If you supply goods on retention of title, lease equipment, or place stock with another business without correctly registering your security interest on the Personal Property Securities Register, you risk losing those goods if that business becomes insolvent. By the time insolvency arrives, it is generally too late to fix the registration.
You delivered the stock. They haven't paid. Now it's sitting in their warehouse. While your customer is trading, your retention of title terms may still protect you. If your customer becomes insolvent and your security interest was never properly registered, an administrator or liquidator may be entitled to treat the goods as the customer's.
Supplying goods on retention of title or leaving equipment with another business? Get in touch and we'll review your PPSR position.
Book a Free Client Assessment →What Does the PPSR Actually Protect?
The Personal Property Securities Register is the national register of security interests in personal property, such as goods and equipment. It matters because possession and ownership can be two different things. A business can be holding goods it doesn't own, and if your interest in them is not properly registered, it may not hold up against a liquidator or other creditors.
Supply stock on retention of title, lease out equipment, or leave machinery with a customer, and without a proper registration you may be left as an unsecured creditor if things go wrong. That is a materially worse position than being a secured creditor. Secured creditors are generally paid from specific assets before unsecured creditors receive anything.
When Do You Need to Register on the PPSR?
There is no single deadline for every arrangement, and getting the timing wrong can cost you priority.
- Supplying goods that will be your customer's inventory? For purchase money priority, register before your customer takes possession. Once the goods are physically with them, it is too late for that priority.
- Leasing out equipment or supplying other goods? For purchase money priority, register before or within 15 business days after your customer takes possession. Registering early is fine.
Where your customer is a company, there is also a separate 20 business day window after the security agreement. A later registration can be lost if the company becomes insolvent within six months of registering. There is no grace period for "we meant to register it."
What Happens If You Don't Register in Time?
The business you supplied goes into administration or liquidation. Your registration is missing, or too late to count. Your security interest can vest in the customer, which means the administrator or liquidator can deal with your stock or equipment as the company's property. Other secured creditors may be paid first, and as an unsecured creditor you may receive cents in the dollar, if anything at all.
Where This Shows Up
This is not a niche problem confined to one industry. It can show up wherever goods or equipment leave your hands under an arrangement that creates a security interest, for example:
- Longer term hire equipment left on a construction site
- Stock on consignment to a retailer
- Vehicles leased to another business
- Materials supplied on retention of title terms
Different goods, different industries, same exposure. If your business leaves goods with customers before being paid in full, this is worth checking now, not after a customer's insolvency notice arrives.
How Phan Campbell & Associates Can Help
At Phan Campbell & Associates in Footscray, our commercial law team reviews and registers PPSR interests for suppliers, equipment hire businesses, and trade creditors across Melbourne and Victoria. We check that existing registrations are accurate, correctly classified, and lodged within the right window for your type of arrangement.
Because we are a combined legal and accounting firm, we can also help you build PPSR registration into your standard trading terms and invoicing process, so it becomes a routine step rather than depending on someone remembering.
A PPSR search matters just as much on the other side of a transaction. Buying a business means checking whether the equipment you think you're acquiring is actually free of someone else's security interest. See our due-diligence checklist for buying a business in Victoria.
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Frequently Asked Questions
1. What does the PPSR actually protect?
The Personal Property Securities Register is the national register of security interests in personal property, such as goods and equipment. If you supply goods on retention of title, lease equipment or place stock with another business, a correct and timely registration can protect your security interest and your priority if that business becomes insolvent.
2. When do I need to register on the PPSR?
It depends on the arrangement and the goods. For purchase money priority, goods that will form part of your customer's inventory must generally be registered before your customer takes possession. For other goods, registration generally needs to happen before or within 15 business days after your customer takes possession. Where the customer is a company, a registration made more than 20 business days after the security agreement can be lost if the company becomes insolvent within six months of that registration.
3. What happens if I don't register in time?
If your security interest is not perfected, usually by registration, when your customer enters administration, liquidation or bankruptcy, it can vest in the customer. You may lose your right to recover the goods and be left as an unsecured creditor, behind creditors with priority.
4. Does this only apply to large suppliers?
No. It can apply to any business, of any size, that leaves goods with another business under a security interest. Examples include longer term equipment hire or leasing, stock on consignment to a retailer, and goods supplied on retention of title terms. Any business in this position should check its PPSR position.