Fundraising and closing

Subscription agreement

Also called Sub doc, Subscription booklet.

Definition

A subscription agreement is the contract an investor signs to commit capital to a fund, stating the commitment amount, making representations about eligibility as an accredited investor or qualified purchaser, identity and source of funds, and agreeing to be bound by the limited partnership agreement when the general partner accepts the subscription.

Updated October 9, 2026Checked against our editorial standards

Example

A family trust subscribes for $5M. The agreement states the $5M commitment, the trust's legal name, entity type and address, and the wire instructions for calls. In the investor questionnaire the trustee confirms accredited investor status, for an individual a net worth over $1M excluding the primary residence or income over $200K ($300K jointly) in each of the last two years, and qualified purchaser status. A W-9 and the trust deed are attached as KYC evidence. The fund is oversubscribed, so the GP accepts $4M and countersigns. From that moment the trust is a limited partner, bound by the LPA and liable for calls up to $4M.

Confused with

LPA. The LP does not sign the LPA as a separate document. The subscription agreement contains the joinder or power of attorney by which they become party to it.

Side letter. The subscription agreement is on the same form for every investor. Negotiated differences go in a side letter.

In practice

Institutional LPs return the agreement marked up, so the subscription process takes longer than the signature. The accepted subscriptions are the source for the LP register, the ownership percentages and the first capital call, and the questionnaire is the evidence file an auditor or regulator asks to see for the fund's exemption.

Sources

Rule 501(a), accredited investor definitionwww.ecfr.gov/current/title-17/chapter-II/part-230/subject-group-ECFR6e651a4c86c0795/section-230.501

Related terms

LPA (limited partnership agreement)An LPA, limited partnership agreement, is the contract between a fund's general partner and its limited partners that establishes the partnership and sets its terms: commitments and capital calls, management fee, carried interest and the distribution waterfall, term and extensions, investment restrictions, reporting obligations, key person and GP removal provisions.
Accredited investorAn accredited investor is a person who meets the Regulation D test in Rule 501(a): for an individual, net worth over $1 million excluding the primary residence, income over $200,000 ($300,000 jointly) in each of the last two years, or a Series 7, 65 or 82 licence; for an entity, assets over $5 million or all equity owners accredited.
Qualified purchaserA qualified purchaser is an investor who meets the Investment Company Act threshold, generally an individual or family company with at least $5 million in investments or an entity with at least $25 million, which a fund relying on the Section 3(c)(7) exemption must verify for every limited partner.
KYC and AMLKYC (know your customer) and AML (anti-money-laundering) are the checks a fund performs on each prospective limited partner before accepting their subscription: verifying identity and beneficial ownership, screening against sanctions and politically exposed person lists, and documenting the source of funds, with records kept for audit and regulatory review.