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Personal Property Securities Register
The Personal Property and Securities Register (PPSR) is a national online register of secured interests in property. It is a catalogue of titles and rights to property, equipment and other assets.
The PPSR allows businesses and creditors to formally register security interests and rights. Related parties can search the register to determine if there are registered interests against any property or other assets.
This means that if a business has a registered interest in any property, it will have certain legally recognised rights over that property, should the entity go into liquidation or a dispute about ownership arises.
The PPSR’s two main objectives are to protect individuals and businesses when they purchase property and to protect parties in the event of liquidation or other reasons for not paying.
If a customer goes into liquidation or forfeits on an agreed payment, having the property already registered with the PPSR means a much greater chance of recovering either payment or the property itself.
If the business or any related parties go into liquidation, this means the party with registered security over the property will be more likely to recover the property or payment, or at least a percentage of the value.
While the PPSR has existed since 2012, many small business owners have not taken advantage of the protection it offers, thinking it is for large business only. It is in fact for any Australian business of any size. (It is also available for individuals).
With the increased potential of businesses going into liquidation post-COVID-19, now is the time to encourage your clients to register property.
What Can be Registered?
A wide variety of property can be registered. Collateral types are either commercial or consumer property. Property is registered with both a collateral type and a collateral class.
Types of Collateral Class
Tangible – such as vehicles, boats, aircraft or equipment.
General – most, or all of the current or future property of an organisation, such as inventory.
Intangible – such as an account for payment of goods or services already supplied or intellectual property.
Financial – such as an investment instrument, currency or chattel agreement
Length of Registration
The length of the registration period can vary depending on the type of property being registered. Registration can be a defined period, or it can be indefinite (no end date). Some registrations can only be for a maximum of seven years.
The fee for searching registrations over property is $2.00.
Fees to register security over property vary, according to the security interest's length, and range from $6.00 to $115.00.
Accounting Technician Next Steps
The website is complex; however, it is worth the time to navigate it if you or your clients have property worth being secured with this register.
Talk to your clients about the register and the protections it can offer. Discuss their level of risk with property, equipment and other assets, including loans to other businesses.
Set up a PPSR account to make and manage registrations.
Create a secured party group (SPG). The SPG contains relevant information about the secured party (person or organisation) who has an interest in the property. One account holder can manage multiple SPGs.
Decide whether you want to create an account in your name to manage registrations of multiple clients (SPGs) or whether your client will register in their name and manage their registrations.
You need both an account and SPG before registering any property.
You will then have a portal through which you manage registrations.
Select collateral type (commercial or consumer).
Select collateral class (tangible, general, intangible or financial property).
Check the website for information about the
timing of the registration
For example, registration must be made more than six months before the start of any insolvency process to be secured.
You will need information on the type of collateral, grantor, SPG, and payment method for PPSR fees.
Set up a spreadsheet of registered property showing end date of registration for each property type and flag for follow up at registration end date.
There are specific processes to follow if a business wants to
enforce the security interest
to claim collateral to cover all or part of the debit or property secured.
Consider offering this service to your clients as another way of assisting them in managing their business assets and protecting their interests. It is a form of insurance – one the business may never need – but may also prevent them from losing a great deal.
Australian Financial Security Authority – Personal Property Securities Register