The PPSR Due Diligence Package includes a range of material to assist accountants/business advisers to offer proactive professional advice to SME clients to protect them from the “quicksand” effect on some businesses caused by non-registration of “personal property” on the Personal Property Securities Register.
This ignorance of the consequences of not registering “personal property” can lead to significant losses being incurred by some businesses.
The package includes:
A checklist to assist in identifying any type of asset that your client owned at a particular date including the location of that article. This checklist is known as “Identification of Personal Property Schedule”. This is the checklist that we recommend you commence your due diligence review with.
The package includes a discussion on “customer due diligence review” to determine a policy for a business as to the “total exposure” that a business is prepared to be subjected to and the procedures to be adopted to determine whether to register an individual customer on the Personal Property Securities Register.
Commentary is provided on the effect that not registering on the Personal Property Securities Register can have relative to a business receiving a liquidator’s “preferential payment claim”.
If a business has registered a customer on the PPSR and a liquidator is appointed to that customer, legal opinion is that there is very little chance of the liquidator being able to make a claim for a “preferential payment”.
There is a discussion on “renting, leasing or storing assets on someone else’s property”. This will give you some key questions to pose to your client.
There is a commentary on the preparation of financing statements.
The “PMSI” (Purchase Money Security Interest) is discussed.
There is a discussion on the “Verification Statement” and a “Registration Overview”.
Summaries have been included on court cases and out-of-court settlements relative to litigation or threats of litigation relating to the Personal Property Securities Act.
These summaries emphasise the significant importance for small/medium enterprise operators to be receiving appropriate legal and accounting assistance to ensure that appropriate systems have been implemented within their businesses to alert management that appropriate registrations to protect the business from the problems that can occur by not registering on the Personal Property Securities Register have been clearly identified to management.
Our research has indicated that the legal profession views their involvement in the Personal Property Securities Act relates to:
We have been unable to identify a legal firm that undertakes the role of advising clients on the implementation of appropriate systems and the monitoring of those systems for an effective control on the Personal Property Securities Register processing within a business.
ESS BIZTOOLS believes that accountants should be very proactive in identifying to clients the benefits from the accounting firm being involved in the design of an appropriate internal system for all aspects of the Personal Property Securities Register system within a business and the regular monitoring of that system to ensure that it is functioning satisfactorily so that management is assured that appropriate registrations have been made on the Personal Property Securities Register for effective protection for the business.