If you encounter a subscription agreement that is unusually complex or raises compliance questions, seek guidance from qualified legal counsel before signing.
Step 1: Identify the investor information section
Most subscription agreements contain separate sections for individual investors and entity investors. Your plan is an entity. Complete the entity section, not the individual section.
Key fields in the entity section:
| Field | What to enter |
|---|---|
| Entity name | The full legal name of your LLC, trust, or Solo 401(k) plan |
| Entity type | The actual legal form of the entity: LLC, trust, or qualified employer plan |
| Tax ID / EIN | The EIN of your LLC, trust, or Solo 401(k) plan |
| Address | The address on file for the entity |
| Authorized signer | Your name |
| Title | Manager (IRA LLC) or trustee (IRA Trust or Solo 401(k)) |
Step 2: Complete the accredited investor questionnaire
Most private placements require accredited investor certification. The questionnaire typically has separate sections for individuals and entities. Complete the entity section.
When selecting the entity investor type in the accreditation questionnaire, the most commonly applicable category is Employer Qualified Plan or Employee Benefit Plan. This applies to self-directed IRAs and Solo 401(k) plans alike. If neither option appears, select the closest applicable category and note the correct classification. When in doubt, contact the sponsor or their counsel before submitting.
Your plan qualifies as an accredited investor on a look-through basis if you personally qualify. See Does my plan qualify as an Accredited Investor? for how the look-through works by plan type.
Step 3: Review the subscription amount and wire instructions
Enter the investment amount the plan is committing. Verbally confirming the wire instructions is a best practice and can help avoid wire fraud. The wire must originate from your plan entity bank account, not a personal account.
Step 4: Complete any W-9 or tax identification section
Some subscription agreements include a W-9 or equivalent tax identification questions. This section serves a different purpose than Step 1. It tells the sponsor who to report income to for tax purposes, not who the legal investor is.
IRA Trust:
Your IRA Trust plan includes an IRA EIN issued at plan setup. Use that IRA EIN for income reporting. On a W-9 or equivalent, enter the IRA name, check "Other," and write in "IRA."
IRA LLC:
An IRA LLC has its own EIN used for entity identification (Step 1), but for income reporting purposes, the IRA - not the LLC - is the taxpayer. The LLC is a disregarded entity. On a W-9 or equivalent, enter the IRA name on Line 1, the LLC name on Line 2 as the disregarded entity name, check "Other," and write in "IRA."
IRA LLCs do not automatically come with a separate IRA EIN. If the investment will produce UDFI and require a Form 990-T filing, you will need to obtain an EIN for the IRA itself. Contact your CPA for assistance obtaining an IRA EIN if this applies to your investment.
Solo 401(k):
Use the Solo 401(k) plan EIN for both entity identification and income reporting. On a W-9 or equivalent, enter the plan name, check "Other," and write in "401K RETIREMENT PLAN."
Step 5: Execute the agreement
Sign in your authorized capacity. The signature block should reflect your role:
- IRA LLC: "Your name, manager"
- IRA Trust or Solo 401(k): "Your name, trustee"
Do not sign in your personal capacity. The entity is the contracting party; your signature executes the agreement on its behalf.
After signing
Return the executed agreement to the sponsor per their instructions. Wire the subscription amount from the plan entity account once the sponsor confirms the agreement is accepted. Retain a copy of the executed agreement in your plan records.
Frequently Asked Questions
What if the subscription agreement only has an individual investor section?
Contact the sponsor before completing the form. Sponsors of private placements regularly work with retirement plan investors, and a well-structured offering will have entity provisions. If the form lacks them, the sponsor can typically provide a supplemental entity certification or an amended agreement.
Can the sponsor require additional documentation about my plan?
Yes. Sponsors may request a copy of your LLC Operating Agreement, Trust Agreement, or EIN confirmation letter to verify your authority to invest. Have these documents available when you submit the subscription agreement.