No, a capital contribution isn’t necessary. But typically you would, and should, make one. You would because there’s almost no way to start a business without some kind of investment. And you should because if your corporation is “under-capitalized”, then you could be exposing yourself and fellow shareholders or members to personal liability, making the formation of the entity a waste of time and money. And it takes more than $1.00 to protect yourself (but nice try).
Do I have to make 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.