Basic Uniform Commercial Code

Perfect


Security interests may be perfected, which gives the creditor priority over others.

To perfect a security interest, generally the creditor must either file a financing statement or possess the property. UCC § 9-308. (Or control if it is not physical property. UCC § 9-314.)

Physical goods are possessed. Intangibles are controlled. (Usually by getting your name added to the account or an agreement with the bank stating it will transfer according to the security agreement.)

Financing Statement

A financing statement is a record that is publicly filed to put other people on notice of a security interest in the collateral.

A financing statement does not have to be very specific.

File

To file and perfect a security interest, you basically always file centrally in the state where the debtor is located. UCC § 9-301(1), UCC § 9-307, UCC § 9-501(a)(2).

For as-extracted collateral, timber to be cut, and fixtures, you file locally in the county where the property is located. UCC § 9-501(a)(1). (Because they are related to real estate)

Filing is generally required for everything except:

Consumer goods automatically perfect. Equipment does not.

  • Some other types of goods automatically perfect as well. They're just kind of random, but they're listed in UCC § 9-309.
Certificate of Title

Some property like cars have titles. These goods often have separate perfection requirements, usually requiring the security interest to be listed on the title itself.

Certificate of title goods cannot be perfected by filing. UCC § 9-311.

If a business is in the business of selling certificate of title goods, any of that good sold or leased by them counts as inventory and must be perfected as such. UCC § 9-311.

The only way to perfect money (including gold) or a deposit account (e.g., a bank account) is to control it. (But you can still attach to it.)

Chattel papers can theoretically be perfected by either filing or possession. UCC § 9-313.

Investment Property

Investment property is, like, stocks and commodities stuff.

Investment property can be certificated or uncertificated, depending on whether or not they issued a certificate.

A security interest in investment property can be perfected by filing.

A security interest in certificated investment property can be perfected by taking delivery of the stock. UCC § 9-313(a).

A security interest in investment property can be perfected by taking control of the stock. UCC § 9-314(a).

Delivery

Delivery usually occurs when one acquires physical possession of a security certificate. UCC § 8-301.

Certificated securities can be controlled by delivery or by indorsement to the creditor or being registered in the name of the creditor. UCC § 8-106(a)–(b).

Uncertificated securities can be controlled by delivery or by having the issuer agree to comply with the creditor's instructions without the registered owner's further consent. UCC § 8-106(c).

The strength of methods of perfection of investment property goes: control, then delivery, then filing. UCC § 9-328.