Protecting your personal property rights

Protecting your personal property rights

20 August 2012

Business owners are encouraged to register ownership of personal property assets to ensure your interests are protected under the new Personal Property Security Act (PPSA) that came into effect on 30 January this year. 

The existing concept of ‘title’ is irrelevant under the new Act, and is replaced by the concept of a ‘Security Interest’. 

Personal property becomes ‘security’ when a secured party takes an interest in personal property as security for a loan or other obligation, or enters into a transaction that involves the supply of secured finance. 



If you have cattle on agistment, and the property owner where your livestock are agisted becomes insolvent, creditors of the property owner may be able to sell your cattle to help satisfy the property owner’s debt. Registering the ownership of your cattle on the PPSR would ensure your rights are protected. 

If you sell wheat to someone with payment terms of 21 days from last delivery and the buyer goes into liquidation prior to you being paid, you would become an unsecured creditor in the liquidation process. However, if you had registered your interest on the PPSR, you would have a right to take back the wheat. 

Your business leases a bobcat to a business that goes broke and the bank seizes the assets of the business. Without registering your interest in the bobcat on the PPSR, the bank could potentially take your bobcat. 

Your business supplies goods to another business on the condition that you retain title in the goods until you are paid in full. This is normally called “retention of title”.  If the business you supplied the goods to becomes insolvent, your retention of title is not enforceable against the liquidator unless you have registered ownership of your goods on the PPSR. 

Do the new laws affect your business? 

The PPSA impacts most businesses including agriculture and farming, mining, manufacturing, construction, transport, finance and retail businesses. In fact the new laws will affect any business that: 


  • Supplies goods (by sale or lease) 
  • Provides finance 
  • Sells goods on credit, including with a retention of title (ROT) 
  • Leases plant and equipment, motor vehicles or other assets 
  • Has provided stock or other assets on consignment to third parties 
  • Is attempting to refinance, raise capital or is in the market (i.e. trade sale)  


Personal Property Security Register (PPSR)

All personal property provided as security is now able to be recorded on a single on-line PPS Register, rather than through the former array of Australian Government, state and territory registers such as registers of stock and crop mortgages and ASIC’s Register of Company Charges. 

The PPS Register (PPSR) is available to search and register 24 hours a day seven days a week at 

Property Covered by the PPSA

Property that can be added to the PPSR includes, but is not limited to, rights under contracts, motor vehicles, boats, aircraft, shares, art, equipment, stock, receivables, intellectual property licenses and trademarks. That is, almost any asset except land and fixtures (such as buildings), water and certain statutory licences – these are assets that operate under separate title systems. 

If you are a business owner, the PPS Register can help you: 

  • Manage credit risk 
  • Check whether property you plan to buy has a security interest in it, and 
  • Register assets in which you have a Security Interest including to secure a loan you have made or where goods are supplied on credit terms.

PPSR Priorities 

Registration on the PPS Register is a form of perfection under the Personal Properties Security Act. Perfection by registration grants protection for the secured party that is stronger than the creation of the security interest, with two main benefits:   

  • It defines the priority status the security interest has relative to other interests in the collateral, and 
  • It ensures their security interest survives the bankruptcy or insolvency of the grantor (the person that received assistance to acquire the collateral).

Under the PPSA, existing asset protection and separation structures may not be sufficient to protect personal property assets. For example, in a liquidation or insolvency scenario, stock or assets on consignment which are held by another party will be available to a liquidator unless security over the assets is registered (perfected) under the new system. 

What you should do 

It is recommended that business owners seek advice from a legal advisor and put steps in place to mitigate risk and ensure the interests of you and your business are protected. 

It is also important that you search the PPSR if you are acquiring personal property to make sure the property is not already secured by another party. 

For more information please contact your local Boyce Accountant. 

Source: Sydney Business Lawyers

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