Some of the most important steps in preparing a financing statement for registration relate to the secured party. At the outset, a secured party will need a secured party group (SPG) in order to create a registration. A secured party may wish to have more than one SPG for different sectors of its business.
It is relatively easy to create a secured party group. If the secured party is an account holder, it can log onto PPSR and create a secured party group to be used by its account. The secured party will need to provide its details and its address for service and enter its preferences by creating a secured party group favourite, making the group a favourite for its account or setting a default secured party group.
The secured party will be given the opportunity to review and save its decision as to the secured party group. It can also obtain confirmation of the creation of the secured party group with a specific number and date of creation.
The PPSR will send a certification statement and access code for the secured party group to the group’s address for service. The secured party must use the SPG number in financing statements.
The secured party’s details
An application for registration of a financing statement must provide the secured party’s details: the SPG, the name and ACN of the secured party, its address and postal address. Where there are several secured parties, these details must be provided in respect of each of them.
Secured parties can be individuals, partnerships, trustees, bodies corporate or bodies politic. The PPS Regulations provide that the details relating to these different types of secured parties must be obtained from certain sources.
Individuals and sole traders
For individuals, the sources of the secured party’s details are, in descending order of relevance:
- a transitional register in relation to a migrated security interest;
- the individual’s current driver’s licence;
- a current proof of identity or current proof of age issued by a State of Territory body;
- a current Australian passport;
- a current visa issued by the Australian Government;
- a current passport issued by the jurisdiction in which the individual ordinarily resides; and
- a birth certificate.
The term ‘individual’ includes a sole trader who has an ABN for an enterprise in relation to which the security interest is granted. However, it does not include an individual who is a partner in a partnership or a trustee of a trust if the partnership or trust has an ABN for the relevant enterprise.
It is not necessary to record the date of birth of an individual secured party on a financing statement because searches are not undertaken against these details of a secured party.
If the secured party is a partnership with an ABN for which details have been included on a transitional register in relation to a migrated security interest, the secured party’s details must be taken from the partnership details recorded on the transitional register. Alternatively, if the details are not available from this search and the personal property is partnership property, the partnership ABN must be sourced from the Australian Business Register.
If the secured party is a trustee of a trust with an ABN for the enterprise in relation to which the security interest is granted or held, the secured party’s details must be obtained from the details of the trust on the transitional register, in relation to a migrated security interest.
Where the secured party is a body corporate, its details must be obtained from the following sources, in descending order of relevance:
- a transitional register, if the details are recorded on such a register in relation to a migrated security interest (for example, the details contained on the ASIC Register of Charges);
- where the secured party is the responsible entity of a registered scheme (an MIS), the registered scheme’s ARSN (if any) from the National Names Index;
- where the secured party is a body corporate with an ACN, the ACN from the National Names Index;
- where the secured party is a body corporate with an ARBN, the ARBN from the National Names Index; and
- where the secured party is any other body corporate, the name of the body corporate in the body’s constitution or equivalent document.
Bodies politic (such as the Commonwealth or State Governments)
If the secured party is a body politic, the details of the secured party must be obtained from the following sources, in descending order of relevance:
- where the body’s details appear on a transitional register in relation to a migrated security interest, the transitional register;
- where the body politic holds collateral in the course of an enterprise for which an ABN has been created – the ABN from the Australian Business Register;
- where the body politic holds collateral other than in furtherance of an enterprise for which an ABN has been given – the name of the body politic in accordance with its constitution.
The secured party is given the opportunity to specify an ‘identifier’ in the financing statement to facilitate the giving of notices and to avoid confusion or misdirection within the organisation when a notice is given. A generic identifier could avoid the problems that might occur when a particular person to whom notices are directed goes on holidays.
Further procedural steps
There are certain other procedural steps relating to reviewing the application, receipt of notice that the application has been received, authorising payment of fees, obtaining registration details, and checking on the verification statement and the token statement issued by PPSR as a kind of pin-number which can be issued to amend, renew and discharge the registration at a later date. None of these procedural steps presents any difficulty but secured parties should be aware that they must send the grantor a copy of the verification statement, unless they have contracted out of this obligation in relation to security interests in commercial property.
For further information, please contact:
|Dr James O’Donovan||Daniel Butler|
|(08) 9288 6804||(08) 9288 6714|