Tag archives: Personal Property Security Act

Registering and discharging intellectual property security interests

Intellectual property often forms an important part of a target’s assets, especially for start-ups and high-tech companies. It is important for both the purchaser and the vendor to understand the security registration and discharge process in intellectual property assets.

Registration

Pursuant to the provincial Personal Property Security Acts, Intellectual property is considered a type of intangible personal property, and as previously noted in order to perfect a security interest in such intangible property, a secured party must register its security interest at the appropriate personal property security registry in the jurisdiction where the debtor is located .

In addition, a … Continue Reading

“Shop-in-shop” retail: perfecting your security interest

In today’s business world, we continue to see creative interconnection among businesses. These arrangements are often motivated by a desire for companies to attain certain benefits of M&A transactions (such as synergies) without incurring certain costs (such as loss of autonomy and heightened transactional expenses). In the retail sector, a “shop-in-shop” business arrangement has become a common occurrence, where characteristically, a large retailer (herein referred to as a “licensor”) will license physical square footage in its retail store to another retailer (herein referred to as a “licensee”) to sell goods. These types of arrangements enable licensees to operate what would … Continue Reading

Transitioning to the PPSA’s new rules

In a previous blog post, we discussed the amendments to the rules under the Ontario Personal Property Security Act (the PPSA) which determine the location of the debtor for certain types of collateral and the jurisdiction for registration.  In this post we explore the transitional rules which will apply to security agreements made before December 31, 2015.

As described in the previous post, as of December 31, 2015 new Ontario debtor location rules (the New Rules) determine the jurisdiction in which a filing must be made for security interests where the underlying collateral consists of:

  • An intangible
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Where to register under the PPSA’s new debtor location rules

Changes to Ontario’s Personal Property Security Act (the PPSA) may have an effect on M&A transactions that involve certain security interests. This two-part post will explore how the PPSA’s changes affect security agreements entered into both before and after December 31, 2015.

Background

On December 31, 2015 new rules came into force (the New Rules) that determine a debtor’s location for the purposes of choosing the jurisdiction in which to register a security agreement. As these amendments to the PPSA were first proposed in 2006, they come as no surprise to practitioners but secured parties should be aware … Continue Reading

PPSA registrations in asset purchase transactions: when are they necessary?

In asset purchase transactions involving the sale of accounts receivable, questions often arise about whether a registration under the applicable provincial Personal Property Security Act (PPSA) will be necessary. The answer to this questions depends on a number of factors, including where the seller’s accounts receivable are located and whether a party is the purchaser or the seller of the assets.

If the accounts receivable of a seller located in Ontario are being sold, an Ontario PPSA financing statement may need to be filed showing the seller as “debtor” and the purchaser as “secured party.” This is due … Continue Reading

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