Filmmakers gain a huge advantage when they start a film production company. This process allows them to pursue equity-based crowdfunding for larger sums across a wider base of investors than just typical donation-based crowdfunding. It also helps to protect your film and management team, opens additional financing opportunities and makes your projects far more appealing to film investors. You will, of course, need to secure legal counsel to pursue this path, however, here is a high level overview of some of your options and considerations.
After consulting legal counsel, you’ll find the best state (or region in your area) in which to set up your film production company. There are investment and tax implications associated with your choice, so make sure to do your research. Setting up a company protects you personally, as well as your investors and your project, since they are all now separate legal entities. Should anything go wrong with your film production, your investors cannot go after you personally, only the assets of your company. You look far more professional to your investors, making your offer much more appealing and your company name sticks throughout all your films without having to hastily decide working titles for your films.
When choosing the type of film production company to set up, your choice affects the cost of filing to register the company as well as future tax implications. The location of your company will also affect these variables. Should you open an LLC, DBA, C-Corp, S-Corp or other? Only you and your attorney can answer those questions, but here are a few examples of company types from which you can choose:
Everyone loves a good production company name. Try to come up with a an easy-to-remember creative namer, such as Ridley Scott’s ‘Scott Free’, Spielberg’s ‘Amblin Entertainment,’ Drew Barrymore’s ‘Flower Films,’ Jamie Foxx’s ‘No Brainer Films’ and so many more. After some serious brainstorming and creative juice flowing, you’ll want to check if your company’s name is available and trademark it for yourselves at https://www.uspto.gov/trademark.
Running a film production company is serious business, and for that you’ll need to invest in both an attorney and a CPA, who takes your business as serious as you do. Too many filmmakers try and skimp on or skip this step, but it almost always backfires on them and turns out to be more costly than any money they thought they saved up front. If you’re truly dedicated to film production, you need to prove this to your potential investors. Investing in your company up front is the best way to demonstrate you’ve got “skin in the game” and plan to take your investors’ money very seriously.
Now you’ve set up your company, covered all the legal and financial channels and it’s time to start fundraising!!!! Crafting your film business plan is the next step to thinking through your slate of films, how much money you need, the timing and return of investor payback, financial projections and so much more. You will be able to showcase your amazing story and script, the great talent associated with your film, demonstrate your storytelling capabilities by telling your financial story as clear as day and demonstrate with zero doubt that you know how to handle film production money. As we always say, the more serious you are about film investors, the more serious they will evaluate your offer. Once you are prepared, it is quite easy to find investors who are looking for ways to expand their portfolio and a film production company looks good on any investor’s portfolio.
Back to Top Why to Start a Film Production Company
Back to Top Why to Start a Film Production Company
