LLC Formation

[shutterspeed]

Wanted to get some of your thoughts on this issue...

I recently wrote a screenplay which has been generating considerable interest and thus far at least one option contract (still negotiating).

The screenplay is an adaptation of a published story. Through research of my own, I have determined the story to be in the public domain. I also have commissioned a legal opinion by an attorney that expresses the same result.

Would it be a good idea to form and sell the script rights through an LLC in this case? I do have some assets I'm concerned enough to safeguard.

Thanks for the help.

[Plot Device]

Can't hurt. :) If I had the cash I'd do it.

Just pick a name for your company that you'll be comfortable with for a VERY long time.



Perpetual Motion Pictures has already been taken.

So has Dreamworks.

So has United Artists.

And I already have dibs on Sandwich Board Room Productions (the name of my web site).

[nmstevens]

Can't hurt. :) If I had the cash I'd do it.

Just pick a name for your company that you'll be comfortable with for a VERY long time.



Perpetual Motion Pictures has already been taken.

So has Dreamworks.

So has United Artists.

And I already have dibs on Sandwich Board Room Productions (the name of my web site).


A few things. There are numerous consequences and obligations -- tax obligations and other obligations -- that go with doing this which no one here, I suspect, is in a position to answer positively.

You must talk either to an accountant with experience in doing this sort of thing or, preferably an entertainment attorney with like experience (preferably both).

This is not the time for do-it-yourself stuff. It is a realm of countless landmines that can come back and blow up on you when you least expect it.

For instance -- and I'm sure you didn't realize this -- you shouldn't use your own name in your LLC, because it can create contractual difficulties with the various guilds that determine when a given writer, producer or director's *name* -- as distinct from a company's name, can appear in the credits.

Stuff like this is why you *must* talk to someone who knows what he's doing before you get yourself involved in an LLC or get incorporated (I did this when I made my first big sale) or anything along these lines.

NMS

[Plot Device]

Sorry, NM. I haven't beein in business class in over five years now. I do recall something about a minum of (I think) $3,000.00 (or some outrageous amount like that) to start up an LLC, and then some tricky tax rules tacked onto the package deal.

But I like the idea of the protections that an LLC or a corporation can offer. So please forgive my misguided enthusiasm. :)

[shutterspeed]

LLC formation here costs $50. No annual fees. And very simple.

Didn't think about naming the LLC after myself. I'm glad I had always considered otherwise.

I don't really care about tax implications right now. I'm more concerned with adding an extra shell of liability coverage.

As nmstevens mentioned, I just don't want to jump the gun if there are important implications I haven't considered.

[JanDarby]

Talk to a lawyer. This is really not a DIY sort of thing.

Also, it's not at all clear that an LLC will provide any liability protection in a situation where the LLC is owned by one person, and the company's formation could have tax implications, not necessarily for the better, whether you intend them or not.

Consult a professional.

JD, not giving individual legal advice, just general information.

[jonpiper]

If you want to do some quick research, Google: LLC protection.

One of many sites that comes up: http://www.nolo.com/article.cfm/objectID/D7043E4E-91CB-4B29-B8DC0DDA10AD4B3B/111/182/245/ART/

[nmstevens]

LLC formation here costs $50. No annual fees. And very simple.

Didn't think about naming the LLC after myself. I'm glad I had always considered otherwise.

I don't really care about tax implications right now. I'm more concerned with adding an extra shell of liability coverage.

As nmstevens mentioned, I just don't want to jump the gun if there are important implications I haven't considered.


I appreciate that you may not care about the tax implications. The point is -- there may *be* tax implications about which you are unaware, as well as things like filing requirements and other things -- about which the government most definitely *does* care and you can get into trouble if you don't do them.

For instance, when we incorporated, we then, apart from having to file yearly, as private citizens, also had to start filing and paying *quarterly* -- as a corporation.

In addition to that -- you've always heard about "the books" -- corporations have to keep books. They have to hold meetings, have corporate "minutes" of those meetings. Well, a number of those things are legally mandated. Those "books" have to be kept and if you're ever audited, God help you if you don't have the books and if the books aren't up to date.

And that's as true if you're General Motors as if you're "corporation" consists of you and your wife, as in the case of my corporation. Well, we've never had a corporate meeting in our lives. We wouldn't know how to even go about having one. So what we do is we pay a company, essentially to "keep our books" -- to do all that niggling corporate stuff so that we don't have to.

And I suspect that there are going to be comparable issues relating to an LLC. Of course you don't care about them, any more than we cared about them when we formed our corporation, which we did for the same reason -- to protect our assets and because it helped us with our taxes.

But *they* care and if you don't know what you're doing -- or really, know somebody who knows what you're supposed to be doing -- it can really bite you in the behind.

NMS