Business Update

Personal Property Securities Register more important than ever

By registering your security interests on the Personal Property Securities Register (PPSR), you increase your chance of recovery if your debtor fails to pay the debt.

Section 66 of the Personal Property Securities 1999 sets out in rules for determining priority between registered financing statements. It is therefore important to register your security interests as soon as possible. If you do not register your security interests and a debtor is adjudicated bankrupt or is placed into liquidation, secured creditors will be ahead of you when payments are made or assets distributed.

As outlined in the last issue, if you deal with providing goods or inventory on credit using a retention of title clause or provide finance for a specific purchase, “super priority” may exist if you were to register your security interest. If you do not register your interest, your retention of title may be ineffective.

When registering on the PPSR, ensure the following:

• You have a valid security agreement or up to date terms of trade
• Your financing statements are correctly registered and details are kept up to date
• Your description of goods in the collateral fields is wide enough to include any proceeds from the sale of the goods
• You should keep track of your financing statements and renew them before the date of expiry
• You should keep your financing statement PINs in a secure and accessible place as you will need these to make any changes to your financing statements on the register.

For further information, please refer to the PPSR website.

Please note this information is intended to be a guide only. You should seek your own independent legal advice for more information.