A self managed super fund (SMSF) is a special type of trust created and managed in accordance with superannuation legislation. It therefore requires an SMSF trustee to control and make decisions for the fund and ensure it complies with the super rules.

The trustee can be either an individual or a director of corporate trustee.

For a corporate trustee, the company must satisfy the following:

• They have not been deregistered by ASIC
• They do not have any directors or other responsible officers who are disqualified individuals (see the section below for the reasons why an individual would be disqualified from being an SMSF trustee)
• They have not had a receiver or provisional administrator appointed to manage their operations
• No action has been started to wind up the company.

Similarly, if you decide on individual trustees, the conditions are:

• Are not an undischarged bankrupt (or are not insolvent and under administration)
• Have not been convicted of an offence involving dishonesty
• Have not previously received a civil penalty under superannuation legislation
• Have not been disqualified by a superannuation regulatory body (such as the ATO or the Australian Prudential Regulation Authority).

Whilst there is additional cost in having a corporate trustee, there are many benefits:

The benefits of a corporate SMSF trustee structure include:

• it can be easy and more cost effective to add or remove members
• legal ownership of assets does not change when a director/member is added or removed
• it’s the only option if you want to manage your SMSF by yourself
• there may be fewer problems for succession planning where you have two members and one passes away, as the remaining member can stay as the sole director of the trustee company
• ATO administrative penalties apply to the corporate trustee, not each individual director.

Here is a good comparison of individual and corporate trustees https://www.ato.gov.au/super/self-managed-super-funds/setting-up/choose-individual-trustees-or-a-corporate-trustee/

If you decide on a corporate trustee for your SMSF, a company must be set up to act as the trustee of the fund.

Each of your fund’s members must be a director of this company which must be registered with the Australian Securities and Investments Commission (ASIC). Ownership of all the SMSF’s assets is listed in the company’s name as the trustee.

Neither the corporate trustee nor any of its directors can be paid for their services. Importantly, all SMSF assets must be kept separate from the personal assets of fund members.

Trustees own and manage the fund’s assets on behalf of members and are responsible for its ongoing legal compliance with superannuation and taxation legislation.

These responsibilities include annual fund auditing, reporting and taxation obligations to the Australian Taxation Office (ATO). All SMSF trustees must sign a trustee declaration indicating they understand all their legal obligations.