Hello everyone, I wonder how should I record SAFE investment in my start up to be legally compliant? Should it be share capital (even if SAFE has not converted yet) ?

Answer

Hello there, gabriel

You can create a deposit for SAFE investment funds into a checking account. Before performing this, let’s first set up your partners as vendors and create the equity accounts. This way, you can record properly how much was invested in an equity account, though it hasn’t converted yet. Let me guide you through the steps.

To set up your partner as vendor:

  1. Go to Expenses from the menu.
  2. Select Vendors.
  3. Choose New Vendor.
  4. Enter the necessary info.
  5. Click Save.

To set up equity accounts:

  1. Go to the Gear icon at the upper right.
  2. Select Chart of Accounts under Your Company.
  3. Choose New.
  4. From the Account Type drop-down, select Equity.
  5. Choose Owner's Equity or Partner's Equity from the Detail Type drop-down.
  6. Name the account.
  7. Click Save and Close.

Once done, you can deposit the SAFE investment money into a checking account. Here’s how:

  1. Go to the Gear icon at the upper right.
  2. Select Bank Deposit under Other.
  3. Choose the bank account you're depositing the money into from the Account drop-down list.
  4. Enter the Date you deposited the money.
  5. Type in the investor name in the Received from field under the New deposits section.
  6. Choose the appropriate equity account in the Account field.
  7. Specify a Payment method.
  8. In the Amount field, enter the investment amount.
  9. Click Save and close.

For detailed steps about the processes above, you can go through these helpful articles:

However, I’d still suggest consulting your accountant. This is to make sure your financial records are accurate and legally compliant.

In case you want to get a financial snapshot of your company for a specific date, you can run the Balance Sheet report. It presents your business assets, liabilities, and equity amounts. 

I’ll be right here to help if you need further assistance. Have an awesome day.

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IntuitRaymondJay , Community Support Specialist
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