In its most basic terms, this is the money (or sometimes the assets, like equipment) you put into your business. It differs from a loan in that it doesn’t accrue interest payable to you. If you put money into your corporation or LLC (or partnership), then the return of that money to you as you start to distribute money to you, is non-taxable.
What’s a capital contribution?
About the Author: David Herzog
Since 1993, I have represented hundreds of businesses and individuals in a variety of industries. Small business legal advising . . . that's my thing.