The Personal Property Securities Register (PPSR) is a national register used to record security interests over business assets and goods supplied on credit. During voluntary administration, PPSR registrations can affect supplier recovery rights, disputed stock and creditor priority. Directors and suppliers should review records, registrations and contracts carefully.
On This Page
- Introduction
- What Is the PPSR?
- What Is a Retention of Title (ROT) Clause?
- What Is a PMSI?
- What Happens to Supplier Stock During Voluntary Administration?
- What Can Administrators Sell During Voluntary Administration?
- What Directors Should Do Before Entering VA
- What Suppliers Should Do If a Customer Enters VA
- Final Take
- FAQs
Introduction
The Personal Property Securities Register (PPSR) is used to record security interests over personal property, including stock, equipment, vehicles and goods supplied on credit.
For suppliers, financiers and business owners, PPSR registrations can become very important when a company enters voluntary administration, particularly when disputes arise about who owns certain stock, whether unpaid goods can be recovered, and what assets an administrator can lawfully sell.
This guide explains what PPSR, ROT, and PMSI are, how PPSR, retention of title arrangements and supplier claims are treated during voluntary administration, and what both directors and suppliers should understand when dealing with disputed stock and secured goods.
What Is the PPSR?
The PPSR, or Personal Property Securities Register, is a national register established under the Personal Property Securities Act 2009 (Cth) used to record security interests over personal property.
It applies to:
- Inventory,
- Equipment,
- Vehicles,
- Plant and machinery,
- Stock supplied on credit, and
- Other business assets.
The PPS Act governs how security interests are created, registered and enforced across Australia.
The PPSR is generally used by:
- Suppliers,
- Financiers,
- Equipment lessors,
- Asset-based lenders, and
- Businesses supplying goods on credit terms.
Registering a security interest on the PPSR may improve a creditor’s ability to:
- Recover property,
- Preserve priority rights, or
- Protect their position if a company becomes insolvent.
In 2024–25, the PPSR recorded 2.2 million new registrations, with commercial registrations accounting for 79.1% of all new registrations, indicating the register’s significant role in business-to-business lending.
The PPSR is used broadly in commercial lending and trade-credit arrangements, not just insolvency. However, it does not automatically guarantee recovery. In many cases, the timing, accuracy and type of registration can significantly affect the outcome during voluntary administration or liquidation.
What Is a Retention of Title (ROT) Clause?
A retention of title (ROT) clause, sometimes called a Romalpa clause, is a contractual provision commonly used within broader security agreement and supply transactions. It allows a supplier to retain ownership of goods until payment is made in full.
This commonly arises where goods are supplied on credit for commercial value.
For example:
- Wholesale stock,
- Building materials,
- Manufacturing inputs,
- Retail inventory, and
- Trade-supplied goods.
Under a retention of title arrangement, the customer may physically possess the goods while the supplier claims ownership until the debt is paid.
Retention of title clauses are used to reduce supplier risk where businesses purchase goods before payment is made.
Example of a Retention of Title (ROT) Clause:
Suppose Company A is a wholesale electrical supplier supplying $80,000 worth of lighting products to a retail business Company B on 30-day credit terms.
The supplier agreement states that ownership of the goods remains with Company A until full payment is received, even though the retailer (Company B) physically possesses and sells the products.
If the retailer fails to pay within the agreed timeframe, Company A may argue that the stock still legally belongs to them under the retention of title clause, rather than forming part of the retailer’s general assets.
However, a retention of title clause alone may not fully protect the supplier if the customer enters voluntary administration or liquidation. In many situations, PPSR registration becomes critically important in preserving priority and recovery rights.
What Is a PMSI?
A PMSI (Purchase Money Security Interest) is a specific type of security interest registered on the PPSR by suppliers and financiers.
It is often used where:
- Goods are supplied on credit,
- Equipment is financed,
- Inventory is provided before payment, or
- A supplier wants stronger rights over specific supplied goods.
The Personal Property Securities Act 2009 (Cth) allows for the registration of security interests during voluntary administration, but the timing and conditions of such registrations can significantly affect their enforceability.
