Since 1 July, self-managed super funds (SMSFs) have been able to have up to six members. The ATO said it has been making updates to the Australian Business Registry (ABR) which will make it easier for funds to add a fifth and sixth member to the SMSF.
“These updates are expected to be completed by mid-August,” the ATO said.
“We recommend you wait until the ABR is updated before you add more than four members. However, if you wish to add additional members, an interim solution is available for you.”
The ATO has also noted that if SMSFs are considering expanding, it will need to consider what the fund’s trust deed allows, and the structure of the fund.
Furthermore, SMSFs should review their reporting obligations and the laws of their state or territory that may restrict the number of trustees a trust can have, as an SMSF is a type of trust.
In a recent technical update, Heffron managing director Meg Heffron also said that the funds will likely need a corporate trustee.
“While we think corporate trustees are a good idea anyway for a host of reasons, they are actually the only solution in many six-member funds, as most state laws governing trusts only allow a maximum of four individual trustees,” Ms Heffron said.
“There are also considerations for the SMSFs where more people will need to sign documents and that can become administratively challenging.
“It’s good practice to have all directors sign some documents — and that means six people.
“At the very least, most documents, such as financial statements, will need to be signed by at least half of the directors, which means three people for a five- or six-member fund. Of course, this is where digital signatures really come into their own.”