PPSR Australia: Guide for Business Owners and Buyers

The Personal Property Securities Register, commonly known as the PPSR, is Australia’s national register of security interests in personal property.

Businesses may encounter the PPSR when buying assets, supplying goods on credit, leasing equipment, providing finance or purchasing a business.

A PPSR search can be useful, but it does not provide a complete answer about ownership, debt, priority or the wider legal position. The result should be considered together with the relevant transaction documents and other due diligence.

Table of Contents

• What Is the PPSR?
• What Counts as Personal Property?
• PPSR Search vs PPSR Registration
• When Might You Search the PPSR?
• When Might a Business Register a Security Interest?
• Using the PPSR When Buying Business Assets
• PPSR Checks When Buying a Business
• When Legal Advice May Help

What Is the PPSR?

The PPSR is the official Australian register of security interests in personal property.

A security interest can arise where an agreement gives one party rights over personal property to secure payment of a debt or performance of another obligation.

Examples can include arrangements involving:

• secured loans;
• hire-purchase arrangements;
• general security agreements;
• retention of title arrangements;
• some leases and bailments;
• consignments; and
• other transactions that create a security interest under the applicable law.

The PPSR is managed by the Australian Financial Security Authority.

Importantly, the PPSR is not a register of ownership.

A registration indicates that someone claims a security interest over personal property. It does not, by itself, determine who owns the property or whether money is currently owing.

What Counts as Personal Property?

For PPSR purposes, personal property generally includes most property other than land, buildings and fixtures.

Depending on the circumstances, personal property can include:

• vehicles;
• boats and aircraft;
• equipment;
• stock;
• goods;
• company assets;
• shares;
• some intellectual property;
• debts; and
• certain contractual rights.

The PPSR does not generally deal with land, buildings or fixtures.

PPSR Search vs PPSR Registration

Searching and registering serve different purposes.

PPSR Search

A PPSR search checks the information recorded on the register using the relevant search criteria.

A buyer may search the PPSR before purchasing an asset to see whether a registered security interest appears to affect it.

The search result should then be considered in context.

PPSR Registration

A PPSR registration records a claimed security interest.

Registration does not create the underlying contractual arrangement. A valid security interest must arise from the relevant transaction or agreement.

Correct registration can be important because it may affect priority and the rights of the secured party, particularly if the grantor becomes insolvent.

A business should not register on the PPSR merely because it owns property or is owed money. There must be an interest capable of registration.

When Might You Search the PPSR?

A business may consider a PPSR search when:

• buying machinery or equipment;
• buying a vehicle;
• buying stock or other valuable goods;
• purchasing assets from another business;
• buying an entire business;
• considering lending money; or
• undertaking due diligence on another party.

The appropriate search will depend on the asset and transaction.

Some searches may be conducted using:

• an organisation identifier;
• an individual’s details where permitted;
• a serial number;
• a vehicle identification number; or
• a PPSR registration number.

Different search rules apply to different types of property and parties.

Where an individual is being searched, the PPSR imposes rules about authorised search purposes, so individual searches should not be conducted without a proper basis.

When Might a Business Register a Security Interest?

A business may need to consider PPSR registration where an agreement gives it a security interest in personal property.

Examples may include businesses that:

• supply goods on retention of title terms;
• provide goods on credit;
• lease or hire certain equipment;
• provide finance secured by personal property;
• take security over company assets; or
• enter into another arrangement that creates a registrable security interest.

Whether a particular arrangement creates a security interest depends on its terms and the applicable legislation.

The timing and accuracy of registration can also matter.

Accuracy Matters

The PPSR requires specific information about matters such as:

• the secured party;
• the grantor;
• the collateral;
• the collateral class;
• whether the property is commercial or consumer property;
• the registration period; and
• other details required for the particular registration.

Incorrect details can affect the effectiveness of a registration.

Some information cannot simply be changed later, so it is important to get the registration right from the outset.

Using the PPSR When Buying Business Assets

If you are purchasing valuable business assets, a PPSR search can form part of your due diligence.

A practical process may include:

• clearly identifying the asset being purchased;
• checking serial numbers or other identifiers;
• using the appropriate PPSR search;
• reviewing any registrations returned;
• comparing the search result with the sale documents; and
• asking the seller to explain or address relevant registrations.

