept | What it shows | What it does not show |
|---|---|---|---|
| UCC financing statements (UCC-1 and amendments) | Under the official text of UCC Article 9, the state office named in the enacted statute, in all cases other than the fixture, as-extracted collateral and timber filings in the next row. As enacted in Michigan, the office of secretary of state. As enacted in Delaware, the office of the Secretary of State. | Whether a financing statement that designates a particular debtor is on file as of a date and time the filing office specifies, not earlier than three business days before it receives the request. Each filed record bears the date and time of filing. The filing office indexes by debtor name. On request, the filing office issues a certificate or a record that can be admitted into evidence. | Lapsed statements, unless the request states that it wants them. The sufficiency rule lists three contents: the debtor name, the secured party name, and an indication of the collateral. This page does not state what else a filing shows. |
| Fixture filings, as-extracted collateral, timber to be cut | Under the official text of UCC Article 9, the office designated for filing or recording a mortgage on the related real property. As enacted in Michigan, the same rule. The Michigan Department of State FAQ says fixture filings are recorded at a county Register of Deeds office. | As enacted in Michigan, a fixture filing is indexed under the names of the debtor and of each owner of record shown on the financing statement, as if they were the mortgagors. | This page does not state what these searches omit. |
| Federal court cases | PACER provides electronic public access to federal court records. PACER charges fees under its published fee schedule. | Registered users can search for a case in the federal court where it was filed, or search a nationwide index of federal court cases. | PACER is described as access to federal court records. The PACER Case Locator is a national index for district, bankruptcy and appellate courts. PACER says it is built from a nightly subset of data collected from the courts. PACER says new cases will typically appear within 24 hours and the most recent data is available directly from the court. PACER says a search of the specific court is updated immediately and the nationwide index is updated daily. PACER says each court maintains its own case information. This page does not state what else it omits. |
| Federal tax lien notices | For personal property, one office within the state, as designated by the laws of that state, in which the property is situated. If the state has not designated one office, the office of the clerk of the United States district court for the judicial district in which the property is situated. Personal property is deemed situated at the taxpayer's residence when the notice is filed. The residence of a corporation or partnership is the place of its principal executive office. | Whether a notice is on file. Under 26 U.S.C. 6323(a), the federal tax lien is not valid against a purchaser or a holder of a security interest until notice is filed. Under 26 U.S.C. 6325(f), if a certificate of release is filed in the same office as the notice of lien, it is conclusive that the lien is extinguished. A certificate of discharge filed there is conclusive that the property it covers is discharged from the lien. The IRS says a Certificate of Release is filed in the same recording office where the notice of lien was filed. | This page does not state what a notice search omits. |
| State court litigation and judgment liens | As enacted in Michigan, a judgment lien is an encumbrance against the debtor's interest in real property. It attaches when a notice of judgment lien is recorded with the register of deeds for the county where the property is located. The clerk of the court that entered the judgment certifies the notice. As enacted in Delaware, a judgment binds lands from the time of actually entering or signing it. In Delaware, the lien renewal agreement is filed in the office of the prothonotary. | As enacted in Michigan, the notice includes the case caption, the docket number, the current balance due, and the expiration dates of the judgment and of the judgment lien. The notice need not include a legal description of the real property. As enacted in Michigan, a judgment lien has priority over a lien recorded with the register of deeds after the notice of judgment lien, with listed exceptions. The exceptions include a purchase money mortgage and a state or federal tax lien. A Michigan judgment lien expires 5 years after it is recorded unless rerecorded. It may be rerecorded only once. A Michigan judgment lien is extinguished when a signed discharge, a certified satisfaction of judgment, a certified discharging court order, or a bankruptcy discharge with the schedule is recorded with the register of deeds. Within 28 days after payment in full, the judgment creditor must record a discharge with the register of deeds. As enacted in Delaware, a money judgment entered or recorded in the Superior Court continues as a lien on real estate for no more than 10 years unless renewed within that term. At the end of 10 years the lien on real estate is lost unless renewed by agreement or scire facias. In Delaware, a judgment holder who receives satisfaction must forthwith enter the satisfaction on the record of the judgment. | Both statutes read for this page cover real property. This page does not state a rule for judgment liens on personal property. As enacted in Delaware, sections 4702 to 4706 do not extend to judgments before a justice of the peace or to judgments of the Court of Common Pleas. |
