A Shepparton accountant is concerned people are not aware of a government law to protect businesses that lease or seel assets to companies that are then liquidated.ASHLEIGH WILLIAMSON February 15, 2013 8:50am
A Shepparton accountant is concerned people are not aware of a government law to protect businesses that lease or sell assets to companies that are then liquidated.
Brown Baldwin Accountants director Matthew O’Bryan said the Personal Property Securities Act was officially introducted in January last year.
Mr O’Bryan said the law insured business assets if a company was liquidated and could not pay for items bought or leased.
He said the law also applied to people who leased or sold an asset.
‘‘It’s anything that’s tangible, other than land,’’ he said.
Mr O’Bryan said the asset protection was not being used enough.
‘‘I went and told people who aren’t clients, just business people around Shepparton, because .
‘‘A lot of companies are financially doing it tough at the moment, so it’s probably an environment where they do need to protect themselves.’’
Mr O’Bryan said businesses or people needed a written agreement and to enter details of an asset lease or sale on the Personal Property Securities Register to access protection.
‘‘That might just simply be terms and conditions or it might be an actual agreement — they need to sign something,’’ he said.
‘‘It’s a small cost. Depending on what someone is doing, it can be $10, $20, $30.’’
Mr O’Bryan said businesses and liquidators needed to be educated about the law.
‘‘It can save a business,’’ he said.
‘‘I think part of it is that people, by nature, think that if someone sells something to someone, they still own it until they get paid. It’s not the case.’’
Mr O’Bryan said not accessing the protection had an increased impact on businesses in country towns.
‘‘In metropolitan (areas), it’s probably more transactional .
‘‘It sounds harsh, but there’s probably a little bit too much trust in some situations.
‘‘I’ve seen it before where one company isn’t protected and goes down, which then has a severe impact on the next one.’’
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