Eligible security interests should be registered under the Personal Property and Securities Act 2009 (Cth) (‘PPSA’) in time to protect their interests against avoidable expense, loss and inconvenience. Registration on the Personal Property and Security Register (‘PPPSR’) is relatively easy and inexpensive when considering the protections afforded by the PPSA.
Why is it important to register a security interest?
Registering a security interest over personal property on the PPSR ensures that the interest is valid and enforceable against the indebted party, even in circumstances of insolvency and bankruptcy.  Registration also secures the priority of your interest over the personal property (‘Collateral’) relative to other secured parties’ interests in that same property, and ensures that third party purchasers cannot take title without also being liable for the security interest.
Failure or delay in registering the eligible security interest with the PPSR may result in your interest vesting in the individual or company if they become bankrupt or insolvent, and would impede your right to recover the interest if the Collateral was sold to a third party.
Whilst registration is not mandatory, registration should be completed within the timeframes specified by the PPSA to best protect your interests. Timing requirements will vary depending on the nature and subject of the Collateral, and whether the other indebted party (‘Grantor’) is a person or company.
Purchase money security interests (‘PMSI’) have strict timing requirements depend on the nature of the Collateral (i.e. whether it is inventory etc.) and whether ‘special priority’ is desired.  In certain circumstances, it may be appropriate to apply for registration prior to signing the agreement.
If the Grantor is a company, registration should occur within 20 business days after the security agreement comes into force to prevent the interest vesting in the Grantor in the event of insolvency.
What can I do if I haven’t registered within the specified timeframe?
Secured parties can still register their interest after the timeframe specified, however, the interest may lose priority to third party’s security interests created subsequently, and registered prior. For example, late registrations of interests in company Collateral are not protected from insolvency-related consequences for the first six-months after registration. Late registrations should occur as soon as reasonably practicable to start the six-month-timer, particularly if there is a real possibility of financial distress in the company’s future.
Extensions of Time
Under section 293 of the PPSA, an application can be made to the Court to extend the time for registration if satisfied that it is just and equitable to do so. In granting an extension, the Court must consider whether the need for an extension has arisen as a result of accident or inadvertence and if an extension would prejudice the position of other registered creditors. The court may also have regard to attempted registration in the prescribed period, the type of Collateral in question and the perceived risk of insolvency.
If the grantor is a company, an application can be made to the Court under section 588FM of the Corporations Act for an extension similar to that under section 293 of the PPSA. Similarly, the Court will consider whether the failure to register was accidental or unintentional, or whether the failure to register would prejudice the position of other creditors or shareholders. If an extension is sought on other grounds, the Court will consider whether it is ‘just and equitable to grant relief’.
If you require any assistance, please contact us on (08) 6188 3340 or by email to firstname.lastname@example.org.
 Personal Property and Securities Act 2009 (Cth) s 12.
 PMSI example: security interest taken in personal property to secure payment of all or part of the purchase price for the personal property.
 Personal Property and Securities Act 2009 (Cth) s 293.
 Corporations Act 2001 (Cth) s 588FM.
 See, eg, Accolade Wines Australia Limited and other companies  NSWSC 1023.