Subscription Agreement - A Section 3C1 Fund
What is this form?
The Subscription Agreement - A Section 3(c)(1) Fund is a legal document used by private equity firms to raise funds from investors. This form outlines the terms and conditions under which the investor will purchase limited partnership interests in the fund. Unlike other investment agreements, this form is specifically tailored for private equity funds categorized under Section 3(c)(1) of the Investment Company Act, focusing on interests that are subject to specific regulations regarding transferability and resale.
Key parts of this document
- Subscription Agreement: The primary agreement where the investor agrees to purchase interests in the fund.
- Power of Attorney: Grants authority to the general partner to act on behalf of the investor for certain actions related to the partnership.
- Suitability Statements: Assesses the investor's qualifications and suitability for investing in the fund.
- Limited Partnership Agreement: Details the governance and operational structure of the partnership.
- Management Agreement: Information regarding the contract between the partnership and its manager.
Situations where this form applies
This Subscription Agreement should be used when an individual or entity intends to invest in a private equity fund that qualifies under Section 3(c)(1) of the Investment Company Act. It is essential when potential investors assess their financial qualifications and agree to subscribe for limited partnership interests, as required by the fund's management.
Who this form is for
- Individuals looking to invest in private equity funds and who meet the accreditation requirements.
- Entities such as corporations or partnerships intending to commit capital to the fund.
- Investment advisors who are assisting clients in making investments in such funds.
How to complete this form
- Identify the investor: Include the name and relevant details of the investor or entity.
- Complete the Subscription Agreement: Fill in the required fields, including the amount of capital commitment.
- Sign and notarize the execution page: Ensure that the signature page is executed in accordance with state requirements, including notarization if necessary.
- Complete the Suitability Statements: Each investor must provide truthful answers to the suitability questionnaire.
- Return completed documents: Submit all necessary documentation as outlined in the Subscription Booklet.
Does this form need to be notarized?
This form must be notarized to be legally valid. US Legal Forms provides secure online notarization powered by Notarize, allowing you to complete the process through a verified video call.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Common mistakes to avoid
- Failing to provide accurate information on the Suitability Statements.
- Not having the Subscription Agreement notarized when required.
- Leaving out critical details in the Subscription Agreement, such as the capital commitment amount.
Advantages of online completion
- Convenient access to complete the form at any time from anywhere.
- Editability allows for easy corrections and updates.
- Secure handling of sensitive information through encrypted channels.
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FAQ
3C1 funds are also referred to as 3C1 companies or 3(c)(1) funds. The result of 3C1 is that it allows hedge fund companies to avoid the SEC scrutiny that other investment funds, such as mutual funds, must adhere to under the Act.
In other words, 3C1 allows private funds with 100 or fewer investors and no plans for an initial public offering to sidestep SEC registration and other requirements, including ongoing disclosure and restrictions on derivatives trading. 3C1 funds are also referred to as 3C1 companies or 3(c)(1) funds.
What Is 3C7? 3C7 refers to a portion of the Investment Company Act of 1940 that allows private funds meeting specific criteria an exemption from some Securities and Exchange Commission (SEC) regulation. 1 3C7 is shorthand for the 3(c)(7) exemption.
Q: CAN THE 3C7 FUND EXCLUSION AND THE 3C1 FUND EXCLUSION BE COMBINED IN A SINGLE FUND IN WHICH THE INVESTORS CONSIST OF QUALIFIED PURCHASERS PLUS UP TO 100 OTHERS? A: No, except in the case of a fund that was in existence on September 1, 1996 and satisfies certain additional requirements.
What's the definition of a hedge fund? Well, simply put, a hedge fund is nothing more than an investment company that invests its clients' money in alternative investments to either beat the market or provide a hedge against unforeseen market changes. Obviously, though, there is much more to it than that.
The key differentiator here is that qualified purchasers are a relevant classification for funds who want to maximize their assets under management. By contrast, accredited investors are a relevant classification for the ability to invest in certain types of assets (namely, private market securities).
To be an accredited investor, a person must have an annual income exceeding $200,000 ($300,000 for joint income) for the last two years with the expectation of earning the same or a higher income in the current year.