UCC Filing Information
A UCC filing, formally called a UCC-1 financing statement, is a legal form filed with the state to establish a lender's priority claim on a borrower's business assets. When a business takes out a loan secured by its equipment, inventory, accounts receivable, or other personal property, the lender files a UCC-1 to publicly record its security interest. This filing protects the lender's position if the business defaults or sells the collateral. In a business sale, the buyer's attorney searches for existing UCC filings to identify all liens on the business's assets and ensure they are released or satisfied at closing.
Florida Legal Definition
In Florida, UCC filings are governed by Florida Statutes Chapter 679 (which adopts UCC Article 9 - Secured Transactions). UCC-1 financing statements are filed with the Florida Secured Transaction Registry maintained by the Florida Department of State, Division of Corporations. The initial filing is effective for five years and must be renewed by filing a continuation statement (UCC-3) before expiration. Florida Statutes §679.5011 through §679.5181 govern the filing process, including the required content, filing office, and the effect of filing on priority among competing creditors.
How It's Used in Practice
In practice, attorneys conduct UCC searches as a standard part of due diligence in business acquisitions. The search reveals all security interests filed against the seller's personal property, which must be addressed before closing. Typically, the seller uses a portion of the sale proceeds to pay off secured debts, and the lender files a UCC-3 termination statement to release the lien. Failure to clear UCC liens before closing can result in the buyer acquiring assets subject to the prior lender's security interest, potentially exposing them to loss of the purchased assets.
Key Takeaways
- UCC filings (UCC-1) publicly record a lender's security interest in business assets.
- Filed with the Florida Department of State under Florida Statutes Chapter 679.
- Effective for five years; must be renewed with a UCC-3 continuation statement.
- Buyers must search for UCC filings during due diligence to identify all liens.
- All UCC liens should be terminated at or before closing of a business sale.
Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney–client relationship with Barnes Walker, Goethe, Perron, Shea & Johnson, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.
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