What is the UCC?
Many clients have asked us what the UCC is and how is it helpful in the STS program. In researching the web, I came across a site that defines answers to many common questions so I thought I would link to the article and reproduce it here for convenience.
For purposes of the STS program, we utilize a particular section called the UCC-1 Lien, which allows the trustees to protect the assets of the trust by filing a lien in Washington, DC, under the body of law called the Uniform Commercial Code. See also Cornell University Law School for these links to the UCC Articles.
The Uniform Commercial Code, or UCC, is a collection or body of laws that serves to define the structure of a number of different commercial transactions. The main purpose of the collection is to bring a degree of uniformity to various types of secured transactions. This function essentially makes it possible for business to be conducted with a solid foundation of standards that both the buyer and the seller are anticipated to follow.
In general, the UCC is considered essential for three reasons. First, there is a need to regulate commerce with an explanation of existing laws that is clear and concise. Second, the code helps to ensure uniformity of application throughout the all jurisdictions associated with the nation. Third, the code helps to engender responsible expansion of commerce by providing a foundation of custom and usage that all suppliers and buyers can recognize and agree upon.
The scope of the code involves a wide range of financial transactions. The sale of goods is one of the types of transactions that is of particular interest to the consumer. Another important aspect of the UCC is the sections that address the standardized procedure for the reception and processing of bank deposits and collections. Funds transfers of all types are also a particularly important aspect of the Uniform Commercial Code, as this component has broad implications for just about every consumer.
There are aspects of the Uniform Commercial Code that also apply to investment opportunities as well. The purchase and sale of stocks, bonds, and commodities are covered within the provisions of the code. The particulars of this body of law in regard to investing helps to ensure that investors are protected from various types of financial practices and strategies that were possible in years past, but are no longer legal.
Other types of financial transactions are also covered by the provisions of the code. Matters such as the leasing of property, the issuance of letters of credit, bulk sales, and the transfer of any negotiable instrument is addressed in some aspect of the UCC. As any new type of commercial transaction is developed, the code is amended to provide coverage and protection to both supplier and consumer alike.