Case Study Computers for All Ltd. (CFA) runs a computer software service and sales business. Computers for All Ltd. is located at 123 Humpty Street, Brandon, MB, R7A A7A. Presume that on September 30, 2013 you agree to purchase a computer package to do homework containing a Super Duper 88611880 K, Serial No. 464JKF99776 computer, a Snazzy Print 5K64 colour printer, Serial No. HG23H2FD123, and a True Rainbow colour monitor, Serial No. KMVG4534. The total bill for the package is $4999.99. You decided this was a good time to buy because Computers for All Ltd. has a "Pay NO Tax" promotion on right now. The equipment will be payment is ready for pickup on October 1, 2013. You have agreed to pay 5% now, and will pay the balance over 5 years, at an interest rate of 9.75% per year, compounded monthly. The first due November 1, 2013. Computers for All Ltd. has made arrangements to sell account receivables at a discount to Payur Bills Colleclion Co., at 123 Cherry Tree Lane, Winnipeg, MB, R3N 3N3, As soon as customers buy the goods. Payur Bills will take in the payments. You say "okey dokey" to the deal and now the documents have to be prepared. Although you as purchaser would never prepare the bills in "real life", in the pretend world of this assignment you must prepare the conditional sales agreement, the assignment, and the Personal Property Registry (PPR) documents to ensure that the interest in the goods is secured. Use the forms in appendix. Then, answer the questions following. HINTS: Registration of a financing statement at PPR costs $6.00 for each year that the security is registered for, and a search costs $70.00 per name, registration number, or item searched. These charges are added to the cost of the goods. It is common business practice to search immediately following a registration. You may submit handwritten forms as long as they meet all other standards. Sign on behalf of the companies. The Manitoba Personal Property Registry oflice indicales: When completing the Search Form, just type in what you want searched. You may ay this request to us if you have an account with us, or if you have lisa or Mastercard. When searching a business debtor name, if you want all similar matches, please type somewhere (amwhere) on the form to "include all similar matches". This WZy we will include all similar names with your search request. Bling out the forms There are two parts to this exercise. 1. The first is a contract between you and the company you are buying the computer equipment 2. The second is the forms that register the agreement in the PPSR. this contract contains a right for the seller la collect the goods il payment is nol made, il sa scurily agreciment. The way that the contract is wonded will determine what type of secuni zgreement you have. You need to determine this. This part of the assignment is marked on the basis of whether you have ensured that the contract complies with the Consumer Protection Act(CPA) As you learned. il a contract is a security agreement, the CPA says that certain thing must be included. If you feel that something that should be m the contracts not in the contrc. you should write it in the document so that it complies with the CPA. The contract, when looked al as a whole. must contain clauses that meet the requirements set out in the CPA, li doesn't maller where the clauses ard, as long as what is required appears somewhere in the contract. It is important that you understand that the contract is assigned immediately after it is signed. If you do not understand what assignment 15. you should call your instructor le obtain an explanation of this. As you learned, perfection of a wcurity interest is usually a two step process. The lint is the security agreement and the second is often the registering of that agreement in the PPSR. The Toms L. A1, A2. G and I are the forms that are often used to register the agreement. All information on these forms should be printed in capital letters. At the bottom of the forms the number of pages that go together needs to be filled in, along with the order of the pages. (eg Page 2 of 4) Forms A1, A2, G and H go together. They are the forms that are used to register the agreement. L is a form that is used to search the PPSR and it is separate from the other forms. The first page is Form Al. In filling out Al the first thing you will note is that there is a box lo check to indicate the act that you are filing the forms under. You have learned primarily about the PPSA but a business that does work on automobiles can also register an interest in vehicles that they worked on under the Garage Keepers let. If you are registering under the PPSA, you will check the box in the top left hand comer. If you are registering under the Garage Keepers dd, you will check the box above the words "Individual Debtor" You will only check one of these boxes If you are registering under the Pezonal Property Security Act, you need to determine the length of the registration. This is determined by how long it will take to pay off the debt. You will want to register for at least as long as the debtor needs to fulfill the contract, but you should remember that, if the payments are not made on time, the person may still owe money after they are supposed to have fully paid. This could mean that you may still need to seize the item after the deblor was supposed to have fully paid their obligations. It is prudent, therefore, to regaler the security for the length of the contract plus one year. It will cost you six dollars per year to register the security interest. As an alternative, you can register the agreement so that your interest never expires and no one can get priority over you. This would cost $450.00, and you need to consider whether it is more prudent to register for several years or infinity. If you register for a set period, you will place an x in the box to the left of expiry date' on form Al, and