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You've delivered stock to a customer on 30-day payment terms. Your contract includes a retention of title clause. The invoice is sent, the goods are delivered, and you're waiting for payment.
Three weeks later, the customer goes into liquidation. You assume your retention of title clause protects you - after all, the contract says you own the goods until they're paid for. But when you contact the liquidator, you discover your claim ranks behind a secured creditor who registered their interest on the Personal Property Securities Register (PPSR).
Despite your clear contract terms, without PPSR registration, you're treated as an unsecured creditor. The goods you supplied, or their value,may be lost.
I work with business owners to help them understand when PPSR registration matters and how to protect their interests when supplying goods or services on credit. After years of handling business transactions, I've learned that many businesses have the right contract terms but miss the critical step that makes those terms legally enforceable.
Let's work through what the PPSR is, when registration protects you, and how to use it effectively for your business.
The PPSR creates a public record of who has security interests in business assets. Having retention of title clauses or security terms in your contracts isn't enough—without registration on the PPSR, those contractual rights may not be enforceable if your customer becomes insolvent. Registration gives you legal priority over unsecured creditors and, in some cases, other secured parties depending on timing.
Registration timeframes are critical and often missed. The Personal Property Securities Act 2009 (PPSA) sets specific timeframes for registration. If you register outside these periods, you may lose your priority position. This is particularly important for businesses that regularly supply goods on credit - establishing a process to register promptly protects each transaction.
Not all retention of title clauses create registrable security interests. The PPSA introduced the concept of Purchase Money Security Interests (PMSI), which can give you super priority if registered correctly and within timeframes. But the contract wording matters - generic retention of title clauses may not qualify. We can work through whether your contract terms create the right type of security interest.
Buying business assets without checking the PPSR creates significant risk. If you purchase equipment, vehicles, or other business assets subject to a registered security interest, the secured party may have the right to repossess them—even though you paid for them and had no knowledge of the security interest. A PPSR search before finalising asset purchases is essential due diligence.
PPSR registration is Australia-wide and covers most business assets. Unlike property titles which are state-based, the PPSR is a national register covering personal property including stock, equipment, vehicles, intellectual property, and accounts receivable. This makes it particularly relevant for businesses operating across state borders or dealing with customers in multiple locations.
Registration is straightforward but must be done correctly. While the online registration process itself is relatively simple, getting the details right matters. Incorrect debtor details, wrong collateral descriptions, or missing information can make your registration defective. Taking the time to ensure accuracy protects your registration's validity.
Invest time in understanding whether your business needs PPSR protection. If you supply goods on payment terms longer than immediate payment, lease or hire out equipment, or provide business finance, registration likely applies to you. Work with someone who understands the PPSA to ensure your contracts create the right type of security interest and establish a process for timely registration after each relevant transaction. When buying business assets—particularly vehicles, plant, or equipment—always conduct a PPSR search before finalising the purchase to avoid acquiring assets subject to hidden security interests. This practical approach reduces your exposure to bad debts and protects your business interests in the event of customer insolvency.
The Personal Property Securities Register is an online national register that records security interests in personal property. Personal property means any property other than land—so it covers business assets like stock, equipment, vehicles, intellectual property, and even some intangible rights.
The PPSR was introduced in 2012 when the Personal Property Securities Act 2009 came into effect, replacing multiple state-based registers for things like company charges, bills of sale, and vehicle securities. The intention was to create a single, national system that provides clarity about who has security interests in business assets.
From a practical perspective, the PPSR works a bit like registering a mortgage over land. When you register a security interest on the PPSR, you're putting the world on notice that you have a legal interest in specific property. That registration gives you rights if the person who owes you money (called the "grantor" under the PPSA) becomes insolvent or tries to sell the property without paying you.
Under the PPSA, a security interest is created when someone provides value (like goods or finance) and retains an interest in property to secure payment or performance. This can happen in several ways:
Traditional security arrangements: Where a business borrows money and gives security over assets (like a chattel mortgage over a vehicle).
Retention of title arrangements: Where you supply goods but retain ownership until they're paid for. Your contract might say "title remains with the supplier until full payment is received" - this creates a security interest that can be registered.
