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I've been building a website and set up a single member California LLC early this year. Since, I've opened a bank account but have expenses during the building of the site that I've paid out of my personal accounts.

Also, I haven't funded the LLC yet other than a nominal about of money.

I am ready to open the business and need to know how best to do the following from an accounting standpoint. -

1) Initially fund the business 2) Buy / reimburse myself for the expenses to date on the setup of the site.

  • What do you mean by "best"? What are you trying to optimize exactly? – David Schwartz Nov 13 '17 at 2:24
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You can move money in and out of the business at will, just keep track of every transaction. Ideally you'd use an accounting software like QuickBooks or similar. Create a Capital Contributions account and every time you put money into the business checking account record it as a Capital Contribution.

Likewise, if you take money out of the business, it comes from your capital accounts. (You can create a separate Capital Distributions account in your accounting software, or just use a single account for contributions and distributions).

Money coming in and out of those capital accounts is not taxable because you will pay taxes based on net earnings regardless of whether or not you have distributed any profits. So there's no need to make a loan to the company, which would have tax consequences.

To reimburse yourself for purchases already made, submit an expense report to the company. If the company is unfunded right now, you can make a capital contribution to cover current expenses, submit the expense report, and wait until you have some profits before paying out the expense report or making any distributions. Welcome to entrepreneurship.

  • This is great! Is there anything I should be aware of when reimbursing myself for expenses made as to not pierce the corporate vail? – SGro Nov 14 '17 at 5:19
  • It's important to keep separate records and separate business/personal accounts. It can't hurt to get a tax accountant to make sure you set up the books properly. It's harder to go back and fix later, better to set up correctly from the start. – Rocky Nov 14 '17 at 19:38

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