The on-line register closed on 27th January 2012 to be replaced by the Personal Property Securities (PPS) Register (see and earlier article on this topic below).
Reform of credit and relevant controls during insolvency occurred several years ago.
The replacement of the Company Register of Charges with a similar register was legislated quite some time ago.
However, the implementation required ASIC to migrate all existing securities on its database of each Company’s Register of Charges into the new Register. That has taken nearly a year longer than the intended start date last year.
The new system will often strengthen the banks position in an insolvency and make many retention of title terms of trade ineffective or less effective.
All businesses with retention of title clauses should obtain legal advice whether their terms of trade meet these new procedures. Without registration on PPS Register any retention of title terms are ineffective in an insolvency, so taking action to meet enforcement and registration of their interest in the PPS Register needs to be action immediately.
Personal Property Securities (PPS)
In May 2011 new laws will apply uniformly to the granting of security over personal property.
Personal property is any form of property other than land and buildings. Personal property includes motor vehicles and machinery (tangible property) and rights under contract and intellectual property (intangible property).
A PPS is an interest in personal property that secures a payment or performance of an obligation. A loan taken out by a business that is secured over the business’ trading stock is one example of a personal property security.
The PPS Register will be a single, national online register. Secured parties and potential secured parties will be able to use it to search for, and register their security interest in personal property. Other creditors will be able to search and then make an informed decision before granting credit.
New Zealand has used a registration system for many years. We followed them into GST, but still made many mistakes. Will we learn this time?