Subscription Agreement
A subscription agreement is the document an investor signs to commit to a fund, certify eligibility, and agree to fund terms.
Allocator relevance: The execution gate—this is where qualification, representations, and operational onboarding become binding.
Expanded Definition
Subscription agreements include investor representations (accredited/qualified purchaser status), AML/KYC disclosures, beneficial ownership, tax forms, and acceptance of LPA/PPM terms. They are critical for compliance and determine whether an investor is admitted. Errors or delays here can block allocations.
Allocators treat subscription documents as part of operational diligence and workflow discipline.
How It Works in Practice
LPs complete the subscription package, submit supporting documents, pass compliance checks, and then are admitted as limited partners. Administrators track status and maintain records.
Decision Authority and Governance
Legal and compliance typically approve subscription submissions and may require internal sign-off before execution. Governance defines who can sign, what documentation is required, and how exceptions are handled.
Common Misconceptions
- Subscription is just paperwork after the decision is made.
- Accredited status is enough for all funds.
- KYC/AML can be handled last-minute without risk.
Key Takeaways
- Subscription is a gating step with real timeline impact.
- Accuracy and completeness prevent onboarding friction.
- Eligibility and beneficial ownership must be correct.