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Leading Member SMSF Special Purpose Corporate Trustee

About the Product

The LYD Leading Member Special Purpose SMSF company trustee, is a basic version of a standard company which will not pay dividends, as its sole purpose will be to act as a corporate trustee of a Leading Member SMSF.

For Standard SMSF Funds a special purpose SMSF company should be used rather than this company.

PLEASE NOTE: ASIC has recently increased company registration fees - https://asic.gov.au/for-business/payments-fees-and-invoices/asic-fees/asic-fee-indexation/

IMPORTANT INFORMATION regarding your ASIC Company Registration

This product includes the registration of a company with ASIC. Please ensure the company name you would like to register is available prior to proceeding.

The cost of this document INCLUDES the required ASIC registration fee of $576 (excludes GST as ASIC fees are GST free).

► $726.00 (inc GST & ASIC Fees) - OR provided under your unlimited membership (exc ASIC fee)

► The master document has been signed off by LY Legal and is congruent with Australian law.

General Information

The Corporations Act 2001 provides special recognition for a company acting as a trustee of an SMSF.

The Leading Member SMSF Special Purpose Corporate Trustee should be used in conjunction with the LYD Leading Member SMSF Deed.

For Standard SMSF Funds the special purpose SMSF company should be used rather than this company.

Benefits

Benefits of LYD Leading Member Special Purpose SMSF Company

Flexible and matches the requirements of the Corporations Act 2001 for a special purpose corporate trustee;
The Leading Member of the Fund is automatically appointed as Chair;
one director - one vote rule with Leading Member veto power;
the Leading Member can appoint or remove Directors;
on death of a member, the Board of Directors must appoint the deceased members LPR as a Director or loose its trusteeship;
on death, only the deceased member's LPR as a Director has a vote in relation to the payment of the deceased member's death benefits;
all of the shares of the Company are held by the Leading Member. On the death of the Leading Member, these shares are cancelled and new shares issues to the incoming Leading Member;
Provides flexibility in terms of appointing a Chair; and
Only ordinary class of shares offered.

Why have a Corporate Trustee?

Corporate Trustee can continue acting as trustee in perpetuity, compared to an individual who can be exposed to death, divorce, etc.;
Legal ownership over assets does not have to change when making changes to directors or shareholders, compared to individuals in which you have to change the legal ownership when they change;
Increased asset protection;
From a land registry, unit and share registry perspective, it provides administration simplicity as the company is the only name on the register and if directors come and go, there is no registry change; and
Liability which is limited to the assets of the company. Corporate trustees generally hold limited assets and are shell companies.

Frequently Asked Legal Questions

Who acts as Chair?

The Chairman has the casting vote in the event of any locked vote on the Board. The constitution allows a rotating chair or a chair who can be appointed for an indefinite or definite period.

What happens if the company registration details I have entered are incorrect?

If your application is declined by ASIC, a member of our team will be in contact with you. If your registration is successful however you have provided us with incorrect company establishment details, ASIC may charge a fee to make changes. Please ensure ALL information has been checked prior to finalising the interview process, including checking that the company name you would like to register is available and spelt correctly. We recommend checking this on the ASIC professional registers available at www.asic.gov.au.

Will you register the company for me?

Yes, we have a direct integration with the ASIC web services application. The ASIC registration fee is included in your document price - no GST has been charged on this amount. If you do not wish for us to register the company for you, please select "no" where this question is asked throughout the interview process.

Do you provide a completed Form 201 with company documents?

No. From October 2019, Australian company registrations must be completed online. The paper Form 201 is no longer available and not required. All answers are sent directly to ASIC for registration.

Is Proportional Voting an option?

The LYD Leading Member special purpose Trustee company generally provides for one Director – one vote rule but a proportional rule based on representative member account balances can be implemented by the Directors.

What happens on death of a member / Director of the Leading Member SMSF corporate trustee?

On death of a member, the Board of Directors must appoint the deceased members LPR as a Director or loose its trusteeship. In addition, the Deceased members LPR as a Director has the only vote in relation to the payment of the deceased member's death benefits.

What can the Leading Member control?

The Leading Member holds a powerful position in the Company and owns all the shares and had Board veto power. In addition, the Leading Member is the only person who can appoint or remove a Director.

What happens when the Leading Member dies?

The LYD Leading Member SMSF Trust Deed provides succession in terms of the Leading Member and on the death of the Leading Member, these shares are cancelled and new shares issued to the incoming Leading Member.

How long does this document take to assemble?

Depending on the complexity of the data, this document should take approximately 15-30 secs (after ASIC payment) to assemble. If you experience timing outside of this please contact Support via the Surge app, alternatively please read this article for troubleshooting tips https://info.lightyeardocs.com.au/supportcentre/troubleshooting-longer-assembly-times-timeouts .

Is this document a legal document?

All master documents have been signed off by LY Legal lawyers. Tony Anamourlis of LY Legal advises that “at no time, due to inbuilt legal protection and security measures can a user change or amend a document on the LYD platform that has been signed off by a practicing solicitor. To do so would result in the user drafting a document of a legal nature and engaging in the provision of legal services. In addition, it would be a breach of copyright. In our opinion when completing the form fields through the LYD platform, users and their employees are merely carrying out an administrative task which is not the provision of legal advice.”

However in some complex areas such as the insertion of a varied range of client instructions into a Will or other such documents the user must be mindful of the extent to which a document is being drafted by the user rather than merely the administrative task of completing a form where the relevant fields are inserted into the reviewed and signed legal document provided by LY Legal.

The above advice is born out of numerous cases dating back to Re Sanderson, Ex parte Law Institute of Victoria [1927] VLR 394, 397 where the Court held:

“if a person does a thing usually done by a solicitor, and does it in such a way as to lead to the reasonable inference that he is a solicitor – if he combines professing to be a solicitor with action usually taken by a solicitor – I think he then does act as a solicitor.”

Likewise in ACCC v Murray (2002) 121 FCR 428, 448 where Murray was building a franchise business that involved the legal writing and drafting of Wills from scratch based on the client’s personal circumstances. The Court held that this process was legal work.

Is the document easy to read?

All LYD products are written in plain English and assessed for readability. If at any time you come across any errors, please contact support@lyd.com.au.

What lawyers sign off on the LYD documents?

All LYD documents are prepared and signed off by LY Legal.

Are the LYD documents reviewed regularly?

All LYD documents form part of the LYD internal review process. We review all documents at least annually or when required to do so due to changes in legislation. Further details of this process and a review schedule is include on this website.

Can I get a sample of this document?

Yes, please email support@lyd.com.au to request a sample document for you to review.