Are your assets nailed down – Personal Property Security Register
In 2012 a new law passed which established a new national register which has become the final authority for securities claimed over personal property the “Personal Property Security Register”. In broad terms personal property means any asset other than real property (Land & attached buildings) and security refers to the debt(s), obligations, ownership and security over those assets. The Personal Property Securities Register allows businesses to register their security interests over their goods and assets, giving them rights over the personal property in the event that another party does not fulfil certain obligations.
Now what does this have to do with you and your business and should you do something about it?
Does your business:
- Sell goods on commercial terms with a retention of title clause?
- Hire, rent or lease out assets or equipment?
- Operate in building or construction industries?
- Operate in Agriculture or farming industries?
- Buy or sell valuable second hand goods?
- Operate in automotive services or supply industries?
- Sell art or other goods on consignment?
Then this applies to you.
Businesses should be using the new Personal Property Securities Register because it gives them the opportunity to become secured creditors in the event their customers become insolvent. Subject to a few exceptions, if you don’t register your security interest before your customer goes into insolvency (i.e. administration, liquidation or receivership) you will lose your security interest.
When buying goods searching the register lets you know if the goods are being used as a security for a debt or other obligation. Why do this? If you were to purchase a motor vehicle or piece of machinery from a person who has finance owing on the goods and were to stop making payments, there is a real chance the finance company will turn up on your doorstep and take the goods away without paying you a cent.
When selling goods on retention of title terms or consignment, making a registration shows searches you are claiming an interest in the goods and the goods are used to secure the debt or obligation the customer owes you. This way in the event a customer goes broke your goods aren’t used to pay other secured creditors.
When leasing assets registration protects your interest in your assets when they are not in your possession, that way your assets can’t be sold to pay your customers creditors.
How do I use the register?
To search (Buying goods), go to www.ppsr.gov.au, search using the goods serial number or sellers detail (i.e. ACN, ABN).
To register (Selling Goods), go to www.ppsr.gov.au and create an account using you ACN or ABN and other business information and register your assets and goods.
How much does all this protection Cost?
It costs $3.40 each search and $7.40 to register a security interest (less than 7 years duration).
Need more information visit www.ppsr.gov.au, or please contact our office if you would like to discuss this important issue