WHAT THE HELL IS THE PPSR?
Let’s take a hot minute to discuss the PPSR and how you can leverage this tool to protect your business. We’ve top-lined a previous article you can find here. Check out how the PPSR can safeguard your assets and why you should consider it now. Not later…
What exactly is the PPSR?
The PPSR stands for the Personal Property Securities Register. By registering with the PPSR, you can provide your business with comprehensive risk protection. It’s also an effective tool for raising capital. If you ever need to raise funds for your business, it can also help you reach your goals by listing your goods and assets.
How does the PPSR protects your business? • The PPSR protects your business when purchasing goods.
• The PPSR safeguards the process of selling goods on retention of title or consignment.
• The PPSR protests your business when renting, leasing, or hiring out goods or services.
Here’s a tip: don’t rely on your contract’s retention of title clause, or you may be bitterly disappointed.
Eliminate the mystery behind what you’re buying. You can search the data in the PPSR to find out if the particular goods you want to purchase are being used as security for an obligation like a debt. You won’t be able to see the exact value of said debt or obligation. However, the register will tell you to whom the obligation is owed, so you can investigate further.
Here’s an example. Someone wants to sell you used goods, let’s say a valuable piece of machinery you can use for your business. They conveniently fail to mention that they still owe finance on it. It’s not paid in full, even though they tell you otherwise. If this individual stops making payments on their loan, the financing company can come knocking on your door. They can legally take that precious piece of machinery away without reimbursing you. It’s money down the drain, and it happens more often than you might think.
For just $3.40 you can make sure that whatever you are purchasing is completely safe from repossession and free of financed debt. Take the extra five minutes out of your day to protect yourself.
Sell Goods on Retention of Title or Consignment
When you register with the PPSR, it demonstrates to interested buyers that you have an interest in the assets or goods you are selling on retention of title terms. Either that, or you have consigned the goods to a third party to sell on your behalf. This registered interested indicates that the assets or goods secure the obligation owed to you. It safeguards your interest in the assets or goods in case the payment goes into default or the purchaser goes broke.
Let’s say you don’t register those assets or goods. If the purchaser goes broke before paying you in full, your property could in fact be sold to pay the secured creditors upfront. If you do not register, you will be considered an unsecured creditor in the event of an insolvency. The odds are small that you will recover a substantial amount, if any amount, of what you are technically owed.
As you can see, the risks of not registering with the PPSR are considerably high.
The best thing to do is register as early as you can. This will mean that you will have the best chance at getting ahead of the other creditors in line. It will also enable you to protect your interest, regardless if the assets are mixed, sold on, or installed onto other goods.
Renting, Leasing, Hiring out Goods
If you have a hiring arrangement or lease with a term of at least 12 months or longer, or that is for an indefinite period of time, this is the section that applies to you.
By registering your assets with the PPSR, you can safeguard your vested interest when said assets are not technically in your possession. The registry will show that you claim an interest in the assets and/or goods will will be renting, hiring, or leasing out. If you fail to register and your customer becomes insolvent or goes broke, your assets and/or goods will probably be sold to pay creditors. And you’ll have to deal with the loss with no legal avenues for reimbursement.
If You Think You’re Already Covered by Your Contract…
The retention of title clause stipulates that the title will remain with you until the goods are paid for in full. Unfortunately, the retention of title clause in your invoice or contract will not protect you legally on its own. At least not any more. If you fail to register with the PPSR, the clause is highly unlikely to measure up against others, especially those registered.
Ipso facto, anybody who has registered an interest with the PPSR is in front of you in the queue if your customer ends up defaulting or going broke.
For all the business owners out there, registering with PPSR is a no brainer. Protect your business today and find out more here.