Legal Tip of the Day: Funding an LLC

 In America


Talk Legal to Me is here to provide you with “Just the Tips of the Law.”  Today’s legal tip is funding the LLC.

The initial funding of the Limited Liability Company (“LLC”) is is typically accomplished through member capital contributions, loans, investments or some kind of contribution thereof.  Most states allow many ways to fund the LLC.  For instance, Section 18-501 of the Delaware Act specifies that the contribution of a member to an LLC may in form of cash, property, services rendered, promissory note or other obligations to contribute cash or property or perform services.  The member’s capital contributions should be memorialized in the LLC’s operating agreement.   You may need an experienced business attorney to help you draft your operating agreement to ensure the capital contributions and the related material terms are properly memorialized.

A member usually makes cash capital contributions by delivering a check payable to the LLC in the amount of the contribution.  Contributions of personal property are typically made by the member delivering a bill or sale or other assignment document to the LLC.  Contributions of member services are usually documented in the operating agreement, signed by the LLC members, and/or in employment or independent contractor agreements between the member and the LLC.

Member loans to the LLC may be used to initially fund the LLC.  Such loans may be unsecured or secured by the LLC assets. If you are member giving a loan to a new LLC you will be best protected by having your loan documented by a promissory note, loan agreement and a security agreement.  If you need more advice relating to funding your LLC then contact Burdick Law at 702-481-9207 or email at

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