Are you thinking about selling your practice? Don’t forget to reflect on the role of the Personal Properties Securities Register – and how it will help make the process as transparent as possible.
When planning to sell your podiatry practice, you’ll likely be focused on finding the right buyer, setting a fair price, and ensuring a smooth transition. Yet there’s one more critical step to consider: making sure the assets you’re selling are free from any financial claims that might affect the sale.
This is where the Personal Property Securities Register (PPSR) comes in, acting as a safeguard both for sellers and buyers to clarify ownership of personal property, which can include everything from medical devices and podiatry equipment to vehicles used for the practice.
The PPSR, an online database managed by the Australian Financial Security Authority, allows buyers to see if a third party, such as a supplier or lender, has a security interest in any item tied to the business. By registering your assets on the PPSR or clearing previous security interests, you can make the sale process much more seamless and appealing to buyers.
Selling any business can be complex, but especially in the podiatry profession, when it involves transferring ownership of valuable equipment and resources. Unresolved financial claims can surprise buyers and create delays, which is why many prospective buyers request a PPSR search as part of their due diligence.
If you have unpaid debts on some equipment or have financed parts of your practice through suppliers, they may have registered their security interests on the PPSR. This means that, technically, these items aren’t solely owned by your business until the debts are cleared.
When a buyer performs a PPSR search, they’ll see any registered security interests, which could impact their decision to purchase or prompt them to renegotiate terms. They want assurance that when they buy your practice, they’re getting everything free and clear, and aren’t going to face demands from suppliers for bills that are your responsibility.
As a seller, it’s a good idea to conduct your own PPSR search to identify any existing security interests. If you find that a supplier has registered their interest in equipment you’ve financed, you may need to contact them and request the discharge of those PPS registrations. This will reassure buyers that the assets they’re purchasing are yours to sell outright, with no outstanding claims from third parties. Buyers who understand the PPSR often won’t proceed with a purchase that risks them being held liable for someone else’s debts, and failing to clear these interests can delay or jeopardise your sale altogether.
The PPSR acts as a safety net for both parties involved in a business transaction. For sellers, it ensures that all assets tied to the practice are documented, giving buyers peace of mind that they are fully owned, paid-off, and available for transfer without legal hitches. By clearing any security interests, you’re not only protecting your buyer but also adding to the credibility and attractiveness of your practice on the market.
For example, imagine you’re selling a piece of advanced podiatry equipment. You may have financed this item through a supplier or lender who registered their security interest on the PPSR. Without clearing this registration, any buyer who searches the PPSR will see that interest and may insist that it’s removed before the sale goes forward. By proactively addressing these security interests, you’re taking a key step toward a transparent, buyer-friendly transaction.
For more details on how to register or search assets, visit the PPSR website or go to credit bureau such as Equifax for resources on PPSR best practices.
© Copyright 2021 The Australian Podiatry Association
