Does my plan qualify as an accredited investor?

Does my plan qualify as an accredited investor?

Yes, if you qualify as an accredited investor personally, your plan qualifies as well. The plan does not need to meet the income or net worth thresholds independently.

How the look-through works by plan type

The SEC's accredited investor definition includes two entity-level categories that cover self-directed plans directly.

An IRA LLC or IRA Trust qualifies as an accredited entity because all of its equity owners (the IRA) are accredited. The IRA is owned and controlled by you, the accredited account holder. The chain is: you are accredited, therefore the IRA is accredited, therefore the entity the IRA owns is accredited.

A Solo 401(k) qualifies as an employer retirement plan whose trustee (you) is an accredited investor.

In both cases, your personal accredited investor status is the foundation. If you do not meet the individual thresholds, neither does the plan.

How this works in practice on investment documents

Most subscription agreements and private placement questionnaires include separate certification sections: one for individuals investing personally and one for entities. Your plan entity signs under the entity section, not the individual section.

When completing entity certification, self-directed IRAs and Solo 401(k) plans are commonly categorized as an Employee Benefit Plan. Look for that option in the entity investor type list. Some documents may also offer a category for trusts or retirement accounts specifically. If the form has no clearly applicable category, the Entity with All Accredited Owners designation is typically the correct alternative for IRA LLCs and IRA Trusts.

The subscriber on the agreement is the plan entity (the LLC, trust, or Solo 401(k) trust) not you personally. You sign in your role as manager or trustee. 

Frequently Asked Questions

Do I need to provide documentation of my accredited status to the investment sponsor?
For most Rule 506(b) offerings, self-certification on the subscription agreement is sufficient; you check the applicable box and sign. Rule 506(c) offerings require third-party verification of your personal accredited status, which may involve tax returns, a brokerage statement, or a letter from a licensed professional. The sponsor will specify what is required.

What if the subscription agreement doesn't have a category that fits my plan?
Contact the sponsor or their counsel before submitting. A self-directed IRA or Solo 401(k) is a recognized investor type, and sponsors of private placements encounter them regularly. If the form was not designed with retirement plan investors in mind, the sponsor can typically advise which entity category applies or provide an amended form.

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Disclosure

This information is provided for educational purposes only and should not be interpreted as tax, legal, or investment advice. Readers are encouraged to consult a qualified professional who can offer guidance based on their personal situation.


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