Say you have a new business and want to invest your personal income into the business to start. Say you initially just invest $25 to satisfy the bank's requirement for a new account, and say you invest $100 here and $1000 there occasionally. I am wondering how to properly document this so as to still keep the business and personal accounts "separate".

Doing a quick search brings up things like this, but it doesn't quite describe how to effectively document this without external software. In this question/answer, no external software should be used. Instead, just a document with plain text (using any plain text editor or MSWord or whatnot). I would also like to know how a software could document this if it's straightforward. Basically, what sort of record(s) should be created in addition to the original bank transaction record, so as to keep the liability and bank accounts separate.

Finally, I would like to know how to properly document "donating" or "supplying" initial capital in the form of equipment like books, computers, pens, pencils, etc., to the business.

  • If you're using a separate account, they are already separated, so what is the goal? Also, you say "keep the liability and bank accounts separate" but you don't mention what what that liability is, do you have a business loan or something? – Hart CO Dec 24 '18 at 18:22
  • kepp your receipts and credit card online statements. – Fattie Dec 25 '18 at 0:47

A stock company can have more authorized shares than issued shares. And so as the founder puts more investment into the company, the founder can increase the shares held by the founder and have a higher percentage of the authorized shares.

Otherwise, stock company or not, just look at the state tax form and it might look like this:

Computation of Net Worth Tax

Total Capital stock issued ________

Paid-in or Capital surplus ________

Retained earnings ________

Net Worth ________

Capital stock is the authorized stock at par value. Paid-in Capital is obviously as new investment whether in a stock company or not. Retained earnings is the net profit after dividends.

This is a balance sheet.

Furthermore, the company should have its own checking account and that is a cash flow accounting. When writing a check to the company just note the check as "Paid-in Capital".

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