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Super Explorer ***

Multiple partner equity accounts

I see many posts related to this but I'm looking for a specific example of setting up equity account for business w 2 partners. Specifically, should the distribution and contribution account for each partner all roll up into 1 parent Equity Account?  I included a few examples below and wondering which, if any, is the right approach

Example 1

  • Equity
    • Partner 1 - Contribution
    • Partner 1 - Distribution (draw)
    • Partner 2 - Contribution
    • Partner 2 - Distribution (draw)

Example 2

  • Equity Partner 1
    • Contribution 
    • Distribution
  • Equity Partner 2
    • Contribution
    • Distribution

Or is it a step further with each parent account in the second example, becoming sub accounts of 1 parent equity? 

 

Example 3

Equity

  • Equity Partner 1
    • Contribution 
    • Distribution
  • Equity Partner 2
    • Contribution
    • Distribution

Or something else all together like Contributions and Distributions being the parent with the name of the partner as the sub.

 

Thanks!

 

1 Comment
Established Community Backer ***

Re: Multiple partner equity accounts

Example # 3 looks great!

 

Very smart!!