Corporate Trustee vs Individual Trustee in SMSFs
- Josh Foo
- Aug 7
- 2 min read
Updated: Oct 29
When establishing a Self-Managed Super Fund (SMSF), one of the key decisions is choosing the type of trustee structure.
SMSFs can have either individual trustees or a corporate trustee. Understanding the differences between these structures is essential for compliance, governance, and effective management of the fund.
What is an Individual Trustee?
An individual trustee structure means that each member of the SMSF acts as a trustee personally. If the fund has multiple members, all members must be trustees. Individual trustees are directly responsible for the management, investment decisions, and compliance of the fund. This structure is common for smaller SMSFs but may require more administrative oversight when members change or when the fund needs to be updated due to member movements.
What is a Corporate Trustee?
A corporate trustee is a company appointed as the trustee of the SMSF, with members of the fund acting as directors of the company. This structure provides a single legal entity responsible for the fund’s management. Corporate trustees offer certain administrative advantages, such as simplified documentation when adding or removing members, and can enhance asset protection. However, it also involves additional setup and ongoing company compliance obligations.
Key Differences Between Structures
The main differences between individual and corporate trustee structures relate to legal responsibility, administrative requirements, and succession planning. Individual trustees are personally liable for the fund’s compliance, whereas a corporate trustee provides a separate legal entity for governance. Corporate trustees often simplify member changes and may improve administrative efficiency, particularly for funds with multiple members or plans to grow over time.
Considerations for Trustees in SMSF
Choosing between an individual or corporate trustee depends on the SMSF’s size, complexity, and long-term goals. Both structures require compliance with the superannuation laws, including the Sole Purpose Test, investment regulations, and reporting obligations. Trustees should carefully consider how each structure affects administration, liability, and flexibility, and seek professional guidance if unsure.
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DISCLAIMER: This article is provided for general information only. While care has been taken, no guarantee is given as to the accuracy, completeness, or timeliness of the content. It does not constitute financial, accounting, legal, or SMSF advice and does not consider your personal circumstances. You should seek independent, licensed professional advice before making decisions about SMSFs, compliance, or investments.
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