Self funding an LLC

SteveJSteveJ subscriber Posts: 2
edited November 2008 in Startup Funding
I am starting a new online business as a single member LLC.  I will be funding myself, and I am wondering how best to do this.  Lets say I want to take "x" dollars from my personal savings to start.  Do I just transfer the funds to the LLC checking?  How do I show that income?  Should I create it as a loan?  What is later, I need to put more money into the business?
I am curious as to what other typically do when they first start out.
Thanks
Steve

Comments

  • GrillCharmerGrillCharmer subscriber Posts: 7
    Hello Steve!
    Congrats on taking the plunge and joining the world of Entrepreneurship!  Congrats also for being able to self fund your endeavor.  I use Quickbooks and it is under "owner contributions".  It`s not "income".  What accounting software do you have?
     
    Best Regards,
     
  • robertjrobertj Tampa Bay, Floridasubscriber Posts: 0 Member
    Steve,
     
    Generally, the funds put into a business are either capital contributions (equity) or a loan (debt).
    They are not income to the business.
     
    You should consult a tax professional for advice on your specific situation.
    robertj11/16/2008 12:17 PM
  • RetiredMember5RetiredMember5 subscriber Posts: 0
    Steve,
     
    As an attorney, it is critically important that when establishing a new business that you establish it correctly from an infrastructure standpoint so that you do not potentially "pierce the corporate veil" and open yourself up to liability.  With respect to your question, you should write a check to your corporate entity and write in the memorandum of your check "Initial Unit Ownership."  Do not simply just transfer the money from your personal checking to the corporate checking without any substantive paper trail. 
     
    For more information, you may want to check out Innoventum`s FREE 60-page interactive guide on how to start, operate and grow a business in today`s web 2.0 world (which also discusses corporate structure and liability protection).   Such guide has been recommended by more than a dozen government agencies.   On Innoventum`s site, you can also find a number of recommended affiliates, such as Legal Zoom where you can find legal templates for such LLC.   Remember if you ever are interested in obtaining certain business certifications, you will need to establish a your corporate minute book and have all documentation prepared accordingly.
     
    Congrats on the new business venture! 
  • SteveJSteveJ subscriber Posts: 2

    Hello Steve! Congrats on taking the plunge and joining the world of Entrepreneurship!  Congrats also for being able to self fund your endeavor.  I use Quickbooks and it is under "owner contributions".  It`s not "income".  What accounting software do you have? Best Regards,  
     Thanks!  I am just starting to put the wheels in motion.  I plan on using Quickbooks, as it has been recommended to me by others. Steve
  • SteveJSteveJ subscriber Posts: 2

    Steve, Generally, the funds put into a business are either capital contributions (equity) or a loan (debt).They are not income to the business. You should consult a tax professional for advice on your specific situation.
     Thanks for the clarification. Steve 
  • SteveJSteveJ subscriber Posts: 2

    Steve, As an attorney, it is critically important that when establishing a new business that you establish it correctly from an infrastructure standpoint so that you do not potentially "pierce the corporate veil" and open yourself up to liability.  With respect to your question, you should write a check to your corporate entity and write in the memorandum of your check "Initial Unit Ownership."  Do not simply just transfer the money from your personal checking to the corporate checking without any substantive paper trail.   For more information, you may want to check out Innoventum`s FREE 60-page interactive guide on how to start, operate and grow a business in today`s web 2.0 world (which also discusses corporate structure and liability protection).   Such guide has been recommended by more than a dozen government agencies.   On Innoventum`s site, you can also find a number of recommended affiliates, such as Legal Zoom where you can find legal templates for such LLC.   Remember if you ever are interested in obtaining certain business certifications, you will need to establish a your corporate minute book and have all documentation prepared accordingly. Congrats on the new business venture! 
     Thank you very much for the reply.  I will check out the additional info you suggest. Thanks again!Steve 
Sign In or Register to comment.