fill in the date that your security interest will expire. If you decide to check the infinity box, you will place an x in the box marked infinily. Remember that you are registering a contract thal creates a security interest, and that contract becomes very important in filling out the forms. If the debtor. who owes the money, is a person. you will fill in the information about them in the boxes below the words "Individual Debtor". If there is more than one person, they need to be listed on a separate piece of paper hitled "Schedule D1" which needs to be attached to the forms. If the debtor is a business, you will fill in the boxes Business debtor. To be able to actually seize the items, one must be a "Secured Party". The person or business that may actually have to reize the personal property that is secured should be listed in the boxes below the words Secured Party" on the forms. The confirmation information may be left blank. Form AZ is the second of the forms. At the top of the form you are given three choices under the words general collateral. If the security agreement gives the secured party the right to collect anything the person owns you will place an X in the first box. If the security agreement gives the person the right to collect goods set out on the form Gl (explained below), place an X in the second box. If the security agreement gives the person the right to collect good set out on the Lorm All (explained below), place an X in the third box. You need not attach or check the box that is below additional information" The registering agent is usually the same as the secured party, as they are the ones who usually register the documents. Again, the confirmation information need not be lilled in The registering agent should sign next to the words "Authorized Signature and print their name below their signaturc. Fom Gl may be attached to forms Al and A2. Al and A2 taken together are what is called a *Financing Statement". GI could also be attached to a different set of forms which are called a **Financing Change Statement". You have not been provided with a "Financing Change Statement" and you do not need it for this assignment. If you are attaching Gl to a financing statement, you will check the first box. If you are attaching Gl to a financing change statement, you will check the second box. However, you will only use form Gl if the goods that are being used for security are either an aircraft, a mobile home, an outboard motor, a boat, a motor vehicle or a trailer. If you are registering security against one or several of those types of properly, you will fill in the serial number of the item, fill in the year, put an "X" in the appropriate category and write in a brief description for each item. If you are not registering an interest in an aircraft, a mobile home, an outboard motor, a boat a motor vehicle or a trailer, you will not use this form or include it in the documents that you submil. Form Il is used for all goods that are not an aircraft, a mobile home, an outboard motor, a boal a motor vehicle or a trailer. For II is also used when an interest & being registered under a general securily agreement. Form Il can also be allached to either a financing statement or a linancing change slalement, and you will do the same as with form G regarding this. If the secunily interest is taken against all of the debtors personal properly, you place an X in the box to the left of "The security interest is taken in all of the debtor's present and after acquired properly. If you have an interest in specifie properly, you will fill in the specific properly, including serial numbers if the property has them. in the large box that takes up the bottom half Form L is a search request. i can be used by people who are looking to lend money lo weil there is already a secunly interest against property that is gong lo be used as security. For example, if a person went to the bank and offered to use their car as Securily for a loan, the bank would search using form I to see if there was already a debt registered against the car. Form I. is also used alter a financing statement is registered to ensure that the financing statement was regulered properly. With Form L there are lour ways that you can search. You can search a person by searching their name and you will get all of the items that they have used as security that are registered in the PPSR. If you are scarching a person you will put an X in the box to the left of Individual Debtor and fill in the person's name in the appropriate boxes below. This col s10.00 per per300. You can also search a business and find all of the ussels that the business has used as security, by placing an X in the box next to "Business Debtor" and filling in the name of the business. This Cod: $10,00 per business When any financing statement i registered the people who lile it are given a registra number for that financing statement. The third way to register is to search the registration number that the financing statement was registered under. This costs $10.00 per registration number The fourth way that you unn suurch is by serial number for items that have been registered usmg form Gl. This cost $10.00 per serial number Part B - Questions 1. Wha is the squnly interest in your new goods perfected by the creditor? [l mark) 2. What must the registering company do to maintain its perfected interest for the entire oplo al the loan al mark) You wm at bingo Iwo months into the deal. You want lo repay the lean inlull. De lae the legal might lo da se! Why or why nol? (mark) 4. In another semana, aller four years you (both) have lost your jobs, and the trouble making payments, and there is still S1.000 owing on the loan. If you don't make the payments, can the company seize the goods? Why or why not? (1 mark) 5. OOPS! The woods were seized and sold, and you are $100.00 short on the loan. Can you tead for the balance Who El mark