The Personal Property Securities Act 2009 (Cth)
("PPSA") is a new law relevant to
security interests in personal property. Although the PPSA is
already law, it will not commence until May 2011.
The PPSA establishes a single national law in respect of
security interests over both tangible assets (such as motor
vehicles, plant and equipment, inventory, crops and livestock) and
intangible assets (such as intellectual property, contractual
rights and shares). However, real property is excluded from the
After commencement of the PPSA, any new security interests over
personal property will have to be notified on the Personal Property
Securities Register ("Register"). The
Register will be a "noticeboard" of security interests
– not a register of documents. Businesses will note their
security interests on the Register by lodging a Financing Statement
outlining certain details required by the PPSA.
The PPSA replaces the traditional notion of a fixed and floating
charge and the concept of crystallisation of a floating charge over
property. Instead, there will be a charge over
"circulating" and "non-circulating" assets. As
a practical matter, the relevant security agreements will take a
similar form to that of fixed and floating charges.
All charges currently registered on the ASIC register will be
migrated to the Register under the temporary perfection
arrangements provided for in the PPSA.
Businesses which supply goods should pay particular attention to
the requirements of the PPSA as those businesses will need to
register security interests over any goods supplied to minimise any
risk of defeat of retention of title clauses.
Although businesses will have 10 months from commencement of the
PPSA to understand the new law's requirements, businesses
should start development of appropriate compliance programs as soon
as possible. These should include an assessment of what assets will
be covered by the PPSA (such as a commercial consignment or an
equipment lease, not a security interest under current laws) and
whether an interest will need to be registered, what additional
information will be required to register an interest, and a review
of any retention of title clauses in your terms of trade.
If you would like further information or assistance, please
contact Tim Edwards, Partner, Lyle Abel, Partner or Damien Timms,
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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