McKern News

Personal Property Securites Register and your business..

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Recently we have seen some significant change in the registers used across various Commonwealth, State and Territory  bodies to document goods which have a security interest held over them. These registers are used both personally and commercially, however changes and migrations which have taken place will specifically impact on many Small and Medium Businesses. We feel it is important to  remind, or in fact introduce clients, to the Personal Property Securities Register (PPSR) and its applications.

What is it?

From 30 January 2012, the Personal Property Securities Act 2009 (Cth) (PPS Act) established a new system for the creation, priority and enforcement of security interests in personal property, which is generally all property other than land, fixtures and certain statutory interests. This can prove to be a very important tool to take advantage of in business as it can ultimately assist you to recover debt you are owed on goods for which you are yet to receive full payment.

The PPS replaces a number of registers and has provided us with a single national register of security interests in personal property.

Why register?

Do you sell goods on terms, such as retention of title, or leasing out of valuable goods?

Registering goods you supply or lease will assist in managing the credit risk within your business. In the event a debtor liquidates or goes into bankruptcy and can no longer make payments to you, registration with the PPSR ensures that you will be treated as a secured creditor, meaning that payments to cover your debt will be a priority above unsecured creditors. There are many types of business transactions that give rise to a security interest and we have listed some of the more common ones below:

  • Chattel mortgage
  • Conditional sales agreements
  • Hire Purchase Agreements
  • Consignment
  •  Lease of goods
  • Transfer of title

Do you purchase valuable second-hand items?

In this circumstance you can check the PPSR to see if the goods you intend to purchase (ie. Vehicle, machinery, stock etc) are subject to security interests. This is a low cost way to protect your business risk prior to a transaction taking place.

Important new rules for Retention of Title Businesses

Under the new PPS reform, businesses producing contracts whereby a purchaser may take possession of the property, but not acquire the title until full payment is made of the purchase price, will be significantly affected by new rules. New rules stipulate that a business in this circumstance can no longer rely solely on retaining title of the asset should the debtor become insolvent or bankrupt, but MUST be registered on the PPR register. This will allow the business to enforce their right to repossess the items and will protect their interest if the customer does fail to pay.

Registrations post 31 January 2014 transitional period

With the period for registrations to be made under the transitional period introducing the PPSR having closed on January 31st 2014, all registrations going forward for security interests that existed prior to this date will be registered as taking effect from 31 January 2014, as opposed to their actual commencement date. Simply, this means that another person with a security interest in the same collateral with a higher priority ranking (for example, a secured party who registered during the transitional period) will be paid out ahead of you in the event that grantor (the person who hires or buys the goods, or borrows money) defaults. For security interests that commenced post 31 January 2014, there are no negative effects to registering post this date.  

Many security interests registered on existing registers, such as ASIC Register of Company Charges and the Vehicle Securities Register, were migrated onto the PPSR upon its conception and will remain active for their period of initial registration.

Further information on the PPSR can be found at

If you feel that this information will apply to you and your business please contact your Client Manager and we will be happy to provide more detail specific to your circumstances.