A properly registered PMSI may improve a supplier’s priority position over other secured creditors if the customer later becomes insolvent.
However, if a security interest is registered late, it can still vest in the company if the company enters voluntary administration within the subsequent six months, rendering the interest ineffective.
Timing and correct PPSR registration are extremely important. A supplier may lose important priority rights if:
- The PMSI is registered late,
- Registration details are incorrect (incorrect company details, registration defects), or
- The registration does not properly cover the supplied goods.
For many suppliers, PMSI registration is one of the key protections used when supplying stock on credit terms.
What Happens to Supplier Stock During Voluntary Administration?
When a company enters external administration, administrators must determine which assets belong to the company and whether any supplier ownership or security claims exist over stock and inventory.
This can become complicated where:
- Retention of title clauses apply,
- PPSR registrations exist,
- PMSIs have been registered, or
- Goods were supplied on credit but remain unpaid.
Importantly, not all stock physically held by the company necessarily belongs beneficially to the company free of supplier claims.
Unpaid Stock Claims
Suppliers may attempt to:
- Recover unpaid goods,
- Assert legal rights to retain title,
- Enforce PPSR security interests, or
- Claim priority over specific stock.
Whether a supplier can successfully recover goods will often depend on:
- The contract terms,
- PPSR registration status,
- Whether the goods remain identifiable, and
- The administrator’s assessment of competing claims.
From a legal standpoint, suppliers should not attempt taking possession without administrator consent.
Administrator Review Process
Administrators are required to audit PPSR data for flaws, as a seriously misleading registration defect can render a security interest ineffective and unperfected, leading to vesting in the company.
Administrators commonly review:
- Supplier agreements,
- PPSR registrations,
- Invoices,
- Delivery records,
- Stock identification records, and
- Inventory tracking information.
This process helps determine whether the goods belong to the company, whether they are subject to supplier claims, or form part of secured creditor property.
What If the Stock Has Already Been Sold?
Problems can become more complicated where goods have already been sold before the administrator’s appointment.
In these cases, disputes may arise regarding:
- Sale proceeds,
- Tracing of funds,
- Mixed inventory, and
- Priority rights between competing creditors.
The outcome will often depend on the specific contractual and PPSR arrangements involved.
What Can Administrators Sell During Voluntary Administration?
Administrators may continue trading the business and sell company assets during voluntary administration. However, ownership disputes can affect whether certain stock can properly be sold.
Where supplier claims, retention of title arrangements or PPSR registrations exist, administrators will usually need to assess competing ownership and security interests before dealing with disputed goods.
This may affect:
- Whether stock can be sold,
- Whether sale proceeds must be preserved,
- Which creditors may claim priority, and
- How supplier disputes are resolved during the administration.
In many situations, administrators will seek to:
- Verify ownership claims,
- Confirm PPSR registration status,
- Identify affected stock, and
- Negotiate practical commercial outcomes with suppliers and secured parties.
For businesses continuing to trade during voluntary administration, stock ownership disputes can significantly affect ongoing operations, supplier relationships and restructuring efforts.
What Directors Should Do Before Entering VA
Before appointing a voluntary administrator, directors should carefully review the company’s stock position, supplier arrangements and PPSR-related issues.
This includes:
- Preparing accurate stock and inventory records,
- Identifying suppliers with retention of title arrangements,
- Reviewing supplier contracts, general security deed arrangements, and PPSR registrations,
- Ensuring registrations correctly identify the company and business name,
- Identifying PPSR-registered interests,
- Preserving invoices, purchase orders and delivery records,
- Separating consignment or disputed goods where possible, and
- Preparing updated supplier and creditor lists.
Poor stock records can significantly complicate voluntary administration and increase disputes with suppliers, secured creditors and administrators.
What Suppliers Should Do If a Customer Enters VA
Suppliers should act quickly if a customer enters voluntary administration, particularly where unpaid goods, retention of title arrangements or PPSR registrations are involved.
This may include:
- Reviewing supply agreements and trading terms,
- Checking PPSR registration details,
- Identifying unpaid goods,
- Preserving invoices and delivery evidence,
- Contacting the administrator promptly, and
- Seeking advice from an insolvency practitioner/adviser before attempting to recover goods.
