What is required to perfect a security interest under Article 9?

To perfect a security interest under Article 9 of the Uniform Commercial Code (UCC), filing a financing statement is essential. The financing statement serves as a public notice to third parties that a creditor holds a security interest in the collateral specified within the statement. This public filing is critical because it establishes the priority of the security interest against other creditors or claimants who may also have interests in the same collateral.

Perfection of a security interest is key to protecting the creditor’s rights in the collateral against third parties. By filing the financing statement, the secured party demonstrates their claim to the collateral, which is vital in bankruptcy situations or when the debtor defaults. The financing statement usually includes details about the debtor, the secured party, and a description of the collateral.

Other options, such as a court judgment, a financial audit, or a title deed, do not fulfill the requirement for perfecting a security interest under Article 9. The former pertains to judicial processes and does not create a notice to other creditors, while a financial audit involves assessing the financial status of a business and is unrelated to security interests. A title deed pertains to real property and is not relevant in the context of personal property or the establishment of security interests under Article 9. Thus,