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36-725: It is similar in structure to Article 9 of the Uniform Commercial Code in the United States, but there are important differences. The British Sale of Goods Act 1893 was followed closely in Canada in the first half of the twentieth century. In the 1970s it was noticed in Ontario that the law of contract had departed from the 1893 Act. To remedy this shortcoming, the Law Reform Commission proposed

72-517: A warehouse line of credit , while a distressed loan workout specialist may obtain a line of credit . The first makes loans for the purchase of real property; the second will acquire nonperforming loans at a discount from their face value (and then will either renegotiate them or foreclose on the underlying collateral). In either situation, the mortgage lender or workout specialist's interest in underlying real property collateral will be secured under state real property law. But their lender's interest in

108-424: A direct representation of any underlying asset. The relationship between financial capital, money , and all other styles of capital , especially human capital or labor , is assumed in central bank policy and regulations regarding instruments as above. Such relationships and policies are characterized by a political economy – feudalist , socialist , capitalist , green , anarchist or otherwise. In effect,

144-455: A mortgage over a rental property will also register a PPSA security interest against the rents being generated, in order to attorn the rents in the event the mortgage goes into default. In the absence of any other special priority rules, the general order of priority is as follows: For moveable property in Québec, secured creditors create their security interests by way of hypothec through

180-664: A new regime, which was duly enacted by the provincial government as the Uniform Sale of Goods Act . The legislation that implemented the PPSA scheme was first introduced in Ontario , followed by the remaining provinces and territories (which followed a newer uniform model with notable differences). The Atlantic provinces, together with the Northwest Territories and Nunavut , have fully computerized registries, while

216-415: A secured interest in a promissory note that is secured by a mortgage or deed of trust on real property, which is regulated by Article 9. This latter distinction is important in the context of the sale and purchase of promissory notes secured by real property. There are a variety of situations in which this distinction is important. For example, a non-depository mortgage lender may fund their operations with

252-452: A stable store of value. If this is very important, inflation control is key - any amount of money inflation reduces the value of financial capital with respect to all other types. If, however, the medium of exchange function is more critical, new money may be more freely issued regardless of impact on either inflation or well-being. Socialism , capitalism , feudalism , anarchism , and other civic theories take markedly different views of

288-627: Is any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services to the sector of the economy upon which their operation is based (e.g. retail, corporate, investment banking ). In other words, financial capital is internal retained earnings generated by the entity or funds provided by lenders (and investors ) to businesses in order to purchase real capital equipment or services for producing new goods or services . In contrast, real capital (or economic capital ) comprises physical goods that assist in

324-517: Is immediately required and saving the surplus. Financial capital can also be in the form of purchasable items such as computers or books that can contribute directly or indirectly to obtaining various other types of capital. Financial capital has been subcategorized by some academics as economic or " productive capital " necessary for operations, signaling capital which signals a company's financial strength to shareholders, and regulatory capital which fulfills capital requirements . Fixed capital

360-476: Is known as own capital or equity , whereas that which is granted by another person or institution via debt instruments is called borrowed capital, and this must usually be paid back with interest. The ratio between debt and equity is named leverage . It has to be optimized as a high leverage can bring a higher profit but create solvency risk. Borrowed capital is capital that the business borrows from institutions or people, and includes debentures: Own capital

396-467: Is money firms use to purchase assets that will remain permanently in the business and help it make a profit. Factors determining fixed capital requirements: Firms use working capital to run their business. For example, money that they use to buy stock, pay expenses and finance credit. Factors determining working capital requirements: Capital contributed by the owner or entrepreneur of a business, and obtained, for example, by means of savings or inheritance,

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432-488: Is not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than an Indian or a band. Recent jurisprudence has tended to restrict how this provision should be applied. There can also be complex interplay with security interests under admiralty law . Secured transactions in the United States Secured transactions in

468-410: Is private capital that owners of a business (shareholders and partners, for example) provide, sometimes called owners equity. The ownership interest is typically represented in preferred shares , and may be of various types, for example: These typically have preference over the common shares . This means the payments made to the shareholders are first paid to the preference shareholder(s) and then to

