How Many Members Can I Have in an SMSF?

Self-Managed Super Funds (SMSFs) offer flexibility and control for retirement savings, but understanding how many members your fund can have and how this differs between individual and corporate trustee structures is crucial for compliance and efficient administration.

These rules vary depending on your trustee setup and, in some cases, state legislation.

How Many Members in an SMSF?

Individual Trustees in SMSFs

An SMSF with individual trustees can generally have up to six members, with each member acting as a trustee. This ensures that all members participate in fund governance.

Single-member SMSFs require at least two trustees, though only one trustee must be a fund member. Trustees cannot be employees of other members unless they are relatives. Certain states and territories may impose stricter limits on the number of trustees a trust can have.

Because an SMSF is legally a type of trust, professional advice is recommended to ensure compliance. If state rules restrict your fund, a corporate trustee structure may provide a solution.

Corporate Trustees in SMSFs

When a corporate trustee is used, each SMSF member must also be a director of the corporate entity. For single-member funds, the member can either be the sole director or one of two directors, provided the second director is a relative or not employed by the member. Directors must obtain a Director Identification Number (Director ID), a permanent unique identifier that ensures compliance with the Corporations Act 2001 and facilitates fund registration with ASIC. See also Corporate Trustees v Individual Trustees in SMSFs

Costs & Admin

Corporate trustees incur registration fees and annual review costs payable to the Australian Securities and Investments Commission (ASIC). These fees are lower if the corporate entity functions solely as a super fund trustee and higher if it performs additional functions, such as operating a business. Individual trustees are not required to pay ASIC fees. Trustees and directors cannot be remunerated for their services in managing the SMSF.

Governance & Compliance

Both individual trustees and corporate directors must follow the rules set out in the SMSF trust deed as well as tax and superannuation law. Directors of corporate trustees must also comply with the company’s constitution and the Corporations Act 2001.

Obtaining a Director ID prior to fund registration is mandatory. Failing to comply with these governance requirements can result in penalties from ASIC or issues with fund registration.

Ownership of SMSF Assets

All SMSF assets must be held separately from personal assets and registered either in the name of the fund or in the names of individual trustees “as trustees for” the fund. In individual trustee structures, any change in trustees requires updating each asset’s ownership record, which can be time-consuming and incur government or financial institution fees.

Corporate trustee structures simplify this process: when a member becomes or ceases to be a director, the corporate entity remains the registered owner, eliminating the need to update asset titles.

Succession & Continuity

For SMSFs with individual trustees, at least two trustees must always be maintained. If a trustee leaves or passes away, the fund must appoint a new trustee, transition to a corporate trustee structure, or be wound up. Notification of changes must occur within 28 days.

Corporate trustee structures provide greater continuity, as the entity remains unchanged even if directors change or leave. All director changes must be reported to ASIC within 28 days.

Summary - SMSF Members

Understanding how many members an SMSF can have and the differences between individual and corporate trustee structures is critical for compliance, cost efficiency, and smooth administration.

Professional advice ensures your SMSF adheres to both superannuation law and state-specific regulations, reducing the risk of penalties and operational issues. Careful planning around trustee structures also simplifies succession and asset management.

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(GENERAL INFORMATION ONLY)

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DISCLAIMER: This article is provided for general information and educational purposes only. It does not constitute financial, legal, tax, investment, or other professional advice and has been prepared without taking into account your personal objectives, financial situation, or needs. This article may include perspectives from industry contributors. Contributor participation does not imply endorsement, recommendation, or preferred referral status. While reasonable care has been taken in preparing this content, no representation or warranty is made as to its accuracy, completeness, or currency. SMSF Intelligence does not accept liability for any loss or damage arising from reliance on this information or any linked materials. SMSF Intelligence does not provide financial, legal, or tax advice. Before making any decisions, you should consider the appropriateness of the information in light of your circumstances and seek advice from a suitably qualified and licensed professional.