WHAT IS A CONTRIBUTION OF INITIAL CAPITAL?
A contribution of initial capital is what each member will “put-in” at the start to get the company started. In exchange for their initial capital contribution, each member will receive a proportionate ownership interest in the limited liability company. The contribution of a person may be in money, property, or services, or other obligation to contribute money or property or to render services. See California Corporations Code section 17200. See also California Corporations Code section 17001(g) for a more detailed definition of what constitutes a “contribution.” There are different tax consequences for different types of contributions. You should seek the assistance of a tax professional in deciding what to contribute as your initial capital.
