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Uniform Commercial Code

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If you are conducting business transactions outside of your state, such as borrowing money, leasing equipments, establishing contracts and selling goods, you need to comply with the Uniform Commercial Code (UCC). In this section, you&rsquo;ll learn more about the entities that recommend UCC requirements, and how your business has to comply when filing financial statements and securing loans through proper lien processes.</p>
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The Uniform Commercial Code (UCC) is a comprehensive set of laws governing commercial transactions between U.S. states and territories. These transactions include borrowing money, leases, contracts, and the sale of goods.</p>
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UCC is not a federal law, but a product of the National Conference of Commissioners on Uniform State Laws and the American Law Institute. Both of these organizations are private entities that recommend the adopting of UCC by state governments. State legislatures may either adopt UCC verbatim or may modify it to meet the state&#39;s needs. Once a state&#39;s legislature adopts and enacts UCC, it becomes a state law and is codified in the state&#39;s statutes. All 50 states and territories have enacted some version of UCC.</p>

The most important UCC regulation affecting small businesses is the UCC-1 form, also known as a Financing Statement. When a lender secures interest in a borrower's personal property used as collateral, the lender files form UCC-1 with the state's Secretary of State Office (or equivalent state records office). Lenders can also file UCC-1 forms in multiple states if a borrower has business locations in multiple states, or moves from one state to another.

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