A capital contribution is an act of giving money or assets to a company or organization.
There are basically two contribution agreements, the ones that require a debt from the business (loan) and contributions that lack the characteristics of debt, such as a date of execution, interests and the capital doesn’t necessarily have to be paid back.
An agreement for a capital contribution is usually made with an investor but it can also be made with someone who's interested in partnering with your company.
Both types of contributions are represented by the Liability account type (yellow) which represents a permanent credit account.
The difference between how we register both contribution types on Bkper is that debt agreements are included in the Equity group and that none debt agreements are not included in the Equity group.
None debt contributions increase the Equity of the business and they do not appear as “account payable” on the balance sheet.