Consignment arrangements: Where you deliver goods to someone else to sell on your behalf, but you retain ownership. Under the PPSA, this is treated as a security interest.
Leasing and hiring arrangements: If you lease or hire out equipment or vehicles for more than 90 days (or in some cases, more than one year), this may create a security interest requiring registration.
Commercial consignments: Where goods are delivered to another business to be sold, with payment to come from the sale proceeds.
The key thing to understand is that many normal commercial arrangements create security interests under the PPSA, even if you wouldn't traditionally think of them as "security." This is why PPSR registration matters for businesses engaged in everyday trading activities.
The main benefit of registering on the PPSR is priority. If your customer becomes insolvent, goes into liquidation, or faces other creditor claims, the order in which different creditors get paid matters significantly.
Secured creditors with registered interests generally rank ahead of unsecured creditors. If you've registered your security interest on the PPSR, you have a better chance of recovering your goods or their value compared to trade creditors who haven't registered.
Between secured creditors, registration time usually determines priority. The general rule is "first in time, first in right" - the first person to register has priority over later registrations. There are exceptions, particularly for Purchase Money Security Interests (PMSI) which can get super priority if registered within the required timeframes.
Unregistered security interests generally rank behind registered ones. Even if your contract includes retention of title or security terms, if you haven't registered on the PPSR, you'll likely rank behind creditors who have registered. In practical terms, this often means you get nothing when the business collapses.
I often see business owners who need PPSR registration in these situations:
Supplying goods on credit terms: If you manufacture or supply products and give customers 14 days, 30 days, or longer to pay, registering a security interest protects you if they don't pay. Your retention of title clause only works if you've registered it.
Leasing equipment or vehicles: When you lease or hire out equipment, machinery, vehicles, or tools for extended periods, registration protects your ownership interest. Without it, the person leasing may be able to use the equipment as security for their own loans, or their creditors may claim the equipment if the business fails.
Providing business finance: If you're lending money to a business and taking security over their assets, registration is essential. Without it, your security is practically worthless in an insolvency.
Selling a business and taking payment over time: When you sell a business and the buyer pays you over time, you might retain a security interest in the business assets until full payment. Registration protects that interest.
Holding consigned goods: If you deliver goods to another business to sell on your behalf, with payment to come from the sale proceeds, registration protects your ownership until you're paid.
The PPSA introduced the concept of Purchase Money Security Interests (PMSI), which can give you priority over earlier security interests in some circumstances. This is particularly relevant for businesses supplying goods.
A PMSI arises when you supply goods and retain an interest in those specific goods to secure payment. The key is that the security interest must be in the goods you supplied, not in other assets.
If you register a PMSI in inventory within 15 business days after the goods are delivered, you get super priority. This means you rank ahead of earlier security interests—even those registered before yours—in relation to those specific goods.
For PMSI in equipment (like machinery or vehicles), you need to register before the goods are delivered or within 15 business days after delivery, and you must provide written notice to any prior registered security interest holders.
The PMSI rules are complex, and the timeframes are strict. Missing the registration window means you lose super priority and fall back to normal priority rules. This is an area where getting professional guidance helps—I work with businesses to ensure their registrations qualify for PMSI treatment and meet all the timing requirements.
The PPSR covers most types of personal property used in business. Here's what can be registered:
Inventory and stock: Raw materials, work in progress, finished goods held for sale. If you supply products on credit, these are often what you're protecting.
Equipment and plant: Machinery, tools, equipment, fixtures. Whether you're leasing it out or supplying it on credit, registration protects your interest.
Motor vehicles: Cars, trucks, trailers, motorcycles, boats. Even if not required for registration under state vehicle registers, PPSR registration provides additional protection.
Intellectual property: Patents, trademarks, copyright. If you've licensed IP and want security for payment, or if you've taken security over someone else's IP, this can be registered.
Accounts receivable: Debts owed to a business. If you're factoring invoices or providing finance secured against receivables, these can be registered.
Intangible property: This can include things like licenses, permits, authorities under legislation. The definition is broad.
All present and after-acquired property: You can register a security interest over "all present and after-acquired property" of a business. This creates a general security interest over everything the business owns now and everything it acquires in the future.
