Personal Property Securities (Corporations and Other Amendments) Act 2010

The Personal Property Securities (Corporations and Other Amendments) Act 2010 is a Commonwealth amending Act. Its stated purpose is to amend certain Acts as a consequence of the enactment of the Personal Property Securities Act 2009, to amend that Act, and for related purposes.

In practical terms, this Act helped move Commonwealth law away from the older company charge framework and into the PPSA system for personal property securities. It did this by changing the Corporations Act 2001, making amendments to the PPSA itself, and updating a number of other Commonwealth statutes so the laws work together under the new national regime.

That matters because businesses do not deal with security interests in only one place. A lender may rely on finance documents, a supplier may rely on retention of title terms, a lessor may rely on leasing documents, and a company in distress may need to understand how all of those interests are treated in administration or winding up. This Act is one of the key pieces of legislation that aligned those areas with the PPSA framework.

This Act is broader than its title might first suggest. It is not just a Corporations Act amendment.

Schedule 1 amends the Corporations Act 2001. Schedule 2 amends the Personal Property Securities Act 2009. Schedule 3 amends other Acts, including the Designs Act 2003, Fisheries Management Act 1991, Mutual Assistance in Criminal Matters Act 1987, Navigation Act 1912, Offshore Petroleum and Greenhouse Gas Storage Act 2006, Patents Act 1990, Personal Property Securities (Consequential Amendments) Act 2009, Proceeds of Crime Act 2002, Torres Strait Fisheries Act 1984 and Trade Marks Act 1995.

For business owners, the main takeaway is that the PPSA reform was not confined to one register or one statute. It required related Commonwealth laws to be updated so that concepts like security interests, secured parties, retention of title arrangements and enforcement rights were treated consistently across the legal system.

This Act is most relevant to businesses that create, grant, take, document, register or enforce security interests over personal property, especially where a company is involved. It is also relevant to businesses that supply goods without immediate payment, lease or bail goods, use consignments, or rely on rights that may now be characterised through the PPSA framework.

The official text shows that the Corporations Act was updated to include PPSA concepts such as PPSA security interest, secured party, secured creditor, circulating security interest and possessory security interest. It also introduced the concept of PPSA retention of title property for corporations. That means the Act reaches beyond traditional bank lending and into ordinary trading arrangements that can create security interests under the PPSA.

Examples specifically reflected in the inserted provisions include property subject to retention of title sale arrangements, hire purchase agreements that secure payment or performance, leases, consignment agreements, commercial consignments, and goods leased or bailed under a PPS lease.

One of the most important things this Act did was insert PPSA-based concepts into the Corporations Act.

It inserted a definition of PPSA security interest by reference to the Personal Property Securities Act 2009, excluding a transitional security interest. It also inserted a broader Corporations Act definition of security interest, which includes a PPSA security interest or a charge, lien or pledge.

The Act inserted a definition of secured party, which for a PPSA security interest takes its meaning from the PPSA, and otherwise covers a chargee, lienee or pledgee. It inserted secured creditor to mean a creditor whose debt is secured by a security interest.

It also inserted circulating security interest. For PPSA interests, this covers a security interest attached to a circulating asset where the grantor has title to the asset. The definition also includes a floating charge. This is important because the Act bridges older Corporations Act concepts and the PPSA framework rather than simply deleting the old language without replacement.

Another inserted concept is possessory security interest, which includes a PPSA security interest perfected by possession or control, and also a lien or pledge.

The Act introduced a specific Corporations Act concept called PPSA retention of title property. Under the inserted definition, property is PPSA retention of title property of a corporation if it is personal property, used or occupied by, or in the possession of, the corporation, the corporation does not have title to it, a PPSA security interest has attached to it, and the corporation is the grantor in relation to that PPSA security interest.

The examples in the legislation are practical and important. They include property sold subject to retention of title, hire purchase arrangements that secure payment or performance, property under a lease or consignment agreement that secures payment or performance, goods under a commercial consignment, and goods leased or bailed under a PPS lease.

The Act also says that a reference in the Corporations Act to the property of a corporation does not include PPSA retention of title property unless the law says otherwise expressly or by necessary implication. For businesses, that is a major interpretive point in insolvency and administration. A company may have possession or use of goods, but that does not automatically mean those goods are treated as the company’s own property for all Corporations Act purposes.

A central reform in this Act was the repeal of Chapter 2K of the Corporations Act, which dealt with registration of charges. The Act also removed related references elsewhere in the Corporations Act and updated provisions that had depended on the old charge registration system.

For businesses, the practical point is that the old ASIC company charge registration framework was removed as part of the PPSA transition. If your older documents, internal checklists or precedent clauses still refer to Chapter 2K, company charge registration, or section 1302, they may be outdated.

