UCC-1 Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of UCC-1, written in plain English, along with examples of how it is used.
What is UCC-1?
(n). UCC-1 is the form used under Uniform Commercial Code provisions to take a loan on the security of personnel properties like equipments and plants etc.
History and Meaning of UCC-1
The UCC-1 form or Uniform Commercial Code-1 is a legal document filed by creditors or lenders with the secretary of state office in order to provide public notice to all other interested parties that a secured transaction has occurred or is taking place between the creditor and debtor. The form is used in commercial transactions which involve personal property as collateral.
The UCC-1 law was created in 1952 by the National Conference of Commissioners on Uniform State Laws in the United States to standardize commercial transactions throughout the country. This law has been adopted by all 50 states in America, Washington D.C. and United States territories. It is used as a legal framework to govern commercial transactions for the sale of goods, leases, contracts, and secured transactions.
The UCC-1 form is used to protect the lender's interest in the personal property of a borrower for various loans such as car loans, business loans, and commercial property loans. Once the form has been filed, the creditor or lender has a security interest in the property until the debt is repaid or settled.
Examples of UCC-1
A business owner borrows money from a bank to purchase new equipment and uses the equipment as collateral. The bank files a UCC-1 form to take a security interest in the equipment.
A car buyer takes out a loan to purchase a car and the lender files a UCC-1 form with the state to secure their interest in the car until the loan is fully paid.
A company uses their inventory as collateral to secure a loan from a bank. The bank files a UCC-1 form to have a priority claim if the company defaults on the loan.
Legal Terms Similar to UCC-1
UCC-2: File a UCC-2 form for selling, leasing or financing goods with an agreement that the buyer or lessee will make a payment over time.
UCC-3: File a UCC-3 form to amend an existing UCC-1 or UCC-2 filing or to terminate or discharge a security interest.
Secured Transaction: A transaction where the borrower or debtor pledges collateral as security for the loan or debt.