| State tax liens | As enacted in Michigan, a notice of state tax lien on real property is recorded with the register of deeds of the county where the real property is situated. For personal property of a corporation or partnership whose principal executive office is in Michigan, the notice is filed with the secretary of state. In all other cases, it is filed with the register of deeds of the county where the taxpayer resides at the time of filing. As enacted in Delaware, for an assessed and unpaid tax, the Director of the Division of Revenue or the Secretary of Finance may file a certificate with the prothonotary of any county. From the time of filing, the amount in the certificate is a judgment of record. | As enacted in Michigan, the secretary of state marks, holds and indexes a notice of state tax lien under MCL 440.9519 as if it were a financing statement. A certificate of release or nonattachment is indexed as if it were a termination statement. A certificate of discharge or subordination is indexed as if it were a release of collateral. On request, the filing officer issues a certificate showing whether any notice of state tax lien naming a particular person is on file, with the date and hour of each filing. The filing officer may remove a notice from the file if no refiled notice is presented within 7 years and 60 days. A state tax lien not filed or recorded under the act is void against a mortgagee, pledgee, purchaser or judgment creditor who secured an interest in the property before the notice was filed. As enacted in Delaware, the certificate states the amount due, the taxpayer's name and last known address. The prothonotary enters it in the regular judgment docket and indexes it regardless of the county of the taxpayer's residence. A Delaware tax judgment lien under section 554 continues automatically for 20 years from the date of entry. The 10-year renewal rule in 10 Del. C. 4711 does not apply. Within the 20-year term, the Director may renew the lien for an additional 20 years by filing a renewal certificate with the prothonotary of any county. The Director may release all or part of the property from the lien, or subordinate it, if the Director makes the determination the statute lists. | This page does not state what a state tax lien search omits. |
| Entity records and good standing | Michigan's Corporations Division, in the Department of Licensing and Regulatory Affairs, says it provides services that enable corporations and limited liability companies to be formed, and foreign entities to obtain a certificate of authority to transact business. Michigan LARA says searches and certificate requests run online. A Certificate of Good Standing is ordered through the Request Certificate function. In Delaware, a Certificate of Status or Certificate of Good Standing is ordered from the Division of Corporations by written request. | As enacted in Michigan, a certificate of good standing for a domestic limited liability company states that it has been validly organized, that it is validly in existence under the laws of Michigan, and that it has satisfied its annual filing obligations. For a foreign limited liability company, it states that the company has been validly authorized to transact business in Michigan, holds a valid certificate of authority, and has satisfied its annual filing obligations. A Michigan limited liability company that fails to file annual statements for 2 consecutive years and does not cure within 60 days after notice is not in good standing. Michigan LARA says an LLC's standing shows as an AR Standing status. The Corporations Division records the name of the resident agent on the public record. In Delaware, the short form certificate of status includes the name of the entity and its status when issued. The long form certificate states all documents filed, including dates, times and name changes, with the status when issued. | As enacted in Michigan, a limited liability company that is not in good standing remains in existence and may continue to transact business in Michigan. The Michigan statute read for this page is the Limited Liability Company Act. This page does not state the Michigan rule for corporations. The Delaware Division of Corporations says its online status check reflects the status of an entity but does not generate an official certificate of good standing. |
| Licenses and permits | One example. As enacted in Michigan, a liquor license, or an interest in one, cannot be transferred from one person to another without the prior approval of the commission under the Michigan Liquor Control Code. | As enacted in Michigan, a transfer of more than 10% of the outstanding stock of a licensed corporation, or more than 10% of the total interest in a licensed limited partnership, in one licensing year is considered a transfer requiring prior approval. Each privately held licensed corporation and licensed limited partnership must notify the commission by July 1 each year whether shares or interests have been transferred. | This page does not state rules for other licenses or other states. This page does not state successor liability rules. |
Michigan and Delaware statutes and official pages were checked on 2026-10-05. Michigan and Delaware are shown as examples of enacted law. Other states enact their own text.
