KRIS W. KOBACH Secretary of State |
![]() STATE OF KANSAS |
UCC Definitions
Acknowledgment Copy - The document is returned to the customer after
it has been filed. Customers will not receive an acknowledgment unless they
complete box "B" of the form even if they send a self addressed
envelope. The acknowledgment copy provides evidence as to who filed the document
and what information was contained in the filing.
Acknowledgment Letter - A letter is sent with each filed document stating
how the document is entered into the filing officer's index system. The filing
party should examine this information carefully to make sure the names, addresses
and lapse information were entered correctly.
Addendum - Both the UCC financing Statement and UCC financing statement
amendment forms include an addendum if additional information is necessary.
Filers may attach additional information to the filing, but only information
provided in the appropriate fields of the financing statement, amendment or
addendum will be indexed.
Administrative Rules - Kansas law requires the Secretary of State's
Office to develop and maintain administrative rules to implement the law. They can be found in the
Kansas Administrative Regulations beginning with KAR 7-17-1.
See Kansas Administrative Regulation Index for more details.
Agister's Lien - . A person who leases his land for pasturing has a
lien upon all livestock pasturing on the land for the payment of rent. The
person files notice of the lien with the Register of Deeds. The lien may be
executed by selling the livestock at a public sale after filing notice of
the lien. K.S.A. 58-222
Agricultural Input lien - State law provides an agricultural supplier
a security interest in the product created by the input from the supplier.
The supplier's interest takes priority over a lender's (bank) security interest.
The policy behind this law is to encourage suppliers to extend credit for
supplies necessary for the buyer to plant crops, and in the case of livestock,
raise livestock. (Livestock production input supplier means the supplier that
provides feed or labor and not merely grazing land. Confinement feeders or
landowners, i.e. pasture lands, are covered by statutory liens in K.S.A 58-207
and 58-220.)
Amendment - The term amendment is a broad term meaning all filings
that affect the initial financing statement. Besides an amendment to information
on the financing statement, the term includes termination, continuation, assignment,
and release.
Article Nine - The uniform commercial code (UCC) is a body of law
created by the uniform law commission to govern commercial transactions. The
law is divided into chapters called "articles." Article 9 is the
chapter covering secured transactions. All US states have adopted this article,
but most states have amended the article in some fashion, so the law is not
completely uniform from state to state.
Assignee - The secured party that is given all or part of the rights
to collateral in a financing statement by an assignment.
Assignment - A secured party may give all or part of the rights to
the collateral in a financing statement to another secured party. As an example,
a bank might sell a loan to another bank.
Assignor - The secured party that assigned all or part of its rights
to a financing statement in an assignment.
Auto Loan - In Kansas, a car purchased by an
individual is not subject to article nine filings. Cars that are held by a
business may be considered inventory and would be subject to UCC requirements.
Bailee/Bailor - The Uniform Commercial Code covers business relationships
in addition to Debtor/Secured Party. The UCC 1 financing statement form allows
filing parties to designate alternate relationships, such as bailee/bailor,
in box 5.
Bailee's Lien - A bailee is defined by Kansas statute as a forwarding
merchant, warehouse keeper, state, express or railway company, hotelkeeper,
carrier or other bailee. A bailee has a lien upon goods in the possession
of the bailee and may sell the goods at public auction to execute on the lien.
Notice of the sale must be given, either by sending written notice to the
owner, publishing the notice, or posting the notice. Copies of the notice
and proof of the publication must be filed with the county clerk's office.
K.S.A. 58-208
et seq.
Bankruptcy - Federal law allows a debtor to be released of the obligation
to repay certain debts. The Secretary of State's Office does not file bankruptcies
in the UCC filing system. Bankruptcies are recorded with the U.S. Bankruptcy
Court.
Bogus Filings - The UCC filing system is often used by anti- government
/ anti-tax groups as a method to harm public officials or other individuals,
or to perpetuate fraud. Filing offices generally see two types of filings:
1) Listing a public official as the debtor. This is often an attempt to harm the person's credit.
