This is a very common question for those looking for simplicity in setting up a self managed super fund. Under Trust law this is not a possible option. Self managed superannuation are a trust in nature. For a trust to exist, the essential requirement of separation of legal and beneficial ownership needs to be present. In the absence of such an essential requirement, a superannuation fund entity does not exist. In certain circumstances, an individual may wish to set up a self managed super fund with just one member.
The viable solution is to establish a corporate trustee, with the member acting in the capacity as sole director. The alternative solution is to appoint a second individual trustee. From 1 July 1999, a member may appoint a second person as trustee, provided that person is a relative or have business association with the member.
Can an existing company act in the capacity of a corporate trustee?
This question is often posed where members have incorporated other companies such as for business purposes, or have an established corporate trustee for other trusts within the family group. While this is a possible option, most superannuation lawyers would recommend against this. Should other entities within the family group experience financial difficulties, then the same corporate trustee may well be scrutinized by creditors in an attempt to recover debts.
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