Findings: what the statute says, what a finding can change, and who usually clears it
This is general information about how these records work. It is not legal advice for any deal.
| Finding | What the statute says | What it can change in the deal | Who usually clears it |
|---|---|---|---|
| A UCC financing statement names the seller and covers assets in the sale | Under the official text of UCC Article 9, on the filing of a termination statement, the financing statement ceases to be effective, subject to Section 9-510. As enacted in Delaware, the same. Within 20 days after a secured party receives an authenticated demand from a debtor, the secured party must cause the secured party of record to send the debtor a termination statement, in the cases the statute lists. One listed case is that no obligation is secured and no commitment to give value exists. As enacted in Michigan, the same 20 days. | On filing of a termination statement, the financing statement ceases to be effective. This page does not state what a given financing statement changes in a deal. | The secured party causes the secured party of record to send the debtor a termination statement, after the debtor's authenticated demand, in the listed cases. |
| |||
| A financing statement is more than five years old | Under the official text of UCC Article 9, a filed financing statement is effective for five years after the date of filing. As enacted in Michigan, the same. A continuation statement may be filed only within six months before the five-year period expires. On lapse, the statement ceases to be effective and the security interest it perfected becomes unperfected, unless the security interest is perfected otherwise. As enacted in Delaware, a filed financing statement is effective for five years after the date of filing. As enacted in Delaware, on lapse the statement ceases to be effective and the security interest becomes unperfected, unless perfected otherwise. A security interest that becomes unperfected on lapse is deemed never to have been perfected as against a purchaser of the collateral for value. As enacted in Delaware, a continuation statement may be filed only within six months before the five-year period ends. One filed outside that six-month period is ineffective. | A security interest perfected only by a lapsed statement becomes unperfected. A search request can ask the filing office to include lapsed statements. | This page does not state who clears a lapse. |
| A filing appears under a near-match of the seller's name | Under the official text of UCC Article 9, a financing statement that substantially satisfies the filing requirements is effective even with minor errors or omissions, unless they make it seriously misleading. If a search under the debtor's correct name, using the filing office's standard search logic, would disclose a statement that fails sufficiently to give the debtor's name, the name provided does not make the statement seriously misleading. | The statute asks whether a search under the debtor's correct name would disclose the statement. This page does not state more about the deal effect. | This page does not state who clears it. |
| The seller has a COVID-19 EIDL loan | SBA calls a request for a change in ownership or a release of collateral a servicing action, and publishes instructions for it. The requirement letters SBA lists include Release of Collateral request, Subordination request, Assumption request, and Substitution of Collateral request. See the SBA page Manage your EIDL. | A release of collateral or a change in ownership runs through an SBA servicing action with its own requirements. This page does not state which path fits a given deal. | The borrower emails the completed servicing action request to SBA. SBA addresses its instructions to the borrower. |
| A notice of federal tax lien is on file | Under 26 U.S.C. 6323(a), the lien is not valid against a purchaser or a holder of a security interest until the notice is filed. The statute sets where a notice is filed for personal property. | Whether a notice is on file is the point the statute turns on for a purchaser. | Under 26 U.S.C. 6325(a), the Secretary must issue a certificate of release not later than 30 days after the day on which the Secretary finds the liability fully satisfied or legally unenforceable, or accepts a bond. The IRS says it releases the lien within 30 days after the tax debt is paid. Under 6325(b), the Secretary may discharge part of the property in listed cases. One listed case is when the property is sold and, under an agreement with the Secretary, the proceeds are held as a fund subject to the liens and claims of the United States. At the owner's request, the Secretary must issue a certificate of discharge if the owner deposits money equal to the value of the interest of the United States or furnishes an acceptable bond. That rule does not apply if the owner is the person whose unsatisfied liability gave rise to the lien. The IRS says a discharge under 6325(b) is applied for on Form 14135. The IRS asks for the application at least 45 days before the transaction date. Under 6325(f), if a certificate of release is filed in the same office as the notice of lien, it is conclusive that the lien is extinguished. A certificate of discharge filed there is conclusive that the property it covers is discharged from the lien. The lien attaches to discharged property if the person liable for the tax reacquires it after the certificate is issued. |