2) Listing an individual as both the debtor and the secured party or designating the person as a transmitting utility. This is a convoluted, nonsensical attempt to defraud the government.
Because the filing officer's duties are strictly ministerial,
bogus documents are accepted and filed. In some cases the filing office might
alert either the Kansas Bureau of Investigation or other agencies of the filing.
A debtor who feels they have been harmed by an unauthorized filing should consult
the Expedited Determination of Validity of Lien Act. (58-4301).
Car Loan - See Auto Loan
Central Filing System - See Food Security
Act
Check Digit - A check digit (CD) is a number mathematically derived
from the values of digits or characters, which identifies a record. It uses
a numbering method that is designed to automatically catch common errors in
numbers such as transposition or substitution errors.
A typical single digit check number scheme can be up to 90% effective in catching
erroneous filing numbers. The following computations would be used for a given
filing number.
Filing number: 98-123456
Step 1 - Assign weights to each digit and multiply each digit by its assigned
weight.
9 8 1 2 3 4 5 6
1 2 1 2 1 2 1 2
9 16 1 4 3 8 5 12
Step 2 - Total the values derived in step 1
9 + 16 + 1 + 4 + 3 + 8 + 5 + 12 = 58
Step 3 - Divide the sum in step 2 by 10 and use the remainder as the check digit (Visual Basic Mod function returns the remainder, i.e., "58 mod 10")
58 / 10 = 5 with 8 remainder
Check Digit = 8
Step 4 - Append the check digit to the filing number
98-123456-8
Cleaning Establishment Lien - A person who cleans, presses or repairs
garments, clothing or household goods has a lien on the goods for payment
of the work done. The lien may be executed by selling the goods after giving
notice to the owner. K.S.A. 58-222
Collateral - The property subject to the security interest. If the
debtor defaults on the loan, the collateral is the property that the debtor
has agreed to turn over to the secured party. The secured party will sell
the property and hopefully recover the balance of the loan amount.
The presence of collateral is what differentiates a secured loan from an unsecured
loan. An example of an unsecured loan would be the use of a credit card.
Consignee/Consignor - The Uniform Commercial Code covers business relationships
in addition to Debtor/Secured Party. The UCC 1 financing statement form allows
filing parties to designate an alternative relationship, such as consignee/consignor,
in box 5.
Continuation - An amendment that continues the effectiveness of a financing
statement for an additional five years. Continuations may only be filed in
the six months prior to the filings lapse date.
Copy Request - A person may request a search report with or without
copies. An information search request lists the file date, file number, debtor
and secured party. A copy request is a search that lists the above information
and is accompanied by copies of the actual filings that contain collateral
information.
Correction Statement - A document that is filed by a party who believes
that a record on file is inaccurate or was wrongfully filed.
This filing has no legal effect. The form should not be confused with an amendment
which does legally affect the record.
This should not be confused with a filing officer correction statement.
Creditor - The individual or organization that extends credit and is
owed money.
DBA - See Trade Name
Debtor - The person or organization who owes payment to the secured
party.
Debtor Name - The UCC requires filers to provide the correct debtor
name. The requirements are spelled out in 84-9-503.
If the debtor is a registered organization, the financing statement
must provide the name of the debtor exactly as it is on file with the Secretary
of State's Office.
If the debtor is a decedent's estate, the financing statement must
provide the name of the decedent and indicate that the debtor is an estate.
If the debtor is a trust or a trustee acting with respect to
property held the financing statement must provide the name specified for
the trust in its organic documents or, if no name is specified, provides the
name of the settlor and additional information sufficient to distinguish the
debtor from other trusts having one or more of the same settlors; and the
financing statement must indicate, in the debtor's name or otherwise, that
the debtor is a trust or is a trustee acting with respect to property held
in trust; and
If the debtors are married debtors jointly engaged in business and
it is unclear whether a partnership exists, the financing statement may be
filed in the names of the individual debtors;
If the debtor does not have a name, the financing statement must provide
the names of the partners, members, associates, or other persons comprising
the debtor.