The main thing the PPSR doesn't cover is land and fixtures that have become part of land. Real property remains subject to the land title registration system in each state.
Not registering your security interest on the PPSR creates several risks:
You may be treated as an unsecured creditor. If your customer becomes insolvent, unsecured creditors typically receive little or nothing. In many insolvencies, there are insufficient assets to pay anyone except secured creditors and priority creditors like employees.
You lose priority to registered security interests. Even if your contract clearly states you retain title until payment, an earlier registered security interest will generally rank ahead of your unregistered interest. This can happen when your customer has given a bank a general security over all their assets—the bank's registered interest beats your unregistered retention of title.
Your retention of title clause becomes practically worthless. Contract terms about retaining ownership or security only work if they're properly registered. Without registration, those clauses provide limited protection in an insolvency scenario.
You may not be able to repossess goods you've supplied. Even though you haven't been paid, if you haven't registered your interest, you may have no right to recover the goods from the customer's premises or from a liquidator.
Liquidators and administrators may ignore your claim. When I deal with insolvency practitioners on behalf of clients, a registered PPSR interest changes the conversation completely. Without registration, you're just another unsecured creditor in line.
I've seen business owners lose significant amounts because they had good contracts but no PPSR registration. The frustration is understandable—they did the right thing with their paperwork but missed the registration step that makes it enforceable.
Before you purchase business assets - particularly vehicles, equipment, or plant - conducting a PPSR search is critical due diligence.
If you buy an asset that's subject to a registered security interest, several things can happen:
The secured party may be able to repossess it. Even though you've paid for it, if someone has a registered security interest, they may have the right to take the asset back. This is particularly common with vehicles and equipment.
You may have to pay the secured debt to keep the asset. Some secured parties will allow you to keep the asset if you pay out their debt—meaning you effectively pay for the asset twice.
You might end up in a dispute with the secured party. These situations often end up in court or require negotiation. It's time-consuming, expensive, and entirely avoidable.
The PPSR allows anyone to search for security interests against specific assets (like a vehicle VIN number) or against a particular business (by ABN or ACN). The search is inexpensive and takes minutes.
I recommend PPSR searches in these situations:
Buying second-hand equipment or vehicles: Particularly from businesses that may be in financial difficulty. Check before you commit to purchase.
Purchasing assets as part of a business sale: The business sale contract should include warranties about encumbrances, but conducting your own searches provides independent verification.
Acquiring assets from liquidation or administration: These can be good opportunities for value, but check carefully. Some assets in the liquidation may be subject to security interests.
Any significant asset purchase: If it's valuable enough to matter, it's worth the small cost of a PPSR search to confirm there are no hidden interests.
When you conduct a search and find a registered interest, you can contact the secured party to understand their claim and arrange for their interest to be discharged (removed from the register) as part of your purchase. This protects you from later repossession claims.
Consider a business that manufactures and supplies commercial kitchen equipment. They receive an order for $80,000 worth of equipment from a new café fitout. The purchase order is signed, the equipment is custom-manufactured, and the café's contract includes a retention of title clause stating that ownership remains with the manufacturer until full payment is received.
The equipment is delivered and installed. The manufacturer sends an invoice for $80,000 with 30-day payment terms. The café pays $30,000 immediately, with the balance due in 30 days.
Three weeks later, the café business goes into voluntary administration. The manufacturer contacts the administrator claiming ownership of the equipment under their retention of title clause and requests return of the equipment or payment of the outstanding $50,000.
The administrator conducts a PPSR search and discovers that the café's bank has a registered all-assets security interest over the business, registered 18 months earlier. The equipment manufacturer never registered their retention of title interest on the PPSR.
Result: The administrator advises that the bank's registered security interest has priority. The manufacturer's unregistered retention of title claim is not enforceable against the administrator or the bank. The manufacturer becomes an unsecured creditor for the $50,000 debt. Given insufficient assets to pay unsecured creditors, the manufacturer receives only a few thousand dollars from the administration, despite having supplied $80,000 worth of equipment just weeks earlier.
