How to Request a Transfer of Interest
This article explains how to transfer your SPV membership interest to another party and what Sydecar needs from you to complete it.
How to request a transfer of interest
This article explains how to transfer your SPV membership interest to another party and what Sydecar needs from you to complete it.
What is a transfer of interest?
After an SPV closes, an investor may want to transfer their membership interest to another party. Because the investor has already been admitted as a member, this requires a formal transfer of interest rather than a new subscription.
Sydecar facilitates the transfer using a template transfer agreement. The initial member (the Transferor) assigns their interest to the new member (the Transferee). As an administrator, Sydecar assists solely in transferring the capital account and membership interest.
NOTE: No discussion of a purchase price is contemplated in this agreement and any negotiation or documentation related to a purchase price will need to be handled in a separate agreement between the two parties.
Before you submit a request
Securities law compliance. Transfers of Reg D SPV interests may be subject to resale restrictions, and SEC Rule 144, which requires that restricted securities be held for a minimum period (typically 6 to 12 months) before a sale or transfer can take place. If you are looking to transfer your interest shortly after investing, we strongly recommend consulting with legal counsel before proceeding to ensure the transfer does not constitute a violation of securities laws.
Additional regulations, including Publicly Traded Partnership (PTP) rules, may also need to be considered depending on the nature of the SPV and the parties involved. It is the responsibility of all parties to understand and comply with any applicable securities laws before requesting a transfer. Sydecar does not provide legal or tax advice.
Transfers from an individual to their own trust or may not trigger resale restrictions or Rule 144 concerns.
Deal lead approval is required. Sydecar cannot process a transfer without approval from the Organizer of the SPV. If you are an investor submitting a request, make sure the Organizer is aware and has approved the transfer. We will contact them directly if they are not already included in your request.
What we need from you
To process your transfer, Sydecar will need the following information:
- Full legal name of the Transferor (the current investor)
- Full legal name of the Transferee (the party receiving the interest)
- The amount being transferred (the portion of the initial subscription amount)
- The requested effective date (this must be a quarter-end date — 3/31, 6/30, 9/30, or 12/31)
- Confirmation of whether this is a value transfer or an administrative transfer
The Transferee must have a Sydecar profile. Before the transfer can be completed, the Transferee must have an investor profile in the Sydecar platform. If they do not already have one, they will need to create one and complete KYC/EDDverification.
If you are not sure whether a profile exists, include the Transferee's name and email address in your request and we will check on our end.
How to submit a request
Email operations@sydecar.io with the information listed above. Include the Organizer in your message, or let us know if you need us to reach out to them separately.
Once we have everything we need, our team will prepare the assignment agreement and circulate it for signatures.
Important notes
- The amount being transferred cannot exceed the Transferor's remaining interest in the SPV. If the Transferor has previously transferred a portion of their interest, only their remaining balance is eligible
- The transferee must meet the certification threshold that applies to the SPV (i.e., Accredited Investor, Qualified Client, Qualified Purchaser)
- Once completed, the Transferee will receive applicable tax documents (K-1) going forward. The Transferor will receive a K-1 for the year the transfer occurred