LP Onboarding Checklist for Private Fund Managers

In our experience many LP onboarding delays come from sequence, not substance: a document list that does not fit the investor, KYC that starts after the commitment is signed, or a nominee structure discovered in the last week before a closing. This checklist puts the work in order and shows the rule behind each step, so that an operations lead can turn it into a procedure and a compliance lead can defend it.

It complements our guide to fund subscription documents, which explains what each part of the booklet does. This article cites the current texts as read on 5 November 2026 and is general information, not legal advice. Thresholds and exemptions depend on the fund's domicile and the place of sale, so take counsel's advice on your structure.

Write these down once for each fund, because every later decision depends on them. Which offering route applies (for example Rule 506(b) or 506(c)) and which Investment Company Act exception (3(c)(1) or 3(c)(7))? Which AML regimes apply to the fund, the manager and the administrator? Which beneficial-ownership threshold is used? A master-feeder fund usually needs one standard that meets the strictest regime across its vehicles: a Cayman feeder applies Cayman's 10% test to legal-person investors even if the manager's home rule looks to 25%. See our master-feeder structure entry. Also decide which LP types the fund will not accept without senior approval, and set the cut-off date for clearing KYC before each closing.

Eligibility is a separate question from KYC, and it is often answered by different people. A failed test can cost the fund its offering exemption or its Investment Company Act exception, so get it right before accepting money.

• Accredited investor (17 CFR 230.501(a)). An individual with net worth above US$1,000,000 excluding the primary residence (alone or with a spouse or spousal equivalent), or income above US$200,000 in each of the last two years (US$300,000 joint) with the same expected this year. Banks, brokers, registered advisers and most other institutions listed in (a)(1) qualify by status; employee plans listed there have asset or fiduciary conditions. Companies, partnerships and LLCs under (a)(3), trusts under (a)(7) and other entities under (a)(9) generally need more than US$5,000,000 in total assets, or for (a)(9) in investments, and must not be formed for the specific purpose of the purchase. An entity whose equity owners are all accredited qualifies under (a)(8). See our accredited investor guide.
• Rule 506(b) or 506(c). Under 506(b) no more than 35 non-accredited purchasers are allowed in any 90-calendar-day period (or the issuer reasonably believes so), each of whom, alone or with a purchaser representative, must be sophisticated. Under 506(c) every purchaser must be accredited and the issuer "shall take reasonable steps to verify" that status. The rule lists non-exclusive methods for natural persons: review of IRS income forms with a written representation on current-year income; asset statements and a consumer credit report dated within the prior three months, with a representation that liabilities are disclosed; or written confirmation from a registered broker-dealer, SEC-registered adviser, licensed attorney or CPA that it took reasonable steps to verify within the prior three months. A prior 506(c) verification can be carried forward by written representation for five years, if the issuer is not aware of contrary information.
• Qualified purchaser (15 USC 80a-2(a)(51)). For a 3(c)(7) fund: a natural person owning at least US$5,000,000 in investments; a family-owned company owning at least US$5,000,000 in investments; a trust not formed for the purpose whose trustee and each settlor qualify; or a person acting for its own account or for other qualified purchasers that in the aggregate owns and invests on a discretionary basis at least US$25,000,000. A company formed for the specific purpose of acquiring the fund's securities is not a qualified purchaser under the company limbs unless each of its beneficial owners is one (17 CFR 270.2a51-3(a)). The reasonable-belief standard is in 270.2a51-1(h). See our qualified purchaser guide.
• The 3(c)(1) count. A 3(c)(1) fund is limited to 100 beneficial owners (250 for a qualifying venture capital fund) and may not make a public offering. An LP counts as one person unless it owns 10% or more of the fund's outstanding voting securities and is itself an investment company or would be one but for 3(c)(1) or 3(c)(7); then its holders are counted (15 USC 80a-3(c)(1)(A)). Capture this at onboarding for every LP that is a fund.
• Qualified client (17 CFR 275.205-3). Relevant where a registered adviser charges performance compensation to the investors of a 3(c)(1) fund; counsel will confirm the position for other structures. The dollar tests are adjusted by SEC order approximately every five years, with the rule naming an order on or about 1 May 2026, so use the figures in the most recent order rather than a number from an old questionnaire.
• Bad-actor check (Rule 506(d)). The covered persons include "any beneficial owner of 20% or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power". Ask any LP that could reach that level, and refresh the question at each later closing.
• Outside the US. Apply the test in the marketing and offering rules of the place of sale. An authorised EU AIFM may market an EU AIF it manages to professional investors in its home Member State under Article 31 of the AIFMD, for example, and a Cayman master fund regulated under the Mutual Funds Act must have a minimum aggregate equity interest purchasable by a prospective investor of CI$80,000 (US$100,000) unless its interests are listed on an exchange approved by CIMA.

