I'm seeking an tax specialist or accountant to advise on a proper chart of accounts in Xero and general accounting for a new startup.
You can fund your new Corporation bank account by depositing personal funds into that Corporation account for initial capital for the business. That investment can be classified as a loan to the Corporation or may be for issued stock shares of the Corporation (a needed conversation).
I can help you set up ta chart of accounts, based on your specific business, which can be used by any accounting system but I mostly work with QuickBooks Online. (Message me for a referral to a Xero bookkeeper if Xero is imperative.) Best wishes!
Answered 4 years ago
It’s usually way easier to deposit funds than to withdraw them. I would simply write a check to the company name and deposit it into the corporate bank account with a detailed note in the memo section referencing the purpose. I would then put out a job proposal on Upwork for a CPA who can help with the chart of accounts. You can also check with outsourced CFO Firms like NowCFO and Hardesty. Best of luck in your new venture!
Answered 4 years ago
I am well-versed in taxes, business consulting and teaching best practices, and I have been in this field for many years.
To answer your question, you can log the funding to the C-Corp as a Loan from Owners (liability account). This would require a loan agreement, and the agreement must cover details of the loan to the company including a fair market interest value to be paid back to the owner. I have an excellent template for this type of agreement you would need to draft. With this documentation and treatment of the loan, when you distribute money from the company back to the owner, it would not be considered dividends. Therefore, it would not be taxable to pay the owner back his/her funding.
I'd love to discuss this in more detail over a call. This is a pretty complex subject with the setup and ongoing treatment so I'd be happy to go into more detail with you! Also, we can cover the chart of account and other best practices.
Answered 3 years ago
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