What is the most common method of perfecting a security interest in personal property under Article 9 of the UCC?

• A. Taking physical possession.
• B. Filing a financing statement.
• C. Obtaining a court order.
• D. Filing a tax lien.

Answer: (B)

Perfection means giving public notice of a security interest so that the secured party has priority against other creditors. In Article 9, the most common way to perfect is by filing a financing statement with the appropriate filing office (usually the state Secretary of State). This creates a public record (the UCC-1) that identifies the debtor, the secured party, and the collateral. Filing is versatile and practical for a wide range of collateral, including both tangible assets like equipment and intangible assets like accounts or general intangibles, and it doesn’t require taking possession of the property. The perfection date is the filing date, and the interest can be continued every five years. While perfection by possession or control is possible for certain types of collateral, filing remains the standard method due to its efficiency and breadth. Perfection by court order or tax liens isn’t a typical Article 9 approach.