How do I check for liens on business assets?

Assets that look owned outright can still carry a registered claim against them. A lender who financed equipment, a supplier who sold on credit terms, or a judgment creditor can all register an interest that survives a change of ownership if it is not dealt with at closing.

The core search

A personal property security search, run against the exact legal name of the corporation and any relevant trade name, will show registered security interests over equipment, inventory and other movable assets. Search well before closing, not the week of, because clearing a registration that turns up unexpectedly takes time the seller may not have budgeted for.

Where financed equipment fits in

Equipment bought with the help of a government-backed loan program, a lease-to-own arrangement, or ordinary equipment financing will typically show a registered interest in favour of the lender until the loan is repaid. That is not unusual and not necessarily a problem — but it means the payout amount and discharge process need to be confirmed and built into the closing mechanics, not discovered afterward.

Judgment and execution searches

• Search for registered judgments against the corporation and, where relevant, the individual seller
• A judgment can attach to business assets even without a specific equipment-level registration
• Ask the seller directly about any pending litigation that could result in a judgment before closing
• Confirm how and when any existing registrations will be discharged

What a clean search actually confirms

A clear search at the time you run it tells you the position on that date — not that it will stay clear until closing. Build a fresh search close to the closing date into the transaction itself, and make discharge of anything registered a condition you confirm before funds move, not an assumption you make afterward.