Episode 7: 3…(c)…(1) Counting!

Tokens of Wisdom

This episode covers the rules for counting beneficial owners under section 3(c)(1) of the Investment Company Act. Tune in to find out about the differences between a 3(c)(1) fund and a 3(c)(7) fund, the pros and cons of each, what counts as a beneficial owner, and what options you have when you reach the 100 beneficial owner limit of a 3(c)(1) fund.

Key Points From This Episode:

• What to consider when choosing between 3(c)(1) and 3(c)(7) for your fund.
• The definition of a beneficial owner.
• Situations where you have to count each of the underlying owners of your entity investors as beneficial owners of your fund.
• Questions you are likely to ask yourself as you approach the 100 beneficial owner limit.
• Why you might not be able to start another 3(c)(1) fund when you reach that limit.
• Why you can convert a 3(c)(1) fund to a 3(c)(7) fund (but you may not want to).
• A common solution for forming a parallel 3(c)(7) fund and the benefits of this.

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal advice. Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

Episode 1: Private Fund Legislative Overview – https://open.spotify.com/episode/1aTrBhJ0t1UCnSGY0SfUXQ

Dave Rothschild – https://www.linkedin.com/in/davidcrothschild/

Cole-Frieman & Mallon LLP – https://colefrieman.com/

Music by Joe Ginsberg – https://www.instagram.com/thejoeginsberg

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