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Contents Define the parties involved in the agreement and their respective roles. Identify the purpose of the agreement, including the capital contribution amount and any related terms and conditions. Detail any applicable taxes, fees, or charges related to the agreement.
Contributed capital, also known as paid-in capital, is the cash and other assets that shareholders have given a company in exchange for stock. Investors make capital contributions when a company issues equity shares based on a price that shareholders are willing to pay for them.
Capital Contribution Documents means the documents to be executed by the parties governing the Capital Contribution, as may be amended and/or supplemented, the forms of which shall be included in the Plan Supplement.
The accounting entry for the contributed capital are to debit cash or asset and credit Shareholders' Equity, reflecting the increase in assets and balance owed to shareholders.
An example can illustrate better how the capital account works. If three persons create an LLC and each contributes USD 20.000, the capital account of each owner starts with a record of USD 20.000.