Choose individual trustees or a corporate trustee

Differences between SMSF trustee structures

You can choose one of the following structures for your fund:

You should discuss this decision with an SMSF professional.

Media: SMSF trustees - individual or corporate
https://tv.ato.gov.au/ato-tv/media?v=bi9or7odwy7aknExternal Link (Duration: 02:40)

Note: Single member funds have different trustee features to funds with 2 to 6 members. Refer to table 2 for information.

Table 1: Comparison of member and trustee requirements for individual and corporate trustees (funds that have more than one member)
Structure	Features
Individual trustees	2 to 6 members. Each member of the fund must be a trustee, and each trustee must be a member of the fund. A member cannot be an employee of another member – unless they are relatives. Some state and territory laws restrict the number of trustees a trust can have to less than 6. As an SMSF is a type of trust, it is important that clients seek professional advice to help understand if their SMSF is impacted by these restrictions. Alternatively, they could restructure or structure their SMSF to have a corporate trustee, where each member is a director of that corporate trustee (see below).
Corporate trustee	2 to 6 members. Each member of the fund must be a director of the corporate trustee, and each director of the corporate trustee must be a member of the fund. Directors of corporate trustees need to have a director identification numberExternal Link (director ID). A member cannot be an employee of another member – unless they are relatives.

Table 2: Comparison of member and trustee requirements for individual and corporate trustees (single-member funds)
Structure	Features
Individual trustees	There must be 2 trustees. One trustee must be a fund member. If the fund member is an employee of the other trustee, the fund member and the other trustee must be relatives.
Corporate trustee	The corporate trustee company can have one or 2 directors, but no more. The fund member must be the sole director or one of the 2 directors. Directors of corporate trustees need to have a director IDExternal Link. If there are 2 directors and the fund member is an employee of the other director, the fund member and the other director must be relatives.

Table 3: Comparison of the costs associated with individual and corporate trustees
Structure	Features
Individual trustees	There are no Australian Securities & Investments CommissionExternal Link (ASIC) fees, so establishment costs and ongoing administrative requirements are less. A trustee cannot be paid for their duties or services as a trustee.
Corporate trustee	ASIC charges a fee to register a corporate trustee for the first time. There is an annual review fee, which is lower if the corporate trustee acts solely as a super fund trustee, but higher if the corporate trustee also performs another function, such as running a business. It's free to apply for a director IDExternal Link. A corporate trustee cannot be paid for its services as a trustee, and directors of the corporate trustee cannot be paid for their duties or services as directors in relation to the fund.

The title of fund assets must be in the name of the current trustees 'as trustees for' the fund.

Table 4: Comparison of ownership of fund assets for individual and corporate trustees
Structure	Features
Individual trustees	If an individual trustee is removed or another added, you must change the titles of the SMSF's assets. This can be costly and time-consuming. State government authorities may charge a fee for title changes. Most financial institutions also charge a fee for title changes.
Corporate trustee	Recording and registering assets can be simpler, particularly for changes in membership. When a person starts or stops being a member of the SMSF, they become, or cease to be, a director of the corporate trustee. You must notify us and ASIC of any change in director. The corporate trustee doesn't change, so the titles of the SMSF’s assets are unchanged.

The fund's assets must be kept separate from any assets members hold personally.

Table 5: Comparison of the separation of assets for individual and corporate trustees
Structure	Features
Individual trustees	Fund assets must be in the fund's name. Fund assets must not be combined with personal assets.
Corporate trustee	Fund assets must be in the fund's name. Fund assets must not be combined with director's personal assets. Companies have limited liability, so a corporate trustee offers greater protection if the trustee is sued for damages.

Table 6: Comparison of penalties for individual and corporate trustees
Structure	Features
Individual trustees	If super laws are breached, administrative penalties are levied on each trustee.
Corporate trustee	If super laws are breached, administrative penalties are levied on the corporate trustee. Penalties may be imposed if the directors of a corporate trustee do not have a director IDExternal Link.

Table 7: Comparison of succession for individual and corporate trustees
Structure	Features
Individual trustees	Where changes in trustees occur, the fund is not likely to continue to operate as usual unless an appropriate succession plan has been prepared.
Corporate trustee	A corporate trustee continues in the event of a member's death. In the event of the death or incapacity of a member, control of an SMSF and its assets by a corporate trustee is more certain.

Once you have considered which structure will be most suitable for your fund, appoint your trustees.