If your business supplies goods on credit or leases equipment, your terms and conditions are likely to include Personal Property Securities Register (PPSR) protections. But registering a security interest on the PPSR isn’t enough and you need to register it correctly for it to be effective.

One of the most common mistakes we see is registering against the wrong entity or identifier. This can make your registration invalid, meaning you could lose priority or even your security altogether.

The Problem with Incorrect Identifiers

The PPSR requires that registrations match the correct legal identity of the party granting the security (the grantor). This means:

Companies: you must register against the ACN (Australian Company Number).

Trusts: you must register against the trust’s ABN (Australian Business Number), not the trustee’s ACN.

Using the wrong identifier can immediately invalidate your registration.

Case example: OneSteel Manufacturing Pty Ltd [2017] NSWSC 21

In this case, a leasing company registered its interest against OneSteel’s ABN. The problem? OneSteel was a company, and the Personal Properties Securities Act stipulates registrations must be against a company’s ACN.

The judgment: the court ruled the registration invalid. The leasing company lost its security interest and became an unsecured creditor, despite having a proper lease agreement. This caused Onesteel to lose a $23m asset.

What This Means for Your Business

If your customer becomes insolvent and your PPSR registration is defective, you may not be able to recover your goods, or the money owed to you.

To reduce that risk, we recommend you make sure that:

1 – You double-check whether you’re dealing with a company or a trust.

2 – Always use the correct identifier for PPSR registration.

3 – Ensure that all registrations match the grantor’s legal status exactly.

If you’re unsure, don’t guess. A simple error can lead to significant financial consequences.

How We Can Help

We assist businesses in reviewing their PPSR registrations and processes to make sure they’re compliant and enforceable.

We can:

Check your existing registrations for issues;

Help you register correctly for companies, trusts, or more complex structures;

Review or update your terms and agreements to improve and better support your security interests.

Please contact Charlie Beresford, Lawyer on 03 9629 9692 or charlie.beresford@lewisholdway.com.au for assistance