Entities

STRATEGIC PLAN INVESTMENT SOCIETY

This document contains information about the requirements and constraints for setting up an independent Investment Society. Most of the information sources were primary sources, but some of them might come from secondary information. It should therefore be checked for consistency.

Investment Society Confidential Date Published: 01/10/2008

Investment Society Strategic Plan

Table of Contents Table of Contents ............................................................................................... 2 Document Objective........................................................................................... 3 Possible entities ................................................................................................. 3 Tax implications ................................................................................................. 4 Conclusion .......................................................................................................... 4

Investment Society Confidential

Page 2

10/1/2008

Investment Society Strategic Plan

Document Objective This plan should give a basic outline about the requirements and constraints of setting up an independent entity. All the information comes from Dutch law, and the sources are therefore translated into the English language.

Possible entities The following entities come from the website www.kvk.nl, which is the Dutch chamber of commerce. The entities are titled in dutch, and I gave a free translation of the entity to make a comparison easier. Then, in short, the requirements and constraints of business. (I limited the list to the most common entities for companies, and the one for organizations with common boards)

Eenmanszaak (Sole proprietorship) This is the most simple entity. One person is held completely liable for all business operations. This would not be a good entity for our fund.

Besloten vennootschap (limited partnership) Is not option, as it requires at least € 18,000 to be invested as capital into the company

Naamloze vennootschap (corporation) Is needed to issue public shares. It requires at least € 45,000 to be invested as capital into the company.

Vereniging met vollegide rechtsbevoegdheid (Association with full liability) This entity requires the group of people to set up a memorandum of association which needs to be signed by a notary. It does not require any specific capital input, and the association is leaded by a board. The board is chosen by its members, and the members are therefore owners of the association. The board is responsible only when they make decisions not in line with the rest of the members. It has tax liability when it pays out dividend or other capital gains. However, the goal of the association cannot be to make profit that will be divided among all members.

Vereniging met beperkte rechsbevoegdheid (Association with limited liability) This is the same is the previous one. However, now the association has limited liability.

Cooperatie (Co-operation) Investment Society Confidential

Page 3

10/1/2008

Investment Society Strategic Plan

Here, all the members are liable for the losses made by the entity. At least 2 persons are needed to sign up as the board of the co-operation. The goal can be to make profit as a group, that can be sub-divided among the members. Taxes need to be paid on the dividends. The co-operation needs to publish an annual report and will be subscribed to the tax agency as a separate entity. The yearly contribution to the Chamber of Commerce is € 145,-

Tax implications The tax implications are summarized before. I think we can pay out as dividend, which means that we need to pay 15% taxes on the dividends paid. However, I will check if I can find some more information about this.

Conclusion The co-operation is in my opinion the best option.

Investment Society Confidential

Page 4

10/1/2008