Doing Business As - See Trade Name
Employer Identification Number (EIN) - See Social
Security Number
Electronic Filing - A method of filing that allows an individual to
file financing statements from the person's own computer via electronic access
to the state database.
Expedited Determination of Validity of Lien - (58-4301)
Any person who believes that a filed document purporting to create a lien
or claim against the person's real or personal property is fraudulent may
complete and file with the district court of the county in which such lien
or claim has been filed, or with the district court of the county in which
the property or the rights appertaining thereto is situated, a motion for
judicial review. The motion must be supported by an affidavit setting forth
a concise statement of the facts upon which the claim for relief is based.
The court may rule on the motion in an ex parte hearing.
Fees -
a. Paper filings - $20.00 plus $1.00 for each page after 10
b. Electronic filings - $8.00 except Terminations which are $5.00
c. Searches performed by our office - $20.00 plus copy fees
d. Electronic searches - $10.00 . plus copy fees
e. Copy fees - $1.00 per page
f. Fax fee - $2.00 for 1st page, $1.00 for each additional
Filing Officer Correction - An amendment filed by the filing officer
when the filing officer makes an error in filing a document. The
form describes the inaccuracy or mistake on the part of the filing officer
and the administrative action taken as a result of the inaccuracy or mistake.
The document is considered filed on the date the correction was made.
This should not be confused with Correction Statement.
Financing Statement . A record or records composed of an initial financing
statement and any filed record relating to the initial financing statement.
Fixture . Goods that have become so related to particular real property
that a reasonable person would assume they were part of the property. Examples
of fixtures might include a ceiling fan, furnace, etc.
Food Security Act . (7 U.S.C. 1631)
Federal law providing that a buyer in the ordinary course buying farm products
from a person engaged in farming operations takes free of a security interest
even if it is perfected and even if the buyer knows of the existence of the
security agreement, unless the buyer has received written notice of the security
interest within a year before the sale. The buyer can avoid the security interest
by paying the obligation owed to the secured party as described in the notice.
The federal act has two methods of notifying the buyer; prenotification
and central filing. Kansas uses prenotification.
1. Prenotification: Lender is responsible for notifying potential buyers that a lender has a security interest in the farm product. The buyer must pay the obligation owed to the lender before taking the product. Kansas follows this method.
2. Central filing system: Lender files an EFS (effective financing statement) with the Secretary of State. The list is distributed regularly to buyers who are registered with the Secretary of State. Lender takes priority over the buyer, unless the buyer pays the lender the obligation as listed on the EFS.
Nothing is filed with our office.
Formerly Known As - The former name of a secured party or debtor.
Forms - Upon adoption of Revised Article Nine, the Kansas Secretary
of State adopted the use of the national financing statement and amendment
forms, which are contained in statutory law. These forms can be found on the
Kansas Secretary of State website. www.sos.ks.gov
Information Request - A search report that lists the file date, file
number, debtor, and secured party.
In-Lieu Filings - When revised article 9 took effect July 1, 2001 it
changed the location where some financing statements are filed.
Financing statements covering all goods except fixtures, timber and mineral
interests are now filed with the Secretary of State. The place of filing also
changed from the location of the collateral to the location of the debtor.
To continue the effectiveness of a financing statement that must be filed
with our office under the new law but filed somewhere else under the old law,
the secured party must file an "in-lieu filing." (so called because
the financing statement is filed "in lieu" of a continuation statement).
The secured party must file a new UCC 1 financing statement form that includes
a reference to the old filing with a statement that the old filing continues
to be effective under the new law. This information is placed in the collateral
box (Box 4).
The language should read essentially, "This pre-effective document is
filed pursuant to KSA 84-9-706
and remains effective." The original document was filed in __________
(example: Shawnee County Register of Deeds).
Original financing statement number _______ Dated _________
Continuation file number _________ Dated ________
A description of the collateral must also be included.
