Transfers of interest glossary
Short definitions of the terms used in Sydecar's transfer articles and in the app. These explain how Sydecar uses each term and are not legal definitions.
Administrative transfer
A transfer between related parties where nothing is sold, such as an investor moving their interest to their own trust, usually for administrative or estate planning purposes.
Beneficial owner
A beneficial owner is the final person (or sometimes entity) that owns an entity investing into an SPV. In the case of a trust, for example, a UBO can be the trustee, the settlor, or the grantor.
Control person
A control person is the responsible member of an entity that invests into an SPV. This is usually the person with signing authority on behalf of the investing entity.
Publicly traded partnership (PTP)
A partnership where the interests are traded on a public marketplace, rather than held and bought/sold privately. Publicly traded partnerships are not supportable by Sydecar due to the unique tax circumstances PTPs face. Publicly traded partnership requirements can be triggered on Sydecar when there are more than 100 beneficial owners in an SPV and when more than 2% of the SPV’s value has been transferred in a calendar year.
De minimis exception
A publicly traded partnership (PTP) safe harbor that allows the SPV to transfer up to 2% of the SPV’s value in a calendar year prior to becoming a PTP.
Transfer Effective date
The date a transfer takes effect and the transferee becomes a member of the SPV. An effective date may only be after the date the SPV closes (inception date)..
Transfer Holding period
How long the current owner has held the interest. Sales usually require the interest to be held for at least 90 days.
Inception date
The date the investor’s (transferor) subscription agreement was countersigned and the investor was admitted to the SPV. Also known as the date the SPV closed..
Initiation date
The date a transfer is initiated in the Sydecar App.
Publicly Traded Partnership (PTP) safe harbor
Tax rules that keep an SPV from being treated as a PTP.
Resale exemption
A securities law exemption that allows an interest in a private offering to be resold.
Sale
A transfer between two unrelated parties. Also called a for-value transfer.
Second-generation transfer
A transfer by someone who received the interest in an earlier transfer.
Signing date
The date the parties sign the transfer agreement.
SPV certification level
The investor qualification an SPV requires: accredited investor, qualified client (QC), or qualified purchaser (QP).
Transfer restriction
A limit in the target company's or fund's documents on transferring an interest. Note: review your investment agreements to confirm whether the company or fund you invested into has any transfer restrictions that do not permit for transfers of interest on the SPV level.
Transferee
The person or entity receiving the interest in a transfer of interest.
Transferor
The investor that originally held the interest, and is transferring part of all of their existing interest to another party..
Still have questions? Contact our Deal Operations team at operations@sydecar.io.
This article describes how transfers of interest work on Sydecar and does not constitute legal or tax advice.