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Hello, I'm new to the forum and am hoping someone would be able to help me out and give me some insight.
I own an event productions company (LLC) and have a friend who also owns their own company. We often partner on events and have since decided to create a joint subsidiary LLC (owned by our individual LLC's) so that when we do partner for events, our vendors and clients can deal with one entity rather than 2.
The events we partner on can vary greatly in required investment and don't occur on any specific schedule, so we're not really looking to fully capitalize the joint LLC, as that would potentially tie up a lot of money from our individual businesses. Ideally, we're looking for a way to fund an event from our individual LLC's, and once the event is complete, we split the revenue and deposit it into our individual LLC's. However, my research has indicated that this isn't quite that simple in terms of accounting and book keeping.
My question is what is the best way to move the money between the LLC's?
Can we just create an investment account in our individual Companies to reflect the cash transferred to the joint LLC, and then use the owners equity account in the joint company to reflect the incoming investment money, and then take a draw on the profits (if they occur) of the joint LLC?
I appreciate any insight that can be provided. Thanks.
I own an event productions company (LLC) and have a friend who also owns their own company. We often partner on events and have since decided to create a joint subsidiary LLC (owned by our individual LLC's) so that when we do partner for events, our vendors and clients can deal with one entity rather than 2.
The events we partner on can vary greatly in required investment and don't occur on any specific schedule, so we're not really looking to fully capitalize the joint LLC, as that would potentially tie up a lot of money from our individual businesses. Ideally, we're looking for a way to fund an event from our individual LLC's, and once the event is complete, we split the revenue and deposit it into our individual LLC's. However, my research has indicated that this isn't quite that simple in terms of accounting and book keeping.
My question is what is the best way to move the money between the LLC's?
Can we just create an investment account in our individual Companies to reflect the cash transferred to the joint LLC, and then use the owners equity account in the joint company to reflect the incoming investment money, and then take a draw on the profits (if they occur) of the joint LLC?
I appreciate any insight that can be provided. Thanks.