Roles in an SMSF
- Leonie Martin
- 43 minutes ago
- 5 min read
Who does what? Members, trustees, directors, shareholders — and what it means for your fund.
In a self-managed super fund (SMSF) the legal structure often involves multiple roles. One person might be a member, a trustee, a director, even a shareholder — all in the same fund. Understanding these roles helps you operate your SMSF smoothly, avoid compliance pitfalls, and frame your decisions clearly.
At a Glance: Who Does What?
Role | Who It Applies To | What They Do | Important Notes |
Member | Anyone with a balance in the SMSF | Accumulates super & receives benefits | All members must also be trustees/directors (with limited exceptions) |
Trustee | Individuals when using individual trustee structure | Operates the SMSF and makes decisions | Operates the SMSF and makes decisions |
Director | When the SMSF uses a corporate trustee | Runs the trustee company, which acts as trustee | Every member must be a director |
Shareholder | Owners of the trustee company | Appoint/remove directors & control the company | Often one share per member, or a divisible share structure |
1. Members
Members are the individuals whose superannuation benefits are held by the SMSF.
Key points:
A member may have a balance — or may join with a zero balance.
A member has rights (like receiving benefits and accessing information).
A member does not automatically have control unless they are also a trustee/director.
Most SMSFs have 1–4 members, though up to 6 is permitted.
2. Trustees (Individual Trustee Structure)
If your SMSF uses individual trustees, every member must be appointed as a trustee. Trustees are responsible for running the fund and meeting all legal obligations under the SIS Act.
Key responsibilities include:
Managing fund investments
Maintaining records
Ensuring fund assets are kept separate from personal assets
Acting in the best interests of all members
Signing financial statements and key documents
All members must be trustees, and all trustees must be members (with limited exceptions).
Who Can Be an Individual Trustee?
To be an individual trustee, a person must:
Be a member of the SMSF
Be at least 18 years old and have legal capacity
Not be a disqualified person (e.g., bankrupt, convicted of certain offences, disqualified by ATO or court)
Employer/Employee Rule
Two people cannot be trustees together if one is the employer of the other unless they are relatives.
This prevents conflicts of interest and protects the “self-managed” nature of the fund.
Relatives include:
Parents, children, siblings
Spouses and de facto partners
Grandparents, grandchildren
Aunts, uncles, nieces, nephews
Certain in-laws
If trustees are relatives, they can be in an employer/employee relationship.
Exceptions
A non-member can act as trustee only if:
the member is under 18, or
the member lacks legal capacity—in which case a parent, guardian or legal personal representative steps in.
3. Trustees (Corporate Trustee Structure)
Instead of having individuals act as trustees, an SMSF can appoint a company as the trustee. This company is referred to as the corporate trustee.
With this structure:
The company is the trustee
Directors of the company make decisions and run the SMSF
Every member of the SMSF must be a director of the corporate trustee(with the same limited exceptions as above)
Why many SMSFs choose a corporate trustee
A corporate trustee structure offers several advantages:
Easier to add or remove members no need to retitle bank accounts and assets)
Better long-term administration
Clearer separation of personal vs fund assets
Improved succession planning
Ideal for single-member SMSFs
4. Directors of the Corporate Trustee
When an SMSF uses a corporate trustee, all members must be appointed as directors of that company. Directors have obligations under both the SIS Act and the Corporations Act.
Directors must:
Ensure the company meets its obligations as trustee
Act in the best interests of all members
Sign documents, minutes and reports
Keep records and ensure compliance
Apply for a Director ID (required before the company can be set up)
5. Shareholders of the Corporate Trustee
Shareholders own the trustee company and typically are the same people as the members.
Although share value is usually nominal, ownership matters because shareholders can appoint or remove directors.
Choosing the Number of Shares
There is no “correct” number of shares, but consider:
Single member
One share is simplest
But if future members may join, consider issuing a divisible number
Two members
Options:
One share each (simple)
100 or 120 shares split equally (more flexible)
Three or more members
A divisible number (e.g., 120 shares) allows easy equal splits:
40/40/40
30/30/30/30
A divisible structure supports future changes, succession, and maintaining clear control.
6. Members Must Be Involved in Controlling the SMSF
Super law requires that:
Every member must be a trustee, OR
Every member must be a director of the corporate trustee
Limited exceptions apply for minors or those lacking capacity.
This rule keeps SMSFs genuinely “self-managed.”
7. Common Role Scenarios
Two-member SMSF (most common)
2 members
2 trustees OR 2 directors
Usually equal share ownership
Single-member SMSF
Corporate trustee is highly recommended
Member → sole director & usually sole shareholder
SMSF with adult children joining
3–4 members
All directors
Shares can be equal or planned for succession
Loss of capacity
A legal personal representative acts as trustee/director
The member remains a member
8. Why Understanding Roles Matters
Getting the roles right ensures you:
Maintain legal and tax compliance
Minimise risk when members change or capacity issues arise
Avoid unnecessary asset transfers or retitling
Align your SMSF structure with your long-term goals
Set up governance that supports clarity and control
9. Quick Decision Checklist
Are all members appointed as trustees (or are all directors of the trustee company)?
If there’s a corporate trustee: do you understand how shareholders, directors and the company interact?
If a member is under 18 or has limited capacity: is there a trustee or director arrangement in place?
If planning future membership (e.g., children joining): is the shareholder and director structure set up for easy transitions?
Are governance roles documented (trust deed, company constitution, minutes) to reflect decision-making?
FAQs
Do all members have to be trustees or directors?
Yes — this is a core requirement of SMSFs.
Can a trustee be someone who is not a member?
Only if acting for a minor or someone lacking legal capacity.
Can employers and employees be trustees together?
No, unless they are relatives.
Do all directors need a Director ID?
Yes — before the company can be registered.
Who owns SMSF assets?
The trustee (individuals or the company), not the members personally.
Related Guides
You can explore each of these via our guides below:
👉 What Are SMSFs?
👉 Eligibility & Trustee Responsibilities
Ready to Explore Setting Up Your SMSF?
SMSFs involve more than one title and understanding the roles of members, trustees, directors, and shareholders ensures your fund runs smoothly, remains compliant and adapts as your life evolves.
Setting up these roles correctly from the start gives you clarity, control and confidence.HelloLedger can help you with all required tax and compliance steps to establish your SMSF safely and correctly.