A Uniform Commercial Code lien, or more commonly known as a UCC lien, is a part of a comprehensive set of laws governing commercial transactions in the United States. While it is not a federal law, it is adopted by each state as its own state law; meaning each state’s UCCs may differ. In Nevada, it is important for businesses to understand their rights and legal options, especially when it comes to UCC liens. For lenders, sometimes filing a UCC lien is the only way to secure interest in a borrower’s assets. For borrowers, you’ll want to make sure that any claim against your business is accurate as this can severely limit your ability to access finances or other assets. The result of a UCC lien is determined by the circumstances surrounding the transaction, we’ll go over what to do and how to remedy any false or fraudulent UCC liens.
You just received a UCC lien notice against your company, what now? For Nevada entities, you will want to search for the lien in the Nevada Secretary of State’s UCC system. There are two options for a Nevada UCC lien search.
1. You can fill out a request form and send it to the Nevada Secretary of State’s UCC division. More info on paper requests and forms can be found here: https://www.nvsos.gov/sos/businesses/ucc
2. You can use the Nevada Secretary of State’s UCC search function via the online portal here: https://www.nvsilverflume.gov/redirectToCenuity/ucc (You may have to create an account if you do not already have one.)
If you believe the UCC claim to be false or fraudulent, there are some remedies post filing. A person who knowingly files a false or fraudulent record with the Secretary of State is liable for $10,000 or actual damage, whichever is greater, plus costs, attorney’s fees, and punitive damages according to NRS 225.084. Furthermore, that person would also be committing a class C felony in Nevada according to NRS 239.330. A Nevada business attorney can confirm compliance with state laws and provide advice on protecting your interests in the event of a disputed UCC lien. They can also save you time and help secure financing or recover debts, so you can get back to running your business.
