The Personal property Securities Register (PPSR) is where details of security interests in personal property can be registered and searched. The PPSR register allows individuals and businesses to improve the way they manage credit risk by registering their security interest in the goods they supply or lease on the PPSR.
Prior to PPS reform, the rules for registering a security interest were different for the Commonwealth and for each state and territory. The PPS Register replaces the many states territories and Australian Government registers, and brings them together into one national system, effective from 30 January 2012. All previous registrations were migrated to the PPS register upon commencement, including from the Australian Security and Investments Commission's Register of Company Charges and the state and territory registers of encumbered vehicles.
What is a Security Interest?
A security interest is an interest in personal property provided for by a transaction that secures payment or performance of an obligation. Types of Security Interests include:
- a floating charge
- a chattel mortgage
- a fixed charge
- a conditional sale agreement (including an agreement to sell subject to retention of title)
- a hire purchase agreement
- a pledge
- a trust receipt
- a consignment (whether or not a commercial consignment)
- a lease of goods (whether or not a PPS lease)
- an assignment, or
- a transfer of title
There are many different kinds of business transactions that can create a security interest. Often when you buy property or use property as security for another purchase the transaction creates a security Interest.
What is personal property?
A security Interest can be registered over personal Property, which is given a wide definition by the PPS Act. With a few exceptions, it covers any property someone can own, other than land, buildings and fixtures, and includes the following;
- goods
- plant and equipment
- cars, boats, planes
- crops, livestock
- art
- licenses, shares, accounts receivable, contract rights, and
- intellectual property
Why is it important?
Registering your interest is vital to ensure that you are given priority in recovery processing’s. Without registration, your rights becomes similar to that of an unsecured creditor, and upon a debtor going into bankruptcy or liquidation, you will be in an unfavourable position, with secured creditors being ahead of you when payments are made or assets distributed.
The PPSR register can have important consequences for businesses so it’s important you understand if it is applicable to you in a transactions. For more information please see the PPSR website at http://www.ppsr.gov.au/ or please contact us on 9238 1188.
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