All reporting companies must comply with Beneficial Ownership Information (BOI) reporting requirements with FinCEN, as prescribed by the Corporate Transparency Act (CTA), by December 31, 2024, to avoid potential penalties. Surprisingly, we’ve found that the majority of entities in small to middle market private equity funds are classified as reporting companies.

Sagemont Advisors works closely with private equity firms and investment managers to ensure they meet these BOI reporting obligations under the CTA.

Common Misconceptions

• We are registered with the SEC as an investment advisor so we are exempt from reporting.

Funds should typically consider the exemptions for registered investment companies, investment advisers, pooled investment vehicles and large companies. Pooled investment vehicle subsidiaries are NOT exempt, nor are blockers, feeders, and co-invest vehicles.

• We do not have any reportable beneficial owners because we are widely held and do not have individuals with 25% or more in equity.

All reporting companies are required to report at least one individual who exercises substantial control (senior officers, important decision makers, etc.).

• A corporate entity owns or controls 25% or more of the ownership of our reporting company, we have no individual beneficial owners to report.
  

Individuals who indirectly exercise substantial control or own 25% of the ownership interest through the corporate entity must be reported as a beneficial owner of your reporting company.

• Our fund entities are all technically controlled by our exempt management company, and therefore should all be exempt.
  

The subsidiary exemption requires 100% ownership or control of the fund entities’ ownership interests by one or more exempt entities. Even if the exempt management company exercises operational or strategic control, if any ownership interest is held by non-exempt entities or individuals (such as co-investors, limited partners, or members of the management team), the fund entities do not qualify for the subsidiary exemption and must still file a beneficial ownership report.

Our team of seasoned CPAs and attorneys conduct in-depth analyses of complex portfolios to ensure accurate and expedient reporting, safeguarding your firm from FinCEN penalties. We bring our real-world PE expertise gained from our collective experience at firms including DLA Piper, Alvarez & Marsal, KPMG, and Deloitte, and provide our comprehensive reporting deliverables on a fixed-fee per-entity basis.

To learn more about how Sagemont Advisors can assist your firm, book a meeting or email Kevin Thompson or Victoria Beck directly today!

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