In today's video
I am going to talk to you about how to fund an LLC
So, you probably clicked on this video because you want to learn about
how to fund your LLC.
Hi, my name is Andrew
I'm an attorney here at Mollaei Law where we've helped over
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Now, before we actually start talking about how to contribute money into your LLC
we must first clarify what it means to be an actual
member of an LLC
to put things as simple as possible
A member of an LLC is also known as an
owner of an LLC
Sometimes entrepreneurs dedicate and contribute money into an
LLC in order to become a member of that LLC
also known as an owner
However
it's important to note that you can be an owner of an LLC
without actually contributing any funds
In fact
you can contribute a service and still become a member or owner
but the most important thing to note is that you do not need to contribute
capital to become an owner of an LLC
Do keep in mind that LLCs are extremely flexible
which means that there are no real requirements to be an owner or a
member of an LLC
The only requirement is that you must be 18 years of age or older
now, without any further ado
let's go ahead and talk about the purpose of this video
What is a capital contribution to your LLC?
Now a capital contribution comes down to this simple
thing
It is the amount that each member of an LLC contributes
in to the company itself
Now these investments in these funds and these capital contributions
help pay any sort of startup expenses
Startup expenses may be startup expenses may have to do
with website design, marketing team, accounting team
being able to have stock for your goods
Other startup expenses include real estate or renting an office
The amount of contribution can be any amount
Now, while a majority of capital contributions comes down to cash
itself
you are also able to make capital contributions by providing
property and or services
Now, in order to determine how much your property or service is worth
in terms of monetary capital contributions
you must first determine how much your property or how much your
service is worth
the fair market value of your service or property
Now, the first way you can make a capital contribution is by contributing
your own money
The second way you may be able to make a capital contribution is something
called an equity contribution
And the third way to make a capital contribution is something called
a debt investment
The fourth way you're able to make a capital contribution is something called a
convertible debt
Anyone who makes any sort of equity investment in to an LLC
becomes a member
also known as an owner of the LLC itself
This means that an LLC member has the rights to profits or
losses of the company
This person also has the right to vote on behalf of the company
or any type of member
resolutions that requires some form of voting
And of course
a set of obligations and responsibilities that are
outlined in the LLC operating agreement
It is important for the operating agreement to outline each
member's contributions, their percentage of ownership
as well as any sort of profit allocation. And of course
you're going to want to also include what happens if a member decides to
leave the LLC
Now, if you want to learn a little bit more about how to contribute capital
contributions to an LLC, if you want to learn a little bit more about ownership
as well as what a member means
then make sure you click in the description box below
click the blue link to book your free call with a professional who can help you
better understand how to make capital contributions and what it means to
be a member of an LLC. If you happen to enjoy this video
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If you would like to continue learning more about LLCs businesses online
businesses, go ahead and watch one of these videos