The Personal Property Securities Register (PPSR) is a national online register that allows creditors to register their interest in personal property — which in this context means property other than land. For businesses that supply goods on credit, register under retention of title arrangements, or hold security over a customer's assets, the PPSR is the mechanism that protects that interest if the customer becomes insolvent.
Why registration matters
Without a registered security interest, a trade creditor who supplied goods on 30-day terms ranks as an unsecured creditor in the customer's insolvency. That means they sit behind secured creditors, employees and tax authorities in the distribution waterfall — and in most liquidations, unsecured creditors receive little or nothing.
With a properly registered security interest, a creditor may have priority over unregistered or later-registered creditors in respect of the secured property. In a retention of title situation, registration under the PPSA (Personal Property Securities Act 2009) is what makes a retention of title clause effective against a liquidator — without it, the clause generally does not bind the insolvency process.
What can be registered
Security interests can be registered over goods, inventory, equipment, receivables, intellectual property and certain other personal property. For most trade creditors, the most common registrations are over inventory supplied on credit (retention of title) and over all-present-and-after-acquired property of a corporate customer (ALLPAAP — the broadest form of security).
How to register
Registration is done at ppsr.gov.au. You will need the grantor's ACN (for a company) or ABN or name and date of birth (for an individual). You need to describe the collateral — what property the registration covers — and choose the appropriate collateral class. The fee varies by collateral type and registration period: a 7-year registration over general collateral currently costs $7.40.
The registration must be made before the debtor enters insolvency to be effective. A registration made after an administrator is appointed is void against the administrator.
Timing is critical
The PPSA has a 20-business-day grace period for registering a Purchase Money Security Interest (PMSI) — the type of security interest most relevant to retention of title arrangements. Miss this window, and the PMSI loses its super-priority. In practice, the cleanest approach is to register at the point of account opening, not after a problem arises.
This article is general information. PPSR law is technical — obtain legal advice to ensure your registrations are correctly structured for your circumstances.
If you supply goods on credit and do not have a PPSR registration strategy in place, speak to Merion — we can advise on how to protect your position.