Starting A Film Production Company

Why should you form a business entity — that is, a company — to produce your film?

Theoretically, if you’re producing an independent film, you can have all the people participating in the production – the cast, crew, investors, etc. – sign contracts with you individually, and you can write all the checks from your own bank account. In other words, you can just go forward without forming a production company, and each contract would be signed by, say, “Adam Actor,” and “Producer Paul” — that is, assuming your name is Producer Paul, which obviously it’s not. Or, you can act as a sole proprietor — meaning you can adopt a "d/b/a" or “doing business as” alias for the purposes of producing movies, like “Paul Productions,” and then sign all your contracts under that name.

But normally, you shouldn’t do this, and there are a couple of different reasons. One of them is protection from personal liability. So, if everybody signs contracts with you, Producer Paul, individually, that means that, if someone claims you didn’t pay them the money they’re owed under their contract, they can sue you individually, and go after all of your personal assets – your bank account, investment accounts, your house, and so on.

But suppose you have a limited liability company called Paul Productions LLC that signed the contracts with the cast, crew and the other people involved. In that case, someone claiming you owe them money usually has to sue Paul Productions LLC, rather than you, and has to satisfy any judgment they get out of Paul Productions LLC’s assets.

There are other reasons to set up a production company that’s separate from you, and I’m going to discuss them in this video. Plus, I’m going to talk about how to go about setting up a production company, and some pitfalls to avoid when you’re doing that.

00:00 Protection from personal liability
02:21 Forming a company is good for optics
02:53 What type of business entity should you use?
05:36 Forming a separate LLC for each film
07:29 One LLC can own other LLCs
08:02 Creating an LLC
10:35 Operating an LLC
11:40 Make sure you treat the LLC as separate from you personally

Follow us on social media at:

Facebook:   / filmtracts  
Instagram:   / filmtracts  
TikTok:   / filmtracts  

Disclaimer: This channel includes only general information on commonly encountered legal issues, and does not provide legal advice. The law is a personal matter, and no general information like the kind provided on this channel can fit every circumstance. Therefore, if you need legal advice regarding a specific issue, you should consult a licensed attorney in your area.