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Individual vs. Corporate Trustee Smsf

One of the greatest benefits of opening your own superannuation fund, is the ability to control the fund according to your personal needs. You are free to do whatever you want with your money. You can either invest or save for your retirement days. Unlike other funds that have strict rules and regulations, the SMSF is far more flexible and gives more freedom to its members. Once you decide to open an SMSF, you will need to choose the right trustee structure – either individual or corporate trustee SMSF structure. In order to qualify for an SMSF, you will need to appoint a group of individuals or a company as a trustee of your own fund. The structure you are going to choose will influence the costs and the way your fund is going to be administered. Therefore, you must pay extra attention on the difference between the individual and the corporate trustee SMSF structure.

Corporate Trustee Smsf

Individual Trustee Structure

The individual trustee structure is a cheaper option than the corporate structure. That’s because you are not obligated to establish a company or to follow specific corporate laws. It’s definitely a better option for those who are budget-limited, but if you want to add or remove a member, then be prepared to pay more than you did initially. Here are some of the basic things you need to consider when choosing the individual over the corporate trustee structure:

  • You can only include four member in your fund or less.
  • All members are equally ranked, none has more rights than the other.
  • It is not allowed to have an employer as a member of your trustee, unless he/she is a relative.
  • None of the trustees are paid for their services, unless there are exceptional circumstances.

Corporate Trustee Structure

Compared to the individual structure, the corporate trustee SMSF is more costly to establish, but you will eliminate some of the hassles associated with your SMSF in the future. This means that you can add or remove members easily. You can even keep the name on the documents every time you make some changes ( either remove a member due to death or want to add a spouse or a child). If you choose the individual structure, you will be required to re-register every time you add or remove a member. The key elements of the corporate trustee SMSF structure are the following ones:

  • The corporate trustee SMSF allows four members or less, like the individual.
  • All four members are appointed as directors of the company.
  • The directors are also members of the fund.
  • None of the members can be an employee of another member, unless they are relatives.
  • None of the corporate trustees are paid for their services, unless there are exceptional circumstances.