Issue 0039 The Personal Property Securities Register – how do you protect your business?
Millions of dollars have already been lost by Australian businesses through ignorance of the operation of the Personal Property Securities Act (PPSA) and the Personal Property Securities Register (PPSR).
This is undoubtedly a “time bomb” for businesses.
Businesses are losing assets through ignorance of the law. A wide range of business activities have been affected, including:
- motor vehicles and trailers
- cleaning equipment and products
- inventory (stock)
- assets that have been hired
- machines owned by one company and hired to another company within the same group
- a cabinet maker caught by a preferential payment demand by a liquidator
- considerable costs have been incurred by hiring and renting businesses
- the owner of $60M worth of electrical generating equipment has lost it
- there has been confusion about terminology of “grantor” or “grantee”.
These are just a small snapshot of some of the problems.
Businesses need to be proactive in protecting their assets from this legislation.
In the first instance, if you haven’t already done so, you should be obtaining legal advice and asking a commercial solicitor to draft two very important agreements for you:
- Terms of Trade Agreement
- Retention of Title Agreement
You should be issuing these agreements to your customers to sign prior to your business transactions being conducted with them.
We would recommend you engage your accountant to undertake a due diligence review of the systems that you’ve implemented within your business. If you haven’t implemented a system, get your accountant to implement a system to protect yourself from this legislation.
Liquidators are surprised about the number of small/medium enterprises that have been caught by this legislation.
When do you need to act? NOW! It’s very important that you get your “house in order” now!
There are very strict timelines for placing a registration on the PPSR:
- For inventory or stock, you should register the potential transaction before you deliver the stock to your customer.
- If it’s not inventory, registration must be made within 15 days of the customer obtaining possession of the goods covered by the invoice.
- Other security interests such as loan agreements, hire agreements, assignment of Intellectual Property agreements, etc. These must be registered within 20 days.
Businesses need to be very vigilant on protecting their assets from this legislation.
If you would like to obtain more information, a complimentary article, “Personal Property Securities Register”, is available. Download below.
ESS Small Business contains other articles that look further into the PPSA and the PPSR, written by a Melbourne Solicitor who is very experienced in the operations of the PPSA. These articles are available to purchase. We will also be producing more articles, over the next 2 months, on the PPSR relating to how the PPSA affects different types of businesses.
ESS Small Business presented a webinar, featuring “PPSR – How do you Protect your Business”. Click here to watch the presentation and to also view other webinars on various business matters, free of charge.
Whilst you are on the ESS Small Business’ website, why not have a look at the offerings from a wide range of business people who are able to assist small/medium enterprises?
If you have any questions on the operation of the PPSR and how it might affect your business, please don’t hesitate to contact us.
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Episode 0039 The Personal Property Securities Register – how do you protect your business?
COMPLIMENTARY MATERIAL Click on the button below to access the following FREE material:
- Copy of this transcript
- Complimentary copy of article - “Personal Property Securities Register”
To download the free material click the link below:-
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