5 WAYS TO LEGALLY REPLENISH AN LLC CURRENT BANK ACCOUNT

[Mutt]

Unlike individual entrepreneurs, limited liability companies have more stringent requirements for the registration of the receipt of funds to the current account, as well as for their withdrawal.
All cash transactions require mandatory accounting, regardless of the reason for their arrival.
Below we will analyze all the details in more detail.

Grounds for depositing money to the settlement account of LLC
An organization can fund its account in one of the following ways:

Base	Regulated	Tax	Return option	Documentation
Loan (including interest-free)	Some low	Is not a subject to a tax	There is	Loan agreement
Material help or gift	Some low	Not taxable only if the share of the founder is more than 50%	No (only as dividends)	Financial aid agreement or donation agreement
Contribution to property	LLC Charter	Is not a subject to a tax	No (only as dividends)	Charter of the company and the decision to deposit money to the settlement account of the LLC by the founder
Replenishment of the authorized capital	Some low	Not taxed, but you need to pay a state fee for making changes to the charter	Sale of a share or its reduction	Minutes of the meeting of participants, amended charter of the company
Payment for goods or services	Legislative acts regulating sales	Assessed like any purchase and sale transaction	Not	Service or delivery agreement.
Revenue input	Bank Ordinance	Not	Cash advance announcement

To the expenses on taxes should be added the commissions charged by the bank for certain operations for depositing cash into the account.

Now about the features of each of the methods.

Loan
Such replenishment of the settlement account of an LLC is possible by the founder, as well as by any other individual or legal entity.
The funds are deposited under a loan agreement, the founder can choose the option without accruing interest, which will make it easier for the accountant to carry out the amount received. On the other hand, additional funds can be obtained from the LLC as interest.
Funds can be deposited in parts or in full, depending on the terms of the agreement.

Taxes:

• The amount received from the investor is not included in the income category and is therefore not taxable.
• If the investor issued a loan at interest, then the LLC will have to withhold personal income tax from the income received.

Accounting entries:

• Debit 51 Credit 66 - for loans less than one year (short-term);
• Debit 51 Credit 67 - for loans over 1 year (long-term).

Other nuances:

• Upon the expiration of the term of the agreement, the loan must be returned and the operation carried out at the cash desk.
• The balance of accounts 66 or 67 must be reflected in the reporting.
• When submitting reporting documents to the bank or to the tax service, loans will need to be additionally explained with documents (in this case, provided together with the agreement).
• The founder can deposit borrowed funds under several agreements.

Financial help
How to deposit money to the settlement account of the LLC in this case without taxes:

• It is enough to have a share in the capital of more than 50%.
• Contribute funds as a contribution to the property of the LLC.
• The statements are also relevant for the simplified tax system.

The following can be distinguished as subspecies of financial assistance:

1. Replenishment of working capital.
2. Coverage of losses.
3. Contribution to property.

1. Replenishment of turnovers
Taxes:
The amount received is included in the taxable base if the share of the founder is 50% or less.

Accounting entries:
Debit 51 Credit 91 - as other income.

Other nuances:

• The deposited amount cannot be returned to the investor.
• It is imperative that the decision of the participants of the society on the introduction of gratuitous assistance be formalized. Purpose - "To replenish working capital."
• The operation is performed once, then no support or separate allocation is required in the reports for the bank or tax office.

2. Coverage of losses
Taxes:
The amount is taxable if the share of the founder is 50% or less.

Accounting entries:

• Debit 75 Credit 84 - as settlements with founders and losses of previous years.
• Debit 51 Credit 75 - for accounting for the deposited funds as a contribution.

Other nuances:

• The deposited amount cannot be returned to the investor.
• The decision of the LLC participants to make gratuitous assistance is drawn up, the goal is "Covering losses of past years".
• The amount should not exceed the incurred losses. Accordingly, if they are not present, such wiring will be unacceptable.
• Such an entry works on the "made and forgotten" principle, since it is recorded only once and does not require maintenance.

3. Contribution to property
Taxes:
The amount is not taxable regardless of the participant's share.

Accounting entries:
Debit 51 Credit 83 - as additional capital funds.

Other nuances:

• The amount is non-refundable.
• The charter should contain a clause on the possibility of adding additional capital.
• If there is a clause, no additional actions with the charter are required (as, for example, in the case of a change in the size of the authorized capital, re-registration will be required).
• Contributions are made by all members of the company and necessarily in equal shares.
• The effective shares of the participants are not changed.
• Such an entry also does not require further support (it is counted once).

Replenishment of the authorized capital
Unlike those indicated above, this is the most difficult way to fund a current account. It requires a change in the charter of the company:

1. It is necessary to organize a meeting of participants.
2. Record its implementation and work out a decision on changing the capital.
3. The new version of the charter must be registered with the tax office, for this you will need to pay the appropriate state duty.
4. After depositing funds, it is no longer possible to return them.

Taxes:
The transaction is not taxable.

Accounting entries:

• Debit 75 Credit 80 - to reflect the debts of the founders for payment;
• Debit 51 (or 50, if through the cashier) Credit 80 - to record the contribution.

Payment for goods / services
Technically, the founder can act as a client and order a product / service by paying for him / her through the cashier or by transferring to the current account.
In this case, the transaction is executed like any other transaction with the client (with a check or agreement).

Refunds can only be made on the basis of consumer protection law:

• if the product or service is of inadequate quality;
• the terms of the contract have been violated;
• the product did not fit (if it does not belong to the list of goods that cannot be exchanged / returned).

How to deposit the proceeds to the settlement account of LLC
If the company accepts cash payments from customers, the funds received can and must be deposited with the bank, which will credit them to the current account of the legal entity.
If you have a cash limit set, then all surplus available at the end of the day must be handed over to the bank (with the exception of payroll days and weekends / holidays).

Banks offer three options:

1. Self-collection, when a company representative (store employee) deposits funds through the nearest ATM.
2. Change at the cash desk of the bank.
3. Cash collection (by a bank or a separate service).

For self-collection, you need a special bank card and a device that accepts cash. There are always restrictions on the amount of input, special rates may apply if the established limits are exceeded.

To visit the bank's cash desk you will need:

1. Power of attorney issued for the employee who will hand over cash (the employee must be appointed to the appropriate position, for which the order of the head is drawn up).
2. Expense cash order (basis for the issuance of funds from the cash desk).
3. Announcement for a cash deposit (many banks require it to be issued in advance through the online banking system, otherwise they may refuse to accept or apply increased commissions).

As a result of the operation, the cashier or ATM issues a receipt for the receipt of funds.
For converting cash, especially small change, higher rates may apply.
The collectors replace the company representative and act as an intermediary. A special contract is concluded for the provision of the service.