Forming an LLC for your movie
There are so many moving parts when you film a movie, from personnel to finances. As an indie filmmaker, you are taking a risk when you decide to make a film, and there are steps you can take to protect yourself. It’s not a sexy topic, but today we’re attempting to answer the question: should I form an LLC for my movie?
I’m a filmmaker, not an MBA; what exactly is an LLC, anyway?
Good question! An LLC is a limited liability company, a business structure that’s unique to the US. An LLC protects its owners from any personal responsibility from its liabilities. This means if, in making your movie, you default on a debt or someone sues you, your home, car, and personal finances won’t be affected. Additionally, LLCs don’t pay taxes directly; profits and losses flow through to the owners, who report it on their own tax returns.
Simple enough. So why would I want one for my movie?
While it’s not required to form an LLC for your movie, we certainly think you should be considering it. Remember, an LLC protects you from being personally pursued if something goes wrong with your movie. That means that if a crew member gets injured on set and they sue, they can’t come after your personal assets, like your home or your car. It also means if you have a debt associated with the movie that you can’t pay, no one can come after you personally. It also makes taxes easier; remember, you can personally report profits and losses on YOUR tax return. It also makes a lot of processes simpler and cleaner; for example, it makes it easier to work with unions and guilds, and it self-contains all liabilities into one entity, which makes it easier to get insurance.
This sounds complicated.
I promise it’s not! Setting up an LLC for your movie is actually quite simple. First of all, almost anyone can be an owner of an LLC, including other LLCs! So even if you’re working for a film company, it may be worthwhile to form an LLC specifically for your movie. Secondly, forming an LLC only takes a few days. After you choose a name (this one’s easy–just use the name of your movie!) you typically file articles of organization with the state, and you pay a fee. Last, you file papers and pay a fee on a federal level. The specifics vary from state to state, so google how to form an LLC in your state specifically and follow those instructions, but this is the basic format you’ll follow.
Although it’s not a requirement by any means, we certainly hope you’ll consider forming an LLC for your indie film! Drop a comment below if you’ve ever done this, or if you have questions about the process.