Which Direction of Investment Form Should be Used for an Entity Investment?

By Elsie Dudukovich0 Comments

A Direction of Investment (DOI) form provides Equity Trust with information vital to processing your self-directed investment request. It provides direction to send funds from your IRA and to sign any documents if needed – including details of how and where to send the funds and/or documents.   Combined with the investment-appropriate supporting documents, the Direction of Investment provides details about the investment your IRA will hold.

Choosing the correct DOI may seem confusing as similar supporting documents may be required.  When it comes to investments involving an entity, some investments are in the entity itself while other investments are loans to the entity. The difference lies in understanding what it is the IRA will actually hold.

Will your IRA own a percentage of ownership or shares of the company?  This is common in entity/private equity investments.   The Private Equity DOI is the appropriate form for this type of investment.  It also identifies the possible supporting documents needed to complete your investment request.

Is your IRA loaning funds to the entity and will receive payment on the loan?  This is common in private debt/promissory note investments.  The Promissory Note DOI is the appropriate form for this type of investment.  Like the Private Equity DOI, it also identifies the possible supporting documents needed to complete your investment request. A copy of the note and, if applicable, information on any collateral securing the note are two common examples of supporting documentation for this type of investment request.

If you are unsure about which Equity Trust form to use, contact Client Services at 877-693-8208.