| A federal case names the seller | PACER provides electronic public access to federal court records. The PACER Case Locator is a national index for district, bankruptcy and appellate courts. PACER says users may conduct nationwide searches to determine whether or not a party is involved in federal litigation. | This page does not state what a federal case changes in a deal. | This page does not state who clears it. |
| |||
| A license does not transfer | One example. As enacted in Michigan, a liquor license, or an interest in one, cannot be transferred from one person to another without the prior approval of the commission under the Michigan Liquor Control Code. A transfer of more than 10% of the outstanding stock of a licensed corporation in one licensing year is considered a transfer requiring prior approval. | In this example, the statute requires prior approval before the license or an interest in it moves. This page does not state the general rule. | In this example, the commission approves the transfer. This page does not state the rule for other licenses or other states. |
For one fictional finding followed from search to closing record, see the worked example: from a search finding to the closing documents.
Send the deal and the finding
The form asks three questions.
- Have you signed the LOI? Yes or no.
- Have the public-record searches been ordered? Yes, no, or not sure.
- What did the search find? UCC financing statement, tax lien notice, court case or judgment, license or permit issue, or nothing yet.
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Who clears a finding
This is general information about how these records work. It is not legal advice for any deal.
- For a financing statement, the secured party causes the secured party of record to send the debtor a termination statement, after the debtor's authenticated demand, in the listed cases.
- The filing office issues a certificate or an admissible record of its search, if requested.
- For a COVID-19 EIDL, the borrower emails the completed servicing action request to SBA.
- For a federal tax lien, the Secretary issues the certificate of release. The IRS says the discharge application is Form 14135.
- This page does not state who clears a court case, or a license issue outside the Michigan liquor example.
Alex Lubyansky leads every engagement, with an associate supporting. See our legal due diligence services.
Where an entity is located under Article 9
- Under the official text of UCC Article 9, a registered organization that is organized under the law of a State is located in that State.
- As enacted in Michigan, the same rule.
- As enacted in Delaware, the same rule.
- As enacted in Michigan and as enacted in Delaware, financing statements for most collateral are filed with the Secretary of State.
- As enacted in Michigan, fixture filings and as-extracted collateral filings go to the office that records mortgages on the related real property.
For more on search scope, see Delaware LLC and multi-state UCC searches and how a UCC lien search works when buying a business.
Reading a UCC search certificate
- Under the official text of UCC Article 9, the report date is set by the filing office. It is not earlier than three business days before the office receives the request.
- Under the official text of UCC Article 9, the report covers financing statements that have not lapsed. It covers lapsed statements only if the request states that it wants them and the filing office maintains a record of them.
- Under the official text of UCC Article 9, the filing office may not remove a debtor's name from the index until one year after the financing statement naming the debtor lapses.
- Under the official text of UCC Article 9, on request the filing office issues a certificate or a record that can be admitted into evidence without extrinsic evidence of its authenticity.
- In Michigan, all search requests go through UCC Online Services. The online portal offers a certified UCC-11 search option.
- As enacted in Michigan, for the Secretary of State filing office, the statute requires a response not later than 2 business days after the office receives the request.
- In Michigan, a termination is submitted to the office where the initial financing statement was submitted. That may be the Michigan Department of State UCC Office or the County Register of Deeds.
Michigan Department of State UCC FAQ read 2026-10-05.
What to bring to the engagement assessment
- The LOI or purchase agreement draft, the structure (asset or equity), and the next deadline.
