Single member funds:
Did you know a fund can be set up with only one member?
The ATO allows for the creation of single member funds but it is important to remember the rules governing management of these funds.
In case you were not aware of the rules, they have been summarised for you below.
The first option for managing a single member fund is to choose a corporate trustee. In this case be sure that the member is one of the following
- the sole director of the trustee company
- one of only two directors, that is either of the following
* related to the other director
* not an employee of the other director.
The second option for managing a single member fund is to have two individuals acting as trustees. In this case one trustee will be the member and the other trustee will be either
- a person related to the member, or
- any other person who does not employ them.
It is important to remember that a trustee or director can’t be paid for their services as a trustee or director in relation to the fund.
Source: ATO
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