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Company charges: change to time for registering

Posted By admin On January 11, 2012 @ 5:25 am In Legislation,PPS register | Comments Disabled

Currently, a company charge must be lodged with ASIC within 45 days of being created or registered more than 6 months before an administration, liquidation, or deed of company arrangement of the grantor, whichever is the later, to ensure it is not void. (Section 266(1)(e) Corporations Act [1]).

What are the rules for a company charge under PPSA?

Under changes to the Corporations Act which commence on 30 January 2012, when a company grantor is being wound up, an administrator appointed, or a deed of company arrangement executed ("the critical time"), any PPSA security interest which was perfected, registered or enforceable against a third party after the latest of:
a. six months before the critical time; or
b. 20 business days after the security agreement came into force;
c. a later time ordered by the Court under section 588FM;
would vest in the company and be available to creditors (section 588FL).

The Personal Property Securities Act does not generally impose any obligation to register a security interest at all or within a particular period of time. The PPSA also will not require a copy of a charge to be lodged.

Of course if a security interest is not promptly registered the secured party may lose priority against third parties or on the insolvency of the grantor. And a Purchase Money Security Interest must be lodged within 15 business days.

If you are taking a company charge as security it is critical to make sure it is registered on the PPS Register within 20 business days (15 business days if it is a Purchase Money Security Interest).

Article printed from Personal Property Securities Australia: http://www.langes.com.au/pps

URL to article: http://www.langes.com.au/pps/2012/01/11/company-charges-change-to-time-for-registering/

URLs in this post:

[1] Section 266(1)(e) Corporations Act: http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s266.html

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