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February 4, 2023
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Want know how to best set up the owner equity account? Have a multi-member LLC with my wife and I as the only partners. All contributions to biz are from a joint account.

  • February 4, 2023
  • 2 replies
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My understanding is that normally we would set the 2 of us up as separate vendors and have 2 separate owner equity accounts. However, since all of our contributions to the business will be from our joint personal account to our business checking, should we just set ourselves up as a single vendor (such as a vendor named something like "Owner 1 & Owner 2") and have just a single owner equity account?
Best answer by Rainflurry

@soleneventures-g 

 

The source of the deposit (your joint bank account) doesn't affect the allocation to your capital equity accounts.  You still want to record the deposit to separate equity accounts based on your ownership percentages.  

2 replies

DivinaMercy_N
February 4, 2023

Hello there, @soleneventures-g. I want to ensure you'll be able to set up an owner's equity account in QuickBooks Online (QBO).

 

Thanks for sharing the details of your concern. I'm here to share some details about setting up an owner's equity in QBO. To start, you can set up the owner and partner as a vendor. You need to do this for the owner and partner who wants to make a contribution. 

 

Once done, you can now create equity accounts for the owner and partner so you'll able to see what they invest and makes from a business. Here's how:

 

  1. Navigate to the Settings menu and select Chart of Accounts.
  2. Then, select New.
  3. Next in the Account Type dropdown and choose Equity.
  4. From the Detail Type dropdown select Owner's Equity or Partner's Equity depending on your situation.
  5. When finished, click Save and Close.

 

For reference, please check this article: Add an owner or partner to your books.

 

Then, to record a capital investment. For detailed steps, check out this link: Record an owner's contribution or capital investment in your business.

 

However, I still recommend reaching out to your accountant to further guide you in setting up equity accounts. They can also advise you on how you can record and track the contributions correctly. 

 

I'd be glad to provide additional assistance if you need further help in setting up an owner's equity account in QBO. Please don't hesitate to post again here. Have a good one and keep safe. 

Rainflurry
February 5, 2023

@soleneventures-g 

 

The source of the deposit (your joint bank account) doesn't affect the allocation to your capital equity accounts.  You still want to record the deposit to separate equity accounts based on your ownership percentages.  

February 5, 2023

Thank you! And I'm assuming with the 2 separate equity accounts we would just use a split for the single deposit amounts coming over from our joint personal account then?