Your business and the Personal Property Securities Register (PPSR)

There used to be many different state-based registers to help people and businesses check security interests in personal property which made things quite complex! That’s until the Personal Property Securities Act 2009 came along.

The Act gave rise to the replacement of many state, territory and Commonwealth laws and registers to provide Australians with a single database. It’s called the Personal Property Securities register — or PPSR for short — and it’s a great tool for small businesses to:

• Check if someone else has a legal claim (security interest) on goods or assets you intend to buy.
• Register your own security interest in the goods you sell, lease or rent out. 
• Check before going into business/partnership with someone, to see if any of their assets are tied up in loans or debts (to help you avoid surprises later on).

Personal property includes all sorts of goods, including cars, furniture, art, crops and even livestock. Almost anything of value can be registered on the PPSR, except for land, buildings and fixtures. 

A security interest is an interest in property taken to secure payment or another obligation. Usually, a contractual agreement is created between two parties (for example, a borrower and a lender) stipulating the nature of the security interest.

A written agreement is not always enough to protect your goods or financial interests, and that’s where the PPSR can help. Registering a security interest on the PPSR can help businesses reduce the risk of losing goods or being left out-of-pocket in the event of a customer becoming insolvent (that’s the fancy legalese term for ‘going broke’). Here are some potential benefits of registering a security interest on the PPSR:

Adds extra legal protection  
By registering, you have an additional layer of protection to help manage your interest in an asset if a customer becomes insolvent before you’re paid. 

Helps increase your priority 
When more than one party has a security interest, there’s a hierarchy that determines who gets their funds and goods back first. Put simply, the highest priority secured party has the first right to enforce their security interest. By registering and ‘perfecting’ your security interest, you may be able to jump ahead of other parties (especially unregistered ones) and enforce your rights before they can. 

Allows you to be found by the insolvency practitioner 
When a business becomes insolvent, the insolvency practitioner needs to find the secured parties to arrange applicable repayments. By registering, you’ll be more easily found. 

There are some small fees that apply for registering and searching on the PPSR.

For a full breakdown, visit fees for using the PPSR.

If your business is involved in any of the following, registering or searching on the PPSR may be relevant:

• Selling, renting, leasing or hiring out goods.
• Buying second-hand items like vehicles, equipment and machinery.

Always seek advice from a professional business advisor such as an asset broker, bookkeeper or accountant for tailored advice for your business.

To learn more about the ways the PPSR can help your business, visit ppsr.gov.au.