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Corporate trustee
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If this happens, the child will become a member in his/her own right. If there are individual trustees this will entail a change in the investment holding; this would not be required in the case of a corporate trustee. The member will need to be represented by a legal personal representative who must become a trustee or director. If there are individual trustees this will entail a change in the investment holding; this would not be required in the case of a corporate trustee. If there are individual trustees this will entail a change in the investment holding; this would not be required in the case of a corporate trustee. The child will need to be represented by an adult who must become a trustee or director. If there are individual trustees this will entail a change in the investment holding; this would not be required in the case of a corporate trustee. Section 52 of the SIS Act and Reg 4.09A of the SIS Regs prohibit mixing of the fund's money and the trustee's money. Where there are individual trustees, this involves ensuring that bank accounts are in the trustees' joint names ATF name of fund. The problem arises when creditors (for example tenants) pay money to the fund. Cheques made payable to one of the trustees only, could not be accepted. Cash also poses a greater problem for individual trustees because there is a temptation to issue an informal receipt without giving the full name of the trust. These problems are less likely to arise with a corporate trustee since all paperwork must be in the name of the company and the company will have no money of its own. Any change of trustee means that the paper ownership of the assets held by the fund needs to be changed. If the fund only has a bank account or term deposit, changing the names should be fairly straightforward. But other types of holding will be more complicated to change. For listed shares or managed investments there will be more paperwork and fees involved. Any change of trustee means that the paper ownership of the assets held by the fund needs to be changed. If the fund owns real property, then the names on the title register will need to be changed. This will involve fees payable to the Titles Registry and solicitor's fees. Some banks require the fund itself to have a corporate trustee in limited recourse borrowing arrangements. The bare (custodian) trustee will also need to be a company. Section 52 of the SIS Act prohibits mixing of the fund's money and the trustee's money. Money from a margin loan will be unused prior to the purchase of the permitted asset (eg. a collection of shares) and is very unlikely to be completely used up in the purchase. The margin loan documents must provide for the ownership of any money left over. Under these arrangements it is much easier to avoid breaching section 52 if the trustee of the fund has no money of its own (ie. a special purpose corporate trustee). It those circumstances it is demonstrable that a "mix" is impossible. A single member fund must either have a corporate trustee (with a sole director) or two individual trustees (which means someone else must be appointed as this second trustee). Where romantic partners who are members of the fund separate or divorce, or where members fundamentally disagree, this will usually involve a change of members. In the case of individual trustees this requires a change of those who hold the investments; in the case of a corporate trustee it only involves a change of director.
Will a child member soon achieve majority? YesNo
Is there a real risk that a member will soon become incapable? YesNo
Is there a real chance that an adult will be added as a new member of the fund, or a member might leave the fund? YesNo
Is there a real chance that a child member might be added who cannot be represented by an existing adult member (eg. parent)? YesNo
Might the fund wish to raise a margin loan (eg. to borrow money to invest in shares)? YesNo
Are you concerned by the fee you would have to pay to ASIC to form a company and the annual fee payable to ASIC? YesNo
Is there a real danger of assets being mixed (eg. income of the fund being paid directly to a member by mistake)? YesNo
Is there going to be just one member of the fund? YesNo
If so, is there someone you can trust to be the second trustee? YesNo
Is it out of the question that the members could fall out requiring a division of the fund? YesNo
Are the only investments going to be cash (term deposits etc)? YesNo
Might your fund wish to make an investment in real property? YesNo
If so, will this be with money borrowed from a bank or similar? YesNo

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