SMSF Record Keeping - Electronic vs Paper Copy Requirements?

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Nodrog, 18th Dec, 2017.

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  1. Nodrog

    Nodrog Well-Known Member

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    I’m in the process of trying to go paperless.

    According to the following article by a well known SMSF administrator Minutes / Resolutions and Investment Strategy in addition to Trust Deeds and Company Constitution need to be kept as a paper copy. Is this correct as I didn’t think this would be the case with Minutes?
    Thanks in advance.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Any deeds should be retained in the original
    can't see a reason why other documents need to be
     
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  3. Ross Forrester

    Ross Forrester Well-Known Member

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    Just review your storage options yearly.

    Think of how you stored electronic documents in 2007 to how you store them now.

    And minutes etc can be electronic.
     
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  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    There is no requirement for SMSF documents to be kept in a physical paper form excepting legal papers such as contracts, deeds and binding nominations etc. Even the paper trustee declaration (NAT 71089) which must be retained and produced on request does not need to be retained as paper. A reproducible format of the document will suffice. A photo may also satisfy the requirement despite being quite difficult to work with as a multipage store of anything.

    Almost all documents can be scanned using a cheap multifunction printer into PDF format capable of reproduction. The key issue is the quality of the scan and its filing for long term archive and retrieval. The ATO has a tax ruling (TR 2005/9) on this and it even permits electronic storage of data to be acceptable IF it can be converted to a paper record (ie a report). For scanned records the inability to manipulate the scan is a function of a PDF that makes it well accepted.

    A signature need not be made with a pen either. This depends on the document., A constitution, contract or deed most certainly may need to be made by hand and may need to also meet witness or other requirements. However many documents can be digitally signed or have digital forms of signature applied.

    Take care with some documents that effect a transfer or which are required to be executed and presented (land transfer, options etc). A good example too is UK share certificates. They can be VERY expensive to replace ($10,000 or more !!) and a reprint isnt acceptable.
     
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  5. Nodrog

    Nodrog Well-Known Member

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    Thank you all.

    What you have said is what I thought. From memory I think Super Concepts was bought by AMP. You’d think an organisation that size would know what’s right. But having to keep Investment Strategy and Minutes / Resolutions in paper form just sounded totally incorrect to me based on previous research I’d done.

    @Paul@PFI thanks for the mention of electronic signature. I was looking into that earlier this morning so Minutes etc don’t need to be printed out, signed then have to scan them back into electronic format.

    I’m using our cheap HP multi-function printer to scan to PDF. It also does multi-page scans to single PDF file which is very useful. Even at 200 DPI the quality is excellent and low DPI speeds up the process.

    Silly question. Does the scan need to be in COLOUR or will Black in White suffice?
     
  6. Ross Forrester

    Ross Forrester Well-Known Member

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    Black and white is fine
     
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  7. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Colour if you need it. 95% wont need colour.
     
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  8. Nodrog

    Nodrog Well-Known Member

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    ELECTRONIC SIGNATURE?

    Just looking into this again now. From what I understand say for example simple SMSF minutes / Resolutions created at home an acceptable Electronic Signature can be a scanned Signature picture file inserted into a Word Document. I could then save the Minute etc as a PDF file so it can’t be modified by others in the future?

    Obviously it’s important to keep scanned signatures secure.

    Is that enough to keep ATO and others happy?
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Note that these don't apply to the corporations act
     
  11. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Our digital signing is more simple than that. Click to sign any PDF. There is also Docusign and even Adobe has a cloud based process. The best systems do NOT use a signature image. Thats a risk. Signing doesnt need a signature. It just needs evidence of approval.

    Ours uses a encryption process that starts with an approved client identification. They click and it adds a certificate to the PDF with the date / time and IP address of the device. The PDF gets locked down and that final page cant be removed or edited.

    The ATO dont have a policy as such. The Commonwealth Govt does.

    Each day the tax returns I lodge are all signed with a digital certificate. Its invisible. But if its not there I cant lodge. And only I know the password to activate it. If a issue occurs they know who in the practice lodged. My name attaches to each return.

    Customs and other agencies like ASIC use another method - Its harder to get than a passport.

    Loads of different means of authenticating approval these days. My phone allows for retina, face scan and finger print.
     
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  12. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    And to trust deeds, wills and other legal documents or land transfers and other registrations involving a form. Many agencies only accept a ink based signing process. I read a law article recently that suggested that law must consider and embrace new methods of "signing"....

    A recent case of a unsent will on a sms in a phone owned by the deceased was held to be a valid form of digital authority when they unlocked the phone and wrote the message.

    The new bank payments system being turned on in March to replace EFT and Bpay has these sorts of features. It will remove BSB and account numbers and allow me to establish a digital payment identity eg [email protected] could choose that and thats all you need to send me money. In real time between any banks.
     
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  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Deeds can't be digitally signed. contracts can.

    There are many invalid SMSFs out there that had their deeds signed digitally.

    Wills cannot be digitally signed. But the succession act allows for documents that don't meet the statutory requirements to be admitted as wills under certain conditions.
     
  14. SatayKing

    SatayKing Well-Known Member

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    Phew, all good stuff and downright fascinating. Way over my head though. I'll stick to using yellow crayon on green paper.
     
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  15. Nodrog

    Nodrog Well-Known Member

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    :eek: I just want to add our signatures to some occasional SMSF / Trust Minutes:confused:. We have MS Word and a scanner so I thought that simply inserting the scanned Signature into the Word documents was the easiest at home solution:(. Saving them in Word as PDF files prevents any future editing so seemed more tamper proof.
     
  16. Nodrog

    Nodrog Well-Known Member

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  17. SatayKing

    SatayKing Well-Known Member

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    Not a problem. I'll have a read and get back to you in due course. Um, the year 2030 OK?
     
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  18. Redwood

    Redwood Well-Known Member

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    With all new clients we still print out the establishment pack hard copy and have physical signatures included. All hard copies are scanned to electronic file and physical copies maintained in our office. There is a lot of debate around whether a electronic signature can be used and in some states inc Victoria my understanding is that its not allowed so I will not take the risk. Further, if you are buying property in a smsf in QLD a certified copy of the original deed must be provided to the stamps office at settlement. Naturally it would be more efficient and cost effective for us to do the establishment online however we will continue to take a cautious approach. Further when transacting on bank accounts a physical signature will need to be matched generally to ID plus the deed provided. We use docusign for annual returns which is great and some still resist an electronic signature as its not their real signature.

    Cheers Ivan
     
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