A Subscription Agreement is the actual “contract of sale” between the investor and your company. While the PPM describes the deal, the Subscription Agreement is what the investor signs to legally commit their money.
In 2026, these agreements must include specific language to comply with the SEC’s 2025 “No-Action” guidance, which simplified the verification process for high-minimum investments.
1. The Offering Snapshot (The “Header”)
Issuer: [Your Company Name], a Michigan Limited Liability Company
Securities: [e.g., Class A Membership Units]
Price per Unit: $[Amount]
Minimum Subscription: $[Amount] (Note: $200,000+ per individual triggers easier SEC verification rules).
2. Subscription & Irrevocability
”The undersigned (the ‘Subscriber’) hereby irrevocably subscribes for and agrees to purchase [Number] Units for a total purchase price of $[Total Amount]. The Subscriber understands that this subscription is subject to acceptance by the Company and may be rejected in whole or in part.”
3. Representations & Warranties (The “Investor’s Promises”)
This is the most legally dense section. The investor must confirm:
- Accredited Status: They meet the SEC definition of an “Accredited Investor.”
- No Third-Party Financing: (New for 2025/2026) The Subscriber must represent that the investment is not financed by a third party for the specific purpose of this deal.
- Risk Awareness: They have read the PPM, understand they could lose all their money, and can afford the loss.
- Illiquidity: They understand they cannot easily sell these units and there is no public market.
4. Michigan “Blue Sky” Clause
Since you are in Michigan, your agreement should include a specific state-level disclaimer:
”THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN UNIFORM SECURITIES ACT. THEY ARE BEING OFFERED IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION. TRANSFER OF THESE SECURITIES IS RESTRICTED BY LAW.”
5. The Signature Page (Execution)
The investor doesn’t just sign; they must provide their legal “vesting” information:
- Entity Name/Individual Name: How the title should appear on the books.
- Tax ID / SSN: Required for K-1 tax reporting.
- Mailing Address: Where distribution checks should be sent.
6. Exhibit: The Investor Questionnaire
Attached to the agreement is a 1-2 page checklist where the investor selects why they are accredited (Income vs. Net Worth).
[!NOTE]
2026 Verification Tip: If you are using Rule 506(c) (advertising) and the investor is putting in at least $200,000, you can now rely on a simplified “Self-Certification + No Actual Knowledge” standard, provided you have no reason to doubt them. If the investment is less than $200k, you still need to collect tax returns or a CPA letter.
How to use this
Usually, you would combine the PPM, Operating Agreement, and Subscription Agreement into one digital “Offering Package” using a platform like DocuSign or a dedicated investor portal (e.g., Juniper Square or AppFolio).
Would you like me to draft a sample “Acceptance Page”? This is the document you (the Sponsor) sign to officially accept the investor’s money into the deal.