20 questions businesses should ask about the PPSA?

If you are in business and you are wondering whether the Personal Property Securities Act 2009 (Cth) (“PPSA”) applies to you and, if so, what you need to do next, here are some questions you may wish to consider:

  1. Have you and your staff familiarized yourselves with the new language and concepts that the PPSA has introduced e.g. “Secured Party”, “Grantor”, “Perfection”, “Financing Statement”, “PMSI”, “Deemed Security Interest,” “PPS Lease”, “Commercial Consignment”, “General Security Agreement”, “Verification Statements,” and “Token Codes”.
  2. Have you changed your credit application form for your new customers to provide for their consent to register your security interests in the goods and equipment that you supply to them?
  3. Have you changed your Trading Terms and/or Hire Terms so that they properly constitute a security agreement under the PPSA?
  4. Do your Trading Terms/Hire Terms contain a clause stating that the customer consents to your company lodging a Financing Statement on the PPS Register?
  5. Do your Trading Terms/Hire Terms contain clauses that properly allow you to exempt yourself from complying with various obligations that you would otherwise be required to comply with under the PPSA? E.g. the obligation to send verification statements received from the Registrar to customers or the obligation to make disclosures of certain confidential information such as providing persons with a copy of your security agreement with your customers or details of the amount or the terms of payment of the obligation secured.
  6. Do you know the correct legal entity in which your customer is trading? (Whether it is an ACN (for companies), an ABN (for partnerships and trusts) and ARBN (for overseas registered companies). (You must specify the correct entity when you lodge your financing statement).
  7. Have you obtained your customer’s consent to the new Trading Terms/ Hire Terms?
  8. If not, what steps have you taken to ensure that your customer has “adopted or accepted” the new terms in accordance with the requirements of the PPSA?
  9. Are you able to call up written evidence of your customer’s consent if required?
  10. 1Are you and your staff up to speed on how to complete all of the information that is required to be provided in a Financing Statement when you go to lodge it on the PPS Register? (Remember, if you incorrectly complete it or fail to register it on time, your security interest may not be enforceable).
  11. How will you manage the filing and retrieval of registration numbers, and token codes (which are essential for future dealings) once you have registered your security interests on the PPS Register?
  12. What will you do with the Verification Statements that you will receive from the Registrar once you have registered your security interest on the PPS Register? Do your Trading Terms/Hire Terms require you to give it to your customers? Where will you file it and keep records of giving it out to your customers (if required)?
  13. What system have you put in place to ensure that financing change statements are filed in a timely manner when you become aware of any changed in your customers’ circumstances (e.g. if you become aware that your customer has restructured, sold or renamed their business).
  14. What systems have you put in place to ensure that you do not miss renewing your security interests before they expire?
  15. What reports regarding your PPSA registrations do you want? Can your system provide you with such reports?
  16. What reports (if any) will your bank require regarding your registrations?
  17. How will your existing financial and accounting software programmes integrate with your PPSA management requirements?
  18. Will your existing software programs be able to cope with your PPSA needs or will you need to purchase new software to manage the process of registration and control of relevant PPSA documentation and reporting?
  19. Should you undertake the task of managing your PPSA requirements yourself or would it be more efficient and cost effective to outsource the task to a third party?
  20. What steps have you taken to train your staff in the new PPSA laws and procedures and have you put in place appropriate policies and procedures for your business? What steps have you taken to ensure that the ball is not dropped if the person who is appointed to look after your PPSA requirements becomes sick, is transferred to another position or leaves?

PS Law
Philip Sheezel


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If you require any assistance to up-date your current legal customer documents or advice on any other commercial legal matters, contact Philip Sheezel at PS Law on 03 9503 0499 or email philip@pslaw.com.au to discuss your specific needs and to obtain fee estimate on the work that you require to be undertaken.