Security Filings and Registrations
Security filings are done to protect creditors from unwanted actions by the debtor, such as selling purchased goods in bulk, relocating goods purchased with credit out of the province in which they were purchased, and from the possibility of a loan not being paid back due to unforeseen circumstances.
Bank Act Filings
When Canadian lenders loan money to a person or a business to purchase goods or equipment, the debtor signs documentation that provides the lender the first preferential lien on those goods or equipment. The lender then registers a ‘Notice if Intention’ to take the goods as security, to protect its security interest. When the lender is ready to release its preferential lien, the lender registers a ‘Certificate of Release’ confirming all obligations of the debtor have been satisfied. Both registration types are filed with the Canadian Securities Registration System (CSRS) pursuant to the Bank Act.
The following must be provided to complete a Notice of Intention filing:
- Two original copies with original signatures on the lender’s letterhead
- The five-digit transit number of the lender must be referenced in the Notice of Intention
- Debtor and lender information
The following must be provided to complete a Certificate of Release filing:
- One original copy with original signatures on Bank Letterhead
- Original Notice of Intention registration number
- Debtor and lender information
Bulk Sales Act Filings
The Bulk Sales Act enforces that business owners selling business assets, equipment, merchandise, wares or inventory in bulk (that fall outside the normal course of business) need to register an affidavit stating that all creditors have, or will be, paid. This affidavit, known as the Bulk Sales Affidavit, is the notice that states all of the business’ creditors have been paid, or that they will be paid from the proceeds of the sale.
The following must be sent to ESC to file a Bulk Sales Affidavit:
- Two original copies of the Bulk Sales Affidavit, which includes:
- Bulk Sales Act Affidavit
- Statement to Seller’s Creditors
- Court Back Page
- The Affidavit also must include:
- Address of the asset(s) location
- Date of sale closing
- Vendor and purchaser name(s)
- Purchase price
- If the affidavit refers to an attached ‘Exhibit’ that references the included Statement to Seller’s Creditors, the Exhibit document must be stamped with the appropriate “Exhibit” stamp
- Cheque made payable to the Minister of Finance for $75.00
Bulk Sales Act filings outside of the Toronto jurisdiction are sent by overnight courier to the appropriate office for processing.
ESC provides easy online access for registration in Personal Property Registry systems across Canada.
A PPSA Registration is a registration made by a creditor against a debtor registering a lien on the moveable property. A PPSA Registration serves as notice to all third parties of the security interest held by the lender (secured party) against the borrower (debtor).
The following PPSA Registration types exist:
- Registration (Initial): A PPSA Registration protects the security interest held by the secured party. The registration will outline the debtor, secured party, length of agreement and further details surrounding the property secured by way of an agreement.
- Amendment: A PPSA amendment is filed to correct an error or omission from the initial registration, or to amend the registration in some other form.
- Renewal: PPSA renewals are filed to extend the existing registration before the registration expires.
- Discharge: PPSA discharges are filed when all obligations under the security agreement have been performed and the creditor no longer holds a security interest against the debtor.
* Note: All product pricing shown reflects government disbursements only. An ESC Service Fee will apply to all orders (the fee varies by service type, i.e. self service vs. staff-assisted processing). Turnaround times are based on uncertified Ontario searches for self-service orders (where available) for non-account (guest) clients. For a full list of pricing, disbursements and turnaround times, please refer to our page.