To file a UCC-1 financing statement for a consignment, obtain a financing statement from the secretary of state in the state where you plan to file. Complete and file the form in accordance with the rules set out in the state's Uniform Commercial Code, according to Godfrey & Kahn.Continue Reading
A consignment is an arrangement where a seller transfers goods to a buyer for use, resale or improvement while retaining the title to the goods until they are sold or otherwise paid for, explains Godfrey & Kahn. This arrangement allows the buyer to defer payment but presents a risk to sellers who send goods to the buyer without first obtaining payment. To protect sellers, the Uniform Commercial Code, which is adopted in some form in every state, gives sellers the option to "perfect" their interest in the goods. The effect of a perfected interest is to allow the seller to repossess any goods not paid for by the buyer.
To perfect goods subject to a consignment, the seller should file a UCC-1 statement before shipping the goods. If the goods are shipped before the UCC-1 is filed, the seller is not protected under the Uniform Commercial Code and cannot repossess goods that are not paid for, states Godfrey & Kahn.Learn more about Taxes