What Is a PPSR Charge and Why Does It Matter When Buying a Business?

What Is a PPSR Charge?

A PPSR charge refers to a registration on the Personal Property Securities Register (PPSR)—a national online system that records security interests over personal property.

These security interests can cover a wide range of assets, including:

• Equipment and machinery
• Stock or goods
• Vehicles
• Intangible assets like intellectual property

A common example is when a person takes out a loan to purchase a car, the lender registers a PPSR charge over the vehicle, giving them legal rights to take possession of the car if the loan isn’t repaid (or is in default)

Why Is This Relevant to a Business Purchase?

A PPSR charge registered against the seller’s ACN, ABN or Company Name usually means that a lender or supplier has a legal claim over some of the company’s assets.

If those assets are part of what you're purchasing, this could create complications—especially if the charge isn't removed before settlement.

It might be a fridge in a café, or a forklift in a trade business; you need to ensure you get clear legal title to the assets.

What Needs to Happen Before Settlement?

When you buy a business, the assets must be transferred to you ‘free of encumbrances’, including PPSR charges. This means:

• All registered PPSR charges must be identified;
• The seller must arrange for them to be discharged (removed) before settlement;

We ensure the seller takes the necessary steps to remove any PPSR charges so that you're receiving clear title to the business assets.

Purchasing a small business in South East Queensland – on the Gold Coast, Brisbane or Sunshine Coast, is an exciting venture. We are experts in this area and have worked with individuals, families and businesses to guide them through the process. Contact our office today to discuss how we can assist you.

Disclaimer: This advice is general in nature and is not intended to be legal advice. If you would like legal advice, please call our office on (07) 5619 0440 and we would be pleased to assist you.