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Are your business assets at risk?

Wednesday, November 07, 2018


The Personal Properties Security Register (PPSR) has been around for a few years now but is still very important for small business owners.

In New Zealand, a stud stallion named Generous was leased out to a third party farm and the owner of the horse had not been registered their interest on the Personal Property Security Register (PPSR). The farm fell behind on the lease payments so the owner of the horse terminated the lease and took possession of their horse. Three days after the horse was removed from the property, a liquidator was appointed for the farm. The liquidator applied to the courts to take possession of the horse and won because the horse had not been registered on the Personal Property Securities Register (PPSR) by the owner; and just like that, a $2 million stud horse was lost because someone else’s business went into liquidation.

While this case is from New Zealand, we have adopted their legislation for our own Australian PPSR. Despite being called the ‘Personal Property’ Security Register, the PPSR is for business assets. Cars, earthmoving equipment, stock on consignment, and leased equipment are just the beginning of the list of items potentially caught under this legislation. While the name is misleading, the message is not; register your assets or risk losing them.

All business owners should, on a regular basis, review their risk of assets being lost to potential action against a third party. Do your employees take company vehicles home of a weekend? Do you have stock held on consignment? Are you leasing equipment to third parties? Are you leasing a premises from a third party? If you’ve answered yes to any of these questions, your assets may be at risk if you have not registered them on the PPSR.

For more information contact your accountant and/or solicitor, or visit https://www.ppsr.gov.au/

 

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