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Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 55708
Experience:  32 years of experience practicing law and a businessman.
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I need to transfer funds from a personal savings account to

Resolved Question:

I need to transfer funds from a personal savings account to the account of a start up LLC which I am part owner. We need to buy some equipment, and since we are a startup, the LLC itself cannot get credit.

Can I simply transfer funds from my personal savings account to the business account, and have the business pay me back as it generates more revenue. How do I document this for tax purposes and federal, local Colorado state government regulations?
Submitted: 7 years ago.
Category: Business Law
Expert:  Richard replied 7 years ago.

Good evening. Yes, you would write a check or have funds wired to an account in the name of the LLC. This would be either a loan or a contribution to the LLC depending upon the terms of the Operating Agreement among the members. You spell out everything in the Operating Agreement, including initial contributions, additional contributions, how profits and losses are to be shared, voting rights...on normal operating decisions and major decisions, sale of the business, sale of interests in the LLC, etc.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Richard and other Business Law Specialists are ready to help you
Customer: replied 7 years ago.
How do I report this transfer to the IRS for tax considerations?
Expert:  Richard replied 7 years ago.

It would show up on the LLC tax return as a non-taxable capital contribution. It is not a taxable event for your individual return.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Richard and other Business Law Specialists are ready to help you