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Legal Definitions - equipment
Definition of equipment
In legal terms, particularly under the Uniform Commercial Code (UCC), equipment refers to goods that a business, non-profit organization, or government agency owns and uses primarily for its operations. These items are distinct from goods held for sale (inventory), agricultural products (farm products), or items bought for personal, family, or household use (consumer goods).
Essentially, equipment comprises the tools, machinery, vehicles, and other durable assets that an entity utilizes to conduct its business, perform its services, or fulfill its governmental functions, rather than items it intends to sell or consume personally.
Example 1: A Commercial Bakery
A large commercial bakery uses industrial ovens, dough mixers, proofing cabinets, refrigeration units, and delivery trucks. These items are considered equipment because they are essential for the bakery's operations – baking bread and delivering it to customers. They are not the bread itself (which would be inventory), nor are they items bought for the personal use of the bakery owner.
Example 2: A University Research Lab
A university's chemistry department purchases high-precision spectrometers, electron microscopes, centrifuges, and specialized fume hoods for its research laboratories. These sophisticated instruments are classified as equipment. They are used by the university (a non-profit entity) to conduct scientific research and educate students, not to be sold as products or used for personal, household purposes by faculty members.
Example 3: A Landscaping Company
A professional landscaping company owns zero-turn mowers, leaf blowers, hedge trimmers, utility trailers, and a fleet of pickup trucks. All these items fall under the definition of equipment. They are the tools and vehicles the company uses daily to provide its landscaping services to clients. They are not items the company sells to customers (like bags of mulch or plants, which would be inventory), nor are they purchased for the personal enjoyment of the company's owner.
Simple Definition
Equipment generally refers to articles or implements used for a specific purpose or activity, especially in a business. Under the Uniform Commercial Code (UCC), it specifically includes goods used in or bought for a business, a non-profit organization, or a government entity, provided these goods are not inventory, farm products, or consumer goods.