This does not mean every older security arrangement became irrelevant overnight. It means the legal framework changed, and businesses needed to move to the PPSA-based system. That is why legacy documents and long-running arrangements still deserve review today.

You should pay attention to this Act if your business does any of the following:

These are the practical trigger points because the Act changes the language and operation of the Corporations Act in those areas. It also affects how rights are described and exercised when a company is under external administration.

This Act is an amending Act, so many day-to-day obligations arise through the Corporations Act as amended and through the PPSA itself. Even so, the practical compliance steps for businesses are clear.

First, businesses should identify whether an arrangement creates a PPSA security interest rather than assuming it is only a simple supply, lease or consignment arrangement. The inserted definitions and examples show that ordinary commercial arrangements can fall within the PPSA framework.

Second, businesses should make sure their documents use the correct concepts. Older references to charges, chargees and the Chapter 2K registration regime may no longer reflect the law.

Third, businesses should check whether their rights in an insolvency scenario depend on a security interest being perfected. The amended Corporations Act provisions expressly tie some enforcement rights to perfection under the PPSA.

Fourth, businesses should review whether property they deal with may be PPSA retention of title property rather than property owned by the company. That distinction can matter in administration and winding up.

Fifth, businesses with long-running or pre-PPSA arrangements should confirm that legacy interests were properly dealt with under the transitional framework and that current registrations and records remain accurate.

The Act made important changes to administration and enforcement provisions in the Corporations Act.

For example, section 436C was amended so that a person entitled to enforce a security interest in the whole, or substantially the whole, of a company’s property may appoint an administrator if the security interest has become, and is still, enforceable. The Act also states that this applies to a PPSA security interest only if the security interest is perfected within the meaning of the PPSA.

The Act also replaced and updated provisions in Division 7 of Part 5.3A so they refer to secured parties and security interests rather than only chargees and charges. It introduced provisions dealing with enforcement before or during the decision period, perishable property, and sale of property subject to a possessory security interest.

For business owners, the practical lesson is straightforward. In an insolvency setting, the legal characterisation of your interest and whether it is perfected can directly affect enforcement rights. This is especially important for lenders, suppliers and lessors dealing with distressed companies.

The Act includes transitional provisions in Schedule 1, Part 10, and the inserted definition of PPSA security interest in the Corporations Act expressly excludes a transitional security interest within the meaning of the PPSA. The notes in the legislation also point readers to Chapter 9 of the PPSA for transitional provisions and to the PPSA definition of transitional security interest.

That means businesses should not read this Act in isolation if they are dealing with older arrangements that existed around the PPSA transition. The transitional treatment depends on the PPSA framework as well as the amendments made by this Act.

From a practical business perspective, the key issue is legacy review. If your business had security arrangements, retention of title terms, leases, consignments or other relevant interests that pre-dated the PPSA registration commencement time, you should confirm that those interests were properly considered under the transitional rules and that any continuing protection was not assumed without checking the current position.

This is particularly important where a business has changed systems, changed advisers, inherited old contracts through acquisition, or continues to rely on standard terms first drafted before the PPSA regime took effect.

The Act commenced in stages. Sections 1 to 3 and anything not otherwise covered by the commencement table started on Royal Assent on 6 July 2010. Some specified items in Schedules 1 and 2 also commenced on that date.

Many of the key amendments, including Schedule 1 items 1 to 185 and item 187, and several Schedule 3 items, commenced at the registration commencement time within the meaning of section 306 of the PPSA. The commencement table records that date as 30 January 2012. The table also notes that the registration commencement time is the start of 1 February 2012, or another time determined by the Minister by legislative instrument, and cross-refers to the relevant instrument.

For practical use, the main point is that this was a staged commencement Act. If you are reviewing historical conduct, older contracts or older insolvency events, the exact commencement item and date may matter.

This page is a practical overview only. The Act is technical and works together with the Personal Property Securities Act 2009 and the Corporations Act 2001 as amended. If you are dealing with a live financing, insolvency, enforcement step or disputed priority issue, you should check the current legislation and obtain advice on the specific arrangement.

The official source is the Federal Register of Legislation compilation of the Personal Property Securities (Corporations and Other Amendments) Act 2010. The compilation referenced is in force and includes amendments up to Act No. 103 of 2013, with compilation start date 29 June 2013.

The Act’s table of contents and commencement table are especially important for understanding its breadth and staged operation. Key practical features visible from the text include the repeal of Chapter 2K of the Corporations Act, insertion of PPSA-based concepts into the Corporations Act, amendments to administration and enforcement provisions, transitional provisions, and amendments to multiple other Commonwealth Acts.