What is the name of your state (only U.S. law)? California
Hi Guys,
I'm new to this forum but have found lots of good advice and information already!
I have a question regarding a member-managed LLC and the individual member capital accounts (contributed assets).
Background: Three of us are considering merging our individual businesses (all currently sole proprietorships) into one entity under a California LLC. Our current businesses share the same customer base but do not compete with each other's products/services. Economy of scale, spreading the management workload and singular location are the main driving force behind this consideration. Our individual products/services are synergistically compatible. We are all mature business owners/operators and have known each other well for over 10 years. Each of us regularly refers our customers to the other.
My understanding of an LLC member's capital account is that it represents assets contributed to the LLC and forms the (tax) basis of each member's investment in the new entity. And, that the actual amounts in each member capital account do not have to be exactly equal in order for the members to own shares equally in the LLC.
Is this correct?
I appreciate and thank you in advance, for your answers.
Tom
Hi Guys,
I'm new to this forum but have found lots of good advice and information already!
I have a question regarding a member-managed LLC and the individual member capital accounts (contributed assets).
Background: Three of us are considering merging our individual businesses (all currently sole proprietorships) into one entity under a California LLC. Our current businesses share the same customer base but do not compete with each other's products/services. Economy of scale, spreading the management workload and singular location are the main driving force behind this consideration. Our individual products/services are synergistically compatible. We are all mature business owners/operators and have known each other well for over 10 years. Each of us regularly refers our customers to the other.
My understanding of an LLC member's capital account is that it represents assets contributed to the LLC and forms the (tax) basis of each member's investment in the new entity. And, that the actual amounts in each member capital account do not have to be exactly equal in order for the members to own shares equally in the LLC.
Is this correct?
I appreciate and thank you in advance, for your answers.
Tom