Corporate vs individual SMSF trustees: What’s the difference?
SMSF members need to decide whether a corporate trustee or individual trustee structure is in their best interests. Learn the difference between these two SMSF trustee structure types and make the correct decision when setting up your self-managed super fund.
Setting up a self-managed super fund means making a few key decisions upfront. One of the first is choosing its trustee structure.
An SMSF can have either:
A corporate trustee, where a company acts as trustee and members are directors
Individual trustees, where members act as trustees directly
What does an SMSF trustee do?
An SMSF trustee is legally responsible for running the fund. That includes making investment decisions, keeping records, following the fund’s trust deed and staying compliant with super rules.
In an SMSF, the members generally have control. That control comes with obligations.
Corporate trustee vs individual trustee
With a corporate trustee, a company is set up to act as the trustee of the SMSF. The SMSF members are usually directors of that company.
With individual trustees, the members themselves act and share responsibility for running the fund. Most SMSFs with this structure have at least two trustees, each member is generally required to be a trustee.
The ATO recognises both structures, but they work differently and can affect cost, admin, penalties and succession planning.
Why many SMSFs use a corporate trustee
A corporate trustee can make an SMSF easier to manage over time.
Some of the key benefits include:
Cleaner admin: If members change, the SMSF’s assets usually stay in the company’s name.
Single-member SMSFs: A corporate trustee allows one person to run an SMSF as the sole member and director.
Succession planning: The company continues even if a member dies or leaves the fund.
Penalty structure: Administrative penalties generally apply to the company, rather than being applied to each trustee individually.
Property investing: Lenders may prefer a corporate trustee structure for limited recourse borrowing arrangements.
A corporate trustee involves additional establishment and ongoing ASIC fees, but it can help reduce friction in areas like administration, succession planning and member changes.
What about individual trustees?
Individual trustees can be cheaper to set up because there is no company registration cost, but they can create more admin later.
If a trustee changes, the ownership details on SMSF assets may need to be updated. That can mean extra paperwork, time and potential costs.
Penalties can also be higher in practice because they may apply to each individual trustee.
So, which SMSF trustee structure is right?
There’s no one-size-fits-all answer. The right structure depends on your fund, your members, your investments and how you want the SMSF to operate over time.
But if you want a structure designed for flexibility, cleaner admin and long-term control, a corporate trustee could be worth understanding.
Want to set up your SMSF without the paperwork hassle?
Whether you're considering an individual or corporate trustee structure, we can help get your SMSF up and running.
Speak to a Stake Super specialist or get started online in minutes.
Speak to a specialist
Want to know more about Stake Super or have questions? Speak to one of our SMSF professionals.
This is not financial product advice, nor a recommendation that a self-managed super fund (‘SMSF’) may be suitable for you. Your personal circumstances have not been taken into account. SMSFs have different risks and features compared to traditional superannuation funds regulated by the Australian Prudential Regulation Authority (‘APRA’). Stake SMSF Pty Ltd, trading as Stake Super, is not licensed to provide financial product advice under the Corporations Act. This specifically applies to any financial products which are established if you instruct Stake Super to set up an SMSF. When you sign up to Stake Super, you are contracting with Stake SMSF Pty Ltd who will assist in the establishment and administration of an SMSF under a ‘no advice model’. You will also be referred to Stakeshop Pty Ltd to enable your trading account and bank account to be set up in order to use the Stake Website and/or App. For more information about SMSFs, see our SMSF Risks page.
Commercial Manager - Stake Super
Ciara is a Commercial Manager at Stake Super, with over 10 years of experience in the SMSF industry and an MA in Accountancy and Finance from Heriot-Watt University in Edinburgh, United Kingdom. Having previously worked at a chartered accounting firm and one of the largest SMSF administrators in Australia, Ciara has extensive knowledge of SMSF compliance. She is also a current member of the SMSF Association.
Subscribe
By subscribing, you agree to our Privacy Policy.
