A supplier of goods under credit can now register its security interest in such goods under the Personal Properties Securities Act. Goods are also cars, boats, machinery and raw materials. A lender of money can also register a security interest. The registration secures payment or performance of an obligation. The registration process is simple and is completed online by visiting www.ppsr.gov.au.

You can register your security interest in anything except real estate, buildings and its fixtures.

The goods that you supply may be then broken down by your customer to form a different product e.g. steel turned into table legs then a table. If you want to protect your position to get paid you need to register your security interest on the PPS register.

Even if you supply goods on hire or lease it is necessary to register your security interest. It is possible for a liquidator of your customer to sell your hired goods if you have not registered your security interest. Unbelievable I hear you say!

This is one area you don’t want to find out too late that you should have done something. With more and more companies experiencing cash flow difficulties now is the time to take action. It’s just common sense in the end.

It is also recommended that you review your “Terms and Conditions” of trade to include a provision to register your security interest. You may also revisit obtaining directors’ guarantees. One important point not to overlook knows who your actual customer is. Make sure that the order you receive has the ABN of the entity that you think you are doing business with and that you register over the correct ABN.

You can also search the register for a small fee to see if your personal property is covered by a security interest. Conduct a search over your company ... you may be surprised what you find that you may not be aware of or long forgotten about. Imagine that you are about to sell your business and that you find some long forgotten charge that delays the sale.

This is general information only and we recommend that you seek advice from your solicitor in this regard.

For more information on the Personal Property Securities Act, please contact your solicitor.