PPSR Registration – Why Timing is so Important

PPSR registrations timing

The Personal Property Securities Act (PPSA) could be described as a double-edged sword. If you abide by the act, it can save your company thousands, if not millions of dollars. However, one small mistake on your registration can render your claim ineffective and deliver a savage blow to your business. 

One area of the PPSR process that can make or break your claim is the timing of your registration. If you fail to perform your registration within the strict timing requirements, your security claim will be impaired, or at worst, ineffective. Not only does the PPS Act create certain timing requirements but so too does the Corporations Act. 

Let’s take a closer look at how critical timing is with the Personal Property Securities Registration process, especially if you sell goods on credit or hire out equipment. 

PPSR Registrations under the Corporations Act

PPSR Registration for equipment

The Corporations Act requires a security interest to be registered within 20 days of its creation (S588FL). This is exactly what you’re doing when performing a PPSR Registration – you’re registering your security interest.

A failure to perform the PPSR registration within this time will mean your registration is ineffective for 6 months. At this stage, your registration is regarded as ‘green’. If your counterparty collapses into insolvency within this ‘green’ period, your registration is ineffective, and you’ve lost the benefit of your security. 

For example, your terms of trade/lease agreement provide you with security over your counterparty’s assets. If your counterparty accepts your security by executing your terms of trade/lease agreement, you have 20 business days to perform your PPSR Registration.

If your PPSR Registration is performed after the 20 business days and your customer collapses into insolvency within the 6 months of the actual date of registration, your registration is ineffective, and your security is unable to be enforced. 

Complying with the Personal Property Securities Act

PPSR Registration warehouse goods

The PPSA imposes further timing requirements for the registration of your security interest. Whilst the Corporations Act requirements determine whether you have a security interest for the first 6 months, the PPSA timing requirements determine the priority of your security interest. 

If you sell goods on credit or hire equipment to your counterparty, your security can achieve the ‘super priority’ of a Purchase Money Security Interest (PMSI). This will elevate your security above any other secured creditor of  your counterparty, meaning you’ll rank ahead of them on the counterparty’s insolvency. 

Clearly, it’s important to get the registration timing right but your timing also depends on how your counterparty will treat the collateral (goods/equipment) you supply. 

If your counterparty treats your collateral as inventory (because they on-sell, on-hire or consume it) you must perform your PPSR Registration before you supply the collateral. 

If your counterparty does not treat your collateral as inventory, you must perform your PPSR Registration within 15 business days of supplying the collateral. 

Remember, your customer will treat your property as inventory when they:

  • Intend to consume your property as materials or on-sell your property
  • Intend to lease or hire your property or have already leased or hired your equipment
  • Hold your property as raw materials or as work in progress
  • Intend to provide your property under a contract for their service

So, if you lease, hire or rent equipment, ensure that you correctly identify whether your property is regarded as inventory before you perform a PPSR registration. 

What can you do if you’ve missed the timing requirements? There are several actions you can take, all with varying degrees of success. Much depends on your type of business, the risk of your counterparty collapsing into insolvency, the nature of your collateral, the value of your potential loss and so on. 

In any case, you should obtain sound legal advice which could recommend anything from doing nothing to making an application to the Courts to extend the time in which to perform your registrations. 


The information provided in this article is general in nature. PPSR Cloud are not lawyers and this is not legal advice. If you have missed the timing of your registrations, you should obtain legal advice on how to address the issue. Our suggestions should be treated as suggestions only and you will need to seek specific advice for your circumstances.

Table of Contents

View All

Similar Articles

Scroll to Top

View Demo