810 ILCS 5/9-313
2021 Illinois Compiled Statutes|Chapter 810 - COMMERCIAL CODE|810 ILCS 5/ - Uniform Commercial Code.|Article 9 - Secured Transactions

 (from Ch. 26, par. 9-313)Sec. 9-313. When possession by or delivery to secured party perfects  security interest without filing.(a) Perfection by possession or delivery.  Except as otherwise provided  in subsection (b), a secured party may perfect a security interest in  tangible negotiable documents, goods, instruments, money, or tangible chattel paper by  taking possession of the collateral.  A secured party may perfect a security  interest in certificated securities by taking delivery of the certificated  securities under Section 8-301.(b) Goods covered by certificate of title.  With respect to goods covered  by a certificate of title issued by this State, a secured party may perfect a  security interest in the goods by taking possession of the goods only in the  circumstances described in Section 9-316(d).(c) Collateral in possession of person other than debtor.  With respect to  collateral other than certificated securities and goods covered by a document,  a secured party takes possession of collateral in the possession of a person  other than the debtor, the secured party, or a lessee of the collateral from  the debtor in the ordinary course of the debtor's business, when:(1) the person in possession authenticates a record     acknowledging that it holds possession of the collateral for the secured party's benefit; or(2) the person takes possession of the collateral     after having authenticated a record acknowledging that it will hold possession of collateral for the secured party's benefit.(d) Time of perfection by possession; continuation of perfection.  If  perfection of a security interest depends upon possession of the collateral by  a secured party, perfection occurs no earlier than the time the secured party  takes possession and continues only while the secured party retains possession.(e) Time of perfection by delivery; continuation of perfection.  A security  interest in a certificated security in registered form is perfected by  delivery when delivery of the certificated security occurs under Section 8-301  and remains perfected by delivery until the debtor obtains possession of the  security certificate.(f) Acknowledgment not required.  A person in possession of  collateral is not required to acknowledge that it holds possession for a  secured party's benefit.(g) Effectiveness of acknowledgment; no duties or confirmation.  If a person acknowledges that it holds possession for the secured party's  benefit:(1) the acknowledgment is effective under subsection     (c) or Section 8-301(a), even if the acknowledgment violates the rights of a debtor; and(2) unless the person otherwise agrees or law other     than this Article otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person.(h) Secured party's delivery to person other than debtor.  A secured  party having possession of collateral does not relinquish possession by  delivering the collateral to a person other than the debtor or a lessee  of the collateral from the debtor in the ordinary course of the debtor's  business if the person was instructed before the delivery or is instructed  contemporaneously with the delivery:(1) to hold possession of the collateral for the     secured party's benefit; or(2) to redeliver the collateral to the secured party.(i) Effect of delivery under subsection (h); no duties or confirmation.  A secured party does not relinquish possession, even if a delivery under  subsection (h) violates the rights of a debtor.  A person to which collateral  is delivered under subsection (h) does not owe any duty to the secured party  and is not required to confirm the delivery to another person unless the  person otherwise agrees or law other than this Article otherwise provides.  (Source: P.A. 95-895, eff. 1-1-09.)