Which action is used to perfect a security interest under UCC Article 9?

Which action is used to perfect a security interest under UCC Article 9?

• A. By recording the asset with the local county clerk.
• B. By notifying the debtor in writing and obtaining consent.
• C. By filing a financing statement with the appropriate state office, usually the secretary of state.
• D. By executing a private agreement between the parties.

Answer: (C)

Perfection of a security interest under Article 9 is achieved by giving public notice of the lien so others know it exists. The typical and most widely used method is filing a financing statement with the appropriate state office, usually the Secretary of State. This document names the debtor and the secured party and describes the collateral, creating a public record that establishes priority among creditors and protects the secured party against later claims. While there are other ways to affect perfection in specific situations (for example, possession or control in certain types of collateral), those are not the general method for most equipment financings. Recording with a local county clerk, simply notifying the debtor and obtaining consent, or relying on a private agreement do not by themselves perfect the security interest against third parties.

Perfection of a security interest under Article 9 is achieved by giving public notice of the lien so others know it exists. The typical and most widely used method is filing a financing statement with the appropriate state office, usually the Secretary of State. This document names the debtor and the secured party and describes the collateral, creating a public record that establishes priority among creditors and protects the secured party against later claims.

While there are other ways to affect perfection in specific situations (for example, possession or control in certain types of collateral), those are not the general method for most equipment financings. Recording with a local county clerk, simply notifying the debtor and obtaining consent, or relying on a private agreement do not by themselves perfect the security interest against third parties.