Internal Revenue Service
Filings (79-2613
et seq) . Some tax liens and other federal lien notices are filed with either
the Secretary of State or the Register of Deeds (see 79-2614
for place of filing).
IRS - See Internal Revenue
Service Filings
Jurisdiction of Organization - The 2-character U.S. Postal identification
of the state of organization if the organization is one in the United States
(e.g., CA, KS, FL).
Lapse Date - The date the effectiveness of the financing statement
expires. A filed financing statement is effective for a period of five years
from the date of filing, but the effectiveness of the financing statement
lapses upon the expiration of the five year period unless a continuation
statement is filed prior to the lapse.
Lessee/Lessor - The Uniform Commercial Code covers other business
relationships in addition to Debtor/Secured Party, such as lessee/lessor.
The UCC 1 financing statement form allows filing parties to designate that
relationship in box 5. Livestock Feed/Care Lien . A person providing care
for livestock has a lien on the livestock for the costs of feed and care.
The person may execute on the lien by selling the livestock. K.S.A. 58-207
Manufactured Home Transaction - A secured transaction:
(A) That creates a purchase-money security interest in a manufactured home, other than a manufactured home held as inventory; or
(B) In which a manufactured home, other than a manufactured home held as inventory, is the primary collateral.
Mortgage Filings - A notice of consensual interest in real property,
including fixtures, that secures payment or performance of an obligation.
Name Change - Debtor . An amendment that is filed changing the debtor
name to something other than what was filed on the initial financing statement.
Name Change - Secured Party . An amendment that is filed changing the
secured party name to something other than what was filed on the initial financing
statement.
Native American Filings - Tribes and reservations are sovereign nations
so they do not fall under the jurisdiction of state laws. Some tribes, such
as those in South Dakota and Washington, have enacted compacts allowing the
state to act as the filing office on behalf of the tribe. The Navajo Nation
and about ten other tribes have their own filing office. Other tribes do not
recognize secured transactions at all.
Organization Type - "Organization" means an entity having
a legal identity separate from its owner such as a corporation, partnership
or similar business entity.
Perfection - A creditor "perfects" its security interest
by filing notice with a public filing office, usually the Secretary of State's
Office. The notice alerts other creditors that the filer claims an interest
in the collateral described in the notice.
PMSI - See Purchase Money
Security Agreement
Pre-notification - See Food Security Act
Public Finance Transaction - A secured transaction in connection with
which:
(A) Debt securities are issued;
(B) All or a portion of the securities issued have an initial stated maturity of at least 20 years; and
(C) The debtor, obligor, secured party, account debtor or other person obligated on collateral, assignor or assignee of a secured obligation, or assignor or assignee of a security interest is a state or a governmental unit of a state.
Purchase Money Security
Agreement (PMSI) - A security interest that is created when a buyer is
loaned money to purchase a specific item with the agreement that the item
serves as collateral for the lender in the event of default or bankruptcy.
Registered Organization - An organization granted a separate legal
existence from its owners and registered with a state filing office. Examples
include corporations, limited liability companies, limited partnerships, and
limited liability partnerships.
Registered Organization ID Number - The number assigned by the filing
office that files and/or registers business entities, most often the Secretary
of State. The ID number is required when listing a business entity as a debtor
on the financing statement. If the filing office does not assign organizational
ID numbers, the box in item 1g indicating "none" should be checked.
Release - Release was a type of amendment under the old article nine.
Its function was to delete specific collateral without terminating the entire
document. Under the current law, a secured party would use an amendment to
delete collateral.
Repairman's Lien - A person repairing or working on personal property
has a lien on the personal property for the costs of the work. The lien may
be claimed by possession of the personal goods or filing a statement with
the Register of Deeds. A description of the goods is required, but a legal
description is not required. The lien is enforced pursuant to the foreclosure
provisions of the UCC. K.S.A. 58-201,
58-202
Revised Article Nine - A revision of the uniform commercial code by
the uniform law commission to amend the section relating to secured transactions.
