PPSR Registrations! Have you protected your business interests?
A bit of background
The Personal Properties Securities Register (PPSR) commenced 7 years ago and has become very important for consumers and businesses when it comes to protecting their interests.
The Personal Property Securities Act 2009 (Cth) (“Act”) only relates to goods and chattels (which we have called “
” in this article, for simplicity), not real property (i.e. land). While the Act refers to personal property, there are a number of items that are excluded (for example, items used only for a domestic purpose).
The main objective of the Act was to introduce to Australia a system that was intended to nationalise:
the creation of security interests in personal property;
the enforcement procedures of security interests in personal property; and
rules to determine who has the right to personal property when enforcing those security interests.
So, what is a security interest?
Under the Act, a security interest is defined as “an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation (without regard to the form of the transaction or the identity of the person who has title to the property).”
Below is a list of commonly used transactions in the commercial world, which involve security interests (and, as a consequence, the PPSR):
fixed or floating charges;
conditional sale agreements (including an agreement to sell subject to retention of title);
consignments (whether or not a commercial consignment);
leases of goods (whether or not a PPS lease);
transfers of title to goods;
But most importantly, what can you secure an interest over and why do you need it?
The main objective in interacting with the PPSR should be to protect your interests in business transactions, particularly circumstances where the person or company that you are lending to goes into liquidation or fails to pay you back. Securing your interest gives you a better chance to recover your funds or the right to reclaim the personal property.
Further, If you are a purchaser of personal property (such as motor vehicles, water craft, artworks and even intellectual property), you can quickly look up the asset before you buy using the PPSR. This can make sure that there are no other interests recorded and that you do have clear title to the goods.
What we can do for you
As of January 2019, there are some 120,000 security interests that are due to expire. Further to this, there are a number of security interests that have never been registered.
At Jenkins Legal, we are accredited specialists in Business Law. If you are thinking of registering an interest on the PPSR or have to deal with security interests, we are able to guide you through this process.