Perfection

Question 1

Automatic Perfection

Answer 1

PMSI - purchase money security interest In Consumer Goods

Question 2

Possession of Collateral by Secured Party

Answer 2

may perfect in most types of collateral simply by taking possession

Note: only way to perfect S.I. in cash is by possession

Question 3

Perfection by “Control”

Answer 3

S.I in investment property and e-chattel paper may be perfected by control

Note: business deposit accounts can ONLY be perfected by control

Question 4

Nonconsumer (Business) Deposit Accounts

Answer 4

bank in which a nonconsumer deposit account is maintained automatically had control over the deposit account

• if secured party is not the bank, then 2 ways:
  1) putting the deposit account in the secured party’s name (co-owner status); OR
  2) control agreement -> an authenticated record w/debtor and bank (account location) follow secured party’s orders w/no further consent by debtor required

Question 5

5 Ways to Perfect

Answer 5

Automatic, Possession, Control, Lien on Certificate of Title, or Filing Financing Statement

Question 6

Lien on Certificate of Title

Answer 6

must get a relevant gov’tal authority to note the secured party’s lien on the certificate of title - e.g.: a motor vehicle

EXCEPTION - if the collateral is held as inventory

Question 7

Filing a Financing Statement

Answer 7

statement filed with SoS (unless real property) that puts others on notice the secured party may have a S.I. in the collateral listed

Question 8

Contents of Filing Statement

Answer 8

Debtor’s name, description of collateral, secured party’s name, real property related financing statement, debtor authorized the filing (but no signature required - *ipso facto authorization)
Note: may also file the security agreement itself so long as it has the above elements