An SMSF can have up to six individual Members, each of whom must be a Trustee of the Fund. Alternatively, an SMSF can have a Company as a Corporate Trustee, with each Member of the SMSF being a Director of the Corporate Trustee and each Director of the Company being a Member of the SMSF.
Most SMSFs are established with individuals as Trustees.
To protect all Members of your Fund, no Member can be the employee of another Member, unless they are related.
Can you have a single Member SMSF?
Yes, but you have to have either:
- a private company as a Trustee (also known as a Corporate Trustee), or
- a second Trustee (a natural person) resident in Australia, with a TFN, who has no criminal convictions and is not a bankrupt.
We charge a fee of $950 to set up a Corporate Trustee. We explain the pros and cons of using a corporate Trustee here.
Nil-Balance Members
An SMSF Member can have a nil-balance as long as they have the intention to contribute to the Fund. There is no set time limit of when the Member should start contributions, as long as the intention remains.
There are some cases where a Member with a nil-balance in an SMSF can be seen as questionable. Some examples include the following:
- If the nil-balance Member does not have any personal funds or money to contribute into the Fund
- If there are multiple Members in the SMSF that have nil-balances and only one Member who contributes
Legal personal representatives
A legal personal representative can be a Trustee of an SMSF (or Director of a Corporate Trustee) in place of a Member who is under a legal disability (except for undischarged bankrupts). A representative may also be a Trustee of an SMSF if they hold an enduring power of attorney in respect of the SMSF Member. This can be done when a Member is overseas.
Children in an SMSF
Children under the age of 18 can be Members of an SMSF but, as minors, they cannot be Trustees. A parent or guardian usually acts as Trustee in place of an underage child. In certain cases, a legal personal representative may be appointed to the position.
Death of an SMSF member
A legal personal representative can be a trustee (or director of a corporate trustee) in place of a deceased SMSF member until the deceased member’s death benefits are paid from the SMSF.