- The seller's exact legal name, former names, state of organization, and entity type.
- The asset list and the states where assets sit.
- Any search already ordered, the certificate or report, and the filing copies.
- The seller's explanation of any filing, in writing.
- The lender's list of required searches and closing evidence, if the lender has sent one.
- Any restriction on contacting the seller's creditors.
Frequently asked questions
Can a buyer run public-record searches without a lawyer?
Public access exists. PACER provides electronic public access to federal court records. The Michigan Department of State says all UCC search requests must be submitted using UCC Online Services. This page does not state which searches a given deal needs.
Does a UCC financing statement on file mean the debt is still owed?
Under the official text of UCC Article 9, a financing statement is sufficient only if it gives the debtor name, the secured party name, and an indication of the collateral. Separately, within 20 days after an authenticated demand from the debtor, the secured party must cause a termination statement to be sent in listed cases, including when no obligation is secured and no commitment to give value exists.
How current is a UCC search report?
Under the official text of UCC Article 9, a search report covers whether a financing statement is on file on a date and time the filing office specifies. That date is not earlier than three business days before the office receives the request. Michigan and Delaware enacted the same three-business-day limit.
Where is a registered organization located for Article 9 purposes?
As enacted in Delaware, a registered organization that is organized under the law of a State is located in that State. Michigan enacted the same rule. In Delaware, financing statements for most collateral are filed with the office of the Secretary of State. In Michigan, they are filed with the office of secretary of state.
What happens to an old financing statement after five years?
Under the official text of UCC Article 9, a filed financing statement is effective for five years after the date of filing. A continuation statement may be filed only within six months before that period expires. On lapse, the statement ceases to be effective, and the security interest it perfected becomes unperfected unless perfected otherwise. Michigan enacted the same five-year period and the same effect of lapse.
The seller has a COVID-19 EIDL loan. Who sends the collateral release request to SBA?
SBA treats a release of collateral or a change in ownership as a servicing action with specific requirements. The borrower emails the completed servicing action request to SBA. SBA's listed requirement letters include Release of Collateral, Subordination, and Assumption.
How is a federal tax lien released or discharged?
Under 26 U.S.C. 6325(a), the Secretary must issue a certificate of release not later than 30 days after the day on which the Secretary finds the liability fully satisfied or legally unenforceable, or accepts a bond. The IRS says it releases the lien within 30 days after the tax debt is paid. The IRS says a discharge under 6325(b) is applied for on Form 14135. The IRS asks for the discharge application at least 45 days before the transaction date.
Does a judgment lien in Michigan attach to business equipment?
The Michigan Judgment Lien Act defines a judgment lien as an encumbrance against the debtor's interest in real property. As enacted in Michigan, a judgment lien attaches when a notice of judgment lien is recorded with the register of deeds for the county where the property is located. This page does not state a rule for personal property.
Related resources
M&A due diligence process guide
The diligence process from LOI to closing.
National due diligence checklist
The item list by category.
Post-LOI checklist
The first 48 hours after signing.
Due diligence red flags
Warning signs to look for when buying a business.
Legal due diligence services
How Acquisition Stars supports buyer diligence.
Worked example
One fictional finding, from search hit to closing record.
UCC lien search
How a UCC lien search works when buying a business.
UCC lien found after the LOI
A closing checklist.
Delaware LLC and multi-state UCC searches
Search scope for entities organized in another state.
Seller has an SBA EIDL loan
Resolving the UCC lien.
License transfer and successor liability
Licensed businesses in an acquisition.
Judgment liens in business acquisitions
Judgment lien searches in a purchase.
Entity good standing
Entity good standing in a business acquisition.
Acquisition Stars helps buyers read public-record findings and carry them into the purchase documents.
Legal counsel for this topic
Acquisition Stars handles M&A transactions nationwide and works with securities counsel on securities matters. Alex Lubyansky leads the M&A engagements.
Closest fit for this topic Due diligence attorney Legal due diligence for acquisitions and divestitures.