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UCC Basics 101
Introduction The following information is covered in this presentation:     -Creation & evolution of the UCC     -What do...
Creation of the UCC Created in 1952, the Uniform Commercial Code (UCC)  consists of uniform acts coordinating the sale of...
Debtor & Secured Party The code was written to govern security interests in a way  that protects potential creditors & ot...
What does perfection do? Allows a company or individual (known as the secured  party) to obtain an enforceable security i...
Risk & Reward Because of the public notice, the secured party does not  need to take possession of the collateral & the d...
Revised Article 9 Effective in most states on July 1, 2001 Transition ended in most states on June 30, 2006. Significan...
Proposed revisions to UCC RA 9 Proposed revisions to the Uniform Commercial Code Article 9 clarify confusion regarding ho...
Proposed revisions to the Uniform  Commercial Code Article 9-503 For registered entities: The proposed revisions were  de...
Proposed revisions to theUniform Commercial Code Article             9-503 For individual debtors, there are two options ...
What are the General rules forwhere to file? Registered Entities located in state of organization Non-Registered Entitie...
When General rules don’t apply. Location of the “Collateral” controls in these  situations:   Fixture Filings   Timber ...
What to file? The National Forms are now, by statute, the recognized  standard:  1. UCC1: Financing statement  2. UCC3: A...
Financing Statement:UCC1   The financing statement is the primary record for    providing notice of a security interest. ...
Amendment: UCC3   The UCC3 allows you to amend the UCC1 in any of the    following:      1.   Amend or replace or add deb...
Correction Statement:UCC5 The correction statement was not intended to have any  effect on the record. You can’t “undo” w...
Performing Searches Before accepting a security interest, a lender will want to  determine if there are existing liens. H...
Where should you search? For a registered company, the search should begin in the  state of organization. For an unregis...
Types of searches you can  conduct with United Corporate          Services, Inc. UCC Liens Federal Tax Liens State Tax ...
Information needed to start asearch….. The Debtor’s Correct Legal Name     Must match what listed as a public record    ...
How United Corporate Services, Inc. can help you with your UCC              project United Corporate Services provides se...
Points to remember Security interest is a tool that lenders use to manage risk in  commercial transaction. The most comm...
Where can I get more information? Email getanswers@unitedcorporate.com or contact a Project  Manager directly. Request a...
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UCC Basics 101-United Corporate Services, Inc.

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United Corporate Services provides search and filing results tailored specifically to our clients’ needs. Reports sorted by individual debtor per page, or a more comprehensive summary report of all search results on one page, both are easily provided in either .pdf format for secure closings or in Excel format for easy manipulation into your existing closing binder. United Corporate Services files and searches in over 3,000 jurisdictions in the U.S. Understanding their unique requirements ensures accurate processing of all your UCC transactions. Revised Article 9 is once again being “revised,” and we have done the legwork necessary to walk with you through your projects to ensure they are completed timely and accurately.

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UCC Basics 101-United Corporate Services, Inc.

