Key points
- One checklist covers the file. Every investor needs signed subscription documents, a questionnaire, a sanctions screening result, a tax form and bank details confirmed by phone.
- An entity also needs formation documents, an ownership chart and screening for the people behind it.
- Under Rule 506(c), the fund must take reasonable steps to verify each investor is accredited.
- A file is complete when every row is done or not applicable, and approved. One open row blocks admission.
- Each file works best with one owner and one current version. Email threads make both hard.
A new investor, an LLC, wants in before month end. The subscription agreement is signed, the tax form is in, and the LLC has cleared sanctions screening. The file looks finished. Then someone asks who owns the holding company behind it, and nobody in the email thread knows.
No one dropped anything on purpose. The file is spread across inboxes, and a checklist turns each piece into a row that is either done or not.
The onboarding checklist
Here is that checklist, ready to adapt to your fund. The statuses follow Investor B, a hypothetical LLC traced in the next section.
| Item | Applies to | Status (example) |
|---|---|---|
| Subscription agreement, signed, with the amount and the investor's statements | Every investor | Done. Signed Mar 2 |
| Investor questionnaire, including whether the investor is accredited | Every investor | Done. States accredited |
| Accreditation evidence, if your offering needs it (see below) | Every investor | Done. Evidence on file, route agreed with counsel |
| ID: a government ID for a person | Person only | Not applicable. Investor B is an entity, see owner rows |
| Sanctions screening against the US sanctions lists, with the result and the date | Every investor | Done. Investor B and Holding Co, Mar 3 |
| Source of funds, where your policy asks for it | Every investor | Done. Per policy |
| Tax form: a W-9 for US investors, the correct W-8 for non-US investors | Every investor | Done. W-9 |
| Bank details for payouts, confirmed by phone on a number you already have | Every investor | Done. Phone check, Mar 4 |
| Side letters, each recorded in a side letter list | Every investor | Not applicable. List checked, none |
| Formation documents | Entity only | Done. Investor B and Holding Co |
| Ownership chart that shows who owns the entity | Entity only | Done. Traced to people, totals 100 percent |
| ID and sanctions screening for each beneficial owner | Entity only | Open. Person C done Mar 3. Person D's ID requested Mar 4 |
| Control check for owners below the threshold | Entity only | Done. Person E has no control role |
| Approval: who approved the investor, and the admission date | Every investor | Blocked. Waiting on Person D |
| File owner and current version | Every investor | Done. Ops lead, v3 |
A file is complete when every row is done or marked not applicable, and the approver has reviewed and approved it. Do not admit an investor before then. Investor B waits until Person D's row is done. When the last row closes, the approver approves, countersigns and records the admission date.
For an entity
For a company, partnership, trust or LLC, the entity rows apply too. Their job is to find the people. A beneficial owner is a person who owns a share above your threshold, or who controls the entity.
The common gap is the one in the opening. The entity is screened, but the people behind it are not. Your policy, your administrator or your bank sets the ownership threshold. Ask them which number applies.
Example (hypothetical). Say Investor B is an LLC. Person C owns 40 percent of it. Holding Co owns the other 60 percent. Person D owns 70 percent of Holding Co, and Person E owns 30 percent. Say your threshold is 25 percent and your policy counts indirect ownership.
- Person C: 40 percent, held directly. A beneficial owner.
- Person D: 70 percent of 60 percent is 42 percent. A beneficial owner.
- Person E: 30 percent of 60 percent is 18 percent. Below the threshold. Check whether Person E controls Investor B.
The three people add up to 100 percent. If your chart does not reach 100 percent, ask who is missing. If you screen only Investor B and Holding Co, the file looks done. But Person C and Person D, who together own 82 percent of Investor B, are unchecked.
Accreditation
Next comes accreditation. The rule your offering uses decides how much proof you need.
- Rule 506(b). Investors usually state their own status in the questionnaire. The fund cannot use general solicitation, such as public advertising.
- Rule 506(c). The fund must take reasonable steps to verify each investor's status.
In March 2025, staff at a US securities regulator gave 506(c) funds one route: a high minimum investment can count as a reasonable step. The minimums in that guidance are $200,000 for a person and $1 million for an entity. The investor must also state in writing that they are accredited, and that no third party financed the investment for this purpose. The fund must not know of facts that say otherwise.
Without that route, funds often use other evidence, such as a letter from a qualified third party. Ask your counsel which route fits your offering. This article is not legal advice.
Is onboarding getting easier?
Once the checklist is in use, three numbers show whether it is working:
- Days from first contact to an accepted subscription.
- How many back-and-forth messages each file needs.
- The share of files that need rework because information was missing or wrong.
If many files need rework, look at the form first, since every file starts there.
And the LLC from the opening? With the checklist, the holding company question becomes an open row with a name and a date. The investor still waits, but now everyone can see what is left.
Where Tahoe fits
Seeing what is left is easier when the file lives in one place, not across inboxes. We are building Tahoe so that the manager sets up the onboarding form that investors fill in, using a form builder, inside a portal in your fund's brand. The manager then reviews each submission and its documents in an onboarding review queue, and approves, rejects or requests a correction.
Tahoe works alongside your administrator, and the manager makes every approval decision.