Trading Company as SMSF Trustee or Sole Purpose SMSF Trustee Company?

 Traditionally the majority of SMSFs steered away from using a company trustee due to the costs associated with it. This has been changing in the last decade as Trustees see the difficulty of adding or removing members or trustees from a fund. The process of replacing a director on the other hand is relatively simple.

The cost to establish a company to act as Trustee for a fund varies from $660 – $1600, depending on who you engage to organise it for you. A SMSF with a corporate trustee can usually be set up within a few days with the ABN and TFN taking up to a month to organise with the ATO and get listed on the Super fund Lookup site

The Company is required to prepare and lodge an Annual Review with ASIC each year  and pay an ASIC lodgement fee of $276. (The lodgement fee is reduced from $290 to $59 for companies who are used solely as SMSF Trustee companies commonly now known as a Sole Purpose SMSF Trustee Company).

The problem is people still look to save on costs so occasionally clients ask if they can utilise an existing trading company to act as the SMSF Trustee, to save on “cost”.

The strict answer is yes but just because you can do something, doesn’t mean you should. Using a company for multiple purposes is fraught with risk. You would have to be meticulous about keeping transactions and record keeping of the 2 functions absolutely accurate.

I really recommend against this for a number of reasons:

  • the accounts and bookkeeping for the trustee company inevitably become much more complex, having to account for its trading activities separately from its activities as a trustee. This in turn results in higher accounting fees and risk of mistakes;
  •  SMSF auditors are very delicate individuals who follow rules to the nth degree. There can’t be any overlap between SMSF funds and other company funds. We often get clients calling and advising us that they accidentally used the wrong cheque book or transferred funds by Bpay to or from the wrong account. (This is also a reason I suggest clients use a different bank for the SMSF )Yes it was accident, but the SIS Act and Regulations say this is totally illegal. You can never guarantee that you will never make mistakes. Avoid this hassle and set up a separate sole purpose corporate trustee;
  •  if the company gets into financial difficulty and a receiver or liquidator is appointed – the SMSF fund assets could be at risk. This is because using a trading company may result in you losing control over your SMSF if the company entered some form of administration due to trading difficulties. Even if you have kept clear records the liquidator or receiver may look to freeze those assets while you prove the true ownership which could take months or years if record keeping not perfect;
  • there are potential issues associated with identifying the true owner of the assets. If all of the company/SMSF assets are held in the same company name, how does one distinguish between assets held in capacity of trustee compared with those held beneficially for the company? For example in most States the Land Titles Office will only record the Trustee name not the “ATF XYZ Super Fund”;
  • Introduce some Business Real Property, say a warehouse, leased back to the business and it gets even messier. The company as trustee for the SMSF leases the business premises back to itself in its capacity as the trading company. Now if the trading company gets in difficulty and can’t make lease payments then the same company has an obligation in its capacity as Trustee of the SMSF to chase itself for recovery of the lease payments!;
  • then to the subject of liability. Trustees of funds are generally prohibited from borrowing but nevertheless, liabilities can still arise.  For example, a plumbing contractor engaged to repair a residential investment property might suffer an injury and can sue the trustee for damages.  This could mean that if the SMSF does not have the funds to meet any damages, the assets of the business may now become a target for the lawyers of the victim. Again in time this could be sorted and true ownership proved but could you or your business afford the time arguing the case or funding the defence.

For those who do have a Trading Company as Trustee, then if the company or business is in trading difficulty your first step is go to the ASIC advice for small company directors at


In early 2021, the Federal Government amended insolvency legislation to include a new debt restructuring process and a simplified liquidation process. It is available to small companies, and requires the appointment of a restructuring practitioner.

In December 2021, amendments were made to the Superannuation Industry (Supervision) Act (SIS Act) to reflect these changes, introducing a new category of disqualified persons.

This new category applies when a restructuring practitioner is appointed to a corporate trustee, and triggers the disqualification of the corporate trustee from managing a SMSF.

If your SMSF has a corporate trustee, and a “restructuring practitioner” is appointed to that trustee, the company will no longer be able to act as the corporate trustee, as it is disqualified. This is so even though the stated goal of the Corporations Amendments is to assist financially distressed businesses to remain viable and continue trading.

I would also suggest a quick visit to your Adviser to put in place a new Trustee Company in charge of your fund or if you really feel you are going to be in trouble you might opt to become a Small APRA regulated fund where you hand over the running of the fund to an Approved Trustee but you may struggle to find one willing to take over in such circumstances.

What are your thoughts? I would be interested in feedback from lawyers, accountants and advisers and of course auditors on this issue!

Liam Shorte B.Bus SSA™ AFP

Financial Planner & SMSF Specialist Advisor™

SMSF Specialist Adviser 

 Follow SMSFCoach on Twitter Liam Shorte on Linkedin NextGen Wealth on Facebook   

Verante Financial Planning

Tel: 02 9894 1844, Mobile: 0413 936 299

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This information has been prepared without taking into account your objectives, financial situation, or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation, and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.

Leave a comment


  1. Leandro Ramos

     /  August 15, 2020

    Basic on the article, what would be the advantages to have a Trade Company as a SMSF Trustee? Could I claim tax from the cost to manage the SMSF such as educational costs, consulting fees or all of it also can be claimed through the Corporate Trustee ?


    • Only advantage is saving you $273 annual review fee. All costs specific to the SMSF Cain be claimed by the SMSF but if you do sat a FX course and buy software that you use for your own personal trading as well as the SMSF then you have breached the SiS rules of “aiding a member” which is a contravention that must be reported.

      Liked by 1 person

  2. It is common for a trading company to grant a fixed and floating charge over its assets in connection with its bank facilities. Usually such a charge attaches not only to the assets that the company holds in its own right but also the assets that the company holds as trustee (even if the trust has not been disclosed to the bank). If this occurs the fund will be in breach of the SIS Act. Safer to have a Sole Pupose Trustee Company


    • Leandro Ramos

       /  August 15, 2020

      Sir, this article was a life saver for me. Thank you so much for this.


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