10 Steps to Setting Up Your SMSF
An SMSF is a complex structure that is based upon providing financial remuneration to its members for their retirement days. The primary difference between other funds and an SMSF is that here the trustees have special functions and obligations in regard to the fund. Whenever you decide to invest in your retirement days and set up an SMSF, you will need an experienced professional to help you so that you can avoid the issues that may arise in the near future. In this article, we will go through the 10 steps to setting up SMSF in a secure and efficient manner.
- The first step consists of deciding the number of members or trustees that will take part of the fund. In Australia, an SMSF can count maximum up to four members. Every member is automatically a trustee or depending on the type of SMSF, can be also a corporate trustee. Trustees have the function to manage the fund while other members profit by them.
- The second step is to choose a trustee structure. There are two choices you can go with, either individual trustees (where each one of the founders is also a member) or a corporate trustee (where each member of the SMSF is also an executive director of the company).
- The third step consists of creating a trust deed. This is the most important step of setting up SMSF. The deed should be created by a professional legal practitioner and confirmed by all of the other trustees of the fund.
- The fourth step is all about signing a trustee declaration. Australian law demands all trustees to sign a declaration that they understand all the responsibilities that come with the managing of the SMSF. Trustees have up to 21 days to sign in after becoming a trustee or a corporate trustee.
- The fifth step consists of picking a control system for the SMSF. With this internal regulations, the SMSF will be eligible for tax benefits. To get control you will need to get a Tax File Number, Australian Business Number and optionally get registered for GST.
- The sixth step consists of nominating and approving other trustees as part of the fund. You can nominate yourself or others (for example your partner), but it all must be approved by all other trusties. In the end, this is only a formal process and can be done in just a few minutes, but it must be part of the SMSF records.
- The seventh step is opening a bank account. Firstly, you need to open an account in your name, accept rollovers of super benefits and earnings and pay all the expenses. Important thing is to keep your personal assets separate from the SMSF assets (regulated by law).
- The eighth step is all about creating and implementing an investment strategy. Before you decide to go all with an investment, decide the strategy together with the other trustees. Consider all the objectives, risks, expenses and which type of assets you would like to invest in. Once the strategy is agreed upon, you can start implementing it.
- The ninth step is to pick your personal service providers. Generally, they are done by accountant or a lawyer or that is pretty trendy today – an auditor. Additionally, you can hire a valuer to keep an eye on the assets and a financial adviser that will delve into future paying pensions.
- The tenth and final step is to appoint an auditor. After the ninth step is finished, the law requires from you to appoint an auditor that is approved by the Australian SMSF Auditor registry or also known as ASIC. You have exactly 30 days to do the appointment before the annual return. With this final step, you have set your personal SMSF.
Get more info here: http://www.smsfwarehouse.com.au/smsf-setup/