Case Study Computers for All Ltd. (CFA) runs a computer software service and sales business. Computers for All Ltd. is located at 123 Humpty Street, Brandon, MB, R7A A7A. Presume that on September 30, 2013 you agree to purchase a computer package to do homework containing a Super Duper 88611880 K, Serial No. 464JKF99776 computer, a Snazzy Print 5K64 colour printer, Serial No. HG23H2FD123, and a True Rainbow colour monitor, Serial No. KMVG4534. The total bill for the package is $4999.99. You decided this was a good time to buy because Computers for All Ltd. has a "Pay NO Tax" promotion on right now. The equipment will be payment is ready for pickup on October 1, 2013. You have agreed to pay 5% now, and will pay the balance over 5 years, at an interest rate of 9.75% per year, compounded monthly. The first due November 1, 2013. Computers for All Ltd. has made arrangements to sell account receivables at a discount to Payur Bills Colleclion Co., at 123 Cherry Tree Lane, Winnipeg, MB, R3N 3N3, As soon as customers buy the goods. Payur Bills will take in the payments. You say "okey dokey" to the deal and now the documents have to be prepared. Although you as purchaser would never prepare the bills in "real life", in the pretend world of this assignment you must prepare the conditional sales agreement, the assignment, and the Personal Property Registry (PPR) documents to ensure that the interest in the goods is secured. Use the forms in appendix. Then, answer the questions following. HINTS: Registration of a financing statement at PPR costs $6.00 for each year that the security is registered for, and a search costs $70.00 per name, registration number, or item searched. These charges are added to the cost of the goods. It is common business practice to search immediately following a registration. You may submit handwritten forms as long as they meet all other standards. Sign on behalf of the companies. The Manitoba Personal Property Registry oflice indicales: When completing the Search Form, just type in what you want searched. You may ay this request to us if you have an account with us, or if you have lisa or Mastercard. When searching a business debtor name, if you want all similar matches, please type somewhere (amwhere) on the form to "include all similar matches". This WZy we will include all similar names with your search request. Bling out the forms There are two parts to this exercise. 1. The first is a contract between you and the company you are buying the computer equipment 2. The second is the forms that register the agreement in the PPSR. this contract contains a right for the seller la collect the goods il payment is nol made, il sa scurily agreciment. The way that the contract is wonded will determine what type of secuni zgreement you have. You need to determine this. This part of the assignment is marked on the basis of whether you have ensured that the contract complies with the Consumer Protection Act(CPA) As you learned. il a contract is a security agreement, the CPA says that certain thing must be included. If you feel that something that should be m the contracts not in the contrc. you should write it in the document so that it complies with the CPA. The contract, when looked al as a whole. must contain clauses that meet the requirements set out in the CPA, li doesn't maller where the clauses ard, as long as what is required appears somewhere in the contract. It is important that you understand that the contract is assigned immediately after it is signed. If you do not understand what assignment 15. you should call your instructor le obtain an explanation of this. As you learned, perfection of a wcurity interest is usually a two step process. The lint is the security agreement and the second is often the registering of that agreement in the PPSR. The Toms L. A1, A2. G and I are the forms that are often used to register the agreement. All information on these forms should be printed in capital letters. At the bottom of the forms the number of pages that go together needs to be filled in, along with the order of the pages. (eg Page 2 of 4) Forms A1, A2, G and H go together. They are the forms that are used to register the agreement. L is a form that is used to search the PPSR and it is separate from the other forms. The first page is Form Al. In filling out Al the first thing you will note is that there is a box lo check to indicate the act that you are filing the forms under. You have learned primarily about the PPSA but a business that does work on automobiles can also register an interest in vehicles that they worked on under the Garage Keepers let. If you are registering under the PPSA, you will check the box in the top left hand comer. If you are registering under the Garage Keepers dd, you will check the box above the words "Individual Debtor" You will only check one of these boxes If you are registering under the Pezonal Property Security Act, you need to determine the length of the registration. This is determined by how long it will take to pay off the debt. You will want to register for at least as long as the debtor needs to fulfill the contract, but you should remember that, if the payments are not made on time, the person may still owe money after they are supposed to have fully paid. This could mean that you may still need to seize the item after the deblor was supposed to have fully paid their obligations. It is prudent, therefore, to regaler the security for the length of the contract plus one year. It will cost you six dollars per year to register the security interest. As an alternative, you can register the agreement so that your interest never expires and no one can get priority over you. This would cost $450.00, and you need to consider whether it is more prudent to register for several years or infinity. If you register for a set period, you will place an x in the box to the left of expiry date' on form Al, and