The Illinois UCC: a short guide for small business owners
The Illinois Uniform Commercial Code sets the ground rules for selling goods, cashing checks and borrowing against business assets. Here are the parts owners ask about most.
Prepared by Prem Tax and Accounting Corp. Last checked against official sources on October 29, 2026.
The Illinois Uniform Commercial Code (UCC, 810 ILCS 5) is the state rulebook for selling goods, handling checks and borrowing against business property. It names no enforcing agency, so disputes are usually private court claims. It matters to stores, makers and borrowers. We use a routine we call the Five-Drawer Deal File. The official text is on the Illinois General Assembly website.
- Any business is covered, with no size test.
- A goods sale of $500 or more needs a record signed by the party being held to it, with exceptions.
- A lender's UCC-1 lasts 5 years; a continuation fits only in the last 6 months.
- Sue on a goods contract within 4 years. A forged signature not reported to the bank within 1 year loses that claim.
Who it covers
| Group | Covered? | Note |
|---|---|---|
| Goods buyers and sellers | Yes | Article 2. Merchant sellers carry an implied warranty of merchantability unless disclaimed. |
| Services-only contracts | No | A mixed deal turns on whether goods predominate. Consumer sales also fall under the Consumer Fraud Act. |
| Lenders and borrowers | Yes | Article 9: security interests in personal property. |
| Banks and customers | Yes | Articles 3 and 4 cover checks. |
The numbers
| Item | Limit | Year |
|---|---|---|
| Goods sale needing a signed record | $500 or more | 2026 |
| Suit on a goods contract | 4 years, down to 1 if agreed | 2026 |
| Written contract or note | 10 years, goods sales aside | 2026 |
| Forged signature report to bank | 1 year after the statement | 2026 |
| UCC-1 fee; information request | $20; $10 | 2026 |
Source: 810 ILCS 5; 735 ILCS 5/13-206
Our checklist
The Five-Drawer Deal File is our five-question check for any deal under the UCC.
- Orders: is there a signed record for each goods sale of $500 or more?
- Warranties: does the disclaimer name merchantability conspicuously, or say "as is"?
- Loans: does each secured loan have a signed agreement and a UCC-1 in the debtor's registered name?
- Dates: are the 5-year lapse and 6-month continuation dates on a calendar?
- Bank statements: are they reviewed well inside 1 year?
Mistakes people make
- Using only a trade name as the debtor on a UCC-1.
- Filing a continuation outside the last 6 months.
- Filing without the debtor's signed authorization, or ignoring a valid signed demand to terminate: $500 per instance, plus actual loss.
An attorney is the right call for security agreements, defaults, bankruptcy or a disputed forgery loss. Pending bills and court decisions are not covered.
Common questions
Does the UCC cover a services-only contract?
No. The sales article is about goods. A mixed deal falls under it when goods predominate, though other law can still govern the services.
Where is a UCC-1 filed?
Usually the Illinois Secretary of State, when Illinois law governs, generally for an Illinois debtor. Fixture filings, timber to be cut and minerals go to the county recorder.
How long does a UCC-1 last?
Five years, or 30 for an initial filing marked public-finance or manufactured-home. After a lapse the lender is unperfected unless perfected another way.
Official sources
- Illinois General Assembly: Uniform Commercial Code, 810 ILCS 5
- Illinois General Assembly: filing fees, Section 9-525
- Illinois Secretary of State: UCC forms and fees
- Illinois General Assembly: 735 ILCS 5/13-206, time limits for written contracts
- Illinois General Assembly: Public Act 103-1036 (Senate Bill 3696)
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