Leading commercial and insolvency lawyer Mark Streeter says many companies are uncertain about whether their credit is secured since the introduction of the Personal Properties Security Register on 30 January 2012.
He says many companies have failed to review all the security documentation that accompanies the PPSR and have not registered their interests, which could result in those companies forfeiting money that is owed to them.
Since the commencement of the PPSR, suppliers, manufacturers, financiers and entities requiring a charge over personal property – such as cars and business assets – are confused about whether or not their credit is secured,” Mr Streeter said.
“The fact is, if the debtor company or debtor (the entity that owes you money) becomes insolvent and the security was not registered on the PPSR, you will lose money that is owed to you.”
Mr Streeter, who is the principal solicitor at Streeterlaw, strongly recommends companies adopt the following procedures to avoid the risk of having further stock unsecured:
- Review your group structure, asset protection strategy and inter-entity arrangements and have any ‘security interests’ registered on the PPS Register;
- Review your business’s governing documents (partnership agreements, succession agreements, company constitutions) and update them if necessary and have any ‘security interests’ created under them registered with the PPSR;
- Identify assets affected and transactions that need to be registered;
- Review the terms and conditions and contract documentation in relation to: retention of title clauses, personal guarantees, charging clauses, and any other security interests.
Mr Streeter said his firm can help clients develop new policies and procedures concerning the requirements for registering transactions and can help establish the required documentation processes.
Contact Streeterlaw for further information on 8197 0105 or by email at advice@streeterlaw.com.au
