There’s no doubt that, in the first instance, you should be talking to your commercial solicitor, to ensure the ‘Retention of Title’ clauses, which you are utilising in your business, have been appropriately drafted after 31 January 2012, to comply with the PPSA.
Businesses also need ‘Terms of Trade Agreements’ prepared, to comply with the PPSA. Some businesses will need a number of different types of ‘Terms of Trade Agreements’, to cover the trading arrangements into which the small business operator has entered with various customers.
However, the drafting of the ‘Retention of Title’ clauses and the ‘Terms of Trade Agreements’ are only the beginning. Unfortunately, many people believe that this is the end of the process. It is not. The PPSA is very complicated and, in our opinion, the responsibility then passes on to the small business operator’s accountant, to ensure an appropriate system is introduced within the small/medium enterprise’s business to safeguard the business’ assets.
When the GST was introduced, the Liberal government of that time spent millions of dollars in educating businesses, both large and small, on how the GST would operate. Unfortunately, neither the previous Labor government nor the current Liberal government has seen fit to finance a major education campaign for businesses, especially small businesses, on the operation of the PPSA. There was little chance of the GST sending a business broke, but it’s a real possibility that it could be the fate of a business for not complying with the requirements of the PPSA.