Personal Property Securities Register (PPSR) Due Diligence System

Ignorance of the PPSR can cause business failure – this is a major area for accountants to offer “trusted adviser” support.

About This Package

Gold Silver
  • The Personal Property Securities Register was established by the government to offer protection for businesses, but unfortunately a large number of businesses are, either unaware of the register or ignore registering customers and assets, which could lead to business failure.
  • This is a significant area for accountants to show leadership and counsel all business clients to participate in, at least, an annual PPSR Due Diligence Review to highlight risk areas that could be protected by registering on the register.Some accountants claim this is “legal work” – we believe that the drafting of the agreements is “legal work”, but the implementation of an appropriate internal system is “accountants’ work”!

Webinar Recording

Product Content

  • Outcomes Of One-On-One Meetings
  • Overview of Personal Property Securities Act
  • Giving Advice to Clients On A System
  • How To Reduce The Risk
  • Retention of Title Clause
  • Terms of Trade Agreement
  • Legal Terms In Personal Property Securities Act
  • Leases
  • Agriculture and PMSI
  • Hiring of Assets
  • Problems With Registration
  • Problems When Selling A Business
  • Dealing with the Personal Property Securities Act

Want To Know More?

The PPSR Due Diligence Product 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 product includes:

  • Papers and articles on the operation of the Personal Property Securities Register System.
  • Articles to assist the client to understand how the PPSR operates.

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 list of assets to be identified include:
  • Stock, Livestock and Crops, Goods
  • Artists’ Works
  • Plant, Equipment, Construction Equipment
  • Plant and Equipment Leased to a Lessee
  • Motor Vehicles
  • Motor Vehicles Leased to a Lessee
  • Boats and Other Types of Watercraft
  • Boats and Watercraft Leased to a Lessee
  • Aircraft
  • Aircraft Leased to a Lessee
  • Other Physical Property and Other Personal Property
  • Debtors
  • Liquidators “Unfair Preference Payment Claims”
  • Licenses and Trademarks, Intellectual Property
  • Loans (including loans to associated entities)
  • Statutory Fishing Rights
  • Assets held in Trust by Other People
  • Services Entity Arrangements with Another Entity
  • Any other Personal Property
The product includes commentary on the two main legal agreements relative to the Personal Property Securities Act. These are:
  • Retention of Title Agreement
  • Terms of Trade Agreement

 

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:

Our research has indicated that the legal profession views their involvement in the Personal Property Securities Act relates to:
  • interpretation of the legislation for business clients
  • preparation of appropriate Retention of Title Agreement to suit the requirements of individual clients
  • preparation of appropriate Terms of Trade Agreements for individual clients

 

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.

More information

  • Accountants Minute – Personal Property Securities Register – Are Your Clients Protected? (Click here)
  • Accountants Minute – PPSR : Insolvency Events (Click here)

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