When a business pledges assets as collateral, the lender registers a financing statement under the provincial Personal Property Security Act — a public record that a lien exists on the company's property.
What it does
The registry answers one question: does anyone else have a prior claim on this company's movable property — inventory, equipment, receivables, intellectual property? A lender that registers first has priority over later lenders on the same collateral.
Because 'all present and after-acquired property' is standard collateral language, a single old registration can block a new lender until it is discharged. Old financing statements that nobody bothered to remove are a routine closing-delay for acquisitions and refinancings.
The searches you will be asked for
Buyers search the registry of the company's province before any asset purchase, lenders search before any secured loan, and investors search in diligence before any investment round. The search result is a condition of the closing, not a formality.
- Search before lending, buying or investing
- Discharge old statements when loans are repaid
- Renewals lapse — usually every 5 years
- Quebec runs its own (civil-law) equivalent
Change statements and discharges
When collateral is released or a loan is repaid, the borrower's real task is confirming the lender filed a discharge. Registrations follow the lender's paperwork, and a stale registration that should have been discharged five years ago still shows up in every search until someone pushes the file.
Frequently asked questions
Does the PPSA cover real estate?
No — land is governed by provincial land-title systems. The PPSA covers personal property: equipment, inventory, receivables, shares and most other assets that are not land.
How do I remove a discharged lien?
The secured party (lender) files the discharge. You cannot remove someone else's registration yourself; you can only request it, persistently, in writing.
Sources
Connectica provides information only, not financial, investment, legal or tax advice. Figures on this page are estimates and generalizations — confirm anything that matters with the relevant professional or authority.