An unexpected registration should not automatically be ignored, but it also does not necessarily mean the transaction cannot proceed.

Its significance depends on the registration, the asset and the legal arrangements between the parties.

What If a Search Shows a Security Interest?

If a search returns a relevant registration, consider:

• who the secured party is;
• which property the registration covers;
• whether it relates to the asset you are buying;
• whether the secured obligation is still current;
• what the sale agreement requires before settlement; and
• whether a release, amendment or discharge is required.

The appropriate response depends on the transaction.

PPSR Checks When Buying a Business

A PPSR search can be particularly relevant when purchasing a business because the transaction may involve multiple assets and security interests.

Depending on the deal, the buyer may need to consider registrations affecting:

• equipment;
• vehicles;
• stock;
• company assets;
• intellectual property; and
• other personal property included in the sale.

The search results should be reviewed together with the business sale agreement and other due diligence material.

The sale agreement may contain provisions dealing with existing security interests and what needs to happen before settlement.

See our business sales and purchases services for more information.

Using the PPSR When Supplying Goods on Credit

The PPSR can also be relevant where a business supplies goods on credit and retains title until payment.

A retention of title clause in Terms and Conditions may create a security interest that should be considered for registration.

Simply including wording in a contract does not necessarily provide the same protection as having an appropriately documented and registered security interest.

Businesses using retention of title arrangements should consider whether their contracts and PPSR registrations work together properly.

See our Terms and Conditions services.

PPSR and Commercial Contracts

Security interests should usually be supported by an appropriate contractual arrangement.

Depending on the transaction, a contract may address:

• the secured obligations;
• the property subject to the security interest;
• rights to register on the PPSR;
• information required for registration;
• costs associated with registration;
• obligations to assist with registration;
• release or discharge of registrations; and
• what happens if the secured obligation is not met.

You can read more about our business contract services.

When Legal Advice May Help

Legal advice may be useful where:

• a PPSR search returns an unexpected registration;
• it is unclear whether the registration affects the asset being purchased;
• a business sale involves multiple security interests;
• you are unsure whether an agreement creates a security interest;
• a retention of title arrangement is being used;
• a proposed registration is complex; or
• the PPSR position needs to be considered together with a commercial contract.

A PPSR search should be treated as one part of transaction due diligence rather than a replacement for reviewing the broader legal arrangement.

How Rise Legal Can Help

Rise Legal assists Australian businesses with commercial matters involving the PPSR.

Our work can include:

• PPSR advice;
• commercial contracts containing security provisions;
• credit applications;
• Terms and Conditions containing retention of title provisions;
• business sales and purchases;
• reviewing PPSR issues affecting a proposed transaction; and
• related commercial legal work.

Rise Legal provides fixed-fee proposals for defined legal work so the scope and legal fee are agreed before work begins.

Rise Legal does not undertake disputes or litigation.

Contact Rise Legal to request a fixed-fee proposal for your commercial legal matter.

Frequently Asked Questions

What does PPSR stand for?

PPSR stands for Personal Property Securities Register.

What is the PPSR used for?

The PPSR records security interests in personal property.

Businesses and individuals can search the register to see whether security interests have been registered over particular personal property or against relevant parties.

Is the PPSR a register of ownership?

No.

The PPSR is a register of security interests, not ownership.

A registration indicates that a secured party claims a security interest in the relevant personal property.

Does a PPSR search prove an asset is debt-free?

No.

A search provides information recorded on the register based on the search criteria used.

It should be considered together with the asset details, transaction documents and other due diligence.

What happens if a PPSR search shows a security interest?

You should check whether the registration relates to the asset or transaction, identify the secured party and consider what the sale documents require.

Depending on the circumstances, further information, a release, amendment or discharge may be required.

Can a business register ownership on the PPSR?

No.

Ownership alone is not something that should be registered on the PPSR.

The business must have a security interest capable of registration.

Do I need a PPSR account to search?

No.

The PPSR allows searches without opening an account. An account is required to create and manage registrations.

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Disclaimer

This article provides general information only and does not constitute legal advice. It does not take into account your specific circumstances. Laws and regulatory requirements may change, so you should obtain legal advice relevant to your situation before acting on the information contained in this article. Liability limited by a scheme approved under professional standards legislation.

 

 

 

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