Which of the following is not a method of perfection for a security interest?

Prepare for the Barbri Secured Transactions Test with flashcards and multiple-choice questions. Each question includes insights and explanations to optimize your exam readiness!

Perfection of a security interest under secured transactions law is essential for establishing the secured party's rights against third parties and competing claims. The correct choice identifies an option that does not qualify as a method of perfection.

Creating a partnership does not act as a method of perfection for a security interest. Although partnerships can enter into security agreements and create security interests, the mere act of forming a partnership does not itself perfect any security interest. Perfection mechanisms typically include methods that effectively notify others of the security interest's existence, thereby providing a level of protection to the secured party.

In contrast, filing a UCC-1 Financing Statement serves as a formal public notice of the security interest, helping to perfect the interest in the collateral. Control of the asset, such as with certain types of collateral like deposit accounts or investment property, serves to establish a secured party’s interest over the asset directly, effectively perfecting the security interest. Additionally, automatic perfection upon attachment applies to certain security interests, such as those in consumer goods, without the need for additional steps to perfect.

Thus, the option of creating a partnership stands apart as it does not function as a recognized means of perfecting a security interest.

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