Do all members of smsf have to be directors

Can a SMSF be a director? How many members does a SMSF have? Who is responsible for the SMSF? An SMSF can have up to four Individual Members , each of whom must be a Trustee of the Fund. Trustees need to abide the rules and regulations when managing an SMSF.

The corporate trustee company can have one or two directors , but no more.

The fund member must be the sole director or one of the two directors. If there are two directors and the fund member is an employee of the other director , the fund member and the other director must be relatives. When there is a change in membership of the SMSF , i. This fund type has more than one, and up to four, members. Each individual trustee of the fund is a fund member and each member of the fund is a trustee, unless the fund has a corporate trustee and members are directors. Members of the fund cannot be employees of other members , unless they are related.

In both cases, it’s the members who run the fund and as a general rule, all members are either trustees themselves or directors of the corporate trustee. Also, it is only the members who run the SMSF and as such, all individual trustees or directors of the corporate trustee must generally be members of the fund. Importantly a Member will only have an entitlement in the SMSF if they contribute to the SMSF.

If they do not contribute to the SMSF the Member will have no entitlement to the SMSF and they are considered a NIL Balance Member. A single member SMSF can also have a corporate trustee an in this case, the member must be the sole director of the company appointed or one of two directors where the other individual is either a family member or an individual who does not employ the single member of the trust. New funds usually appoint trustees or directors under the fund’s trust deed. The Directors of the Company Trustee will be responsible for running the SMSF. For your convenience, if you do not have an existing Company and would like to establish a Company to act as Trustee for your SMSF , ESUPERFUND offers a Company Setup Service as part of its online SMSF Application here.

SMSF trustees are responsible for ensuring the fund’s compliance with superannuation legislation. Single Member Funds Where you have a single member fund the law requires you either have two individual trustees or a corporate trustee, where the member is one of two directors or the sole director. In this latter case, the fund would have one member and one director. Let’s look at the example of the death of a member of a two member fund.

Multi-member corporate trustee SMSFs When all members of an SMSF with a corporate trustee die, then the corporate entity survives the death of the directors (for individual trustees, the older trustee will be assumed to have died first). On the death of a member, the first issue is to determine what constitutes a quorum for a director’s meeting. All Members of an SMSF have a proportional interest in the SMSF assets based on the Contributions and Rollovers made to the SMSF and any withdrawals made from the SMSF.

This means that if one Member contributes 1 of monies to the SMSF and a second Member contributes no monies, then the Member making the total contributions to the SMSF will own 1 of the SMSF. This might sound odd – we’re used to thinking anyone who is a member of an SMSF must also be a trustee. But legally, anyone can have someone else take their place as a trustee or director of the.

Consequently the death of a member will almost always require a change in the trustee arrangements for the fund. Sole member SMSF - You can have an SMSF where one individual is both the sole member and the sole director. Greater asset protection - As companies have limited liability, they provide greater protection where a party sues the trustee for a liability or damages exceeding the fund’s assets.

It is FREE to appoint Individual Trustees for an SMSF.

Jacob and Rachel are SMSF directors with one share each in the trustee company and the only two SMSF members. Alternatively you may select a Company to act as a Trustee for your SMSF. Simon is the adult son of Jacob from a previous relationship and has been appointed Jacob’s alternate director.

The SMSF members are automatically trustees either as individuals or as directors of a company that acts as trustee. In this situation all the directors of the trustee company are members. Since all members have to be trustees, this ensures that each member is fully involved and has the opportunity to participate in the decision-making processes of the fund. With the re-election of the Morrison government, this may soon change to six members , further opening up the advantages of a leading member SMSF.

So, who is the leading member? If a fund chooses to have a corporate trustee, each SMSF member must be a director of the company concerned. All members of an SMSF must also be its trustees. The company must be registered with the Australian Securities and Investments Commission (ASIC) and each director of that company must also be a member of its corresponding SMSF.

But because of a quirk in the legislation, a corporate trustee with one director , with a single- member fun can still meet the SMSF definition. If the company becomes insolvent, your responsibilities as director will apply towards the creditors, instead of the company. A creditor is anyone.