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  • Issue 0042 The PPSR – are you aware of it and how it can affect your business?

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Issue 0042 The PPSR – are you aware of it and how it can affect your business?

The Personal Property Securities Register (PPSR) and the associated Personal Property Securities Register (PPSR) can affect every business in Australia.

Many small business operators say to me, “Why are you worrying about a personal property piece of legislation?” Unfortunately, the term “personal property” is a misnomer. This applies to business property. In fact, it applies to every business asset except land and attachments to land, including your debtors, stock, vehicles, Intellectual Property (IP) and items that you’re renting or leasing to someone else.

In the first instance, it’s highly desirable that you have a consultation with a commercial solicitor, especially if you haven’t done so since January 2012, relative to the two key documents that you need for this legislation – the Terms of Trade Agreement and the Retention of Title Agreement. Your solicitor will give you a general overview as to how this legislation works.

Then we believe that you need input from your professional accountant or adviser, to establish a system that guides you as to what should happen to utilise your two documents and to ensure that registrations are appropriately enacted.

When you start transactions with a new customer, prior to any sales being made, you should’ve asked your prospective customer to review your Terms of Trade Agreement and Retention of Title Agreement and to sign the agreements. When you receive the signed agreements, a decision needs to be made within your organisation as to whether a registration of that customer will be made on the PPSR.

The rule of thumb that I suggest you use is that, if this customer didn’t pay you or you had to refund money that they had paid you in the previous 6 months because you’ve received a preferential payment letter from a solicitor, would that payment financially embarrass you? If so, I believe you should ensure that this customer is registered on the PPSR.


You don’t have to register every invoice. You’re basically registering the customer and, if your solicitor has drafted the Terms of Trade Agreement appropriately, that agreement will cover the current and future sales that you’re going to make to that customer.

If you have stock on consignment at someone else’s premises, that’s a vulnerable position for you and your business. It’s an asset that you can gain protection for on the PPSR.

If you’re renting or leasing assets to someone else, you can obtain some relief by registering on the PPSR.

If you have plant and equipment, scaffolding, building equipment, tradesmen’s tools, etc stored on someone else’s property, then you should be getting advice as to whether you need to register those assets on the PPSR.

If you have IP in your business that you’ve licensed or entered into some type of utilisation agreement with someone else, then that transaction should also be registered on the PPSR.

We believe that the obvious professional group to assist you in this regard are accountants or advisors. Our recommendation to you is, once you’ve received your Terms of Trade Agreement and Retention of Title Agreement from your solicitors, have a discussion with your accountant or advisor relative to implementing an appropriate system to ensure that your system works properly within your organisation, to give you the maximum protection.

It has been 3 ½ years since this legislation started in Australia. If you haven’t experienced any problems or, indeed, had anything to do with the PPSA and the associated PPSR, you’ve been lucky. Over $120M has been lost in court cases by businesses that owned assets and hadn’t registered those assets on the PPSR. Those assets were ultimately forfeited under a court order to someone else – normally a secured creditor via a liquidator. You may also have avoided receiving preferential payment claims from liquidators of companies with which you’ve had dealings.

This is no reason why you shouldn’t be protecting yourself now, for future transactions. The cost for a 7-year protection is very small (under $5), the cheapest insurance premium on the market. I would urge you to have discussions with your solicitor to get the agreements prepared and then have discussions with your accountant or advisor to ensure that you have an appropriate system within your business, to protect you from the consequences of not appropriately registering on the PPSR.

Find an Accountant/Adviser

If you would like to find an accountant who can offer the types of services mentioned in this edition, generally known as business advisory services, please utilise the Find an Accountant/Adviser directory within the ESS Small Business’ website. Please visit and click on “Find an Accountant/Adviser” menu tab. All you need to do is to type in your postcode and the system will then show you accountants in or near your postcode who offer a wider range of commercial services to small/medium enterprises.

ESS Small Business contains other free articles and articles for sale, prepared by approximately 20 other businesses, on a wide range of small/medium enterprise matters.

ESS Small Business also presents webinars, free of charge, covering a wide range of small business matters. These webinars are also recorded and are available for viewing.

We will be presenting a webinar, featuring “PPSR – System for Individual Businesses”, which will be held on Thursday 28th April 2016 at 6pm AEST. Click here to register to attend, free of charge. To view our other upcoming and recorded webinars, click here.

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 services that accountants can offer, please don’t hesitate to contact us.


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Episode 0042 The PPSR – are you aware of it and how it can affect your business?

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