WHY YOU MIGHT WANT TO RUN A UCC LIEN SEARCH AGAINST YOUR OWN COMPANY
Years ago, when I was much younger, in order to file a financing statement against a business, the business itself would have to sign the statement. Alas, that has not been the case for decades. As no signature is required, literally anyone with a computer and a few dollars for filing fees can file a financing statement against a business. Early predictions that this would lead to a lot of fraud and abuse have not borne out in practice. Occasionally, however, someone with a grudge against a company will file a financing statement which will be difficult to deal with.
A more frequent problem is the filing of a financing statement on behalf of a company or a lender you no longer do business with that is not released in a timely fashion or is automatically renewed from time to time by a service used by that company to keep their financing statements current.
In both of these instances, finding out that these are filed against your business sooner rather than later will greatly enhance your prospects for resolving them before they cause serious problems for your business. Ordinarily, lenders in connections with loans, equipment renters in connection with leases, and other creditor parties will conduct a UCC lien search prior to closing a transaction. And certainly in the case where the business is being sold, all financing statements will have to be addressed as part of the closing process. Having closed literally hundreds of transactions over the years, I can tell you from personal experience that dealing with financing statements that are stale or bogus is extremely difficult and frequently causes significant, and sometimes expensive, delays in the closing of a transaction.
In most jurisdictions, a lien search can be ordered online and the governmental charges for the search are generally very modest. As part of keeping your business legally healthy, you may want to conduct a lien search every few years to see what has been filed and to address any problems before they become major. Creditors who no longer have an interest should be asked to release stale filings. If there are bogus filings, legal help may be needed.