We believe that you should treat the business’s former name as a fictitious name, because the business no longer exists under that name. Under the Uniform Commercial Code (UCC) fictitious payee rule, if “the person identified as payee of an instrument is a fictitious person,” then the check can be indorsed “by any person in the name of the payee stated in the instrument.” 810 ILCS 5/3-404(b). (The official UCC commentary makes it clear that this rule applies to a check payee that is nonexistent, as in this situation. Comment 2, UCC Section 3-109 (“an instrument stating that it is payable to an identified person such as ‘ABC Corporation’ if ABC Corporation is a nonexistent company . . . is governed by Section 3-404(b)”).) It is up to your institution to decide how the business should execute the endorsements before depositing the checks, provided that the endorsements include the former business’s name (satisfying the requirement that the endorsement be “in the name of the payee stated in the instrument”).

This rule protects your bank from liability if your customer deposits a forged check made out to the business’s former name. However, there is an exception if your institution does not exercise “ordinary care” in paying or taking the check. 810 ILCS 5/3-404(d). In order to demonstrate your ordinary care, we believe it would be a best practice to request the business’s approved Articles of Amendment from the Secretary of State that made the change in its name.