Subscription Agreement
A subscription agreement is the document an LP signs to join a fund and make required regulatory, tax, and eligibility representations.
Definition
The subscription agreement formalizes LP admission and includes representations about investor status (e.g., accredited/qualified), authority to invest, tax status, ERISA considerations where relevant, and AML/KYC information. It also specifies mechanics for funding commitments and may include acknowledgements tied to the PPM and LPA. Allocator Context For institutions, subscription is often where deals slow down. Even after IC approval, the subscription package must clear legal, compliance, finance operations, and signatory authority. Any nonstandard attestations, inconsistent language across documents, or unclear tax/ERISA sections can trigger delays. Decision Authority Subscription execution typically requires legal and compliance sign-off. Some allocators treat subscription readiness as a “closing gate”—they will not confirm final commitment until documentation and operational onboarding are clean. Why It Matters for Fundraising A clean, standard subscription package reduces closing risk. Managers who provide consistent documents, clear instructions, and a professional onboarding process close faster and reduce last-minute churn. Key Takeaways Admission document with compliance and tax impact Common late-stage bottleneck even after IC approval Consistency across docs is critical Clean onboarding improves LP experience and close velocity