Registering your business goods and interest is good risk management.
The Australian Financial Security Authority has released a new Personal Properties and Securities Register (PPSR) business guide to help business owners better understand the PPSR and how it can protect their business.
What is the PPSR?
The PPSR is a 24/7 national online register that provides information on whether someone is claiming an interest on any personal property. Personal property is any property that is not land, building or fixtures. This includes:
- motor vehicles, boats or aircraft;
- crops, cattle and other livestock;
- stock in trade, artworks and equipment;
- other goods, new or second-hand, whether owned by businesses or individuals;
- intangible property, such as patents, copyright, commercial (not government-issued) licences, debts and bank accounts; and
- financial property such as shares, cash or cheques.
When you’re buying, selling, leasing, renting or hiring out personal property, the PPSR can help you by:
- letting you know if what you are buying has an interest claimed on it; and
- allowing you to register your claim for an interest on goods you sell or hire out, so you ‘re protected if your buyer or hirer goes broke or defaults.
The PPSR business guide
The PPSR business guide helps Australian businesses not familiar with the laws surrounding the PPSR, and what it means for businesses. It also explains how you might benefit from using the PPSR.
The PPSR business guide is relevant if you:
- sell goods on retention of title terms (the title of the good belongs to you until a certain agreement has been fulfilled by the buyer, eg they have paid off the item in full);
- hire, rent or lease out goods;
- buy or sell valuable second-hand goods or assets; and/or
- want to raise finance using stock or other assets as collateral.
The PPSR business guide is available on the Australian Financial Security Authority website.
Think you’re already covered with a contract?
A retention of title clause (indicating that title remains with you until goods are paid for in full) in your contract or invoice no longer protects you on its own. If you don’t make a registration, your retention of title clause is unlikely to stack up against others when you need to rely on it. In other words, someone else who has registered an interest is ahead of you in the queue should your customer default or go broke. It makes sense to protect your contracts by registering your interest.
Talk to Carrick Aland
The PPSR business guide is not legal advice, and it would be prudent to seek professional advice about how the law applies to your particular business and dealings. Please contact our offices in Dalby, Toowoomba or Chinchilla on 07 4669 9800 for further information.