• Who to screen. The LP, every beneficial owner and controller, directors or trustees, signatories, the settlor and protector of a trust, and the bank account holder if different.
• Aggregate ownership. OFAC treats an entity owned 50 percent or more, directly or indirectly and in the aggregate, by one or more blocked persons as blocked (FAQ 399 and 401). An LP in which two blocked persons each hold 25 percent is itself blocked, so screening names alone is not enough; ownership percentages need to be on the file. OFAC also urges caution with entities that blocked persons control or hold a significant minority interest in (FAQ 398).
• PEPs. Singapore requires senior-management approval, source of wealth and source of funds, and enhanced monitoring for a PEP, family member or close associate (SFA04-N02 para 8.3), with a risk-based approach allowed for domestic, international-organisation and former PEPs unless the risk is higher (8.4). The Cayman AMLRs require procedures for senior-management approval before establishing or continuing the relationship (reg 30(1)).
• Timing. Screen before acceptance and again before each closing if the gap is material. CIMA expects investors to be "periodically screened against the vigilance databases/sanction lists" (Part VI, D.6).
• A programme around it. OFAC's Framework describes five essential components: management commitment, risk assessment, internal controls, testing and auditing, and training. An LP onboarding procedure is one of those internal controls, and it applies regardless of the January 2028 date for the FinCEN rule.

Tax documentation is not AML, but it sits in the same pack, and an inconsistency between a tax form and the KYC file is a useful red flag. Fund administrators use these forms to meet the fund's withholding, FATCA and CRS duties.

• Form W-9. A US person gives its correct taxpayer identification number to the person required to file an information return.
• Form W-8BEN. A foreign individual certifies foreign status as beneficial owner for US tax withholding and reporting.
• Form W-8BEN-E. A foreign entity documents its status "for purposes of chapter 3 and chapter 4". Check the status claimed against the rest of the file.
• Form W-8IMY. A foreign intermediary, foreign flow-through entity or certain US branches certify their status for US tax withholding and reporting, and supporting documents may need to be attached. The IRS's requester instructions explain how to validate each form.
• CRS self-certification. Where the fund is a reporting financial institution under the Common Reporting Standard, collect the self-certification for the account holder and, where relevant, its controlling persons. The OECD's CRS FAQs, last updated in December 2025, address reporting whether a valid self-certification has been provided for the account holder and controlling persons. Local CRS law governs the form and deadlines.

A BVI company commits US$10 million to a Cayman feeder fund with a Singapore licensed manager. It is held 60% by a family trust and 40% by a private bank's nominee company, and it says the money comes from the sale of a family business. (Illustrative facts.)

Assume the fund is a 3(c)(7) fund sold to some US persons under Rule 506(b), and that it applies the US tests to this LP, for example because counsel requires it for all investors; an offshore fund's analysis for genuinely non-US investors can differ. If the BVI company was not formed for this fund, it can qualify with US$25 million in investments, or with US$5 million if it is family-owned within section 2(a)(51)(A)(ii). If it was formed for this fund, each owner must be a qualified purchaser. Get the formation date, the ownership and the portfolio figures in the questionnaire.

Cayman's test is 10% for a legal person, and the Singapore manager also treats the investor as its customer. The trust leg points to the trustee, the settlor and the beneficiaries. The nominee leg needs an answer on whose behalf it holds the 40%, because the fund must identify the beneficial owners and take reasonable measures to verify them (AMLRs reg 12). The reg 24 written-assurance route is written for an applicant that itself acts as nominee, so do not assume it covers a nominee further up the chain; take counsel's view. If the principal is not named, the required CDD information is missing and reg 18 applies: do not proceed.

Screen the company, its directors, the trustee, settlor, protector and named beneficiaries, and the nominee's principal. In our view a BVI holding company with a trust and a nominee in its chain would normally rate higher: nominee shareholders and personal asset-holding vehicles are named risk factors in UK MLR reg 33(6)(a) and in Annex III to the EU Regulation. Obtain the sale agreement and bank statement showing the proceeds as source-of-funds and source-of-wealth evidence, and record who approved.

Form W-8BEN-E from the company and CRS self-certification with controlling persons, then compliance sign-off, then GP countersignature. The fund's procedure should require the first capital call to arrive from an account in the company's name; if it comes from another group entity, stop and ask why.

• A single generic document list. LPs receive requests that do not fit their entity type, and every return trip costs days. Send the list for the LP's type on day one.
• KYC started after the commitment is signed. Run the checks in parallel with subscription review, so that a problem with a large LP surfaces before the closing date.
• Structure charts without percentages. Beneficial owners and aggregate sanctions ownership cannot be determined from a chart that shows only names.
• Reusing another fund's file blindly. A re-up LP saves time, but the threshold, the fund's regime and the facts may differ. Refresh the file and record what was relied on. Cayman guidance also says identity need not be re-verified where another group entity verified it in a manner compatible with the Regulations and written confirmation is obtained that the records will be provided on request (Part VI, F.9).
• Side letters that drift. Promises on information rights, or on excusals from KYC refresh, need to reach the people running the file.
• Two teams, no owner. Investor relations holds the relationship, the administrator holds the file, and nobody owns the deadline. Name one owner per closing.