Edmonds Judd

Personal Property Securities Register

Whether you’re retiring, pursuing new ventures or looking to cash in on your hard work, selling a business is a significant milestone and one that needs careful planning and preparation.

To ensure the greatest return on your investment, your business should be at its best when it goes on sale. Building value in your business is important in attaining an optimum result.



Strengthening operations

As a starting point, you should ensure the business can operate successfully without you. All its operations and processes should be well-implemented and running smoothly.

It’s important to delegate responsibilities to capable managers early on. Work to reduce the business’s reliance on you and have a management succession plan in place detailing who will support the incoming owner and what pre-settlement training will be provided.


Sales are critical to the success of any business. It’s therefore important that before you put your business up for sale, you focus on increasing the volume of sales. Tighten up on all expenses and eliminate any shrinkage.

Give your premises a thorough clean. Ensure all physical and digital assets are in good condition, and that sensitive data is secure. Tidy your database and ensure you have favourable terms in place with suppliers, or consider the need to transfer distributor or dealership rights if that’s applicable. Damaged and obsolete stock should be disposed of and not included in the sale.


Collate the information concerning the business’s website, phone numbers, social media information, passwords and an up-to-date client database. Consider compiling this into a ‘starter’ document (operations manual) that will make it easy for the buyer to be up and running early on.

A potential buyer will want to see that the business has an existing marketing strategy for the next year and beyond. This will add value and may lead to a quicker sale.


Although this is a matter for the buyer of your business to consider, you should think about your current employees. Are they likely to be transitioned across to the new owner or will there be redundancies? Good communication with the buyer is important in respect of all employment issues. Existing employees are not likely to be notified of the sale until after the sale and purchase agreement is signed and/or it becomes unconditional.


Discuss with the buyer how customers will be notified of the business sale. The retention of customers is a major part of the goodwill of a business; to ensure a smooth transition, thought needs to be put into this process. Both parties should work together and plan on how your customers will be notified of the change of ownership. In the case of significant customers or clients or referrers of work, it may be necessary to arrange for personal introductions.



Marketing your business

When marketing your business to prospective buyers, you want to showcase its unique selling points. Engaging the services of independent professional advisors who specialise in business sales will be very helpful and provide invaluable assistance.

Considering who your potential purchasers are and negotiating with them can be very time-consuming. Professional advisers understand the market, can identify prospective purchasers, will assist with marketing your business and advise you on the sale process.

It is important to establish the right sale price. Advisers will look at the nature of the business including the value of its assets and its profitability to ensure an appropriate price is set.

If an inflated price is set at the outset, this will deter potential buyers.




Buyers will want to review the historical performance of your business to ensure they are buying a sound and profitable operation. The sale price should reflect the financial position of the business.

Financial statements and tax returns of the business should be formally reviewed by your accountant rather than being generated in-house to ensure their accuracy and to address any red flags. This will make the due diligence process easier for buyers, who will be assured that records are accurate.


Buyers’ lenders will be interested in cash flow and the ability to service any loans a buyer may have or need.

In preparation, formalise deals with customers and suppliers, and update your business forecasts. Search the Personal Property Securities Register to identify security interests registered over your business assets. Seek the removal of any that are no longer required and others that can be removed as part of the sale process.


Give some thought to work in progress/partially completed projects; we will include provisions in the sale contract to cover this situation. It may be that payments made by customers and clients following settlement could be apportioned between the parties. If you have issued gift vouchers and they are redeemed after the sale, a mechanism should be included in the sale agreement to cover this.

Sometimes when selling, a proportion of the sale price is contingent on the performance of the business following its sale. This is often referred to as an ‘earn-out.’ If this is the case, there should be a carefully worded formula included in the sale agreement. This will often include the involvement of an independent assessor. We will help draft any necessary clauses.


Check with your accountant about any taxes, GST and other obligations that may affect the sale. Your options when selling can differ depending on the business structure you have. Getting this wrong can lead to an unexpected tax bill; advice from your accountant is essential.




When selling your business, there are many legal considerations. You should talk with us early to ensure there are no complications down the line. You do not want any issues to arise with the buyer that have the potential to lead to a dispute.