Revised Article 9 was effective July 1, 2001 and was adopted by all states.
Most states, however, further amended the article in some manner so the law
is not completely uniform from state to state.
Search - See Information and or Copy Request.
Secured Loan - A loan that is secured by property that can be taken
by the lender in the event of bankruptcy or foreclosure.
Secured Party -
(A) A person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding;
(B) A person that holds an agricultural lien;
(C) A consignor;
(D) A person to whom accounts, chattel paper, payment intangibles, or promissory notes have been sold;
(E) A trustee, indenture trustee, agent, collateral agent, or other representative in whose favor a security interest or agricultural lien is created or provided for; or
(F) A person that holds a security interest arising under K.S.A. 84-2-401, 84-2-505, 84-2-711(3), 84-2a-508(5), 84-4-210 and 84-5-118.
Security Agreement - A contract that creates or provides for a secured
interest in property outlined in the agreement. The UCC filing (financing
statement) is notice that a legal contract exists. The security agreement
spells out details of the transaction such as the dollar amount borrowed,
the payment schedule, and a detailed collateral listing.
Security Interest - A lender or creditor obtains a security interest
by requiring the debtor to sign a contract (security agreement) agreeing to
forgo certain property (collateral) to the lender/creditor if the debtor defaults
on the loan. The lender/creditor need not perfect the security interest in
order to enforce the security interest against a debtor, although perfection
may be necessary to obtain priority over other creditors.
Seeding/Bailing Lien - A person who operates a broomcorn seeder/baler
or hay baler has a lien on the broomcorn or hay. The person follows the same
filing procedure for threshing liens; filing a statement with the Register
of Deeds, which must include a legal description of the land upon which the
crops were produced. K.S.A. 58-218,
58-219.
Seller/Buyer - The Uniform Commercial Code covers business relationships
in addition to Debtor/Secured Party. The UCC 1 financing statement form allows
filing parties to designate an alternative relationship, such as Seller/Buyer,
in box 5.
Signature - Most UCC filings required signatures prior to July 1, 2001,
however, revised article nine does not require signatures on filings.
SSN - See Social Security Number
Social Security Number - The financing
statement provides a space for TAX ID#, SSN or EIN. Kansas law does not require
such information and therefore filers may leave it blank on the form.
Subordination -
Tax ID Number - Social Security Number
Termination - A type of amendment the secured party files to
terminate the effectiveness of the financing statement.
Thresher's Lien - A person threshing, harvesting or husking crops has
a lien on the crops for payment of his services. The person files a statement
with the Register of Deeds, which must include a legal description of the
land upon which the crops were produced. K.S.A. 58-203,
58-204
.
Trade Name - A trade name is sometimes referred
to as a "DBA"or "Doing Business As." A trade name is an
alternative name used by a business, other than the legal name. For example,
a corporation may have a legal name of "Sachs, Inc." but advertise
under the name "Sachs Socks Store." A UCC filing must use the correct
legal name; a filing that provides only the debtor's trade name does not sufficiently
provide the name of the debtor per K.S.A. 84-9-503(c).
Transmitting Utility . Any person primarily engaged in railroad, street
railway or trolley bus business, the electric or electronics communications
transmission business, the transmission of goods by pipeline, or the transmission
or the production and transmission of electricity, steam, gas or water, or
the provision of sewer services.
Transmitting utilities are filed in the UCC filing system. Filing parties
must use the addendum form and check the appropriate box in section 18. These
filings lapse in 30 years.
Unsecured Loan - A loan based solely on the borrower's promise to repay.
An unsecured lender has no guarantee of recovering any funds or property in
the event of bankruptcy. Unsecured credit generally comes with a higher interest
rate because of this increased risk. An example of an unsecured loan is a
credit card.
UCC - Uniform Commercial Code is a law which covers virtually all business
transactions and is divided into several chapters or "articles"
with article 9 governing secured transactions.
UCCC - Uniform Consumer Credit Code.