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OIM2 HSC Fund Look-Through Structure

Interactive Legal Framework Diagram

INVESTMENT FLOW
LEGAL FRAMEWORK

Investor Layer

Individual Investors

Natural persons investing capital

About
Various entity structures

SMSFs

Self-Managed Super Funds

About
SISA 1993

Companies & Trusts

Corporate and trust entities

About
Corporations Act 2001
Investment Capital

Unit Trust Layer

OIM2 HSC Fund

Sub-trust of OIM Opportunity Capital Fund

Trustee: DICL Services Pty Ltd

Structure: Unit Trust

Units: Issued to investors

About
Trust Law
Division 6 ITAA 1936
MIT Provisions
Trust Assets Investment

SPV Layer

OIM2 Pty Ltd

ACN 657 550 831

Type: Special Purpose Vehicle

Role: Property development company

Ownership: Trust holds shares

About
Corporations Act 2001
Section 136
Section 254A
Share Classes Issued

Property Preference Shares

Classes A through O

Property Preference Shares

Section 258B Rights: Occupancy of designated lots

Constitutional Powers: Amendment provisions

Enforcement: Legal occupancy rights

About
Section 258B
Part 2J.1
Constitutional Amendment
Look-Through Mechanism

Property Layer

Development Property

Designated Lots: Specific property allocations

Occupancy Rights: Direct use and occupation

Title Transfer: Potential conversion mechanism

About
Property Law
Strata/Community Title

Look-Through Benefits

MIS Protections

Managed investment scheme regulatory protections

Professional Management

Expert property development oversight

Direct Occupancy

Legal right to occupy specific property lots

Tax Flow-Through

Trust taxation benefits maintained

Flexible Exit

Redemption or potential title transfer

Legal Enforceability

Multiple legal frameworks provide protection

Legend

  • Investment/Control Flow
  • Look-Through Mechanism
  • Key Legal Provision
  • Investor Layer
  • Trust Structure
  • Property Rights

Section 258B - Corporations Act 2001

Occupancy Rights for Shareholders

Subsection (1) – Right to Grant Occupancy

A company may, by or under its constitution, confer on the holder of shares in the company, or on the holder of a particular class of shares in the company, a right to occupy or use real property of which the company is the owner or lessee.

Subsection (2) – Transfer of Interest

A company may transfer its interest in real property to a person in consideration of the person agreeing to allow the holders of shares in the company to occupy or use the real property under arrangements contemplated by subsection (1).

Legal Significance
  • Enables direct property occupancy rights through share ownership
  • Pre-strata title mechanism for property development
  • Creates legally enforceable occupancy arrangements
  • Facilitates the “look-through” from shares to property rights
Application in OIM2 Structure

The OIM2 SPV company issues preference shares (Classes A-O) where each class provides occupancy rights to specific designated lots in the development property. This creates a direct legal pathway from the investor’s unit trust investment through to actual property occupancy rights.

Strata and Community Title

Property Subdivision Mechanisms

Legal frameworks for subdividing property into individual lots with shared common areas, potentially providing an exit mechanism for converting occupancy rights to ownership.

Property Law Framework

Real Property Rights

Governs rights to use, occupy, and potentially own real property, including mechanisms for transferring property interests and creating occupancy arrangements.

Property Layer - Development Assets

Development Property and Occupancy Rights

Property Development
  • Type: Residential/commercial development
  • Lots: Designated individual units/areas
  • Occupancy: Direct use and occupation rights
  • Future Title: Potential strata/community title conversion
Occupancy Rights Framework
  • Each investor obtains rights to specific lots
  • Rights are legally enforceable against the company
  • Use and occupation permissions clearly defined
  • Maintenance and cost-sharing arrangements
Potential Title Transfer

The structure may include mechanisms for eventual transfer of actual title to investors, potentially through strata title subdivision or community title arrangements, providing an exit strategy beyond unit redemption.

Legal Framework
  • Property Law: Real property rights and interests
  • Strata/Community Title: Potential subdivision mechanisms
  • Planning Law: Development approval compliance

Constitutional Amendment Powers

Company Constitution Amendment

The company constitution can be amended to modify share rights, including occupancy rights under Section 258B, subject to proper procedures and shareholder approval.

Part 2J.1 - Share Capital

Share Capital Provisions

Governs the issue, transfer, and rights attaching to shares in companies, including preference shares and special rights.

Property Preference Shares - Occupancy Rights

Section 258B Preference Share Structure

Section 258B Rights
  • Occupancy Rights: Legal right to occupy designated lots
  • Use Rights: Specific usage permissions and restrictions
  • Constitutional Basis: Rights embedded in company constitution
  • Enforceability: Legally binding occupancy arrangements
Look-Through Mechanism

This is the key mechanism that enables investors in the trust to obtain direct property occupancy rights. The trust holds the shares, but the occupancy rights flow through to the beneficial unit holders.

Legal Protection
  • Multiple legal frameworks protect the arrangement
  • Corporate law enforces share rights
  • Trust law protects beneficial interests
  • Property law recognizes occupancy rights

Section 254A - Share Rights

Nature of Shares

Shares in a company are personal property and may be issued with different rights, powers, duties, and liabilities attached to different classes of shares.

Section 136 - Company Powers

Legal Capacity and Powers of Companies

A company has the legal capacity and powers of an individual both in and outside this jurisdiction, enabling it to enter into contracts, hold property, and issue shares with specific rights.