Review your existing contracts, leases and any business compliance obligations. Make sure any trademarks and copyrights are updated, and that patents and licenses are secured and transferrable. You may want to renew these as their expiry could devalue your business. Completing an audit of your intellectual property and legal obligations reduces any risks for buyers, and for you.


The information provided to prospective buyers that relates to your business’s processes, finances and intellectual property is important and should be protected. Entering into a non-disclosure agreement with them will ensure that any confidential information about your business remains secure even if a sale falls through.

It is likely that the buyer will insist on a restraint of trade clause in the agreement. You should consult with us to ensure it is worded correctly and will not significantly impact your future plans.


Finally, it is important to keep your business running well when it is on the market as it may take time to sell. Be honest and realistic in your dealings, and keep up the marketing. Investing effort into thorough planning will increase the likelihood of achieving a successful outcome.



DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

What is the PPSR?

Gives protection when leasing or selling goods

Anyone who has been in business, even for a short time, will have encountered the PPSR (Personal Property Securities Register). The PPSR is a searchable online register that records if a third party has a financial interest in the assets of individuals or entities.

The register only records interests in personal property (not land). Personal property includes all property that is not land or ships.

If you or your business leases or sells goods on credit terms, or if you have lent money to a third party, you should seriously consider registration on the PPSR in order to protect your business or yourself.

Registering a security on the PPSR

It is helpful to look at examples where registration on the PPSR would be appropriate.

  • Leasing assets for a term of longer than 12 months, such as eftpos or photocopier equipment
  • Selling goods on credit terms, for example, payment is due on the 20th of the following month
  • Selling goods on consignment terms where payment is due when the goods are sold, or
  • Making a loan to an individual or a company.

In each of the above situations, registration on the PPSR provides you with protection if rental payments or invoices are not paid or loan payments are not kept up. PPSR registration ensures you will be paid before parties that do not have registered securities.

If you register, you may be able to collect any goods or even trace the proceeds of the sale of those goods. When goods are supplied on credit terms, a ‘super priority’ exists if registration is completed within 10 working days of delivery of the goods. This super priority will have priority over all prior registrations no matter when registered.

What happens if I do not register?

If you don’t register on the PPSR, it may mean that you are not paid in full – or at all.

How to register?

To register on the PPSR you must have a contract with the party you have leased to, sold goods to or lent money. That contract needs to include a right to register on the PPSR.

Timeliness of registration on the PPSR is critical. Where there are two registrations in respect of the same property the first registration will have priority.

Registration is completed online here.

Searching the PPSR

You would search the PPSR if you are:

  • Considering leasing, selling, or lending to a third party to determine what other obligations and registered securities they have
  • Considering buying personal property from a third-party. The most common example of this is the purchase of a motor vehicle. Money may be owed on the vehicle, and without having the security discharged as a condition of purchase, you run the risk of losing the vehicle and the money you paid for it
  • Buying a business that includes personal property as part of the assets
  • Selling a business and you want to determine if any money needs to be repaid, or
  • Buying land with buildings on it that includes chattels.

How long does PPSR registration last?

Registrations on the PPSR expire five years after registration. It is important to note when to renew registrations before they expire. If registrations are renewed, their priority continues from the date of the original registration.

If registrations are not renewed and you subsequently reregister, the priority will be from the date of the subsequent reregistration.

What if things go wrong?

If a person or entity you have leased to, sold goods to or loaned money to becomes bankrupt, goes into liquidation or placed into receivership – what should you do?

Talk with us as soon as possible so we can advise you on your options. If you have registered on the PPSR, your position is stronger than if you haven’t.

Regularly lease, sell goods or loan money to third parties?

We can help you to review your existing contracts or prepare contracts to help protect your business. We can advise you on how and when you should register on the PPSR.  Navigating the PPSR is fairly straightforward. If, however, you have any questions or queries regarding the PPSR and how it benefits or affects your business, please don’t hesitate to contact us.


DISCLAIMER: All the information published in Commercial eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Commercial eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650