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Deed of Appointment to SMSF

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Q & A – Deed of Appointment
 
The questions and answers below are for information purposes only and are not advice. You should arrange your own legal, accounting, financial and other advice.
 
What is a Deed of Appointment?
 
A SMSF trust deed will include provisions for how a trustee can be removed and how a new trustee can be appointed. Generally, the members can remove any trustee and appoint a replacement or appoint an additional trustee. The members will do so by deed.
 
Who can be a trustee of a SMSF?
 
The SIS Act requires a SMSF to have either:
  • A corporate trustee;  or
  • Two or more individual trustees (in which case the primary purpose of the fund must be the provision of old-age pensions).
Our trust deed allows for the trustees of the SMSF to be either a corporate trustee or individuals.
 
All members of a SMSF must be trustees of the fund and vice versa. This can be achieved in a number of ways:
  •  Sole member fund
    • Individual Trustees - there must be two trustees – the sole member and one other person (the sole member must not be an employee of the other trustee unless they are relatives).
    • Corporate Trustee - the sole member must be either:
      • The sole director of the Corporate Trustee; or
      • One of a maximum of two directors of the company (the sole member must not be an employee of the other director, unless they are relatives).
  • Multiple member fund
    • Individual Trustees – all members must be trustees and each trustee must be a member of the fund.
    • Corporate Trustee – each member must be a director of the Corporate Trustee and each director must be a member of the fund.
Are there any restrictions on who can be a trustee?
 
Certain people are prohibited by SIS from being a trustee or a director of a trustee company of a regulated superannuation fund.  Briefly, a person can not be a trustee, or a director of a trustee company, if:
  • They are an undischarged bankrupt;
  • They have ever been convicted of an offence involving dishonesty (no matter where or when that offence was committed); or
  • They have committed a serious breach of the SIS Act (resulting in a civil penalty order).
The people who are proposed to be the trustees or the directors of the trustee company must sign a Consent to Act or a Declaration of Director form before being appointed as a trustee or director (we provide the forms). The form requires the person to confirm that they are not disqualified from acting as a trustee or as a director of a trustee company of a superannuation fund for the above reasons. It is essential that the proposed trustees or directors consider their position.
 
A parent or guardian can act as a trustee or director for a child under 18 years old who is a member.
 
What are the advantages of having a corporate trustee of a SMSF?
 
The advantages of a corporate trustee include:
  • Removal of most of the risk of personal liability which individual trustees are exposed to.
  • No need to incur the cost of transferring assets to the new trustees or changing names on investments and bank accounts when there is a change in members and therefore a change in trustees.
  • Control of the fund is more certain in circumstances of death or incapacity of key members.
  • While a corporate trustee is more expensive to set up at the outset, there are costs savings later, for example the ASIC annual statement fee is lower for a company whose sole purpose is to act as trustee of a SMSF ($40 compared to the usual $212 for a proprietary company).
How many members can a SMSF have?
 
A SMSF can have a maximum of 4 members only.
 
The fund will cease to be a self managed fund for the purposes of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) and Regulations (SIS) if it has 5 or more members.
 
Who can be a member of a SMSF?
 
Just about anyone can become a member of a SMSF so long as they have a superannuation entitlement to go in to the fund by contribution to the fund or transfer from another fund.
 
However, as discussed above, all members must be trustees of the fund and all trustees must be members. Any new member of the fund will also have to become a trustee or director of the trustee company.
 
Also, a member can not be an employee of another member (or an associated person) unless they are relatives.
 
Relative in relation to a member is broadly defined to include:
(a)        a parent, child, grandparent, grandchild, sibling, aunt, uncle, great-aunt, great-uncle, niece, nephew, first cousin or second cousin of the individual or of the individual's spouse or former spouse;
(b)        another individual having such a relationship to the individual or to the individual's spouse or former spouse because of adoption or remarriage; or
(c)        the spouse or former spouse of the individual, or of an individual referred to in paragraph (a) or (b).
 
What are the delivery options?
 
DIY Print – We will deliver all documents to you via e-mail.
Hard copy – We will print, bind and deliver all documents to you via courier.
 
How much does it cost?                    
 
Deed of Appointment
 
DIY Print         $231.00*  
Hard copy       $275.00*
 
*Prices are GST inclusive. Prices do not include any stamp duty that may be payable.                              
Stamping*
            
SA                               exempt
NT                               $79      
           
* We will arrange stamping in the NT. NT price is GST inclusive and includes stamp duty of $35 (GST free).
SA - as from 1 July 2006 a Deed of Appointment is exempt from stamp duty in South Australia.
 
What do I get if I order a Deed of Appointment?
 
You will receive:
  • Deed of Appointment
  • Members’ minutes
  • Trustee consent
How do I order a Deed of Appointment?
 
It’s easy! Simply click on ‘order online’ on the Deed of Appointment page and you can complete your order in minutes. Or, if you prefer, you can download an order form from the Deed of Appointment page and fax it to us.
 
Once you have placed your order, we will prepare your documents. If you have requested delivery by e-mail, we will e-mail the documents to you, or if you have selected hard copy delivery, we will courier the documents to you.
 
Questions?
 
If you have any questions about how to order a Deed of Appointment, call us on 1300 667 817 or e-mail us at info@documentshop.com.au. If you have questions about legal issues, please call us on 1300 667 817 or e-mail info@documentshop.com.au and we will arrange for you to speak to the right person at Kirrily Mitchell & Associates.
 
Disclaimer
 
You should not rely solely on the information in these questions and answers because they are of a general nature only and the tax and commercial laws apply differently to different people and circumstances. Also as the law changes constantly, there may have been changes to the law since these questions and answers were written. None of the information is intended to be legal, accounting, financial or other advice. You must not act on the information. You must seek your own legal, accounting, financial and other advice.  
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Q & A - Deed of Appointment 

 
 
 
 

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