What is a UCC Filing?
UCC stands for Universal Commercial Code, a group of acts related to sales and commercial transactions that have been adopted as law in all 50 states. It was established when it became clear that the variations in state laws were posing challenges to businesses and it was necessary to standardize the laws for commercial transactions.
A UCC filing refers to the UCC-1 Financing Statement, a legal document that a lender or creditor files with the secretary of state when they have a security interest in the personal or business property of a debtor.
The Incorporators works with many law firms and and lenders to complete UCC filings in the state of Delaware.
Why do lenders do UCC Filings?
When a business is approved for secured financing, the lender or creditor files a UCC-1 Financing Statement with the secretary of state in the state where the entity is registered.
It gives notice that the lender has an interest, or lien, against the asset being used by a business to secure the financing. Should the business fail to repay the debt, the lender is entitled to the asset.
What does a UCC filing mean?
The lender acquires a lien on assets of the business, such as equipment, inventory, receivables, etc., which serve as collateral until the debt owed by the business is discharged.
A UCC Filing provides protection to the lender so that if the debt is not repaid, they would take possession of a valuable asset.
What is the purpose of a UCC search?
A UCC Search is generally conducted when a lender or other business management related interest wants to know if the assets of a business are owed as a collateral for a debt. If the assets are already owed as collateral on a previous debt, it should show up in the UCC search results. This protects the lender by ensuring that the same assets are not used as collateral for multiple debts.
In Delaware, UCC Searches are only able to be completed by a Delaware Authorized Searcher. Any search performed by a Delaware Authorized Searcher are certified and obtained directly from Delaware’s UCC Information System.
The Incorporators Ltd. is a Delaware Authorized Searcher. We are able to provide UCC Searches and Filings and have direct access to the Delaware UCC Information System. If you'd like to request UCC Services, please complete the form found here.
Delaware has a high number of UCC Filings simply because it is the business home to many entities. Did you know that Delaware is home to over 1,000,000 entities and over 66% of Fortune 500 companies? Delaware is considered one of the most business friendly states. Learn more about why many companies choose Delaware as there business home here.
UCC filings are completed in the state where the entity is formed and as such, Delaware has a high number of them.
How much does a Delaware UCC filing cost?
The cost of a UCC filing in Delaware is dependent on a number of factors, including the number of pages the document contains, the number of debtor names on the UCC filing statement, and other variables. If you'd like a quote for your UCC filing, please complete our UCC services request form here.
How much does a Delaware UCC Search cost?
We are happy to help you with your UCC search needs and can provide a quote quickly. Please complete our request form and we'll be in touch shortly with further details.
Do you have additional questions about UCC filings or UCC searches? We're here to help! Give us a call at 800-223-3928.