CFO’s Words…

What is a PPSR and how can it provide you additional protection?

PPSR stands for Personal Properties Securities Register. This is an electronic register which operates as a public notice board where a secured party can register the details of a property that they have interest in. The register is located on the Companies Office website. The claims recorded in the register of secured parties are known as a “security interest”. The way the list works  is that the date on which a security interest is registered, will generally determine the priority that a creditor will achieve if the company that owes them a debt is Liquidated.

If you have rights to property that is in the possession of your customers, you should be registering a security interest on the PPSR. It’s a fairly simple and inexpensive process. You can secure rights in assets and stock, if your sale agreement for materials and stock contains a “retention of title clause”, also known as a Romalpa clause. It is also important for: goods on consignment, leased goods for more than 1 year or no specified time, and general security arrangements.

If you have rights in any of those examples it should be part of your standard business practice to register a PPSR for those assets on the Companies Office website. Failing to do so will pass by a simple opportunity to raise your priority which it comes to distribution of money in a liquidation.

David Pearson