What is the role of the secretary of state in perfecting a security interest?

• A. The office of the Secretary of State where a financing statement must be filed to perfect a security interest.
• B. The county clerk's office where the debtor resides.
• C. The Internal Revenue Service.
• D. The Securities and Exchange Commission.

Answer: (A)

Perfection in a security interest is achieved by filing a financing statement with the state's central filing office. In most jurisdictions, the Secretary of State's office serves as that filing repository, so the financing statement is lodged there. This filing provides public notice to third parties that the lender has a security interest in the debtor's collateral and helps establish priority if the debtor defaults. The statement typically includes the debtor's name and address, the secured party's name and address, and a description of the collateral. The other offices listed do not perform this function: the county clerk generally handles records related to real property or local documents, the Internal Revenue Service handles taxes, and the Securities and Exchange Commission regulates securities and corporate filings, not security interests in personal property. Therefore, the Secretary of State’s office is where the financing statement must be filed to perfect a security interest.