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An Initial Capital Stock Contribution is a specific amount of money you noted on your Operating Agreement that you as a shareholder in your LLC with S Corp tax formation would 'contribute' to get the business up and running.
After you have made your capital contributions to the business, each member's contribution should be recorded on the balance sheet as an equity account. You should have a capital contribution account for each member's contributions and record their initial contribution as well as additional contributions there.
Capital contributions are the money or other assets members give to the LLC in exchange for ownership interest. Members fund the LLC with initial capital contributions?these are usually recorded in the operating agreement. Additional capital contributions can be made at any time later on.
What is a Capital Contribution? A capital contribution refers to the cash or property that owners provide to their business. LLC members typically make initial capital contributions when opening the business and may contribute more throughout the company's lifetime. Managing LLC Capital Contributions and Distributions - IncNow IncNow ? Blog IncNow ? Blog
Your Capital Contribution should be equal (proportionate) to your Membership Interest. For example, if Bob and Jose each own 50% of their LLC, they will each contribute the same amount of money. For example, they can both contribute $500, $1,000, or $25,000. The amount doesn't matter, as long as it's the same.