For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), I recommend you have the following for owner/partner equity accounts (one set for each partner if a partnership)
[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here
LLC means nothing in terms of accounting, that is only a state registration concerning company liability
There are several ways to do paying with personal funds, I prefer:
1. Create a dummy bank account called owners, use write checks (do not print them, they are just a form for entering transactions) on that account to enter and pay the bills/expenses.
2. When you are finished, the balance will be negative, make a deposit for the total amount and in the account block select owner equity, or better owner equity investment
Technically a contribution to the partnership is income (unless they are from a partner of course), better to have relatives contribute to you personally, and you invest personal funds in the partnership using equity investment, and paying the license fees.
Capital is used when talking about c- or s-corporations, sole proprietor and partnerships have equity accounts. The reason for the distinction is the tax laws regarding what and how you do things with equity vs capital.
