When establishing a Self-Managed Superannuation Fund (SMSF), one of the first major decisions you’ll face is whether to appoint individual trustees or set up a corporate trustee. This choice affects how your SMSF is managed, the level of compliance required, and how easily it adapts to future changes. In this article, we’ll explore the key differences between individual vs corporate trustee SMSF structures, compare the pros and cons, and explain how to choose the right structure for your fund.
What is an SMSF trustee?
A Self-Managed Superannuation Fund (SMSF) is a private superannuation fund where the members are also the trustees. That means they take full responsibility for managing the fund’s investments and complying with superannuation and ASIC regulations.
When setting up an SMSF, one of the first and most important decisions you’ll make is choosing a trustee structure. There are two main SMSF trustee options:
Individual Trustees
Corporate Trustee
This decision impacts your fund’s administration, liability, compliance obligations, and succession planning. Let’s compare both structures in detail.
This trustee structure may be cost-effective in the short term but comes with greater administrative burdens and legal risks, especially as the fund grows or members change.
Individual Trustees
An individual trustee structure involves two to six people acting as trustees. Each must also be a member of the SMSF. For single-member SMSFs, at least two individual trustees are required.
Pros of Individual Trustees
Lower setup and maintenance costs – No company registration or annual ASIC fees
Simpler to establish – Ideal for smaller or newly established SMSFs
Direct ownership clarity – Fund assets are held in the names of all trustees
Cons of Individual Trustees
More administration when members change – Legal titles on all assets need updating
Higher personal liability – Trustees are individually responsible for fund breaches
ATO penalties apply to each person – Risk of multiple fines
Potential asset confusion – Greater chance of mixing personal and SMSF assets
Corporate Trustee
A corporate trustee SMSF structure involves setting up a company to act as the sole trustee. All members of the SMSF must be directors of the company. This is a popular option for long-term SMSF planning.
Pros of Corporate Trustees
Allows single-member SMSFs – One director can legally operate the fund
Better asset protection – Fund assets are owned by the company, separating personal liability
Streamlined member changes – Only company records (not asset titles) require updates
Easier succession planning – Smooth transition of control if a member dies or leaves
Shared penalty exposure – Fines are levied against the company, not individuals
Cons of Corporate Trustees
Higher initial and ongoing costs – Includes company registration and ASIC compliance fees
More regulatory obligations – Must comply with the Corporations Act 2001 and maintain director responsibilities
This structure offers significant long-term benefits, particularly for funds looking to grow, maintain stability, and reduce compliance risk.
Why Set Up a Special Purpose Corporate Trustee?
If you choose a corporate trustee, it’s strongly recommended to set up a special purpose company used solely for SMSF trustee duties. This ensures:
Legal and financial separation from any trading activities
Minimised legal risks if the company becomes insolvent or is involved in disputes
Simplified administration and reporting for the SMSF
Avoid using an existing business entity. Keeping the trustee role exclusive protects SMSF compliance and prevents unnecessary complications.
SMSF Trustee Structures: Quick Comparison
| Trustee Structure | Pros | Cons |
|---|---|---|
| Individual Trustees | – Low cost – Easy to set up – Transparent asset ownership | – Higher personal liability – More admin on changes – Separate fines per trustee |
| Corporate Trustee | – Suitable for sole-member SMSFs – Stronger asset protection – Easier succession and admin – Shared penalties | – Higher setup and ASIC fees – More regulatory requirements |
Choosing the Right SMSF Trustee Structure
The decision between an individual vs corporate trustee SMSF structure should be guided by:
Your retirement goals
The complexity of your fund
How often you expect changes to members
Your appetite for compliance responsibilities and risk
While individual trustees may offer a low-cost entry point, corporate trustees provide enhanced flexibility, legal protection, and administrative efficiency, making them a preferred option for long-term SMSF management.
Speak With an SMSF Specialist
Choosing the right trustee structure is not a one-size-fits-all decision. If you’re unsure which SMSF trustee option best suits your circumstances, speak with an independent SMSF auditor or specialist advisor. They can help you navigate the rules and set up your fund for success.
How National Audits Group Can Help You
At National Audits Group, we specialise in independent SMSF audits and work closely with accounting firms and financial advisers across Australia. Our role is to support you and your clients by ensuring every SMSF audit is conducted with independence, precision, and a deep understanding of trustee structures.
Here’s how we can assist:
Independent, conflict-free audits for SMSFs – ensuring compliance with SIS Act requirements and ATO expectations
Guidance on trustee structure risks and audit implications for both individual and corporate trustees
Fast turnaround times and a scalable, high-volume SMSF audit process
Dedicated SMSF audit team with accredited professionals focused solely on superannuation funds
Proactive communication and support for you and your clients throughout the audit process
Whether your client has an individual trustee setup or a corporate trustee structure, we’re here to provide reliable and expert SMSF audit services that align with compliance standards and reduce your administrative burden.
Ready to partners with a specialist SMSF auditor?
Get in touch with National Audits Group today or learn more about our SMSF audit services.