fill in the date that your security interest will expire. If you decide to check the infinity box, you will place an x in the box marked infinily. Remember that you are registering a contract thal creates a security interest, and that contract becomes very important in filling out the forms. If the debtor. who owes the money, is a person. you will fill in the information about them in the boxes below the words "Individual Debtor". If there is more than one person, they need to be listed on a separate piece of paper hitled "Schedule D1" which needs to be attached to the forms. If the debtor is a business, you will fill in the boxes Business debtor. To be able to actually seize the items, one must be a "Secured Party". The person or business that may actually have to reize the personal property that is secured should be listed in the boxes below the words Secured Party" on the forms. The confirmation information may be left blank. Form AZ is the second of the forms. At the top of the form you are given three choices under the words general collateral. If the security agreement gives the secured party the right to collect anything the person owns you will place an X in the first box. If the security agreement gives the person the right to collect goods set out on the form Gl (explained below), place an X in the second box. If the security agreement gives the person the right to collect good set out on the Lorm All (explained below), place an X in the third box. You need not attach or check the box that is below additional information" The registering agent is usually the same as the secured party, as they are the ones who usually register the documents. Again, the confirmation information need not be lilled in The registering agent should sign next to the words "Authorized Signature and print their name below their signaturc. Fom Gl may be attached to forms Al and A2. Al and A2 taken together are what is called a *Financing Statement". GI could also be attached to a different set of forms which are called a **Financing Change Statement". You have not been provided with a "Financing Change Statement" and you do not need it for this assignment. If you are attaching Gl to a financing statement, you will check the first box. If you are attaching Gl to a financing change statement, you will check the second box. However, you will only use form Gl if the goods that are being used for security are either an aircraft, a mobile home, an outboard motor, a boat, a motor vehicle or a trailer. If you are registering security against one or several of those types of properly, you will fill in the serial number of the item, fill in the year, put an "X" in the appropriate category and write in a brief description for each item. If you are not registering an interest in an aircraft, a mobile home, an outboard motor, a boat a motor vehicle or a trailer, you will not use this form or include it in the documents that you submil. Form Il is used for all goods that are not an aircraft, a mobile home, an outboard motor, a boal a motor vehicle or a trailer. For II is also used when an interest & being registered under a general securily agreement. Form Il can also be allached to either a financing statement or a linancing change slalement, and you will do the same as with form G regarding this. If the secunily interest is taken against all of the debtors personal properly, you place an X in the box to the left of "The security interest is taken in all of the debtor's present and after acquired properly. If you have an interest in specifie properly, you will fill in the specific properly, including serial numbers if the property has them. in the large box that takes up the bottom half Form L is a search request. i can be used by people who are looking to lend money lo weil there is already a secunly interest against property that is gong lo be used as security. For example, if a person went to the bank and offered to use their car as Securily for a loan, the bank would search using form I to see if there was already a debt registered against the car. Form I. is also used alter a financing statement is registered to ensure that the financing statement was regulered properly. With Form L there are lour ways that you can search. You can search a person by searching their name and you will get all of the items that they have used as security that are registered in the PPSR. If you are scarching a person you will put an X in the box to the left of Individual Debtor and fill in the person's name in the appropriate boxes below. This col s10.00 per per300. You can also search a business and find all of the ussels that the business has used as security, by placing an X in the box next to "Business Debtor" and filling in the name of the business. This Cod: $10,00 per business When any financing statement i registered the people who lile it are given a registra number for that financing statement. The third way to register is to search the registration number that the financing statement was registered under. This costs $10.00 per registration number The fourth way that you unn suurch is by serial number for items that have been registered usmg form Gl. This cost $10.00 per serial number Part B - Questions 1. Wha is the squnly interest in your new goods perfected by the creditor? [l mark) 2. What must the registering company do to maintain its perfected interest for the entire oplo al the loan al mark) You wm at bingo Iwo months into the deal. You want lo repay the lean inlull. De lae the legal might lo da se! Why or why nol? (mark) 4. In another semana, aller four years you (both) have lost your jobs, and the trouble making payments, and there is still S1.000 owing on the loan. If you don't make the payments, can the company seize the goods? Why or why not? (1 mark) 5. OOPS! The woods were seized and sold, and you are $100.00 short on the loan. Can you tead for the balance Who El mark