How profits are shared, what the company covers and what the shareholder covers. A plain-language summary of the Bylaws (arts. 9, 9B, 61, 66 and 84) and of the Framework Issuance and Placement Regulation (art. 29). If this document and the Bylaws differ, the Bylaws prevail.
1. In short
- CIRCULAR ENERGY S.A.S. is an independent legal entity. It owns the plants, the contracts and the business's debts; shareholders own shares, not the assets.
- The costs of operating, maintaining and insuring the projects, the guarantees and the obligations to third parties belong to the company. No shareholder answers for them with their personal assets or is asked for additional contributions.
- The only thing at stake for a shareholder is the money they put in. There are no capital calls and no debts passed on to the shareholder.
- Profits are calculated on the consolidated result of the whole portfolio of projects and PPA contracts, not project by project.
- They are shared equally per share, regardless of its class or series, and are reviewed and paid every quarter when there are distributable profits.
- No payment is guaranteed: it depends on there being profits once costs and reserves are covered.
2. Asset separation: what belongs to whom
Belongs to CIRCULAR ENERGY S.A.S. (the company)
- Assets: solar plants, equipment, PPA contracts, bank accounts and the business's other property.
- Costs: operation, maintenance, insurance, connection and metering, management fees, the company's taxes.
- Guarantees and obligations: obligations to customers, suppliers and authorities; equipment warranties, insurance and any other cover taken out for the project.
- Liability: the company answers for its obligations with its own assets.
Belongs to the shareholder
- Assets: their shares and the economic rights they carry (sharing in the profits).
- Costs: only their own: withholdings on their payment, the bank cost of a withdrawal and the platform fee if they sell.
- Guarantees and obligations: none. The shareholder is neither a debtor nor a guarantor of the company.
- Liability: limited to the amount they contributed (art. 1 of Law 1258 of 2008). They do not answer with their personal assets.
The energy assets always remain in the company's name. Holding shares gives no direct rights over the plants or the energy they produce (Bylaws, arts. 9 and 84). The founders and Circular Urban, as manager, also have assets separate from the company's.
3. How the dividend is calculated
Every quarter, this order is applied to net profits:
- Company costs. Paid first. Operation, maintenance, insurance, connection, taxes and the manager's fees (for recurring services, capped at 20% of operating revenue). These are the company's costs, not the shareholder's.
- Legal reserve. 10% of net profits is set aside. Until the reserve reaches 50% of subscribed capital (art. 452 of the Colombian Commercial Code).
- Operating reserve. A fund for operations is kept. Equal to 3 to 4 months of the portfolio's fixed costs. Nothing is distributed while it is below 3 months; above 4 months, the surplus becomes distributable profit.
- Distribution. What remains is distributable profit. It is shared among all shares, in proportion to the number of shares each holder owns.
4. Illustrative example
The numbers are made up, only to explain the mechanics. They are not a projection, an estimate or a promise of returns.
- Net profit for the quarter, after costs (assumed): 10,000,000 COP
- Legal reserve (10%): 1,000,000 COP
- Operating reserve (assumed already at its level): 0 COP extra
- Distributable profit: 9,000,000 COP
- Total shares outstanding (assumed): 15,000
- Dividend per share: 600 COP
- A holder of 100 shares would receive (before withholdings): 60,000 COP
5. Who gets paid, when and how
- All shares take part on the same terms. There is no minimum or preferred dividend for any class or series.
- MANAGEMENT shares (founders) receive the same dividend per share as INVESTOR shares. Management is paid separately, as a company cost, through the Special Management Mandate.
- New shares take part from the calendar quarter after they are entered in the Share Register.
- Each quarter is an independent period: closing of accounts, financial statements audited by an independent public accountant and approval by the Shareholders' Meeting. Payment is made no later than the 30th business day after the quarter closes.
- Profits are credited to an individual digital balance in Circular Market. You can request a withdrawal from 50,000 COP net, and the bank cost is yours.
- The withholdings that apply to your tax status are made on each payment.
- The annual close on December 31 remains for tax and registration purposes.
6. When there is no distribution
- If the quarter's profits are not enough to keep the operating reserve at its minimum, nothing is distributed. The company gives notice within the following 5 business days, with the reasons.
- No profits are distributed unless backed by real financial statements, nor while prior-year losses reduce equity below subscribed capital.
- No distribution is assured: the amount varies with the projects' performance.
7. Frequently asked questions
Payments
Is the payment monthly, quarterly or yearly?
Quarterly. Each quarter the company consolidates what all its projects and PPA contracts generate, calculates its profits and, if there are distributable profits, pays them no later than the 30th business day after the quarter closes. Every month you receive a portfolio report.
