Everything you’ve read or heard about the PPSA is designed to confuse you. We’re here to simplify the whole issue.
One of the chief purposes to the PPSA is to protect your business from the insolvency of your customers.
The PPSA is just an administrative function. The Government has created an online register of security interests with one very simple rule – correctly registered security survives the insolvency of your customer.
So, if you have security you had better register it and register it correctly, otherwise you’ll lose your security on the insolvency of your customer (just when you want to use it).
Correctly registered security survives the insolvency of your customer and you can enforce it to recover your collateral.
Unregistered security is lost on the insolvency of your customer and you cannot enforce it.
The cost of compliance is very reasonable (you’ll likely spend more on coffee each year). Usually only one registration against your customer is required, attracting a Government charge of $6 and covering every transaction you have with your customer for the next 7 years.
It’s a 2 step process:
- Step 1 – agree your security with your customer
- Step 2 – register your security on the PPS Register
We’re here to help with both steps.