Despite only taking several minutes online, and costing less than the morning newspaper and cup of coffee, many Australian businesses are failing to protect their legal rights of ownership, according to GlobalX Legal Solutions.

The Personal Properties Securities Register, a single national registry, allows businesses to protect their legal stake in personal property.

Personal property takes on many forms from cranes, scaffolding, inventory, plant and equipment and machinery and is often most at risk when provided under a leasing or consignment agreement.

Despite the ease, low cost, and importance of registering an interest, Australian businesses risk derailing their entire business by failing to do so, according to GlobalX CEO Peter Maloney said.

He said recent legal cases highlighted the importance of protection considerations, with Australian companies at severe risk of losing valuable assets for failing to register their own interests on the PPSR.

The national register came into effect more than five years ago, but Maloney said many businesses were yet to realise the significance and potential damage of not registering assets or retention of title interests.

“In the recent Forge Group Power Pty Ltd v General Electric International Inc case, General Electric lost $50 million of leased assets after Forge went into liquidation. Despite owning the assets, General Electric failed to make a registration on the PPSR to perfect their interest as the lessor,” he said.

“This expensive failure to register by a multi-national should send warning bells to leasing businesses of the fundamental importance of ensuring PPS registrations are in place.

“The Forge v General Electric decision serves as a timely reminder to all lessors of the inherent value of registering, highlighting the detrimental consequences of failing to do so.

“There is a perception that the registration process is time consuming, complicated and expensive, but protecting assets and security interests is simple, quick, and something that legal advisors and businesses alike can do.”

However, to be enforceable against third parties, the purchaser must have signed or accepted the documents which incorporate the retention of title and title holders (suppliers) must have registered their interest on the PPS Register.

Minter Ellison partner Nick Anson said the Personal Property Securities Act had created a ‘perfect or miss out model’ where businesses who failed to correctly perfect an interest by registering a financing statement would lose out on their claim.

“The Australian Financial Securities Authority’s most recent report on PPS registrations list more than eight million active registrations, with 507,895 listings created in the March quarter alone,” Anson said.

“While these figures are encouraging, many businesses are still neglecting to take appropriate measures to secure their assets, with many still unaware of the ramifications of failing to do so.”

There were almost two million searches conducted on the PPSR in the March quarter 2016, which is a 6.4% rise compared to the March quarter 2015.

“It is reassuring that the many people understand the importance of due diligence and searching for perfected security interests, but it is equally imperative that businesses ensure all steps are followed so they are protected against the risks of suppliers or counterparties becoming insolvent,” Anson said.

“Companies should review their terms of trade and if they are relying on a security interest - such as retention of title - they should ensure they are properly protected,” he said.

Maloney said the legal community would be watching the industry closely as the current economic climate was resulting in companies going into liquidation and bringing PPSA cases to fruition.

“Recent cases have highlighted to many the major risks of failing to properly register on the PPSR and businesses need to beware of the potentially devastating consequences,” he said.