504-456: Is provided by lenders for a price: interest . Also see time value of money for a more detailed description of how financial capital may be analyzed. Furthermore, financial capital, is any liquid medium or mechanism that represents wealth , or other styles of capital . It is, however, usually purchasing power in the form of money available for the production or purchasing of goods, etcetera. Capital can also be obtained by producing more than what

540-511: Is synonymous with the net assets or equity of the entity. Under a physical concept of capital, such as operating capability, capital is regarded as the productive capacity of the entity based on, for example, units of output per day. Financial capital maintenance can be measured in either nominal monetary units or units of constant purchasing power. Accordingly, there are three concepts of capital maintenance in terms of International Financial Reporting Standards (IFRS): Financial capital

576-519: The Registre des droits personnels et réels mobiliers (RDPRM). Federal legislation has also created certain security interests that may take precedence over provincial legislation. They notably include: S. 89(1) of the Indian Act governs the application of security interests on reserves: 89 . (1) Subject to this Act, the real and personal property of an Indian or a band situated on a reserve

612-489: The United States are an important part of the law and economy of the country. By enabling lenders to take a security interest in collateral (that is, the assets of debtors ), the law of secured transactions provides lenders with assurance of legal relief in case of default by the borrower. The availability of such remedies encourages lenders to lend capital at lower interest rates , which in turn facilitates

648-421: The social capital (not just credits) of bond-issuers, insurers, and others who issue and trade in financial instruments. When payment is deferred on any such instrument, typically an interest rate is higher than the standard interest rates paid by banks, or charged by the central bank on its money. Often such instruments are called fixed-income instruments if they have reliable payment schedules associated with

684-495: The appropriate state office (usually the office of the Secretary of State) in the U.S. state in which the debtor is located. See U.C.C. §§ 9-301, 9-310. For real property, the creditor records a security instrument such as a mortgage or deed of trust in the county where the real property is located. Financial capital Financial capital (also simply known as capital or equity in finance , accounting and economics )

720-438: The better path was to develop a unified, simplified law of security interests. Transactions where security interests are taken in real property are regulated not by Article 9, but by real property laws that vary among jurisdictions. However, the assignment or conveyance of a contract secured by real property may be regulated by Article 3 to the extent that the contract is a negotiable instrument. Both must be distinguished from

756-412: The debtor acquires after authentication of the security agreement. See U.C.C. § 9-204. Value can include a new loan or an old debt. See U.C.C. § 1-204. Attachment of a security interest does not ensure that the secured party's interest in the collateral will be superior to the interest of other lienors or subsequent buyers, lessees, or licensee. In general, to obtain priority over such other claimants,

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792-424: The debtor have rights in the collateral or the power to convey rights; (ii) that value be given; and (iii) in most cases, that the debtor have authenticated a security agreement that adequately describes the collateral. See U.C.C. § 9-203. Subject to some minor restrictions relating to consumer goods and commercial tort claims, a security interest can encumber after-acquired property—that is, it can attach to property

828-977: The equity shareholders. A contract regarding any combination of capital assets is called a financial instrument , and may serve as a Most indigenous forms of money (wampum, shells, tally sticks and such) and the modern fiat money are only a "symbolic" storage of value and not a real storage of value like commodity money. Normally, a financial instrument is priced accordingly to the perception by capital market players of its expected return and risk. Unit of account functions may come into question if valuations of complex financial instruments vary drastically based on timing. The " book value ", " mark-to-market " and " mark-to-future " conventions are three different approaches to reconciling financial capital value units of account. Like money, financial instruments may be "backed" by state military fiat , credit (i.e. social capital held by banks and their depositors), or precious metals resources. Governments generally closely control

864-449: The free flow of credit and stimulates economic growth. Article 9 of the Uniform Commercial Code (UCC), as adopted by all fifty states , generally governs secured transactions where security interests are taken in personal property. It regulates creation and enforcement of security interests in movable property , intangible property, and fixtures . UCC Article 9 replaced a wildly diverse array of security devices that had evolved in

900-429: The means of money supply and other regulations on financial capital represent the economic sense of the value system of the society itself, as they determine the allocation of labor in that society. So, for instance, rules for increasing or reducing the money supply based on perceived inflation , or on measuring well-being , reflect some such values , reflect the importance of using (all forms of) financial capital as

