Capital Contribution Agreement Template (US)
Updated on July 30, 2026
A capital contribution agreement records a member putting cash, property or other assets into an LLC in exchange for a membership interest — or an increase to an existing one. It's the document that ties the contribution to the ownership stake and capital account it actually creates, rather than leaving that connection implied.
The agreement below is the form: type straight into the highlighted blanks, then the company's authorized representative and the contributing member each sign on their own signature line. Download a clean Word or PDF file with no sign-up and no watermark.
Tap any highlighted blank in the document below and type straight into it.Free — no sign-up, no watermark
Capital Contribution Agreement
This Capital Contribution Agreement is made on between , a limited liability company with its principal place of business at (the "Company"), and (the "Member").
1. Purpose
The Member wishes to make, and the Company wishes to accept, a capital contribution to the Company on the terms set out in this Agreement.
2. Capital Contribution
- Type of contribution:
- Description:
- Agreed value:
- $
3. Ownership Interest
In consideration of the contribution described above, the Member's membership interest in the Company shall be, or shall be increased to, %, subject to and consistent with the Company's operating agreement.
4. Valuation
The value of the contribution stated above is based on the following: .
5. Capital Account
The Company shall reflect the contribution in the Member's capital account in accordance with the Company's operating agreement and generally accepted principles for maintaining member capital accounts.
6. Representations and Warranties
Each party represents that it has full power and authority to enter into this Agreement. The Member represents that the contributed funds or property were lawfully obtained and, in the case of property, that the Member holds good and marketable title to it, free of undisclosed liens or encumbrances.
7. Tax Treatment
Neither party provides tax advice to the other under this Agreement. Each party is responsible for obtaining its own tax advice regarding the consequences of the contribution.
8. Confidentiality
Each party shall keep confidential the terms of this Agreement and the Company's financial and business information, except as required by law or the Company's governing documents.
9. General
This Agreement is governed by the law of and, together with the Company's operating agreement, constitutes the entire agreement between the parties regarding the contribution. It may be amended only in writing signed by both parties.
The Company
Date:
The Member
Date:
Why this needs to be its own document
An LLC's operating agreement sets out the ownership structure in general, but a new or additional capital contribution is a specific event: a particular member is putting in a particular amount (or a particular piece of property), at a particular valuation, for a particular resulting ownership percentage. This agreement is the record of that specific event — cross-referenced against the operating agreement, not a replacement for it.
This matters most when a contribution isn't simply cash for a round-number percentage: a property contribution needs an agreed valuation, and any contribution needs to be reflected correctly in the member's capital account so future distributions and allocations are calculated on the right basis.
Cash versus property contributions
A cash contribution is straightforward to value. A property contribution — equipment, real estate, intellectual property, or anything other than cash — needs the parties to agree on its fair market value at the time of contribution, since that value is what sets the member's initial capital account balance and, in many cases, has tax consequences under the Internal Revenue Code that a cash contribution doesn't raise in the same way.
The clauses, explained
- Parties and company
- Identifies the LLC and the contributing member.
- Capital contribution
- Describes what's being contributed — cash, property, or a mix — and its value, with a table if the contribution has multiple components.
- Ownership interest
- States the new or increased membership interest percentage resulting from the contribution, subject to whatever the company's governing documents require for admitting a member or adjusting interests.
- Valuation
- The agreed basis for valuing the contribution, particularly important for property contributions where there's no obvious market price.
- Capital account
- Confirms the contribution is reflected in the member's capital account in accordance with the operating agreement and applicable tax principles.
- Representations and warranties
- Both sides confirm they have the authority to enter the agreement, and the contributing member confirms the contributed funds or property are lawfully obtained and, for property, that they hold good title to it.
- Tax treatment
- States that neither party is providing tax advice to the other and that each should seek their own — capital contributions can have real tax consequences depending on the property involved and the LLC's tax classification.
Requirements checklist
Consistency with the operating agreement
Check the LLC's operating agreement for any procedure required to admit a new member or adjust ownership percentages — this agreement records the contribution, but the operating agreement's own requirements (member consent, amendment procedures) still need to be followed.
Capital account maintenance
Capital accounts are conventionally maintained in accordance with the principles under Internal Revenue Code section 704(b), which is what makes allocations of profit, loss and distributions defensible if ever challenged.
IRC §704(b) — general reference
How to use this template
- Fill in the parties and company. Type the LLC's name and the contributing member's details into the highlighted blanks.
- Describe the contribution. Set the contribution type and fill in the amount or description and the agreed valuation.
- Set the resulting ownership interest. Enter the new or increased membership interest percentage, checking this against the operating agreement's own requirements.
- Sign and download. Both signature lines can be signed on screen — the company's authorized representative and the contributing member — then download the agreement as a Word or PDF file.
Frequently asked questions
Do I need a separate agreement for every capital contribution?
It's good practice whenever a contribution changes a member's ownership percentage or involves anything other than a simple, already-planned cash contribution — particularly for property contributions, where the valuation needs to be agreed and documented at the time.
How do I value a property contribution?
By agreement between the member and the company, based on the property's fair market value at the time of contribution. For anything significant in value, an independent appraisal is worth getting, since the agreed value sets the member's capital account balance and can have tax consequences.
Does this replace the LLC's operating agreement?
No — it records a specific contribution and refers back to the operating agreement, which governs the company generally. Check whether the operating agreement requires member consent or a formal amendment to admit a new member or change ownership percentages.
Are there tax consequences to contributing property instead of cash?
Potentially, yes — property contributions can trigger different tax treatment than cash under the Internal Revenue Code, depending on the property and the LLC's tax classification. Get advice from an accountant before a significant property contribution.
What's a capital account and why does it matter?
It's the running record of a member's contributions, share of profits and losses, and distributions — it's what determines what a member is entitled to on a distribution or when the company winds up. Getting a contribution reflected correctly in the capital account matters for exactly that reason.
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Disclaimer
This template and guide are provided for general information only and do not constitute legal or tax advice. Capital contributions can have real tax consequences and must be consistent with the LLC's operating agreement. Consult an accountant and, for a significant contribution, an attorney before relying on this agreement.
