Six important steps to

Setting up an SMSF

smsf trustee obligations

SMSF setup process

Once you have decided an SMSF is the right choice for you, here is a list of steps to help you get started.

1. Create a trust deed (and company trustee if chosen)
2. Register your SMSF with the ATO
3. Prepare an investment strategy
4. Open your SMSF bank account
5. Start making contributions
6. Start investing your super

What are the eligibility requirements
for an SMSF?

Anyone 18 years+ can be a trustee of a super fund except when he or she falls into any one of the below categories – that is, when he or she:

Has a legal disability (such as mental incapacity)
Has been convicted of an offence involving dishonesty
Has been subject to a civil penalty order under the super laws
Is insolvent under administration (including being an undischarged bankrupt)

A company can’t be a trustee if:

A director or other responsibility officer of the company falls into one of the above categories
An action has started to wind up the company
A receiver, official manager or provisional liquidator has been appointed to the company

SMSF Trustee Responsibilities

As a trustee or director of a company trustee you will have responsibilities under the law. A trustee must ensure the fund complies with the laws that apply to it, including:

  • Acting honestly in all matters concerning the fund
  • Acting in the best interests of all fund members
  • Keeping investments in the fund separate from your other assets
  • Developing and implementing a strategy for investing fund assets
  • Providing certain information to fund members from time to time

You can find more information relating to trustee responsibilities at the ATO website.

self managed super fund setup consultants

Individual or company trustee?

Here is a comparison between using individual trustees versus a company trustee for your SMSF:

Individual Trustees Company Trustee
Up to 4 members who are also trustees Up to 4 members who are also directors of the company trustee
Can have a fund with 1 member trustee. However there must be an additional person to also act as trustee Can have a fund with 1 member who is also a director of the company trustee – no need to involve anyone else
A member can’t be employed by another member unless they are related A member can’t be employed by another member unless they are related
Can’t be paid for the time and effort involved in running the fund Can’t be paid for the time and effort involved in running the fund
Members have an equal say in the administration of the fund Trustee directors have an equal say in the administration of the fund
Lower setup cost – no company trustee setup and ASIC fees required Higher setup cost – company trustee setup and ASIC fees required
Higher ongoing costs and complexities if a change in trustees is required in future Lower ongoing costs and complexities if a change in trustees is required in future
Many banks will not lend to an SMSF with individual trustees More suited to SMSFs that plan to borrow in order to purchase an investment property
Download your free ITP SMSF Information Pack

Still not sure about whether an ITP SMSF is right for you? Download our complimentary information pack to help you make a more informed decision.