For your investor(s) using their IRAs or Self-Directed IRAs (SDIRAs), this Article will step you through how to create the e-signature template and add the documents to the Capital Raise Commitment Flow.
IMPORTANT: Filling out and executing IRA/SDIRA documents can vary by Custodian. These are recommendations only. For example: Some SDIRA custodians have the Sponsor set up the investment with documents on the Custodians' portal, to allow the entire signature process to be controlled by the SDIRA Custodian. This includes documents being sent to the Sponsor for countersignature.
Typical Document Flow and E-signature Fields with an SDIRA Investor's Documents:
IRA/SDIRA documents will need information and signature from three parties. You will need to set up the e-signature document template fields using this information:
Investor: SDIRA documents must be signed/initialed by the investor to indicate that they are acquiring the number of shares and investing the funds in this investment. The Investor typically fills out these fields:
Class of Investment
Amount of investment
“Titling” for their investment (See below for more information about “titling”)
Their initials/signature by the titling
Sponsor: The Sponsor countersigns the documents to fully execute them. The Sponsor downloads the documents and sends them to the Investor for them to work with their Custodian to complete.
TIP: When blank or countersigned documents are sent to the IRA/SDIRA Custodian, you may need to include additional documents such as the Articles of incorporation (also referred to as the Certificate of Good Standing, Formation document of the LLC.) and the Offering Memorandum. Please confirm with the Custodian before sending documents to ensure all documents are sent and to avoid delays in receiving funds.
Custodian: The Custodian fills out the documents and then signs on the Custodian’s behalf.
Because the Custodian is legally investing on behalf of the investor, the Custodian will fill out and sign the documents as if they are legally the entity investing in the investment. NOTE: IRA/SDIRA’s will use the Tax ID of the Custodian and you will use that Tax ID when setting up the Investor’s Account in InvestNext.
After signing the documents, the Custodian sends the documents to the Sponsor (through the Investor or the Custodian’s system).
The Sponsor manually uploads the final completed documents to the Investor's Commitment in the Capital Raise.
Setting up Your E-signature Document Templates for IRA/SDIRA Investors
When setting up your e-signature document templates for your IRA/SDIRA investor, you will use the same process as when you set up your other documents in the e-signature template.
Please use this Article: How to Create E-Signature Templates (Video) to walk you through the e-signature document template process.
Entity Types: You will use these Entity Types when setting up the documents in the Capital Raise Commitment Flow: SEP-IRA and IRA
Signor Roles: You will have these Signor Roles in the e-signature template: Investor and Sponsor
NOTE: You will not set up the Custodian in the e-signature document template.
After your investor and Sponsor have completed and signed the document, the Sponsor will download the document and send it to the Investor for them to work with their Custodian to complete the documents.
Titling for SDIRA Documents
“Titling” is the format required for the name of the Investor’s Account. Titling can be different for each Custodian and sometimes even within an Custodian depending on who you are working with. It is best to encourage the Investor to call their SDIRA Custodian to confirm titling.
This is the typical titling:
[SDIRA Name] FBO [Investor Name] IRA # [investor account number]
Legacy Trust FBO John Smith IRA # 123456
Note: FBO is “For the Benefit Of”
SUGGESTION: When setting up the e-signature template for the IRA/SDIRA documents, add placeholder text in the titling field (Name) so the investor has a framework for how to title their documents:
[SDIRA Name] FBO [Investor Name] IRA # [investor account number]
Additional Information:
How to Create E-Signature Templates (Video) to walk you through the e-signature document template process.
IRA/SDIRAs: Setting up the Account and Documents for additional information about IRAs and SDIRAs.