Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


SMSF trustees travelling overseas may need company power of attorney

Natasha Ng  |  07 Apr 2017Text size  Decrease  Increase  |  
Email to Friend

Page 1 of 1

John and Mary have an SMSF and they are both directors of the corporate trustee of their fund. As they have worked hard over many years, they now plan to go on more overseas holidays.

What happens if they, in their capacity as directors of the corporate trustee, need to sign off on decisions concerning them as members but they are overseas?

This is a very common scenario and therefore it is very important that if the trustee of your fund is a company that the company appoints a company power of attorney in anticipation of this type of situation.

A validly appointed company power of attorney will allow the corporate trustee to continue to act as trustee of the fund should the director/s be unable to physically sign for a particular period of time.

What is a company power of attorney?

A power of attorney is legal document signed by a principal (which can be an individual or a company) and which gives another individual (the attorney), the authority to act on behalf of that principal. This may include making financial decisions when the principal is unable to.

A validly appointed company power of attorney is an individual appointed by the company to act on the company's behalf.

A company is accorded the legal capacity and power of an individual under s124 of the Corporations Act 2001 and this gives it the company the power to grant a power of attorney.

How can you appoint a company power of attorney?

The first step is finding a suitable person to hold the company's power of attorney. Of course, it is vital that this person be completely trustworthy and someone in whom you have complete confidence.

They also need to be prepared to accept the role. It is also important to note that the appointment of the company power of attorney must be in accordance with the company's constitution.

The second step is ensuring you execute proper documentation to reflect the power of attorney's appointment.

More from Morningstar

Can your SMSF invest in gold?

Further scare ahead for fixed-income investors

Make better investment decisions with Morningstar Premium | Free 4-week trial


Natasha Ng is a solicitor with Townsends Business & Corporate Lawyers. This is a financial news article to be used for non-commercial purposes and is not intended to provide financial advice of any kind. Opinions expressed herein are subject to change without notice and may differ or be contrary to the opinions or recommendations of Morningstar as a result of using different assumptions and criteria.

© 2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.

Email To Friend