cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

Set up owners or partners

new to quickbooks and just started a business. How would you set up partnership with no employees. Do they have payroll or do you just use the equity owner pay? 

5 Comments
Highlighted
Community Champion

Set up owners or partners

What type entity? Just a partnership, LLC, Subchapter S-corp? Makes a difference.

If you are Subchapter S or LLC electing to be taxed as corporation then working partners MUST be paid a reasonabe wage before any distributions. If just an LLC or not formal setup then the partners cannot be on payroll and any money paid to them is draw against their share of profit, which passes through to their personal returns.

 

For each partner you need a set of 4 equity accounts. One top level acts only as summing and is never posted to. Under this parent account are 3 sub accounts, Partner Equity, Partner Draw, Partner Contribution

 

 

Highlighted
Level 1

Set up owners or partners

It is a general partnership with equal shares and contributions.  No employees 

Highlighted
Level 1

Set up owners or partners

Also is draw the same as distribution?

Highlighted
Level 3

Set up owners or partners

yes

Highlighted
Level 15

Set up owners or partners

The Partnership will be filing taxes on Form 1065.

 

The taking of funds for Personal use is Draw from Equity. There are no Distributions from a Partnership. The words "distribution" and "dividend" relate to Corporations. You are not Incorporated.

Need to get in touch?

Contact us