Frequently Asked Questions

Are capital contributions required?

There is no legal requirement for members of an LLC to make capital contributions to the company. Many company’s Operating Agreements assume that the members will contribute amounts that are proportionate to their ownership percentage. If that is not the case, you should work with legal counsel to understand the consequences of any disproportionate contributions.

Notwithstanding the above, the members of an LLC should ensure that the company is sufficiently capitalized to allow the LLC to operate its business and cover its anticipated liabilities. Failure to adequately capitalize the company can be a factor in “piercing the corporate veil”.