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Alberta Unlimited Liability Company ("ABULC")

Subject: US Investors Number: 05-18 Date: 7/15/2005

ABULC's are cost-effective alternatives to NSULC's

Until May 2005, US investors in Canada could only use a Nova Scotia Unlimited Liability Company ("NSULC") in order to get flow-through treatment for U.S. tax purposes. Recent amendments to the Alberta Business Corporations Act have created the ABULC as a possible alternative. For Canadian federal tax purposes, the ABULC will be considered a regular Canadian corporation. For U.S. tax purposes, the ABULC will qualify as a flow-through entity unless it elects to check the box and be considered a corporation.

There are some non-tax differences between an NSULC and an ABULC:

Liability of Shareholders

The members of an NSULC are liable for the debts and liabilities of the company only if the company cannot meet its obligations only when it is wound up. The liability of the shareholders of an ABULC is unlimited and is joint and several in nature. This means that shareholders of an ABULC can be sued at the same time as the corporation. Having said that, an NSULC can easily be petitioned into winding up, exposing its members to unlimited liability. The liability of a past NSULC shareholder can continue if the current shareholders cannot satisfy the company's outstanding liabilities at the time of winding up.

Costs

The incorporation and annual costs of an NSULC are significantly higher than an ABULC. At present, the initial incorporation costs of an NSULC are $6,000, and there is an annual $2,000 renewal fee. The incorporation fee in Alberta is less than $1,000 and the annual costs are less than $20.

This is a brief outline of some differences between an ABULC and an NSULC. Either entity can be used by U.S. investors in order to minimize double tax in Canada and the U.S.

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