March 17th, 2008
Getting Your New Corporation Up And Running - Funding
Once you form a new business entity, you need to come up with a way to get money into it. This concept is known as capitalization or funding of the business entity.
At first glance, funding an entity seems fairly simple. Don’t the officers of the corporation simply open a bank account and deposit some money? Unfortunately, it is not that simple. The money has to come from somewhere, typically the shareholders.
Funding a new corporate entity is obviously a critical step, but how is it done. There are three primary methods, although one should check with applicable laws in your state to delineate which are available. Regardless, let’s take a closer look.