By Graeme Colley
Keeping records for your SMSF is important for many reasons. One that comes instantly to mind is compliance and keeping the ATO happy. But you’ll need good records that show your entitlements, the fund’s investments and what you have contributed. This comes in handy for the day to day operation of your SMSF but are essential if something happens in your personal life, such as divorce, insolvency or on your passing.
It’s important you document all significant meetings and decisions of your SMSF. It’s a legislative requirement and keeping your reporting obligations up-to-date will help see that your fund remains compliant.
Even where an SMSF is involved, minutes and resolutions need to be taken seriously and read carefully before signing. They provide an official and legal record, or evidence of actions and decisions made by the trustees. If the minutes and resolutions are ambiguous and unclear they can lead to possible legal ramifications. Just because an SMSF is small doesn’t change things, minutes and resolutions are just as important as they are for larger funds.
A minute is a written record of what has happened at a meeting. All meetings of an SMSF’s trustees should be minuted in a timely manner and each year, as a minimum, the trustees need to meet to review and confirm the investment strategy of the fund.
The minutes of trustee meetings will include details of any resolutions made.
A resolution is a record of any decisions made at the meeting. Even if you are a sole director of a corporate trustee a record of any resolution must be included within a minute and signed.
Resolutions should be made for:
Your fund’s trust deed may also indicate whether minutes or resolutions are required for other trustee decisions.
All investment decisions of your SMSF should be in line with the fund’s investment strategy which is required to be reviewed and agreed to each year. Investing and investments is a key responsibility of all trustees and minutes should be taken of investment decisions. This is very important to help protect decisions of all fund trustees, should an investment fail.
Not making and retaining records of investment decisions may result in other trustees taking action against any decision you make for failing to be diligent in your trustee duties. By recording investment decisions in the fund’s minutes, signed by other trustees, shows that they have agreed with the strategy in writing. Minutes must include details about why a particular investment decision was taken and which trustees agreed or disagreed with it.
To keep the regulator happy, your SMSF will need to keep all minutes and resolutions in writing and in English. If they are kept electronically, they must be accessible and in a form that the ATO can understand.
Some decisions and actions taken by the trustees may need to be reported to the ATO within specified times. For example, the ATO must be notified within 28 days of changes to trustees, directors of the corporate trustee, members, contact details, address, or change in fund status.
The superannuation law requires your SMSF to keep minutes of trustee meetings and any resolutions for a minimum of 10 years.
By keeping minutes and resolutions of the fund as required not only ensures you keep the regulators happy but when things get difficult they may serve as an insurance policy that justifies your decision and those made by other trustees.
