What is the diffference between owners draw and owners distributions? Is it just semantics or does it really affect the the balance sheet differently? My understanding is that distributions are monies that the owner has invested in the company?
If the business entity is a sole prioretor, then monies withdrawn from the businees by the owner for his own personal use are called an Owner Draw. Monies paid in by a sole proprietor are called Owner Contributions or Owner Investment.
If the business entity is an S-Corp, then monies withdrawn from the business by a shareholder is called Shareholder Distribution, and monies contributed to the business by a shareholder is called Shareholder Contribution.
You can check with your accountant to get further clarification and to see which applies in your instance.
Andrea
Sublimedove,
A single-member LLC not selecting to be treated as a corporation is the same as Sole Proprietorship.
A multi-member LLC not selecting to be treated as a corporation is a Partnership. Your LLC formation documents control draws, distributions, or guaranteed payments.
You have to work with your CPA or tax accountant.
