Perfecting and registering security

Perfecting security

A brief description of the reasons for perfecting security follows. For information on how to perfect security and further information on why it is necessary, see Practice Notes:

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   Perfecting security

2. •

   How to perfect security in loan transactions

3. •

   Perfecting security—summary of required steps

Validity and enforceability against third parties

Once security is validly created, it is binding as between the security provider and the secured party. However, the security is not necessarily automatically binding on third parties such as a liquidator or administrator of the security provider, or third party secured creditors.

In many cases, further steps must be taken to 'perfect' the security. Perfection is the means by which security is made enforceable against certain third parties.

Perfection can be achieved in a number of ways and the correct way of perfecting a particular security interest depends on:

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   the type of entity granting the security

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   the type of security being taken, and

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   the