SMSF company registration for Special Purpose company on our law firm’s website
SMSF company as corporate trustee of your Self-Managed Super Fund
Build an SMSF company that acts solely as the trustee of your Self-Managed Super Fund (SMSF). The constitution prohibits distributing income and property to shareholders. It is ‘safer’ for your SMSF to have a Special Purpose company. You save on ASIC’s annual charge.
We check your company registration. This is before it proceeds to ASIC.
Incorporating SMSF Company with ASIC is important.
Which is better as trustee of your SMSF: company vs human
When I started practising in superannuation law in the 1980s, the majority of SMSFs had just ‘dad’ as the trustee. In those days you only needed one trustee. Now all the members must be trustees, or all the members must be directors of the company. These days most superannuation lawyers, accountants and financial planners recommend a company as trustee of your SMSF. This is because:
- A company lives forever. This is better succession planning. If a member dies, you don’t need to transfer land. The land just stays in the company name. You change the directors only.
- You need a Deed to change an SMSF trustee. You change trustees via a Deed of Variation of your SMSF. Conversely, changing a director is straightforward. This is because merely changing a director of the company does not change the trustee.
- If ‘mum’ and ‘dad’ are two trustees, there is a problem if one dies. An SMSF cannot have one human as trustee. You need at least two humans. Act quickly when your spouse dies. Appoint another human as trustee or replace everyone with a company. The last thing you want to worry about is getting your SMSF compliant. A company is compliant with just one director.
- Ease of audit
You can’t mix SMSF assets with your other assets. A dedicated special purpose company has no other job. When ‘mum’ and ‘dad’ buy an asset for the SMSF, they may forget to add ‘as trustee for the SMSF’. There is a breach. In contrast, if you buy an asset in the name of the company and forget to put ‘at SMSF’, it is not a big issue.
- Contrary to popular belief, an SMSF can go insolvent. Any structure, even a conservative super fund, may not be able to pay its debts as they fall due. You can sue an SMSF. If you have a company you have another layer of protection. A director does not automatically go down with the sinking trustee company.
- Banks require SMSF to have a company as trustee for borrowing money.
- The ‘Central Management and control‘ rules are easier to comply with if you travel overseas.
- ATO penalties are less with a special purpose company. Human trustees are jointly and severally liable.
- A corporate trustee (special purpose company) pays lower ASIC fees each year.
- A special purpose company won’t have an ABN. It does not trade in its own right. Instead, the SMSF has the ABN.
- A corporate trustee does not prepare accounts. It has no assets. SMSFs prepare accounts.
- You have the added ASIC expense of setting up the company. Human trustees are free.
Seven advantages of using a law firm website to build your company
The 7 advantages of using Legal Consolidated:
- 94% of incorporations happen within 25 minutes of you building the document online
- our lawyers personally vet the details before submitting to ASIC
- when required, we contact ASIC to confirm your company name
- what if your company name is unavailable or challenged by ASIC? We contact you via telephone and help you find one that is available
- You receive a secure, personalised email containing:
- our covering letter on law firm letterhead
- Certificate of Incorporation
- Company Constitution
- All minutes
- as always, our hints and training videos guide you. The law firm is available 24/7 via telephone for legal advice on how to build your document
- a constitution is a deed. Only a law firm can legally prepare deeds.
For more legal advice telephone us. We are a law firm. We can help you answer the questions.
Adjunct Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, Dip Ed, BArts(Hons), LLM, MBA, SJD
Legal Consolidated Barristers and Solicitors
Head Office: 39 Stirling Highway, Nedlands, WA
National Australia law firm
Mobile: 0477 796 959
National: 1800 141 612