Asset Protection Structures Under the PPSA

The Personal Property Securities Act (PPSA) came into effect on 30 January 2012. The legislation introduced a national online Personal Property Securities Register which replaced other registers including the ASIC register of company charges.

Under the PPSA, the concept of "title" and "ownership" are replaced by the term "security interests". Title itself will not equate to rights over property unless security over them is registered. Effectively, if you own assets which are not within your possession, you are at risk unless your interest in the asset is registered. The act covers security interests over all forms of property other than land and buildings or fixtures which are a part of land. 

When setting up a business, it is common practice to establish a holding entity (trust or company) in order to protect business assets from the risk of the operating entity. The operating entity then leases the assets from the holding entity.

Prior to the commencement of the Personal Property Securities Act, the assets held by the holding entity would be protected as creditors of the operating entity would have no claim over these assets. However, under the new law, the lease must be registered on the Personal Property Securities Register in order to achieve this same protection. If the security interest is not registered, such arrangements are ineffective against a liquidator or trustee in bankruptcy.

All equipment leased to the operating entity should be registered within 15 business days of the operating entity taking possession of the equipment. Security interests that are not registered within this timeframe are still validly created, however will receive a lower priority than those registered within it.

Common situations where this would apply include:

  • Farming businesses where equipment is owned separate to the operations
  • Service trust arrangements where a trust owns equipment used by a professional practice
  • Construction businesses where equipment is owned separate to the operations

If these circumstances apply to your business, please contact your Brentnalls SA team member

If you would like to print this information please click here for PDF format

The information provided in this information sheet does not constitute advice.  The information is of a general nature only and does not take into account your individual financial situation. It should not be used, relied upon, or treated as a substitute for specific professional advice.  We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements and circumstances.

Industry Focus

We are not just your accountant, we are your business advisor, here to support you and your business. We specialise within the following industries:

Agribusiness Services
Construction, Building & Allied Services
Medical & Allied Health Services


Please click on one of the following links to access additional resources: 

Fact Sheets
Tax Facts
Key Dates
Internet Links

Our Location

255 Port Road, PO Box 174
Hindmarsh SA 5007 
View location map

P: (08) 8241 8444
F: (08) 8241 8488

 Brentnalls SA on LinkedIn Brentnalls SA on Facebook