After a number of delays, the Personal Property Securities Act 2009 (PPSA) finally commenced operation on Monday 30 January 2012.
The PPSA represents a substantial reform of the way in which security interests are created, registered and enforced and will affect almost all businesses in Australia. These include individuals, corporations, partnerships and joint ventures which are involved in any of the following transactions:
- financing or lending;,
- buying or selling goods on credit or subject to a "retention of title" arrangement;
- creating, registering or discharging charges or other security interests;
- leasing or licensing arrangements (except arrangements involving real property); and
- acquiring or selling personal property.
One of the significant reforms introduced by the PPSA is the establishment of a nation register, the Personal Property Securities Register (Register), which records security interests and plays an important part in determining the "priority" and enforceability of many security interests. To ensure that your business is properly prepared for the impact of the PPSA, and that your security interests are properly protected, you will need to:
- review your existing agreements and business practices to ensure that they reflect the requirements of the PPSA;
- conduct a search of the Register to ensure that it accurately reflects the state of all of your current security interests;
- register your security interests on the Register; and
- if you are acquiring an asset, search the Register to ensure that the asset is not subject to any undischarged security interests.
The PPSA is now in effect and we strongly recommend that you act now to assess your business practices to ensure that your interests are properly protected. If you would like further information regarding the PPSA, please do not hesitate to contact us.
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.