936-474: The notes secured by the underlying collateral will be secured under Article 9. Security interests are particularly valuable in bankruptcy , because creditors who have security interests in a bankrupt debtor's estate take priority over creditors who lack such interests (unsecured creditors) in the distribution of the debtor's assets. A security interest becomes enforceable against the collateral as soon as it attaches. Attachment requires three things: (i) that

972-448: The others have varying degrees of electronic and paper registration. The following is a brief outline of how the regime generally works. The scope of the Act is extremely broad, as it is concerned with every transaction which in substance creates a security interest, without regard to its form and without regard to the person who has title to the collateral. There are small differences between

1008-480: The production of other goods and services (e.g. shovels for gravediggers, sewing machines for tailors, or machinery and tooling for factories). Financial capital generally refers to saved-up financial wealth , especially that used in order to start or maintain a business. A financial concept of capital is adopted by most entities in preparing their financial reports . Under a financial concept of capital, such as invested money or invested purchasing power , capital

1044-477: The provinces as to how far this extends, but the concept is basically the same. That said, however, there are some items that are specifically excluded: Personal property is classified into the following categories: Security interests are created through attachment , which can be followed on by perfection . Attachment occurs when Perfection can occur by possession of the collateral, or by registration. In certain circumstances, possession can be considered to be

1080-518: The role of financial capital in social life, and propose various political restrictions to deal with that. Financial capitalism is the production of profit from the manipulation of financial capital. It is held in contrast to industrial capitalism , where profit is made from the manufacture of goods. It is common in Marxist theory to refer to the role of finance capital as the determining and ruling class interest in capitalist society, particularly in

1116-406: The secured party registers notice against the land at the local registry or land titles office. Where attachment occurs before the affixation to the land, the interest will have priority, However, where attachment occurs after affixation, the interest is subordinate unless where the debtor otherwise consents. Other intersections can also occur with interests in land. For example, a lender that grants

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1152-419: The security interest must be "perfected." Although some security interests are perfected automatically upon attachment, see U.C.C. § 9-309, for most perfection must be achieved through compliance with statutory procedure designed to give the world notice that the collateral is encumbered. The most common method of perfection is through filing a financing statement (often referred to by its form number: UCC-1) in

1188-473: The superior form of perfection. A PMSI is a special type of security interest taken in collateral by a party who gives value for the purpose of enabling the debtor to acquire rights in the collateral. Some examples are: In specified circumstances, PPSA registrants can obtain "super-priority" status over other secured parties, when the following steps are taken: PPSA security interests can have priority over real property security interests against fixtures, when

1224-466: The supply of it and usually require some "reserve" be held by institutions granting credit. Trading between various national currency instruments is conducted on a money market . Such trading reveals differences in probability of debt collection or store of value function of that currency, as assigned by traders. When in forms other than money, financial capital may be traded on bond markets or reinsurance markets with varying degrees of trust in

1260-1122: The uniform rate of interest. A variable-rate instrument, such as many consumer mortgages , will reflect the standard rate for deferred payment set by the central bank prime rate , increasing it by some fixed percentage. Other instruments, such as citizen entitlements , e.g. " U.S. Social Security ", or other pensions, may be indexed to the rate of inflation, to provide a reliable value stream. Typically commodity markets depend on politics that affect international trade, e.g. boycotts and embargoes, or factors that influence natural capital , e.g. weather that affects food crops. Meanwhile, stock markets are more influenced by trust in corporate leaders, i.e. individual capital , by consumers, i.e. social capital or "brand capital" (in some analyses), and internal organizational efficiency, i.e. instructional capital and infrastructural capital . Some enterprises issue instruments to specifically track one limited division or brand. " Financial futures ", " Short selling " and " financial options " apply to these markets, and are typically pure financial bets on outcomes, rather than being

1296-573: The various states during the 19th and early 20th centuries, in response to the reluctance of U.S. courts to enforce general nonpossessory security interests as either against public policy or because they were perceived as fraudulent conveyances . The drafters of UCC Article 9, particularly Grant Gilmore , successfully argued that since historical experience showed that disfavoring such security interests would not prevent creditors from requesting them or debtors from trying to give them by any means necessary, and because they were clearly economically useful,

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