How does the Personal Property Securities Act (PPSA) affect your business?
The Personal Property Securities Act 2009 (PPSA) is a national register that consolidates State based and National personal property registers into one. The Personal Property Securities Register (PPSR) is the register where details of security interests in personal property can be registered and searched. The Insolvency and Trustee Service Australia (ITSA) is the Australian Government agency responsible for administering the PPSR.
The PPS Register is a single point of contact register for consumers, businesses and the finance industry.
How will the PPS Register be used?
The PPS Register will be used in many situations including:
• finance companies that provide loans on the basis that they receive a security interest in an item of personal property to register their interest in the property on the PPS Register
• business operators who sell personal property on credit, consignment, or on a retention of title arrangement to register their interest in the property on the PPS Register, and
• consumers who are about to purchase personal property, such as valuable second goods, to search the register before buying to make sure that the property is free of a security interest.
What information can be recorded on the PPS Register?
Security interests can be registered on the PPS Register if they:
• are created by an agreement made in any state or territory of Australia, or
• relate to a corporation incorporated under Australian law.
How does the PPS Register affect businesses?
The new PPS Register is part of a reform that affects the way businesses deal with secured lending in Australia.
Importantly, business owners need to be aware of changes affecting arrangements such as the supply of goods on:
• consignment, or
• retention of title arrangements.
Business owners may be affected by the changes to personal property securities laws as:
• providers of credit
• buyers of property that may be subject to a security interest, or
• investors who are contemplating buying into a new business.
Property that can be included on the PPS Register includes almost anything except land and fixtures (such as buildings). Initially, it is expected a large proportion of registrations will be company charges and interests over motor vehicles. Boats, machinery, crops, shares, art, intellectual property and contract rights can all also be offered as security for a loan and therefore included on the PPS Register.
If you are a business owner, the PPS Register can help you:
• manage credit risk
• check whether property you plan to buy has a security interest in it, and
• register assets used to secure a loan you have made, or where goods are supplied on credit terms.
Issues for business owners to consider
• Do you need to search the PPS Register?
• Do you have security interests that are registrable under the PPS reform rules and, if so, whether to make a registration?
• When to register your security interests to make sure you do it on time.
The PPSA is a significant change to the law concerning dealing in personal property. Here at The Quinn Group our experienced team of Lawyers and Accountants are able to assist you with changes to the PPSA. Submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.