SMSF Corporate vs Individual Trustees: What to Consider

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An SMSF can have individual trustees or a company acting as corporate trustee. The structure affects member requirements, asset ownership, ongoing administration and succession. A corporate trustee does not remove the members’ duties or guarantee protection from every liability.

How do the structures differ?

For a multiple-member SMSF, members generally must be individual trustees or directors of the corporate trustee, and vice versa, subject to statutory exceptions. A single-member fund has special requirements: individual trustees require a second trustee, while a corporate structure can have the member as sole director.

The ATO’s trustee structure guidance explains the conditions. A person’s role as company shareholder is distinct from the director and SMSF member requirements.

Ownership and changes in membership

Fund assets must be held in the appropriate trustee capacity and kept separate from personal assets. With individual trustees, admitting or removing a trustee can require changes to asset ownership records. A corporate trustee remains the legal entity when its directors change, which can simplify administration, but director and membership records still need updating.

Before changing structure, obtain advice on the deed, trustee appointment, title transfers and any state duties or transaction costs. Do not assume a change can be implemented merely by editing the fund’s accounting software.

Costs and responsibilities

A corporate trustee adds establishment and company administration costs. An eligible special purpose superannuation trustee company can receive a lower ASIC annual review fee; it must meet the conditions. Check ASIC’s special purpose company guidance and the current fee schedule rather than relying on an old dollar estimate.

Both structures require proper decisions and compliance. Where an administrative penalty applies, the distinction between individual trustees and a corporate trustee can affect how it is imposed. Directors should not treat incorporation as a way to avoid personal accountability.

Questions to discuss before deciding

• Will the fund have one member or several, and are future changes likely?
• How are assets currently registered, and what would a change involve?
• Who can act following death, incapacity or a member’s departure?
• What ongoing company obligations and costs would apply?
• Does the deed support the intended appointments and succession arrangements?

Stewart Private can discuss accounting and compliance implications. Legal drafting and financial product recommendations may require separate professional advice. For an existing fund, also read our guide to leaving or winding up an SMSF.

Discuss your circumstances

Stewart Private Accounting helps business owners in Perth and across Australia with accounting and tax support. Contact our team to discuss the records, scope and fees for your work.

This guide provides general information current at the update date. The treatment depends on your circumstances and the applicable income or FBT year.