Protect your business: Ensure your PPSR registrations are enforceable

Have you ever been in a situation where goods you bought were reclaimed by the manufacturer as the dealer you bought off owed money on them? Or have you sold goods on credit to a customer that became insolvent?

Either way, you’d be feeling a bit ripped off.

The Personal Property Securities Register (PPSR) has been available since 2012 to assist businesses and individuals in protecting their financial interests. It is essentially an online noticeboard of assets that businesses and individuals have claimed a right to in the event of their customer defaulting on an obligation to them.

You can use it to:

    1. check if an item you are considering purchasing has an outstanding debt on it (so you know if someone else has ‘first rights’ to the item even if you were to purchase it),
    2. list an item you are selling, leasing or hiring to a customer (so that if the customer becomes insolvent you are protected)

Do I need to use the PPSR?

If you buy, sell, lease or hire goods that are of a significant value to you, then yes, you should be using the PPSR.  A valid registration could be seen as ‘insurance’ in case of things going wrong.

Without registering your interest in an item on the PPSR, you are essentially an ‘unsecured creditor’ with low priority for repayment in the case of insolvency. For example, you provide machinery worth $10,000.00 to a customer with a payment plan of $1,000.00 per month for 10 months. Three months later the customer goes into administration. You have only received $3,000.00 for your supplied items. The administrator looks first at the secured creditors and then sells the customer’s assets (including the machinery you provided) to raise cash to pay the secured creditors. After they have done this there is $1,000.00 left to pay to unsecured creditors. However another unsecured creditor is owed $3,000.00 – so between you there is $10,000.00 payable.  The money left over after paying the secured creditors is then divided up between the unsecured creditors according to the proportion of their interest. So the other unsecured creditor will receive $300.00 for their $3,000.00 and you will receive $700.00 for your $7,000.00.

But my contract of sale includes a ‘retention of title’ clause?

Your contract may well include a ‘retention of tile’ clause, but the chances of that protecting you are very low now.  What if your customer offered the same items you are wanting to recover as security for another purchase they made?  This other supplier may have registered this on the PPSR and it is the order of PPSR registration that determines who has first right to an item. If you haven’t registered the item, you are not in the queue to recover the item in the event of things going wrong.

OK, so how do I register an item on the PPSR?

The PPSR website provides detailed instructions on how to register a security interest – see They can provide assistance and further information relating to the PPSR – see for contact details.

A number of court cases have highlighted the importance of having a perfect PPSR submission for the registration to be found enforceable:

How can I ensure my PPSR registrations are valid?

Check and double check your registrations before submission.  It may also be worth reviewing any previous submissions for items you still want protection on. Just because you have made a submission doesn’t mean it is automatically enforceable.

Some critical points to watch out for:

    1. Enter the proper name of the Purchaser correctly, in full and without spelling mistakes
    2. Where the Purchaser is a corporate entity it is best practice to list the name, the ACN and the ABN
    3. If you as the Grantor have an ACN then the registration should be under your ACN not your ABN
    4. The description provided for the item being registered should be relevant and should include all specific identifying details – make, model, identification number, colour etc.
    5. If part of the description is right, or part of the Purchasers or Grantors details are right, that is not enough. The part that is not right that will render the registration as defective (and therefore not enforceable) despite the information that was correct.

You may find it helpful to review some more court cases to get an idea of how the courts determine when a registration is deemed defective:

If you are uncertain if the PPSR is for you or if your existing registrations are enforceable, it’s worth following this up.  Call us on 03 5339 3200 or contact us here to discuss.

Thanks for reading.

By Genna Kidd

The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.

Looking For A Clear Picture
Of Your Finances?

Focus Accounting and Financial Group offer clarity and insight into your current position, as well as a reliable strategy for future success. For tailored accounting services, business advice, SMSF support and a partnership you can trust, book your free consultation today.


Contact Us