Final Take
Voluntary administration can create significant uncertainty around stock ownership, supplier claims and PPSR security interests.
For directors, supplier stock disputes can significantly affect trading continuity, restructuring efforts and creditor negotiations during voluntary administration.
Before entering voluntary administration, directors should seek professional advice to identify supplier arrangements, review PPSR-related issues and ensure stock records are accurate, particularly where inventory, consignment goods or trade-credit supply arrangements are involved.
At Halo Advisory, we work for you — the director. Financial expert Greg Bartels offers a no-obligation, consultation to help you understand where you stand, what risks exist, and what options are realistically available before deadlines reduce control. Get in touch today.
FAQs
What is the PPSR?
The PPSR, or Personal Property Securities Register, is a national register used to record security interests over personal property such as stock, equipment, vehicles and goods supplied on credit.
The Personal Property Securities Register (PPSR) plays a critical role in protecting creditor rights by enabling the registration of security interests over both tangible and intangible assets, ensuring priority in the event of default.
What is voluntary administration?
Voluntary administration is an insolvency procedure aimed at stabilising a financially distressed company by providing time to restructure or achieve a better return for creditors than immediate liquidation.
When a company enters voluntary administration, a legal freeze is automatically placed on most creditor enforcement actions, creating a statutory moratorium.
What is a retention of title clause?
A retention of title (ROT) clause is a contractual provision allowing a supplier to retain ownership of goods until payment is made in full.
These arrangements are used where goods are supplied on credit terms.
Does a retention of title clause need to be registered on the PPSR?
In most cases, yes. PPSR registration may improve a supplier’s priority and recovery position if the customer becomes insolvent.
What is a PMSI?
A PMSI, or Purchase Money Security Interest, is a specific type of PPSR security interest used by suppliers and financiers.
A properly registered PMSI may improve a supplier’s priority position if the customer later becomes insolvent.
Can suppliers recover unpaid stock during voluntary administration?
Yes.
Recovery rights may depend on:
- The supplier contract,
- Retention of title terms,
- PPSR registration status,
- Whether the goods remain identifiable, and
- The administrator’s assessment of competing claims.
Does voluntary administration stop PPSR claims?
Not necessarily.
Suppliers and creditors with PPSR-registered security interests may still assert ownership or security claims during the administration process.
Can administrators sell disputed stock?
In some cases, yes, but administrators will usually need to assess competing ownership and security claims before dealing with disputed goods.
This may involve reviewing:
- PPSR registrations,
- Supplier agreements,
- Invoices, and
- Stock identification records.
What happens if the stock has already been sold?
Recovery and tracing issues can become more complicated once goods have already been sold.
Disputes may arise regarding:
- Sale proceeds,
- Tracing of funds,
- Mixed inventory, and
- Competing creditor claims.
Should suppliers register retention of title interests on the PPSR?
In many situations, yes.
PPSR registration may improve a supplier’s recovery position and priority rights if the customer enters voluntary administration or liquidation.
However, when a company enters voluntary administration, the ability to register security interests may be subject to court orders, which can complicate the process of securing interests in personal property.
What should directors do before voluntary administration?
Directors should prepare:
- Accurate stock records,
- Supplier agreements,
- PPSR information,
- Inventory records, and
- Supporting purchase and delivery documentation.
This can significantly reduce disputes and operational disruption during the administration process.
What happens to PPSR security interests during voluntary administration?
In the context of voluntary administration, security interests granted after the critical time may not be enforceable unless registered within specific timeframes as outlined in the Corporations Act 2001 (Cth).
Perfected PPSR creditors have a strict 13-business-day decision period after the start of administration to enforce their security interests or risk being bound by the moratorium.
Can unsecured creditors seize properties during voluntary administration?
Unsecured creditors cannot initiate or continue legal actions to collect debts or seize property without obtaining permission from the administrator or the court during voluntary administration.
Can suppliers remove goods during voluntary administration?
Not automatically.
Suppliers should follow the proper legal process and communicate with the administrator before attempting to recover goods from company premises.
