What types of private equity investments can I hold within my Sterling account? Types of private equity investments that Sterling will process include, but are not limited to, stock of C-corporations, limited partnerships, limited liability companies, and unit investment trusts. Back to Top Are there any types of investments that Sterling will not process? Types of private equity investments that are not administratively feasible for Sterling to process include, but are not limited to, single-member entities, general partnerships, limited liability partnerships, joint ventures, working interests, stock of S-corporations, and foreign entities. Back to Top Can my Sterling account invest in an entity that I or a family member owns or controls? If your IRA or Qualified Plan invests in an entity that you or certain family members own or control (whether controlled individually or as an officer of a corporate general partner, managing member, etc.), the transaction could possibly be a prohibited transaction under Internal Revenue Code Section 4975. Sterling's policy on this issue is that if you or another disqualified person is an officer or director of an entity (or an officer or director of a corporate general partner, managing member, etc.), and you will collectively own less than 50% of the entity, then you will need to obtain a legal opinion from an ERISA or tax attorney addressed to you in which the transaction is discussed in detail prior to Sterling processing your investment instructions. If you, any family member, or disqualified persons collectively will own 50% or more of the entity, Sterling will not process the investment even if you are able to obtain a legal opinion. Back to Top What is a prohibited transaction? In general, Internal Revenue Code Section 4975 defines a prohibited transaction as a transaction between a plan (your account) and a disqualified person. Generally, "disqualified persons" are defined to be the accountholder, other fiduciaries, certain family members (lineal descendents and spouses of lineal descendents), and businesses under the accountholder's (or disqualified person's) control. Back to Top Does Sterling have a limit to the amount of an entity that an account can own in conjunction with other disqualified persons or family members? Yes.  Sterling will not process an investment where 50% or more of the entity will be owned by the Sterling account and other disqualified persons or family members. Back to Top Will Sterling assist with setting up a limited partnership, limited liability company, or other entity? No. As a directed custodian, this is not a service that Sterling provides. You will need to rely on your attorney or tax advisor with respect to the entity's formation and any other legal or tax advice. Back to Top What is the proper vesting that should be used for my account's interest in the entity? Your account's ownership must be registered to Sterling Trust Company, Custodian FBO Accountholder Name, Account #_____________. This includes stock certificates, limited partnership agreements, operating agreements, etc. Back to Top Where do you receive the value of a private equity investment reported on my quarterly statement? All privately held assets are valued at the good faith estimate value given by the investment sponsor or entity. Since these assets are not publicly traded and there is not a market for the assets, we must rely on the investment sponsor or entity to provide the value. We require that the value of all privately held assets be updated annually. Please refer to the custodial agreement for Sterling 's valuation policy.   Back to Top