UCC Filing??

[TromboneAl]

So, I've sold my business (actually for tax reasons, I sold all the copyrights and trademarks rather than the business itself).

It's my understanding that I should make a UCC filing for this transaction.There's no coherent information on the UCC filing site for my state. Can anyone tell me more about this?

 

[Martha]

So you are selling the assets over time and retaining a security interest in the assets so you can repossess them if you aren't paid?

A UCC filing generally refers to a financing statement filed in the state records which evidences your security interest in certain assets. You have to have a security agreement as well. There are financing statement forms approved by the state to complete and file with the state. The form has you identify the debtor, creditor and the collateral. Wasn't the form provided at closing by the attorneys?

Security interests in copyrights are treated different from most other assets. Perfection of security interests in copyrights can only be made through the US Copyright office. The copyright has to be registered.

(extra disclaimer-not legal advice, just general principles)

 

[TromboneAl]

Thanks, Martha,

No, I'm selling only the copyrights so that the buyer can write off the purchase in three years instead of 15. There's no security interest talk in the asset transfer agreement.

 

[cute fuzzy bunny]

You need a CPA. Maybe one thats a marketing executive too.

Make sure he's heard of the "hummer deduction".

 

[Martha]

Then why is someone saying you need to file a UCC?

 

[TromboneAl]

I take it back about no security interest talk in the agreement. Here's the relevant paragraph in the agreement:

"b. As my security that you will make the payments as set forth
above, you grant to me a security interest in all rights in and to the Products
that I am conveying to you as security for your obligation to pay me. At my
expense, such security interest may be recorded in accordance with the Uniform Commercial Code using a financing statement in a form acceptable to both parties."

 

[Martha]

Ok, so you have a security interest. Now you need to perfect it. Inotherwords, make it valid as against third party claims.

For everything but the copyrights, you file a UCC. It looks like you can do it online here: https://uccconnect.ss.ca.gov/acct/acct-templogin.asp

For copyrights, the only way to perfect is at the copyright office which is not the same as a UCC. And the copyright has to be registered.

 

[TromboneAl]

Thanks for the help. I've PM'd you with more details.

make it valid as against third party claims.

I'm not clear on what that means.

 

[cute fuzzy bunny]

Al, I believe you owe me fifty bucks because I thought of the idea for your product, whatever the heck it is, and produced a product that has nothing to do with it but has the same name, before you did.

Now you know

 

[justin]

Perfection of the security interest gives you protection against 3rd party claims. If someone tries to get the assets (through a legal judgment, a subsequent sale, etc) that you sold to Business Buyer, your perfected security interests in those assets are still valid as against that 3rd party. The security agreement you signed gives you a security interest as against the Business Buyer, but not against 3rd parties in general. Once the security interest is perfected (through filing UCC statements, or registering copyrights), it is as if everyone else in the world is notified of your security interest in those assets, and as a result, 3rd parties can't acquire title to those assets due to your security interest.

 

[TromboneAl]

Thanks -- what would I do without you guys.

You can deduct hummers!!??

 

[justin]

Thanks -- what would I do without you guys.

Pay some damn attorney hundreds of dollars an hour to splain this stuff to you, and fill out a single-page UCC1 form.

You probably still want to consult with an attorney to make sure you've dotted all the i's and crossed all the t's with respect to the UCC filings and copyright registration. It could be money well spent if the buyer goes under at some point in the future (depending on the amount you have at stake).

 

[Mr._johngalt]

Pay some damn attorney hundreds of dollars an hour to splain this stuff to you, and fill out a single-page UCC1 form. 

You probably still want to consult with an attorney to make sure you've dotted all the i's and crossed all the t's with respect to the UCC filings and copyright registration.  It could be money well spent if the buyer goes under at some point in the future (depending on the amount you have at stake). 

As usual I mostly did my own UCCs. Never had a problem. Just lucky I guess.

JG

 

[Nords]

You can deduct hummers!!??

Only the vehicle. The tax code has clamped down, so to speak, on the other type.

 

[Mr._johngalt]

Only the vehicle.  The tax code has clamped down, so to speak, on the other type.

OOH..good one!

JG

 

[HFWR]

Blow is just a figure of speech...