Aussie larrikinism is alive and well.
There are names about the purpose of the fund (‘The Money Tree’, ‘Extra Pocket Money Fund’), names describing the owners (‘Hot Chick Superannuation Fund’, ‘The Monk and His Money Super Fund’), names about what the fund is for (‘Kids Get Nothing Superannuation Fund’, ‘Relax to the Max Super Fund’, ‘Work til I Die Super Fund’) lots of names about animals (‘Waiting for the Cat to Die Super Fund’, ‘Pineapple Chicken Superannuation Fund’, ‘Black & White Cow Super Fund’) and even the cynics are catered for (‘What-A-Lot-Of-Bull Superannuation Fund’) as are fans of The Simpsons (‘Huge As Super Fund’) and those with a private joke (‘Loopy Chook Skeg Superannuation Fund’).
Apart from their entertainment value (it must be funny to see normally po-faced auditors and tax officers when they come across these names) can we learn anything from them? Well, actually, yes.
A super fund doesn’t need a name under the common law; no trust does. A trust is not a legal entity, it is a relationship. It is one entity (trustee) holding an asset for the benefit of another entity (beneficiary). Specific relationships don’t need names. You don’t call your marriage “The Ding Dong Battle Marriage”.
We give trusts names for no other reason than it makes it easier to refer to them. It means that every time you want to refer to the trust relationship you don’t have to say something like “the trust set up by Fred and Ethel who are holding trust assets for the benefit of Fred and Ethel and their kids and grandkids and other people and companies set out in the trust deed”. You just say “The Fred & Ethel Trust”.
But just because superannuation funds don’t require a name at common law doesn’t mean they don’t require a name at all to be legally compliant. Unfortunately, some third parties will require the fund to have a name in order for those third parties to process the fund’s needs.
Chief among these of course is the tax office which requires the fund to have a name in order to be duly registered and put up onto SuperFund Lookup. Then there are the banks, which will certainly not open a superannuation account unless the fund has a name that can fit into their systems and protocols. After that come fund managers, life offices, stockbrokers and the myriad of other suppliers to the fund that want to be able to refer to the fund efficiently.
Now that we understand that the requirement to name the fund is more practical than legal, what things should be considered when choosing a name for an SMSF? SMSFs don’t carry on business, so the rules which often apply in the business context are not as relevant when it comes to an SMSF. That’s why the members of those funds can get away with choosing their funny names. That’s not to say that there are no rules at all; it’s just that the rules that apply will be those dictated by other pieces of legislation and the common law.
It would be unwise to choose a name that:
• is obscene
• is seditious
• is defamatory
• suggests connection with royalty or government
• is misleading or deceptive, or
• is the same as an unrelated commercial enterprise.
From a practical point of view perhaps it might be best to:
• use a short name
• don’t bother with 'The'
• use ‘Super’ in preference to ‘Superannuation’
• not use a name that readily identifies the members or connection with the member’s business.
But it’s your choice. They say that people choose to use their own self-managed fund because they like the control and presumably that extends to control over the choice of name. That’s why we have ‘Put Everything on Red Super Fund’, ‘Just Dreaming Super Fund’, ‘Not on the High Street Super Fund’, ‘Big Daddy G and Princess Super Fund’ and the unpretentious-sounding ‘Unpretentious Superannuation Fund’.
Me? Mine’s ‘The Congaman Super Fund’. It’s a long story.
Peter Townsend, principal, Townsends Business & Corporate Lawyers