Oct 9, 2014
Lack of knowledge of the Personal Property Securities Act (PPSA) and the Personal Property Securities Register (PPSR) could be a ‘time bomb’ for businesses.
Millions of dollars has already been lost by businesses who paid for an asset but haven’t registered that asset on the PPSR. Whilst it’s voluntary to register, if your client is going to register, he/she has to register within a very tight registration time period. This highlights the need for a proper due diligence review to be undertaken now (if not yet done) so the decision can be made promptly on whether the registration of a transaction or asset rental, lease or storage is to be made on the PPSR.
If a registration is not made, whilst there may be no immediate problem, there’s a possibility that, sometime in the next seven years or so, an insolvency event may occur with a customer, hirer, lessee or property owner where the asset is stored. This could be the ‘time bomb’.
Whilst it is true that businesses should have consulted a commercial solicitor for advice on ‘Terms of Trade’ agreements and ‘Retention of Title’ agreements, as a ‘trusted adviser’, have you checked whether your clients have done this?
I don’t know many solicitors who are prepared to develop an internal review system for your clients to use. This is risk management – just as important as asking clients relative to their insurance policies.
Now is the time to take action to assist your clients to avoid the ‘time bomb’ event in the future.
ESS BIZTOOLS has developed a Personal Property Securities Register Due Diligence System, to assist accountants and advisers to undertake a review for their clients.