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Capital Account

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Home Startup Terms Glossary Capital Account

What is a Capital Account?

Capital accounts are those containing a startup’s cash and assets. Owners can use a capital account to fund operating expenses and earning revenue. The amounts reported don’t always reflect a startup’s market value due to several accounting principles.

Still, they will tell investors about how much the owners have invested.

Different types of businesses that use capital accounts include:

  • Type 1. Sole proprietorships and freelancers
  • Type 2. General, limited, and professional partnerships
  • Type 3. Limited liability companies (LLCs)
  • Type 4. S-corporations
  • Type 5. Family and business trusts

Capital Account Examples

Examples of capital accounts include:

  • Example 1. The bank account that contains Uber's operating cash.
  • Example 2. The bank account that contains DocuSign's operating cash.

This article also talks about capital accounts.

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