UCC-1 Filing Requirement Checker

A UCC-1 financing statement is a legal document filed with the state (usually the California Secretary of State) to perfect a security interest in personal property. The filing provides public notice that a creditor has a security interest in the debtor's collateral and establishes priority among competing creditors. Under Cal. Com. Code §9501-9516, a UCC-1 filing creates a record that gives the secured creditor priority over later creditors and improves the creditor's position relative to the debtor's bankruptcy trustee.

UCC-1 filing is required to perfect most security interests in personal property. However, some collateral types can be perfected through possession, control, or automatic perfection. For example, security interests in instruments and negotiable documents can be perfected by possession rather than filing. PMSI in consumer goods are automatically perfected without filing. Investment property and deposit accounts can be perfected through control. The collateral type and circumstances determine whether filing is required.

For most collateral (equipment, inventory, accounts, intangibles), file with the California Secretary of State. However, special filing locations apply to certain collateral:

• Fixtures: File with both the California Secretary of State AND the county recorder in the county where the property is located
• Timber to be cut: File with the county recorder in the county where the timber is located
• As-extracted collateral (oil, gas, minerals): File with the county recorder in the county where extraction occurs

The California Secretary of State maintains a UCC search database that is searchable online at www.sos.ca.gov.

Under Cal. Com. Code §9515, a UCC-1 filing is effective for five years from the filing date. If the security interest is still in effect when the filing expires, you must file a continuation statement at least six months before expiration to maintain perfection. A continuation statement extends protection for an additional five years from the expiration date of the original filing. If you fail to file a timely continuation statement, the filing lapses and the security interest becomes unperfected as of the lapse date, which can seriously harm the creditor's priority and collection rights.

A Purchase Money Security Interest (PMSI) is a security interest created to the extent that the creditor provides funds that the debtor uses to acquire the collateral. For example, if a lender finances the debtor's purchase of equipment and takes a security interest in that equipment, the lender has a PMSI. Under Cal. Com. Code §9324, PMSI holders receive super-priority status under certain circumstances: (1) PMSI in equipment has priority over earlier-filed secured parties if perfected within 10 days of the debtor obtaining possession; (2) PMSI in inventory and livestock has super-priority if perfected before the debtor obtains possession and advance notice is sent to earlier-filed secured parties; (3) PMSI in consumer goods is automatically perfected without filing. PMSI super-priority significantly enhances the creditor's collection position.

Several collateral types can be perfected through methods other than UCC-1 filing:

• Possession: Instruments, tangible documents, tangible chattel paper, money, and negotiable documents can be perfected by taking physical possession under §9313
• Control: Deposit accounts, investment property, and electronic chattel paper can be perfected through control (§9314-9318)
• Automatic perfection: PMSI in consumer goods are automatically perfected upon attachment without any filing or possession (§9309(1))
• Statutory liens: Certain creditors (mechanics, warehousemen) may have statutory perfected interests in specific collateral without filing

The availability of alternative perfection methods depends on the collateral type and the creditor's interest.