Also known as: financing statements · UCC-1 · UCC financing statement
Written by attorneys · grounded in primary & secondary sources — see below
A document filed in the public records to notify third parties of a secured party's security interest in collateral. Filing is required to perfect most security interests and agricultural liens.
Frederick Ferguson borrows from Foxfire Biotech and grants a security interest in his inventory. Foxfire Biotech files a financing statement identifying the debtor, secured party, and collateral. The filing perfects the security interest against later creditors and the bankruptcy trustee.
Floyd Franklin buys a truck from Flagship Logistics on credit and grants a security interest. Flagship Logistics files a financing statement instead of noting its interest on the certificate of title. The filing does not perfect the security interest because state certificate-of-title law governs.
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The filing provides public notice to third parties that a secured party claims an interest in the debtor's collateral. This notice allows later creditors and buyers to discover the prior interest and protects the secured party's priority.
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Filing is unnecessary when the secured party takes possession or control of the collateral or when another statute such as a certificate-of-title law governs perfection. Automatic perfection also applies to certain purchase-money security interests in consumer goods.
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A security agreement creates the security interest and must be authenticated by the debtor. A financing statement is only a notice document filed to perfect the interest against third parties and need not contain granting language.
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The statement is filed in the office of the secretary of state in the state where the debtor is located. For individuals this is the state of the principal residence. For registered organizations it is the state of incorporation.
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