Also known as:certificated securities · certificated share
Written by attorneys · grounded in primary & secondary sources — see below
A security that may be perfected by a secured party taking delivery of the certificate under UCC § 8-301.
Sources & Authorities
How it applies
Common Examples
2
Perfection by Delivery of Certificates
Connor Clark borrowed funds from Citadel Security and granted it a security interest in his shares of Apex Corp stock. Citadel Security received the endorsed stock certificates from Connor Clark and placed them in its vault. Citadel Security thereby perfected its security interest in the certificated securities without filing a financing statement.
Possession Through Agent for Perfection
Canyon Construction granted a security interest in its certificated securities to Cascade Manufacturing. Cascade Manufacturing arranged for its agent to hold the certificates in a locked facility accessible only to the agent. The agent's exclusive control satisfied the delivery requirement and perfected Cascade Manufacturing's security interest.
Put it into practice
Test Yourself
9
Practice Questions4
· 8 primary sources
Select any source to read its text and confirm it supports the definition.
Uniform Acts
Casebooks
Hornbooks
Course Outlines
Study Supplements
Dictionaries
In re Havens Steel Company317 B.R. 75 (Bankr. W.D. Mo. 2004)
Common questions
Frequently Asked
3
How does a secured party perfect a security interest in a certificated security?+
A secured party perfects by taking delivery of the security certificate under Section 8-301. Delivery occurs when the secured party acquires possession of the certificate or obtains an acknowledgment from a non-intermediary possessor that it holds the certificate for the secured party's benefit.
Supporting sources
Does filing a financing statement perfect an interest in certificated securities?+
Filing is permitted but is not the only or always the preferred method. Delivery of the certificate provides perfection by possession and can confer priority advantages over filing alone in certain conflicts with other secured parties.
Supporting sources
What happens if the debtor retains access to the certificates after delivery?+
Perfection may fail if the secured party does not maintain exclusive dominion. Shared access that allows the debtor independent control defeats the possession or delivery required for perfection under the statute.
Supporting sources
Secured TransactionsRights of third parties; perfected and unperfected security interests; rules of priority (§ 9-301, et seq.) · Requirement of filing and steps to be taken for perfection (§§ 9-308 through 9-316; § 9-501, et seq.); assignment of security interest (§§ 9-514, 9-519)UBEFoundational