Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

What is a PPSA Registration?

What is a PPSA Registration?

By:

Posted September 21, 2021

We frequently work with small businesses on a variety of matters, from leasing to employment contracts. As the business becomes more successful, plans often turn to expansion and our clients will meet with their bank to obtain financing. Without a property to mortgage, they are usually concerned about what they can offer the bank to get sufficient funds for their business. When I then mention that the bank can register security under the Ontario Personal Property Security Act (the “PPSA”) against some of their company’s assets, they will often ask “what is a PPSA registration?”.

In order to understand what a PPSA registration is, it is important to know what the PPSA is. The PPSA is legislation that governs debtors who use their personal property as security for the repayment of their debt to a creditor (or, in simpler terms, a business offers their personal assets as collateral to get a loan). The specific types of personal property being pledged are usually outlined in a security agreement between the debtor and creditor and involves items like equipment, motor vehicles, accounts, and inventory. Furthermore, the personal assets secured will often cover both those already owned by the business and items acquired in the future. Once the security agreement is signed and the loan is given, the security has attached to the collateral. However, another step is required to “perfect” the security.  A security agreement will not be effective as against all other interests unless it has been formally recognized under the PPSA. Perfecting the security agreement accomplishes this formality.

Registration of the security under the PPSA will perfect the security. The form submitted will list the types of personal assets being secured, the length of time for the registration, and other relevant information. With the security registered, there is now notice on the record of the creditor’s interest in personal assets of the business. As a result, the creditor can take possession of these assets in the event of default by the debtor. One way to think of a PPSA registration is that it is like a mortgage but, instead of registering something on title against land that is owned, the registration is against other personal property owned.

There are many other aspects of the PPSA that are important, such as priority, renewals, and discharges. However, hopefully this blog gives you a basic understanding of the PPSA and why registration of a security interest is so important.

This blog post was written by Jason Peyman, a member of the Real Estate and Business Law teams.  He can be reached at 613-369-0376 or at jason.peyman@mannlawyers.com.

More Resources

Blog |
Wills, Trusts and Estates
By: 

Posted November 28, 2023

As a lawyer who has worked in the field of Wills and Estates for the last three years, I get the following question quite a[...]
Blog |
Family Law
By: 
Amongst the profession, we often refer to domestic contracts prepared by the parties themselves without legal advice as “kitchen table agreements”. In May 2023, the[...]
Blog |
Wills, Trusts and Estates
By: 

Posted November 7, 2023

What is a Power of Attorney document? A Power of Attorney is a legal document that authorizes someone else, known as your “attorney” to act[...]
Blog |
Real Estate
By: 

Posted November 6, 2023

If you enter into an Agreement of Purchase and Sale to buy a new build home, your offer could be conditional on having your lawyer[...]
Blog |
Wills, Trusts and Estates
By: 
Do I need a Will? A short answer is most likely. If you possess assets of value, such as chequing or savings accounts, investments, a[...]
Blog |
Real Estate
By: 

Posted October 31, 2023

The Status Certificate is a document written by a condominium corporation that discloses certain financial, governance, and legal information about the condominium corporation and a[...]
Jason Peyman

Jason Peyman

My practice focuses on residential real estate, as well as corporate/commercial law. I pride myself on providing clients with help throughout the various stages of a real estate transaction and making the process of buying or selling a home as simple as possible. In addition, I also enjoy assisting clients with other real estate issues, such as preparing co-tenancy agreements and advising clients regarding boundary disputes. For the firm’s corporate/commercial clients, I am involved in preparing and reviewing commercial agreements, such as asset and share purchase agreements, shareholder agreements, leases, and license agreements. Born in Kingston and raised in the Greater Toronto area, I obtained a Bachelor of Business Administration from the Schulich School of Business at York University, where I was also President of the Sports Business Club. I am a graduate of the joint law degree program between the University of Ottawa and Michigan State University. During law... Read More

Read More About Jason Peyman

Subscribe to Our Newsletter

"*" indicates required fields

Name*
Consent*
This field is for validation purposes and should be left unchanged.