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