Submitted by UCS on May 9, 2019
As you know, a UCC Financing Statement is used by a creditor to provide notice that it has a security interest in the personal property of a debtor. Quite often when a UCC Financing Statement is submitted, the participants involved are identified as the Debtor and Secured Party but the UCC1 form also allows the filer to select alternative designations (See Item 7). This option, used when applicable, allows the filer to further clarify the nature of the transaction and the relationship between the parties. Below are brief descriptions of how each designation can be utilized.
A financing statement can be filed in the real estate records by a lessor of fixtures to establish the priority of the lessor’s rights against a holder of a mortgage or other lien on the real property. The filing of a financing statement gives notice of whatever rights the creditor or lessor has under their loan documents or lease. A lessor is the legal owner of an asset that allows the lessee through a lease agreement to use the asset for a specified period for a set amount of rent.
The act of consignment refers to the process of sending goods from the seller to the buyer and consignor and consignee are the parties in the transaction. The consignor is the sender of the goods while the consignee is the receiver of the goods. The ownership of the goods or the consignment remains with the consignor until the consignee has paid for the goods in full.
In this case, the seller is someone who sells or contracts to sell goods to a buyer.
A Bailee is a person or entity who takes temporary possession of the property of another, in this case the Bailor, in order to keep that property safe for the other. A bailment is different from a sale or a gift of property because it concerns only the transfer of possession, and not ownership. The property is also typically off-limits to the Bailee in that he is not permitted to use it while it is in his possession though this is not a requirement.
The licensee is the party that receives a license, while the licensor is the party that grants the license. Licensing agreements between private parties involve one party allowing another to use, create or sell its products or intellectual property.
For more information on the Uniform Commercial Code and Financing Statements feel free to contact us at (800) 899-8648 and speak with a Client Service Representative or visit the United Corporate Services YouTube channel featuring our UCC series.
Contributor to this article:
Keith Sheppard received his Bachelor of Science degree in Paralegal Studies from St. John’s University and is a Business Development Coordinator with United Corporate Services, Inc. As a former corporate paralegal and manager with over two decades of experience in the legal services field, Keith has an established track record of how to assist lawyers and fellow paralegals with corporate filings and due diligence.
Have a question or a suggestion for a blog? Contact Keith at email@example.com