When Stella Startup, the hyperwidget entrepreneur, first organized the corporation Hyperwidgets, Inc., she received 100 shares in the corporation. The only other person to gain shares in the new corporation was Stella's brother, Stewart, who received 20 shares. Stewart was given stock Certificate #2 duly issued by the corporation, evidencing that these 20 shares were held in his name. The corporation is doing well, and it is apparent that these 20 shares are of substantial value. Stewart enters into an agreement to borrow $100,000 from Venture Loans Group, his intention being to start up his own business making organic animal foods and treats. As part of his loan agreement, Stewart grants the lender a security interest in his 20 shares of Hyperwidgets.

(a) Could Venture Loans perfect on this interest by filing a UCC1 in the correct place and indicating the collateral with sufficient clarity? If so, would this be considered perfection by control?

(b) Suppose instead that Stewart simply handed over his Certificate #2 to Venture Loans, which kept the certificate in its possession. Would its interest be perfected? If so, could it now claim perfection by control?

(c) What exactly would Venture Loans have to insist be done for it to be able legitimately to claim perfection by control over Stewart's shares in Hyperwidgets?