Agency Agreement Smsf

One solution is for the SMSF to hand over with the linked contractor an “agency” or “refund agreement” which stipulates that the owner does not buy the material for himself (and therefore for his wealth), but on behalf of the SMSF. This too needs to be designed correctly, and you can always run into the problem of “arm length” requirements. The appointment of an agent in this scenario would normally mean that the SMSF agent would assign the related party as an agent as part of an agreement on the Agency or by amending the construction contract. On the other hand, the Agency`s designation and the power of action conferred on the agent in the work contract could be explicitly or implicitly implied. The question of whether the specific agreements under which building materials are delivered boils down to a direct acquisition by the SMSF agent by the original suppliers, the nearby party acting only as an agent, is determined by the application of the normal contractual and representation laws to the facts of the case in question. The agreement through the Agency would give the officer the terms of the Agency and authorize the related parties to acquire the goods and materials as representatives on behalf of the directors. Can John and Mary use their brother-in-law, who is a builder, for development work? From a compliance perspective, it would be safer to hire companies that are not related to the fund. However, when a related unit is involved, the SMSF business with the company must be of very long duration and appropriate documentation should be available to assist. Before hiring members or their families for a fee-based service, make sure that members and/or other associated parties are prohibited from offering financial benefits and ensure that there are reasons to use their service and rate of pay. They should also ensure that the Fund does not acquire assets such as building materials held by parties related to the Fund. If you are purchasing materials for the project, make sure the agent buys directly from third parties or seek advice on whether an agency agreement can be reached for the purchase of equipment through related persons.

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