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family business capital

Also called: modal bersama

Funds pooled by family members to start or run a shared business.

What it means

Family business capital is money pooled together by family members to run or grow a business. The source can be personal savings, proceeds from selling assets, or an agreed loan. Because it involves several people's money, recording ownership and how the funds are used is key.

Why it matters for families

Without records, shared capital can easily turn into unclear debt or ownership disputes. The family needs to agree on who owns which share and how the funds are returned if the business stops. This clarity protects the household money and preserves relationships.

Example

Two siblings pool Rp15 million to open a small shop, Rp7.5 million each. They record the ownership shares and set aside part of the profit to return the capital. If the business closes, the remaining assets are divided according to the recorded shares.

Common misunderstanding

People often assume family capital doesn't need to be recorded because it's all in the family. The correction: simple records actually prevent misunderstandings that damage relationships.

Related terms

  • profit sharingDistribution of family business profit according to the capital share or an agreement made together.
  • chipping inSplitting the cost of something equally or as agreed among family members.
  • guarantorA person who bears repayment of another family member's debt if the borrower fails to pay.
  • adopted childA child adopted legally or by custom and treated as a biological child.

Definitions in this glossary are educational. For documents that are legally or financially binding, confirm with the party that issued them.

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The calculators and guides here are educational and are not personal financial or legal advice.