  1. 1. UCC Basics 101
  2. 2. Introduction The following information is covered in this presentation: -Creation & evolution of the UCC -What does perfection do? -Upcoming revisions to RA9 -Where & what forms to file? -Types of Searches to perform -Contact UCS
  3. 3. Creation of the UCC Created in 1952, the Uniform Commercial Code (UCC) consists of uniform acts coordinating the sale of goods and other commercial transactions throughout the United States.
  4. 4. Debtor & Secured Party The code was written to govern security interests in a way that protects potential creditors & other interested parties. To do this, the code requires a lender (known as a secured party) to take certain actions before it can enforce the security interest against the claims of third parties. This is known as perfection.
  5. 5. What does perfection do? Allows a company or individual (known as the secured party) to obtain an enforceable security interest in assets pledged by the borrower (known as the debtor) when taking out a loan. The most common method of perfection is to file a public notice of the security interest.
  6. 6. Risk & Reward Because of the public notice, the secured party does not need to take possession of the collateral & the debtor is free to continue to use it to repay their obligation. Once the debtor has given the secured party a special claim on its assets, that collateral is no longer available to satisfy the claims of the other creditors. By granting a security interest it makes credit less expensive and more available to the debtor.
  7. 7. Revised Article 9 Effective in most states on July 1, 2001 Transition ended in most states on June 30, 2006. Significant Changes:  Filing Location – File where the debtor is located not the collateral  Standard National Form  Elimination of signatures  Exact debtor names  Generic Collateral Descriptions allowed
  8. 8. Proposed revisions to UCC RA 9 Proposed revisions to the Uniform Commercial Code Article 9 clarify confusion regarding how a debtor’s name should be listed on financing statements.  Although these changes are not drastic, they are an important reminder that lenders should exercise caution when identifying the debtor on financing statements.  The Uniform Law Commission proposed these changes and has recommended a nationwide effective date of July 1, 2013 with a five year transition period.
  9. 9. Proposed revisions to the Uniform Commercial Code Article 9-503 For registered entities: The proposed revisions were designed to make it easier for lenders to determine the correct name of entities registered with a particular state. That means the correct name for the financing statement is the name on the “public record” most recently filed in the jurisdiction in which the entity is organized.
  10. 10. Proposed revisions to theUniform Commercial Code Article 9-503 For individual debtors, there are two options that states may adopt:   (1) the “only if” option:  If the debtor has a driver’s license or other state issued identification that has not expired, the financing statement may use the name on the driver’s license or other state issued identification.  If, and only if, the debtor does not have a driver’s license or other state issued identification, the financing statement may use the debtor’s first personal name and surname;  (2) the “safe harbor” option:  The financing statement sufficiently names the debtor by providing (a) the debtor’s individual name as determined by state law, (b) the debtor’s surname and first personal name, or (c) the name on an unexpired driver’s license or other state issued identification. 
  11. 11. What are the General rules forwhere to file? Registered Entities located in state of organization Non-Registered Entities located in state of chief executive office Individuals located in state of residence Foreign debtors deemed to be located in D.C.
  12. 12. When General rules don’t apply. Location of the “Collateral” controls in these situations:  Fixture Filings  Timber to be cut filings  As-extracted Collateral filings  Agricultural lien filings (RA 9-301 and 9-302)
  13. 13. What to file? The National Forms are now, by statute, the recognized standard: 1. UCC1: Financing statement 2. UCC3: Amendment 3. UCC5: Correction statement 4. UCC11: Search request States have no need to create and maintain State Specific Forms
  14. 14. Financing Statement:UCC1 The financing statement is the primary record for providing notice of a security interest. It requires the following information to be effective: 1. Debtor’s legal name, address, state of organization, org. id if applicable 2. Secured Party’s name & address 3. Collateral description 4. If a fixture, you must provide a land description
  15. 15. Amendment: UCC3 The UCC3 allows you to amend the UCC1 in any of the following: 1. Amend or replace or add debtor or secured party 2. Continue the effectiveness of the lien 3. Assign the lien to a different debtor or secured party 4. Amend the collateral description 5. Terminate the lien
  16. 16. Correction Statement:UCC5 The correction statement was not intended to have any effect on the record. You can’t “undo” what was already filed. Instead, the form allows a party to put comments in the record when the party believes the UCC contained inaccuracies or was wrongfully filed.
  17. 17. Performing Searches Before accepting a security interest, a lender will want to determine if there are existing liens. Hence, a UCC search is conducted. Once the search is complete, a potential creditor can make arrangements to address any added risk.
  18. 18. Where should you search? For a registered company, the search should begin in the state of organization. For an unregistered company, the search begins with the location of its place of business. If the debtor has more than one place of business then search where the chief executive office is located. For International entities the search is conducted with D.C. Register of Deeds.
  19. 19. Types of searches you can conduct with United Corporate Services, Inc. UCC Liens Federal Tax Liens State Tax Liens Judgment Liens Litigation Searches Property Searches Title Searches
  20. 20. Information needed to start asearch….. The Debtor’s Correct Legal Name  Must match what listed as a public record  State or county where debtor is registered The Debtor’s Prior Names  This Is Strongly Recommended Since Filings Under Prior Names Usually Still Remain Effective If a fixture, judgment, state tax lien requires the address
  21. 21. How United Corporate Services, Inc. can help you with your UCC project United Corporate Services provides search and filing results tailored specifically to our clients’ needs. Reports sorted by individual debtor per page, or a more comprehensive summary report of all search results on one page, both are easily provided in either .pdf format for secure closings or in Excel format for easy manipulation into your existing closing binder. United Corporate Services files and searches in over 3,000 jurisdictions in the U.S.
  22. 22. Points to remember Security interest is a tool that lenders use to manage risk in commercial transaction. The most common method of perfection is to file a public notice of security interest.(UCC1) Make sure the names recorded are correct. A UCC3 can amend or terminate a UCC1. UCC searches reveal existing liens and can determine the relationship between borrower and lender.
  23. 23. Where can I get more information? Email getanswers@unitedcorporate.com or contact a Project Manager directly. Request a username and password for UCS Connect at r equestpassword@unitedcorporate.com Visit UCC Services at www.unitedcorporate.com

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