Or, you can choose your state from the list below to start an LLC yourselfįor most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.Īll businesses need insurance to protect their business assets - even LLCs.You can hire a dependable LLC formation service to set up your LLC for a small fee.There are two options for forming your LLC: Credibility plays a key role in creating and maintaining any business.īusinesses gain consumer trust simply by forming an LLC.Ī growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.įorming an LLC is easy. Credibility and Consumer Trustįilm production companies rely on consumer trust. Our How to Start an S Corp guide will lead you through the process. You can start an S corp when you form your LLC. We estimate that if a film production company owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status. To offset these costs, you'd need to be saving about $2,000 a year on taxes. In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform. S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums. S corp status allows business owners to be treated as employees of the business (for tax purposes). Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.Īn S corporation (S corp) is an IRS tax status that an LLC can elect. The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes. This means that the business's net income passes through to the owner's individual tax return. LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. LLC Tax Benefits and Options for a Film Production Company To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil. The store owner sues your company for the damages.Īn LLC will also protect your personal assets in the event of commercial bankruptcy or loan default. With limited liability protection, your personal assets are protected from legal action, and only the business assets will be held liable.Įxample 4: While filming a scene on a city street, a contained fire outbreak gets out of control and ends up destroying a nearby store. The studio decides to sue your company for breach of contract. Limited liability protection ensures that the lawsuit will have no effect on your personal assets.Įxample 3: Your film production company is contracted to create a full-length feature film for a studio, but your team cannot deliver within the required timeframe. Your company is sued for damages and medical costs related to the injury. With an LLC structure in place, the company’s personal assets are protected from legal action.Įxample 2: A camera operator working on a film production is critically injured due to faulty equipment. The locals sue your company for obstructing their business during the time of the shoot. Unfortunately, the team was unable to complete their shoot and must return at a later date. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.įilm production companies will benefit from liability protection because of the risk of trademark infringement, property damage, libel, and personal injuries.Įxample 1: Your production company is filming in a remote location for a TV show. LLCs provide limited liability protection. Protect your savings, car, and house with limited liability protection.LLC Benefits for a Film Production Companyīy starting an LLC for your film production company, you can: You should start an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility. LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes. Should I Start an LLC for a Film Production Company?
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