SPV Layer - Property Development Company

OIM2 Pty Ltd – Special Purpose Vehicle

Corporate Structure
  • ACN: 657 550 831
  • Type: Proprietary limited company
  • Purpose: Property development and management
  • Shareholder: OIM2 HSC Fund (via trustee)
Legal Framework
  • Corporations Act 2001: Standard company law applies
  • Section 136: Full legal capacity and powers
  • Section 254A: Share issuance and classification powers
Role in Structure

Acts as the critical link between the trust investment vehicle and the underlying property assets, enabling direct occupancy rights while maintaining the beneficial tax and regulatory treatment of the trust structure.

Managed Investment Trust (MIT) Provisions

MIT Taxation and Regulatory Framework

Division 275 ITAA 1997

Provides specific taxation rules for managed investment trusts, including withholding tax concessions for foreign investors.

MIT Benefits
  • Reduced withholding tax rates for foreign investors
  • Capital account treatment for certain gains
  • Streamlined taxation reporting
  • Attribution managed investment trust (AMIT) eligibility
Compliance Requirements
  • Must satisfy commercial debt test
  • Widely held requirements
  • Must be managed by Australian resident
  • Investment must be primarily passive

Division 6 ITAA 1936 - Trust Taxation

Trust Taxation Flow-Through Provisions

Present Entitlement Concept

Beneficiaries with present entitlement to trust income are taxed on that income, even if not distributed. This ensures flow-through taxation treatment.

Section 97 – Assessment of Beneficiaries

Where a beneficiary has a present entitlement to income of a trust, they are assessable on that income rather than the trustee.

Tax Benefits in OIM2 Structure
  • Investors taxed directly on trust income (no double taxation)
  • Capital gains flow through to investors
  • Losses may be available to offset other income
  • Depreciation benefits flow through to investors
Interaction with Property Rights

The trust structure maintains tax flow-through benefits while the Section 258B mechanism provides direct property occupancy rights, creating the best of both worlds.

Trust Law Framework

Traditional Trust Principles

Beneficial Interest

Unit holders have beneficial interests in the trust assets, with the trustee holding legal title for their benefit.

Trustee Duties
  • Fiduciary duty to act in beneficiaries’ best interests
  • Duty of care in investment decisions
  • Duty to maintain accurate records
  • Duty to distribute income as required

Unit Trust Layer - Investment Vehicle

OIM2 HSC Fund Structure

Trust Characteristics
  • Type: Sub-trust under OIM Opportunity Capital Fund
  • Trustee: DICL Services Pty Ltd
  • Purpose: Property development investment
  • Units: Issued to investors creating beneficial interests
Legal Framework
  • Trust Law: Traditional trust principles apply
  • Division 6 ITAA 1936: Flow-through taxation
  • MIT Provisions: Managed investment trust benefits
Investment Mechanism

The trust receives investor capital and invests in OIM2 Pty Ltd shares, creating the linkage between unit holders and property occupancy rights through the SPV structure.

Key Benefits
  • Professional trustee management
  • Flow-through taxation treatment
  • Limited liability for investors
  • Flexible redemption mechanisms

Corporations Act 2001 - Company Law Framework

SPV Company Legal Framework

Section 136 – Constitution of Company

Companies have the legal capacity and powers of an individual, subject to their constitution and any limitations imposed by law.

Section 254A – Shares

Shares in a company are personal property and may be issued with different rights attached to different classes.

Application to OIM2 SPV
  • OIM2 Pty Ltd operates under standard company law
  • Different classes of preference shares (A-O) can have different rights
  • Section 258B rights attached via constitution
  • Standard corporate governance applies

Superannuation Industry (Supervision) Act 1993

SMSF Regulation

Regulates self-managed superannuation funds, including investment restrictions, in-house asset rules, and concessional tax treatment.

Various Entity Structures

Investor Entity Types

Different legal structures for investors including individuals, companies, trusts, and superannuation funds, each with different tax and legal implications.

Legal Framework

“Legal Framework” refers to the structured set of laws, regulations, agreements, and governance protocols that underpin all transactions and stakeholder interactions within the platform. This framework ensures transparent, compliant, and equitable engagement between wholesale investors, developers, builders, and homeowners, safeguarding interests, managing risk, and enabling the innovative features of Oroshiuri’s multisided real estate investment model.

Investment Flow

Within Oroshiuri Systems, “Investment Flow” describes the seamless process by which capital moves from investors through the platform into real estate projects, and ultimately generates returns. This flow is carefully designed to maximize efficiency, minimize friction, and align the interests of all participants—ensuring that funds are allocated transparently, milestones are tracked, and profits are shared equitably as projects progress from inception to completion.

Investor Layer - Capital Contributors

Investment Entities

Individual Investors
  • Natural persons investing personal capital
  • Direct beneficial ownership of trust units
  • Personal tax treatment under Division 6
Self-Managed Super Funds (SMSFs)
  • Regulated under Superannuation Industry (Supervision) Act 1993
  • Concessional tax rates (0-15%)
  • Must comply with investment restrictions
  • In-house asset rules apply
Companies and Trusts
  • Corporate entities subject to company tax rates
  • Family trusts with distribution flexibility
  • Various tax planning structures
Investment Process

Investors contribute capital in exchange for units in the OIM2 HSC Fund, creating beneficial interests in the underlying trust assets and indirect rights to property occupancy.

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Terms and Conditions

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Membership Terms and Conditions

These Membership Terms and Conditions (“Terms”) outline the agreement between you (“Member”) and Oroshiuri Systems Pty Ltd (“Oroshiuri Systems”) regarding your membership in our multi-sided platform. By signing up and becoming a Member, you acknowledge and agree to the following:

1. Multi-Sided Platform: Oroshiuri Systems operates a multi-sided platform that offers various subscriber products. As a Member, you may have access to these products via our platform.

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Please note that these Terms are subject to change, and any updates will be communicated to Members accordingly.