SMSF has been brought into a class action where a private company is suing its shareholders. SMSF are not related parties to the private company and hold shares worth $120k at 30 June 2019, there is no loan for the acquisition of these shares. The SMSF receives dividends each year from the company, it is not an in-house asset.
Can the SMSF pay the legal fees incurred to join a case to prevent the company from suing the SMSF and claim them as a tax deduction? (the members may not be able to fund the legal fees personally).
Can the company sue the SMSF - will they be only liable for the cost or market value of the SMSF?
Is there anything the SMSF can do to protect its asset?