This situation illustrates the practical importance of PPSR registration. The manufacturer did everything right with their contract—they had clear retention of title terms. But without registration, those contract terms couldn't be enforced when the customer failed. A simple PPSR registration within 15 business days after delivery would have given them PMSI super priority, ranking ahead of even the bank's earlier security interest.
If you supply goods on payment terms, lease out equipment, or provide business finance, here are the key actions to consider:
Review your existing contracts to confirm they include appropriate retention of title or security interest clauses. If you don't have clear contract terms, those should be updated before you think about PPSR registration.
Establish a registration process for new transactions. This might mean designating someone in your business to register security interests within required timeframes after each relevant delivery or lease commencement.
Consider registering existing unregistered security interests from current supply arrangements where you haven't yet been paid. While you won't get PMSI super priority for retrospective registration, you'll at least have priority from the date you register.
Always conduct PPSR searches before purchasing business assets to avoid acquiring equipment or vehicles subject to hidden security interests.
Watch for these red flags:
⚠️ Customer financial difficulty: If you notice signs your customer is struggling financially, confirm your security interests are properly registered before the situation deteriorates.
⚠️ Large or unusual orders from newer customers: For significant transactions with customers you don't know well, registration provides important protection if things go wrong.
⚠️ Buying assets at below-market prices: If an asset seems unusually cheap, conduct extra due diligence including PPSR searches—the low price might reflect an existing security interest.
⚠️ This is urgent if: Your customer has entered administration or liquidation and you have unregistered security interests. Contact someone who works in business law immediately to understand your options and whether there's any opportunity to protect your position.
The Personal Property Securities Act creates important protections for businesses supplying goods on credit, leasing equipment, or providing finance—but those protections only work if your contracts are properly structured and your security interests are registered on the PPSR.
I work with business owners Australia-wide on business law matters, including PPSR registration strategy. Whether you need help reviewing your contracts to ensure they create enforceable security interests, establishing a registration process for your business, or conducting due diligence on asset purchases, we can work through what makes sense for your specific situation.
If you're supplying goods on payment terms and want to ensure you're properly protected, let's discuss your circumstances. I'll help you understand whether PPSR registration applies to your business and how to implement it effectively.
Yes, in most cases. Having retention of title terms in your contract creates a security interest under the PPSA, but that interest needs to be registered on the PPSR to be enforceable, particularly if your customer becomes insolvent. The contract creates the right, but registration is what makes it work when you need it. I can help you understand whether your specific contract terms create a registrable security interest and establish a process for registering new supplies.
You choose the registration period when you register—anywhere from 1 year to 25 years, or you can register for an indefinite period. For ongoing trading relationships, an indefinite registration makes sense. For single transactions, you might register for a specific period that covers your payment terms plus a buffer. The registration remains effective until it expires or until you discharge it.
This is a real concern because defective registrations can be challenged and may not be enforceable. The PPSA requires specific information including correct debtor details (legal name, ABN/ACN), collateral description, and secured party details. If you get these wrong, your registration may be considered seriously misleading and therefore defective. It's worth taking the time to get it right or working with someone who regularly handles PPSR registrations to ensure accuracy.
You can register at any time, but your priority position depends on when you register. If you're claiming a PMSI in inventory, you need to register within 15 business days after delivery to get super priority. If you register later, you'll still have a registered interest, but you'll only have priority from the date of registration—meaning anyone who registered before you will rank ahead. For this reason, establishing a process to register promptly after delivery protects each transaction properly.
A PPS lease is a type of security interest that arises from leasing or hiring arrangements that meet certain criteria (typically more than 90 days for goods, or more than one year for some equipment). If your lease or hire arrangement is a PPS lease under the PPSA, you need to register it on the PPSR to protect your ownership. The distinction matters because PPS leases have specific rules about when registration is required and how they're enforced.
Registration fees are set by the government and are relatively modest—currently ranging from around $6 for short-term registrations to around $150 for long-term or indefinite registrations (fees are subject to change). For businesses that regularly supply goods on credit, the small registration cost per transaction provides significant protection compared to the risk of being an unsecured creditor. When you consider the potential losses from an unpaid debt, registration is a straightforward risk management investment.
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