When is a production "company" an actual company?

[DrOddbody]

I see a lot of "productions"/"pictures"/"films" on this forum - B and D Films and Three Amigos, for example. I was wondering if everyone's production company is official in anyway. Obviously something like NextNewNetworks is a "legit" company with a health plan and company picnic (I have seen Erik tooling around the streets of Manhattan in a limousine made out of a single giant diamond.)

I was just wondering for all the private, independent producers out there how did you "incorporate?"

(It should be noted that I work at one of the biggest financial corporations on the planet.)

[HunnyBunchFilms]

It kind of depends on recognition and how far the work you do goes.

[DeadFishProductions]

I think setting it up as a company works in the same way as setting a company for anything else. Buy some business start-up books.

[jburas]

When you start paying taxes :P

[NaziActionFigure]

No one here has a legitimate production company.

[17thletterfilms]

No one here has a legitimate production company.


1.a number of individuals assembled or associated together; group of people. 2.a guest or guests: We're having company for dinner. 3.an assemblage of persons for social purposes. 4.companionship; fellowship; association: I always enjoy her company. 5.one's usual companions: I don't like the company he keeps. 6.society collectively. 7.a number of persons united or incorporated for joint action, esp. for business: a publishing company; a dance company.

[Whole Milk Productions]

No one here has a legitimate production company.


and won't for some years too, if anything.


Sounds hypocritical seeing as my name here is Whole Milk Productions, everyone here just chooses stuff like that as a name to work under.

[Doctor Webley]

Every company here is technically legit. There is no fine line between companies and non-companies, true you may be too small to pay taxes. But you don't need health care or a business plan to be a company.

com·pa·ny noun.:
1.a number of individuals assembled or associated together; group of people. (Courtesy of www.dictionary.com)

I think everyone here fits this definition.

[jburas]

Usually a production company is actually what's called a Limited Liability Corporation (LLC). Normally the only thing that is required is filling in a form at your state's filing office and paying registration fees. After filing, you sometimes need a business license before you can begin operating. After that, keep track of your spending and pay taxes. There's not much more to it.

[moustrapfilms]

Yeah, the simple difference is basically whether you pay to be recognized or not.

[NaziActionFigure]

com·pa·ny noun.:
1.a number of individuals assembled or associated together; group of people. (Courtesy of www.dictionary.com (http://www.dictionary.com))

I think everyone here fits this definition.
Yeah, they do, but that's only the definition of company, not production company. If you and a group of friends make films, you're filmmakers, not a production company. If you and a group of friends pay other people to make films, you're a production company.

[next-tarantino]

Yeah, they do, but that's only the definition of company, not production company. If you and a group of friends make films, you're filmmakers, not a production company. If you and a group of friends pay other people to make films, you're a production company.



Yeah, I kind of agree with you on that. Although, I think if that group of friends regularly makes films and whatnot, then that would make it a "production company."

I wouldn't call a group of people that makes one movie a production company.

[Atomic Samurai]

Usually a production company is actually what's called a Limited Liability Corporation (LLC). Normally the only thing that is required is filling in a form at your state's filing office and paying registration fees. After filing, you sometimes need a business license before you can begin operating. After that, keep track of your spending and pay taxes. There's not much more to it.

I think this pretty much nails it on the head. We (some friends and I) formed an LLC here in Nebraska. We had to write up some By-Laws and File with the state. It would be wise to get a lawyer but if you can't afford one then there are books you can get to help you write a basic one up. This is mainly to protect you from each other because if things go bad it will get ugly real fast. Now this is just to start. Then you have to file with the state.

Here in NE it was $100 to file plus $5 for every sheet of paper in the filing. We got a form online from the state website and filed it out. It cost a total of $115 for us to file. Then, by state law, we had to buy in to our company. This money is basically your company's capital. Since it is $100 minimum to open a Business account at the bank every body bought in for $25 for 25% of the company. (Special note: the state may want you to pay for a name search to see if the name you wish to use isn't already being used. More times then not this is just a formality if you are pretty sure your good then skip it. We did.)

So that was it, for $215 ($53.75 per person) we became a legit LLC. After that we got a Federal Employer Identification Number and a State Tax ID number. Both you can apply for with online forms.

The thing to remember is once you file you MUST file a Tax form for the company every year regardless if you make money or not. Plus every "Member" must get a K-1 form (A W2 for LLCs) because it counts as a job. Taxes for an LLC are pass through so each member must pay his fair share of the taxes you make in a given year. If he bought in at 25% then he must pay 25% of the taxes. The nice thing is you can write off camera, computers, or just about anything else you purchase for use within the company. For example, if you purchase a camera with your own money (Not through the business) for $5000 then you can write off $2500. You may not get the entire amount back in your refund but it helps.

When the company starts to make money then you can use the profits to improve the business. If you sell a movie for $10,000 and your profit is $6000 then you buy a new camera for $4000 before the end of the year then you would have to pay taxes on $2000 which would pass through to the "Members". Each paying 25% of what is owed. If the company goes tits up then the camera must be liquidated in some why to either help pay off the debt, if any is owed, or to pay off the members if the company is in the black.

It can really get confusing if you don't know what you are doing. I don't recommend forming an LLC unless you are sure you can make money from your company. Sometimes people form an LLC just to make one movie then dissolve it after the movie is made and the investors are paid. It is also important to point out just forming an LLC doesn't automatically protect your intellectual property. It would be wise to register scripts and treatments with the WGA or the Library of Congress. It is also wise to get an agent. Those you can get just by calling them up and setting up a agreement. Mine just take my scripts and passes them around, if one sells he takes his standard fee which I believe is about 12% but don't expect any personal friendships to blossom until you sell something. Sometimes it's 2 weeks before I even get an email back.

If you have any questions just ask and I'll try to help but remember I'm not a Lawyer and everything I have learned I learned by researching the internet and asking questions to other business owners.

I hope this helps.

[DrOddbody]

All of this is great - thanks everybody.

[bubblefax]

I production company is liget company when it makes a film.