Australia is moving to a new system of registration of property securities. The Personal Property Securities Register will allow lenders to secure loans against specific assets and have those securities registered in a centralised database. This reform is due to commence in October, 2011 and will replace several state based registers.What are personal property securities:
Personal property is any form of property other than land, buildings or fixtures which form a part of that land. It can include tangibles such as cars, art, machinery and crops; as well as intangibles such as intellectual property and contract rights.
A personal property security is when a secured party takes an interest in personal property as security for a loan or other obligation, or enters into a transaction that involves the supply of secured finance.
An example is when a person borrows money from a bank and offers it as collateral or security for the loan. The bank’s interest over the collateral is a personal property security.
The grantor, who owns the property and is borrowing against the security, can be an individual, company or business.
We believe the register can be an important tool in the protection of business assets. If the business has loans from shareholders or directors, it may be prudent to formally secure these loans against key assets of the business.
To properly achieve this protection, agreements, mortgages and registration must be completed at arms length and the secured assets properly and clearly identified.
Hudson & Young is able to discuss with you the implementation of these new measures in your business.