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Posted: 23 March 2016

The Personal Property Securities Register – how do you protect your business?

Issue 0039

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.

The Personal Property Securities Register – how do you protect your business?

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