Document why the money entered the LLC
Owners commonly fund an LLC through capital contributions or bona fide loans. Third-party financing and revenue are different sources. Record the source, amount and terms so the books, tax reporting and ownership records remain consistent.
Common funding methods
Choose the method that matches the economics.
Capital contribution
The owner contributes cash or property as equity under the operating agreement and company records.
Owner loan
The owner lends money under documented repayment, interest and maturity terms.
Third-party financing
A bank, investor or other lender provides funds under its own underwriting and loan documents.
Operating revenue
Customer payments belong to the company and should be deposited directly into its account.
Non-cash contributions
Property transfers can carry legal and tax consequences.
Before transferring real estate, intellectual property, equipment or an existing business, consider valuation, title, lender consent, contracts, taxes and insurance. Do not assume a transfer is merely an internal bookkeeping event.
Company records
Keep the bank, books and ownership documents consistent.
Use the LLC bank account, record the transaction promptly and preserve contribution approvals, promissory notes or other supporting documents. Avoid unexplained personal payments and reimbursements.
Understand how to take money back out.
The payment method depends on the LLC's federal tax classification.