I am reaching out to accountants out there. I am trying to develop financials for a start up which is an llc with investors. Profits would be distributed per an agreement. The investors want to see the cashflows that would be distributed. If this distributions is made it needs to be deducted from retained earnings. This would reduce the cashflows. It does notgo under drawings which is the owners’ drawings. Anybody out there that works in structuring deals right now – can you provide some insights?
I don’t know what is your question about? By accounting point of view, there is no difference between term investor into the company and the owner of company. If this start up called for additional capital in the form of venture capital (aka business angels or what else), this venture capitalists are also shareholders but might be preferred share holders for example in case they have priority in cash flow distribution over ordinary share holders.