Consignment the right way: file a UCC financing statement.(Credit Column)(Uniform Commercial Code)

Business Credit, April, 2004 by Nathan, Bruce S.

Frequently vendors enter into consignment arrangements with their customers. In a typical consignment, a vendor does not book a sale until the customer reports that it had sold or used the consigned goods. In many instances, vendors intend the consignment arrangement to be a security device to increase the likelihood of payment from a financially distressed customer.

However, all too frequently, consignment vendors belatedly discover that they had failed to satisfy all of the requirements for obtaining a special protected interest in their consigned goods, and end up being ...