Is it a fixed return?
No. It is a share of profits that varies with the portfolio's performance and may not happen in a given quarter. Nobody guarantees returns.
Does each project pay me separately?
No. All revenue and costs are consolidated into a single result, and each share takes part in the whole portfolio, regardless of which project its series' money went to.
I bought shares today. Do I get paid this quarter?
No. You take part from the calendar quarter after your shares are registered.
Why might there be no payment in some quarters?
Because the operating reserve (3 to 4 months of fixed costs) must be full before anything is distributed. If profits are not enough for that, nothing is distributed.
How do I get paid?
Your payment is credited to your digital balance on the platform, and you can request a withdrawal from 50,000 COP net. You cover the bank transfer cost.
Costs and deductions
Is any percentage deducted from what I receive?
The company pays the business's costs before distributing, so they are not charged to you separately: operation and maintenance, insurance, connection and metering, the company's taxes and the manager's fees, which for recurring services are capped at 20% of operating revenue. In addition, 10% is set aside for the legal reserve and the operating reserve is maintained. On your payment, only the legal withholdings for your tax status and the bank cost of the withdrawal apply.
Do founders earn more per share than investors?
No. They receive the same dividend per share. Management is paid through the Special Management Mandate, which is a capped company cost reported to shareholders.
Do I pay for the plants' maintenance?
No. Maintenance is a company cost, paid from consolidated revenue before profits are distributed. The money raised in each series covers equipment, installation, connection, permits and the first 3 months of operation of the project it goes to. You are not asked for additional money.
Guarantees and liability
Who guarantees my earnings for 12 years?
Nobody guarantees earnings: the investment may produce less than expected, or losses. Terms such as 12 years are the length of each project's power purchase agreements (PPAs), which may differ from one another, not an assured payment. What you receive does not depend on a single contract but on the portfolio's consolidated profits.
What protects the investment?
The PPA contracts with each project's customers; the operating reserve; a monthly report on generation, revenue and reserves; and mandatory alerts within 48 hours of an incident, a drop in generation, a customer's failure to pay or the loss of the grid connection. If Circular Urban seriously breaches its duties as manager and an arbitration tribunal declares it so, investors have the right to have the company buy back their shares.
Who answers for the business's debts, guarantees and obligations?
The company, with its own assets. The contracts, equipment warranties, insurance and obligations to customers, suppliers and authorities belong to CIRCULAR ENERGY S.A.S., not to the shareholder. The shareholder is neither a debtor nor a guarantor of the company.
Can I lose more than I invested?
No. Your liability is limited to the amount you contributed (art. 1 of Law 1258 of 2008). The most you can lose is that contribution, and nobody can demand additional contributions from you or collect the company's debts from your personal assets.
Are the plants mine because I hold shares?
No. The plants and contracts belong to the company. Your shares give you the right to share in the profits, not to dispose of the assets. That separation protects the company and all shareholders equally.
What happens if another shareholder, a founder or Circular Urban runs into trouble?
Their financial problems do not pass to the company's assets or to yours: each answers with their own. Circular Urban acts as manager under a contract (the Special Management Mandate), and its assets are separate from CIRCULAR ENERGY's.
Buying and selling shares
Can I sell my shares at a higher price?
You can offer them on Circular Market at a price you agree with the buyer. Nobody guarantees that the price will rise or that you will find a buyer. You must wait 6 months from the registration of your shares, the buyer must meet the platform's requirements, and any gain is taxed under the applicable rules. The platform charges a fee of between 1% and 3% of the transaction, borne by buyer and seller, and does not set or recommend prices.
What happens to my dividends if I sell?
Dividends accrued up to the sale are yours and are settled in the same transaction, unless you agree otherwise with the buyer on the platform.
Taxes and information
Are taxes deducted?
Yes, the withholdings that apply to your tax status are made. The company does not give tax advice: check your case with your accountant.
Where can I see how much was generated and how much was distributed?
Every month you receive a consolidated portfolio report (energy generated, revenue, operating reserve status and other indicators), and at the close of each quarter the profit distributed per share is reported.
Where is this written?
In the Bylaws of CIRCULAR ENERGY S.A.S. (arts. 9, 9B, 61, 66 and 84) and in the Framework Issuance and Placement Regulation (art. 29).
Important notice
This document is informational and is not a public offering, an investment recommendation or financial, legal or tax advice. The shares of CIRCULAR ENERGY S.A.S. are not registered in the National Registry of Securities and Issuers and are not traded on a stock exchange (art. 4 of Law 1258 of 2008). All investment carries risk, including the partial or total loss of the capital contributed. The numerical examples are illustrative and do not represent expected results.