What is a Uniform Commercial Code Filing?

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The uniform commercial code (UCC) is a legal template for states to enact that governs commercial activities within a state and over state lines. States may make revisions to the UCC template or adopt the template as-is. The UCC is not federal legislation and according to business.gov has been enacted by all 50 states in the union. A UCC filing is the act of filing UCC paperwork with the individual secretary of state or similar state body.

UCC Filings

The UCC covers all commercial transactions including sales, leases, private financing arrangements and issues of asset title transfer. UCC filings may be made against property to create a lien to secure private financing.

Role of Secretary of State

The office of the secretary of state, or department, is responsible for overseeing UCC filings in each state. Many, if not all, states provide online access to UCC filing forms and information.

Purpose of a UCC Filing

A UCC filing is typically requested when one party is privately financing a transaction between itself and another party. A UCC filing is the only way to publicly record a pledge of security or collateral against private financing.

The UCC-1 Form

Perhaps the most common usage of the UCC is when a lender files a UCC-1 form when issuing a business loan. The UCC-1 form gives the lender the first lien position against all assets of the business should the loan be defaulted upon. When a loan is paid off the business should request that the lender remove the lien.

Significance of the UCC

The UCC is a marvel of modern law. It is a code established by public organizations that is adopted universally by all 50 states. It provides small businesses with a clear and concise set of laws that governs all commercial transactions.