Personal Properties Securities Register (PPSR)

Are you the supplier of goods?

Do you hire equipment out to your customers?

You need to protect your interests

Have you ever wondered what would happen to your goods or assets if one of your customers is liquidated? Did you know that if you are not registered with the Personal Properties Securities Register (PPSR), you could potentially lose your goods or assets? This could mean you personally lose thousands, or potentially millions of dollars.

The Personal Properties Securities Register (PPSR) is an important tool for protecting your assets and reducing your business risk. Morrows would like to help you so you are protected from this risk.

The PPSR is a single national online data base of people’s security interest in personal property. Morrows would like you to consider two main areas which are important regarding the PPSR register.

1. Supplier of Goods Protection

Do you sell goods to your clients and use “retention of title” clauses in your terms of trade? (ie You sell the goods to your customer; however you own the goods until the customer pays.) If so, have you registered with the PPSR? If you have answered no to this question, you could be at risk in losing the goods that you have provided to your customer if they are liquidated.

To protect your business you will need to register your interest on the PPSR database. The major benefit of the new PPSR is that, if your customer becomes insolvent you can repossess your goods which could save you thousands of dollars in potentially lost goods. By registering with the PPSR you will ensure the protection of your goods.

Other key benefits include:

1. If you have a problem with a customer who is selling their business without paying you, PPSR registration can stop this. The sale will not continue until your customer approaches you for a discharge from the PPSR.

2. If a liquidator demands a return of a preference payment that your customer made to you and you have registered on the PPSR, the payment will not be deemed a preference payment since it is a settlement of a secured debt.

The consequences of not registering or not registering correctly on the PPSR are:

• If you do not attend to all compliance issues your security may be invalid and, if so, you will lose your goods.
• If you do not register on the PPSR and there is a competing creditor with a security over your goods then, providing that they have complied with the PPS rules, they will acquire your goods.
• If you do not register on the PPSR, even where there is no competing creditor, if the debtor goes into liquidation you will lose your goods.
• If you register when you are not entitled to you may face civil penalties and be liable for up to $27,500 for each instance.

2. Equipment Loan and Rental

Do you hire equipment to your customers? If so, Morrows recommends registering your assets with the PPSR. Did you know that if you did not have your asset registered on the PPSR and you hired it to an entity that was liquidated that you could lose your equipment and even though you own the asset?

We strongly recommend that you register your equipment on the PPSR if your business rents or loans equipment to your customers.

Registration Process

Registering with the PPSR is a tricky process and if you do not register correctly your registration will be invalid. For this reason we do not recommend that you register your goods and assets yourself.

Morrows has access to software to assist you with your obligations and can also help you to search current records so please contact your representative to advise you on the best course of action on 03 9690 5700 or businessandtax@morrows.com.au.