The creative side of the filmmaking business is obviously important, but equally vital to being successful is the business side. One of your top priorities should be to make sure you’re protected from being personally liable if anything goes wrong. One way to do this is by forming an LLC or Limited Liability Company.

It may sound intimidating at first, but it’s actually a fairly common process. LLC’s are quite easy to setup and reasonably simple to maintain. And while you may not think you need to form one, you should strongly consider it. There are many aspects of filmmaking, including equipment, investments, crew, and staff issues, that could go wrong. LLC’s can protect you in myriad ways, provided you set them correctly and obey the law. *

Here are five things to consider if you’re starting your own company and forming an LLC:


1. Have a good company name

Make sure you put a lot of thought into coming up with a company name. The ideal name is both memorable and unique. An alliterative or well known phrase will be memorable, as will a simple, evocative word (Lunacy, for instance!). A unique name might make you easier to remember and to search (it worked for Google). But before you get too far into the process, be sure the name hasn’t already been taken. Visit your state’s Secretary of State database to see if the legal name (e.g. Company Name, LLC) is available.

2. Choose your state wisely

In what state will you be doing most of your business? In what state do most of your investors live? Do any of these states have potential tax benefits vs. others? Where you choose to form your company can be just as important as the type of entity you create. Each state has it’s own idiosyncrasies and filing requirements. And annual fees can vary widely from state to state. Do your homework!

3. Know who you are and where you are

The term is “Articles of Organization and Registered Agent”. This simply refers to paperwork that has the address of your company’s headquarters and the person in charge of receiving notices. Know this information before you go through the steps of forming your LLC. If you’ve got your ducks in a row, filling out the paperwork will be a breeze.

4. Get an attorney

Again, forming an LLC is fairly easy, but some of the paperwork can be complicated. For example, you’ll need a series of LLC Operating Agreements. These are the rules and regulations for your company. While it may not be necessary when working solo, it’s absolutely essential if you’re going into business with friends. The Operating Agreement explains who’s in charge, how votes are cast, and basically covers the managerial power structure of your company. It also determine how revenues are distributed. These are all a necessary part of doing business and are all issues that could lead to problems when mixing friends and business. That’s why it’s important to have a lawyer who can guide you, or at least look over the details.  

5. Understand your obligations

LLCs must file tax returns every year. This usually means paying a filing fee, even if you don’t make a profit. Give yourself enough time to prep and save money throughout the year for the franchise tax dues (California’s is a minimum of $800). Most importantly, keep good records!

By staying organized and knowing what to anticipate, you can make the paperwork part of doing business easy. Now all that’s left is dedicating yourself to what you really want to be doing… making films!


Want more information on this topic? Check out Stu Pollard’s guest post on Starting a Production Company, from our friends at Film Independent.


*  Please note this post, nor any of this blog, should be construed as legal counsel or a substitute for legal advice