Transfers from outside accounts

[Tommy Trussell]

On Sun, Feb 8, 2015 at 9:12 AM, EngineInstitute <info at chinablueart.com>
wrote:

> I have a partner who transfers funds from his personal savings account into
> the company checking account. What is the best way to manage these
> transfers?
> Thanks.
> China Blue
>

It depends upon what the partner's intent is, AND what your attorney and/or
accountant say about how it needs to be recorded and reported.

For example, if the partner is shelling out the cash with an expectation
that he will be repaid, then it's a loan, so it's a liability to the
company.

If the partner is putting in his money in exchange for a greater share of
the company (more company stock), then you need to follow the rules
prescribed by your corporate charter and the state and federal rules about
how to account for the stockholder equity.

I suppose the transfers might instead be a "gift," in which case they might
be recorded as ordinary income to the corporation. But of course that
income might be taxable.

SO that goes back to needing to do whatever your accountant and/or
corporate attorney say.



> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>