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Risk Management Blog

UCC & Corporate Due Diligence

Resource Guide for Legal and Financial Professionals

What’s the difference between a “lapsed” and “purged” UCC filing?

UCC, Due Diligence, Reduce Financial Risk

Lapsed vs. Purged UCC filingWe’re back at it with more UCC terminology and definitions! Last week, we discussed the difference between “active” and “effective” UCC filings, and this week we’re moving on to the definitions of “lapsed” and “purged” filings.

Lapsed UCC filing: The filing has passed its effective period and no continuation has been filed.

Purged UCC filing: The filing has been removed from the index and is no longer searchable in most state systems.

While neither filing is sufficient to perfect your security interest, there is an important difference between the two terms. A lapsed UCC filing will often remain in the state’s index (or within a third party’s database, such as the FCS online UCC system) for up to a year after its lapse. This means that a lapsed UCC filing is (most likely) still searchable, and UCC searchers will often searched for lapsed, or inactive filings, within a database for reference purposes as part of their due diligence process.

A purged filing has been removed from the state’s index, which means it is no longer available for search. Some state filing offices do keep records of purged filings in a separate database, but it is not mandatory for states to do so. A service provider may not be able to provide information on purged filings, depending on the capabilities of the provider and the state filing office’s practices.

As always, if you are unsure of any definitions or procedures, consult your legal counsel immediately.




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