Murray Now

The Personal Property Securities Act 2009 (PPSA) will apply from 30 January 2012 when the Personal Property Securities Register (PPSR) commences. Not since the introduction of the GST have businesses been subjected to legislation with such major ramifications on their business operations. Unfortunately the government has not adequately informed businesses of the affects of the PPSA which may result in many businesses being exposed to financial loss. The PPSA has changed the property landscape in Australia and businesses that are ready for the change will be best placed to reap the advantages of the PPSA.

What is the PPSA?

The PPSA is a new legal regime for personal property. Don’t be fooled by the term personal property. Personal property under the PPSA includes all property/assets such as business assets, equipment, goods and inventory and only excludes land, buildings, fixtures and some statutory licences such as water rights. The PPSA not only merges many current state and federal registers but it changes the current law to require owners of personal property in far reaching circumstances to register their interest in the personal property on the PPSR in order to protect their legal ownership rights.

What businesses will be affected?

Some examples of businesses affected by the PPSA include those that sell goods on credit, lease, hire or bail goods or those that operate through an operating/asset holding company structure.

Under the PPSA a business selling goods on credit must, in order to reclaim those goods from a customer who fails to pay or from a customer who becomes insolvent, have compliant PPSA documentation in place and they must have registered their interest in those goods on the PPSR. Failure to do both steps may result in the business loosing the right to repossess the goods. For more information click here.

Businesses that lease, hire or bail goods will no longer be able to rely on their legal ownership to guarantee the ability to repossess their goods from a customer if the customer breaches their agreement or they become insolvent. Businesses must have compliant PPSA documentation and a valid registration on the PPSR. For more information click here.

Businesses that operate through an asset holding and operating company structure may be exposed to the PPS Lease provisions of the PPSA. To avoid loss of the asset holding company’s assets if the operating company becomes insolvent businesses must have compliant PPSA documentation between the companies and a valid registration on the PPSR.

What should a business do to be compliant under the PPSA?

Businesses need to review their operations to assess their exposure under the PPSA and put a system in place to manage their exposure and PPSR registrations. As the PPSA has far reaching ramifications businesses should seek expert advice.

EDX provides PPSA Consultancy and PPSR Registration services. EDX can assess a business’ exposure to the PPSA, set the business up on the PPSR and maintain registrations. Once the register commences on 30 January 2012 businesses will be exposed to the PPSA whether they are ready or not so don’t delay call EDX on 1300 339 842. Or click here to go to the website.