The Guerrilla Rep
The Guerrilla Rep
  • Home
    • About
    • In the Press
  • Blog
  • YouTube
  • Projects
    • Cicada Moon
    • Film Insight
    • Events >
      • Producer Foundry >
        • Producer Foundry Pitch Workshop
      • Archieve
  • Resources
  • Contact
  • Submit
    • Early Stage
    • Completed
  • COVID-19
    • COVID-19 News/Affects
    • COVID-19 Resources
  • Home
    • About
    • In the Press
  • Blog
  • YouTube
  • Projects
    • Cicada Moon
    • Film Insight
    • Events >
      • Producer Foundry >
        • Producer Foundry Pitch Workshop
      • Archieve
  • Resources
  • Contact
  • Submit
    • Early Stage
    • Completed
  • COVID-19
    • COVID-19 News/Affects
    • COVID-19 Resources

How to Legally Structure Your IndieFilm Production Company

3/7/2018

2 Comments

 
Picture
​I’m not a lawyer, but I get a fair amount of questions about the legal structure of a Production company and a film.  So I thought I would write a blog about how I’ve learned to structure each individual entity, as well as the benefits and drawbacks of each choice.

Generally, you’ll want to have one legal entity that exists as your production company, and one legal entity for each project you produce.  Generally, your production company will be a general partner in each project, and when each project has run it’s course, the entity will be dissolved.   If you’re producing episodic content, you can probably get by with one entity per season.
Picture
Before we get started, I’d like to reiterate that I’m not a lawyer.  You should definitely talk to one before you proceed in forming a business. ​

LLC>LP

The way I was originally taught was that your production company should be a Limited Liability Company (LLC) and your projects should each be Limited Partnerships (LPs.) In this instance, your production company would be the General Partner, and all of your investors would be limited partners.  This structure offers you better creative control, shields the assets of your investor in case something goes wrong. 

​The way that your creative control is protected is that only the general partner can make important decisions regarding running the business.  As such, any important creative decision remains with the general partner.  In exchange for the limited liability protection, your investors are treated as silent partners, and unable to heavily advise on the day to day operations and decision making of the company. ​

​Given that the General Partner is your production company, your personal assets are still protected. 

​However, I will admit that I’m just about the only person I know (aside from the teacher who taught it to me) that favors this structure.  Most producers I know favor the following structure.

LLC>LLC

The Production Company LLC being the general partner of the film’s LLC and all of the investors being considered full partners in the film LLC is the most common structure I’ve seen in my time in California.  The big benefit here is simplicity.  Investors are treated the same way that the general partner is, and everyone benefits from the pass through nature of the entity. 

The assets of your production company are also better protected here is things go awry, but the investors are not forced to be silent.  This can lead to less creative control for the filmmaker, however if you were going to run into this with the film being a Limited Partnership, it likely would have ended just as poorly as it would end in this scenario. 
​

S-Corp/C-Corp

Finally, the other primary way you could structure your film is as a corporation.  Either an S-Corp or a C-Corp.  The primary reason you would do this is to issue lots of shares to potential investors. Practically speaking this would mean more than 10-20 individual investors.  This is relatively unlikely for most filmmakers.   

Corporations also encounter additional accounting challenges, and in many states additional taxation beyond that of an LLC.  Corporations are subject to corporate accounting, and then payroll is generally issued as an individual check.  For an LLC, you can pass your income through to yourself, which makes tax time much easier.  LLCs provide most of the same benefits that you would actually use as a media production company/media project.

Thanks for reading!  If you like this content, and want more of it, you should support me on Patreon!  You’ll get lots of great perks including access to me on a livestream, Access to my ad-free blog, or you could even get your name and a link in my blog!  The biggest benefit you get is that you enable me to continue creating great content like this, that I’ll keep giving away for free.  Check it out and become a patron!

Visit me on Patreon!
Picture
If you have a specific question for me, you should consider booking a FREE Strategy Session!  In that session, I'll help you figure out the path to becoming a fully capable executive producer, and I'll help you take the next steps on that path.  If you’d would like me to consider representing your project to sales agents/Distributors, then submit it through the button below. ​
Picture
Picture
Picture

Right Below our Sponsors (Who you should visit!)

2 Comments
Josh link
10/15/2020 06:05:56 am

Hi. I would love to discuss this in more detail if possible. I'm currently building a business plan for an indie and deciding on our LLC format. We are confident in our ability to raise money, however one thing is clear we are not willing to negotiate creative control or final cut.
Any thoughts on this?

Reply
dissolve an llc in new mexico link
6/23/2021 05:58:10 am

"You'll want one legal entity to exist as your production company and one for each project you produce. In general, your production company will be the general partner on each project. , and once each project has run the company will be dissolved." I still don't understand the problem.

Reply



Leave a Reply.

    Author

    My name is Ben, I'm an Entrepreneur, Producer's Rep, and Author.  I'm the founder of Guerrilla Rep Media, Co-Founder/CMO of ProductionNext, and founder of Producer Foundry.  Together, the organizations seek to help make filmmaking a more economically sustainable endeavor.  I am dysic, I have capitalization issues, and the blogs are often unedited. opinions all my own.

    View my profile on LinkedIn

    Join my Mailing List for FREE Resources!

    I'm happy to offer a FREE Resource Package to anyone who joins my mailing list.  You'll also recieve monthly digests of my articles and other valuable resources.
    Sign Up!

    My Books

    Picture
    Find it at
    Your Local Library
    Books Inc
    Barnes and Nobles
    ​Amazon

    Audiobook Free through Audible.com

    Picture

    Available exclusively through Amazon.com​

    Archives

    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    October 2016
    September 2016
    July 2016
    June 2016
    April 2016
    February 2015
    August 2014

    Categories

    All
    Affiliates
    AFM
    Aggregation
    Angel Investing
    Angel Investment
    Audience Engagement
    AVOD
    Branding
    Business Plan
    Business Planning
    Career Growth
    Community
    Contracts
    Crowdfunding
    Data
    Deck
    Distribution
    Distribution Agreements
    Distribution Deliverables
    Distributors
    DVD
    Email Marketing
    Entertainment
    Entrepreneurialism
    Executive Summary
    Film Budgeting
    Film Distribution
    Film Festivals
    Film Finance
    Film Financing
    Film Industry
    Film Investment
    Filmmaking
    Film Marketing
    Film Markets
    Film Money
    Financing
    First Feature
    Genre
    Grants
    Grantwriting
    Hustle
    Indiefilm
    International
    International Sales
    Look Book
    Markeing
    Marketing
    Marketing Materials
    Packaging
    Packaging Documents
    Physical Media
    PR
    Press
    Producer's Rep
    Publicity
    Sales Agency
    Sales Agents
    Screenplay
    Script
    Self Distribution
    Short Films
    Social Media
    Staged Financing
    Studio
    SVOD
    Tax Incentives
    Technology
    Terminology
    Transparency
    Venture Capital
    Waterfalls

    RSS Feed

Home

About

Services

Menu

Contact

Copyright © 2019 Guerrilla Rep Media.  All rights reserved