accuracy of the name.
If you have concerns about the debtor's
name or the debtor goes by several names,
we recommend you use all combinations
of the debtor's name in the registration.
For example, Alexander R. Levy could
be described as (i) Alexander R. Levy, (ii)
Alex Levy, (iii) Alexander Ragan Levy,
and (iv) Alex R. Levy.
In regards to a debtor corporation,
you should be sure to have a copy of
the articles of incorporation (or similar
document) and any corresponding
amendments in your possession.
A registration of a corporate name
should list both the English name and
the French name, if applicable. It the
corporation uses a business name, it is
prudent to register this name as well.
describe the collateral using words on the
financing statement.
Many years ago, describing the
collateral using words was a requirement.
However, under the current version
of the PPSA, secured parties have the
(recommended) option to simply check
generic boxes describing the collateral
such as "inventory" or "equipment,"
rather than describing the collateral in
detail.
The benefit of checking the generic
boxes to describe the collateral is that
it affords the secured party greater
protection. The downside is that a third
party will not be able to tell exactly
what collateral you have secured and
pros of additional protection must be
weighed against the cons of potentially
being bothered, generally speaking it is
recommended that you check boxes rather
than inserting words in the collateral
description section of the financing
statement.
protection as a creditor, there must be
"attachment" and "perfection" of a
security interest.
"Attachment" of a security interest
to collateral happens when the following
conditions are met (i) a security agreement
is signed; (ii) it contains a description of
the collateral; (iii) value is given; (iv) the
debtor has rights in the collateral; and (v)
the attachment has not been postponed.
Assuming there has been attachment,
perfection will require registration (the
process involving the financing statement
noted above) or possession (for tangible
collateral only); the latter of which is
beyond the scope of this article.
The basic rules for determining
priority are:
(unregistered) security interest;
security interests were perfected by
registration, priority goes to the first
to register, regardless of the order of
perfection; if all were perfected by
possession, priority goes to the first to
perfect; or
goes to the first to attach.
Determining priority can be a complicated
affair.
statement will require you to list the
duration over which you will have security
in the specified collateral.
If your security interest will last longer
than the maximum duration allowed by
the financing statement, it is imperative
you file a financing change statement prior
to the expiry of the original registration.
Failure to file a financing change
statement may result in your security
interest becoming unperfected and in
certain circumstances losing its priority
status.
Other examples of when a financing
change statement should be registered
generally include, but are not limited to,
if the debtor changes its name or if all or
part of the collateral is sold.
properly navigated with care and attention
to detail.
If you are doing business in Ontario or
considering doing business in Ontario and
require advice on securitizing collateral,
please feel free to contact me or another
member of our team.