PPSR Registration when buying or selling a business

When buying or selling a business, it is important to understand what a Personal Property registration is and how it may affect the transaction. The Personal Property Securities Register (PPSR) records security interests in personal property; similar to a mortgage, but over assets instead of real estate. Without the right guidance, it is easy to miss risks hidden in PPSR registrations that could affect a sale or purchase of business.

Often if a person or a company does not have legal representation or advice on a business sale or purchase, PPSR registrations can be overlooked with sometimes costly consequences. This article explains what the PPSR is, what assets can be registered, and why having a lawyer assist is recommended when buying or selling a business.

What is PPSR?

The PPSR is a centralised, Australian Government-run register that records security interests in personal property, which includes anything of value other than land or buildings. Registering on the PPSR gives a lender or supplier the first claim over those assets if the business has financial issues, defaults on payments, or is sold.

What business assets can be registered on the PPSR?

When a business changes hands, it is not just the premises or goodwill (the business’ reputation) that are being sold, it generally also includes plant and equipment, i.e. the assets of the business, and many assets can have PPSR registrations over them. These indicate whether an asset is truly owned by the business or if a lender, supplier, or other party has a claim on that asset. According to the Australian Financial Security Authority’s December quarter report for 2025, there are now 10.6 million current registrations, showing just how widespread PPSR interests are.

Buyers need to be sure the assets they are buying are free from debt or claims, and sellers should be contractually required to remove any PPSR registrations to avoid delays or disputes.

Plant and equipment

Business equipment, from vehicles and machinery to office technology, can have registrations over the item recorded on the PPSR. For example, if a seller financed equipment through a lender, that lender may have a registered interest over that equipment. Buyers need to ensure these registrations are discharged prior to settlement and any monies repaid to avoid inheriting someone else’s debt.

For example: A café owner might have an espresso machine under finance. If that loan has not been discharged, the financier will still hold a PPSR registration over the machine and the lender will therefore have a right to that machine regardless of if that equipment has been sold.

Stock-in-trade

Suppliers often register retention of title (ROT) over stock they supply on credit or delayed payment terms. This means if the buyer defaults, the supplier can reclaim the goods. Buyers should verify whether such PPSR registrations exist over stock they are purchasing, as this may affect the value of stock included in a sale.

For example: A liquor store may have stock supplied on 30-day credit terms. The supplier will have an ongoing interest registration on the PPSR over the business stock to ensure they can reclaim the goods if they are not paid.

Other types of property

Other types of property can include the intellectual property (IP) owned by a business, as well as all present and after-acquired property of the business (called a PAP). This means it secures interests in personal property the seller currently owns, and any personal property acquired after the security agreement is made.

PPSR registration & buying a business

For purchasers, conducting a PPSR search is one of the most important steps in due diligence. This ensures that the business assets you are buying are not subject to existing claims or if they are, they can be dealt with as part of the purchase. If you buy assets without clearing PPSR registrations, you risk losing those assets to secured creditors, even after paying the seller for them.

Buyers should:

• Order PPSR searches over all relevant entities for all significant assets before settlement
• Insist that sellers provide evidence of discharge for any registered interests, by way of a verification statement
• Seek legal advice to ensure proper release documentation is obtained

Failing to check the PPSR can result in costly disputes or even total loss of the acquired assets.

PPSR registration & selling a business

For sellers, PPSR issues can derail a transaction. If interests are not released on time, buyers may refuse to complete, demand a price reduction, or walk away altogether.

A lawyer can help by:

• Contacting secured parties early to arrange releases
• Negotiating with lenders who are slow to act
• Preparing the necessary confirmations buyers will insist on before settlement

Real life case

In one matter, a seller assumed their lender would “automatically” discharge equipment finance when the loan was paid out. They were wrong, the registration stayed on the PPSR. The buyer’s lawyer picked it up, delaying settlement by several weeks, because the seller had not sought advice early and almost lost the sale.

Closing

The PPSR is designed to protect creditors and knowing how to navigate it is a skill. At Turnbull Hill Lawyers, our Business Law team has the expertise to identify risks, secure releases, and protect your position in any business transaction. Don’t risk going at it alone, let us make sure your deal runs smoothly.

If you are buying or selling a business, contact our team of trusted Business Law experts who will guide you through PPSR registration and all aspects of the transaction.