PPSR Registrations – Getting it right the first time
Any business that leases goods, sells goods on consignment or on terms, or otherwise uses goods to secure debt, needs to be familiar with the Personal Property Securities Register (PPSR).
It’s easy for businesses to make simple mistakes during the registration process which can have big consequences in the future.
Using the wrong identifiers for grantor, secured party, or collateral: the PPS Regulations set out, in great detail, precisely how the parties and goods must be described. For example, companies must generally be described by their ACN, trusts by their ABN, and individuals by their name as it appears on their drivers licence. However, there are always exceptions to exceptions to exceptions. This is an easy mistake to make, because the PPSR will not stop you from using the wrong identifier. For example, it is possible to use a company’s name instead of its ACN, or to describe a vehicle by its make and model instead of its VIN number. Such mistakes are likely to invalidate a registration.
Purchase Money Security Interests (PMSI): PMSIs are a specific type of security interest that, if registered correctly, enjoy “super-priority”
over all others – they can even trump earlier interests. The most common PMSIs are leases for one year or more, and retention of title arrangements
(where goods are given to a buyer but not owned until paid for).
The PPSR looks simple, but is based on highly technical legislation. Liquidators will often try to invalidate as many registrations as possible to
increase the property available to them. Don’t give them a reason to go after your interest – register early, register correctly and, if in doubt,
see a lawyer.
This is general information only. It is not legal advice and should not be relied upon. If you require advice for your circumstances, please contact us.