PRODUCTION TIPS: Should You Form a Production Company?
Here's an excerpt of some advice I posted on Avvo, recently, in response to a filmmaker asking whether they should form a production company or continue working under their own name as a sole proprietor. It seems like a no-brainer and that the answer is yes but I would only say yes, it's worth the time and money if it meets your goals. Check it out:
Basically, whether to form a business entity like an LLC, partnership or corporation or remain as a sole proprietor (which is what you are when you do business "just as yourself") comes down to what kind of goals your production is trying to meet.
You should form an LLC, partnership or corporation if your goals are any or all of the following:
1. raise funds from investors,
2. hire a team of independent contractors or employees,
3. work with business partners and co-producers, writers and directors,
4. avoid risky liabilities that can personally bankrupt you (especially if you are shooting a picture with action scenes or other dangerous components to it),
5. establish a brand presence,
6. obtain a certain level of legitimacy in the business and entertainment community, and
7. take advantage of taxation benefits and deductions.
(This is not an exhaustive list but it gives you an idea of what kind of benefits you get from forming an LLC, partnership or corporation that you may not get as a sole proprietor.)
There are additional strategies that you can use with your productions to help the production save money, reward investors, protect your intellectual property assets and minimize risks which I like to impart to my clients as well. At the end of the day, you should talk with a lawyer who can help you plan and meet your business goals and give you the pros and cons for each type of business entity that will accommodate those goals.
For help in starting and running your film production business from formation to operation to dissolution, contact me at email@example.com or 929.322.3546.
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