Film production companies rely on consumer trust. Credibility plays a key role in starting and maintaining a business. Film production companies enjoy liability protection due to the risk of trademark infringement, property damage, defamation and personal injury. LLC also adds professional influence over your customers and helps you attract investors by making your business more reliable in their eyes. Learn more about the benefits of film production company LLC. Limited liability protection is important to ensure that lawsuits against the business do not affect the owners` personal property. Other benefits of LLCs include the ability to share profits as members deem appropriate, far fewer records and documents than other corporate structures, and the ability to apply for S-Corp status for tax purposes (a lawyer may advise). Disadvantages to consider include taxing the self-employed for Medicare/Medicaid and Social Security, and the short lifespan of an LLC; if one of the members decides to leave the corporation, the LLC must generally be dissolved. If you know that your film production company relies on external investors, then a company might be the right choice. The film industry is changing. We no longer see the days when screenwriters bought a script in Hollywood in the hope of attracting the attention of a large production studio. Instead, this model has tipped over. The films are primarily aimed at captivating an audience, without the help of the studios.

Technology and social media have made this possible. The LLC: For most independent filmmakers, a limited liability company is the best choice for starting a film production company. It can be taxed either as a company or as a partnership, and its exploitation agreement is more flexible than the company`s articles of association to structure the commercial activities of the film company. Like any other business or start-up of a new business, the first question an entrepreneur faces is how to organize the structure of the business. The same goes for independent filmmakers when setting up a production company. The best choice of business structure depends on the filmmaker`s goals, which balances four considerations: control, financing, responsibility, and tax obligations. Often, these four areas are in conflict. The filmmaker must determine the nature of the project early in its existence, as planning decisions may dictate some of the subsequent decisions available to them. But business organizations can change as the situation evolves. Film production companies make money by producing and selling video content such as movies, TV shows, and commercials to customers. This can be for a flat rate or an hourly rate, depending on the project.

The LLC: For most independent filmmakers, a limited liability company is the best choice for starting a film production company. It can be taxed either as a company or as a partnership, and its exploitation agreement is more flexible than the company`s articles of association to structure the commercial activities of the film company. The personal liability shield is effectively the same as a company. Many filmmakers also hope to create an ongoing film company in hopes of creating multiple projects, but they must keep the investments of each film project separate to ensure that the profits from each film are distributed to investors in a particular project. To achieve both goals, a popular structure is to form a parent company formed as an LLC to own and be operated by the production team or an individual film entrepreneur, and then this umbrella LLC will be the sole manager of a second LLC formed to finance, develop and distribute a particular film. The investors in the film are members of the second LLC. Nevertheless, a different structure may be preferred. It depends on the composition of the filmmakers and investors. For films that are heavily funded by external investors, the traditional form of business may be the best. Investors may often be reluctant to participate in an LLC and may prefer a more traditional corporate structure to buy shares that invest in an LLC. Some of the main operating costs of a film production company are payroll, insurance, office space rental, and travel.

Question: Hello, I`m making my first documentary and I`m wondering if I need to start a business or an LLC? Office documentaries: Yes, ideally, every documentary you make should have its own LLC.