Introduction

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

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 (but not necessarily all third parties). For information about the third parties who may not be bound by security which has been perfected, see: The difference between perfection and priority below.

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

1. •

   the type of security interest granted

2. •

   the type of entity granting the security, and

3. •

   the type of asset which is secured by the security

For further details on why security is perfected and the ways in which it can be perfected, see Practice Note: Perfecting security.

Security