I'm working on my first documentary. Do I need an LLC?

by Dee
(USA)

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Question: Hi, I'm in process of shooting my first documentary and I'm wondering if I need to set up a company or LLC?

Desktop Documentaries: Yes, ideally, each documentary that you make should have its own LLC. (See answer from an attorney below)

Being incorporated protects you from liability in case there's a lawsuit. (Someone can sue you if they don't like how they were portrayed in your film.) If your film is set up as an LLC or a corporation, if anyone sues you and wins, they don't get your personal possessions, only the assets that belong to the film.

For tax purposes, having a LLC also allows you to take donations for your film without the money going to you personally.

We submitted your question to Washington-based entertainment/sports attorney Jaia Thomas and here's her response:

Law Office of Jaia Thomas | Answer

A Limited Liability Company (LLC) is a hybrid business structure allowed by state statute that combines aspects of a corporation and a partnership. Similar to a corporation, an LLC offers protection from personal liability for business debts.

Unlike a corporation, an LLC is a pass-through tax entity and the profits and losses of the business pass through to its owners, who report them on their personal tax returns just as they would if they owned a partnership.

While a filmmaker is not required to incorporate an LLC prior to filming a documentary, it is strongly recommended. The advantages of incorporating an LLC are two-fold: a). shields filmmaker from business debts or lawsuits against the film/company and b). third-party entities (e.g. distribution companies) are often more prone to work with incorporated structures as opposed to individuals.

While other corporate structures are available – Corporations, Partnerships and Sole Proprietorships, the most commonly used structure by filmmakers is an LLC.

In terms of where to incorporate your LLC, generally, the home state where the LLC will conduct its business is the best choice. However, you are free to incorporate in any of the 50 states. We have included a chart of LLC incorporation fees for all 50 states for your reference.

View the LLC Incorporation Fee Chart

Prior to incorporating, also consider an appropriate name and designated registered agent for the company.

Desktop Documentaries: With the two fees listed on the LLC Fee chart (domestic and foreign).. is it required to pay for both?

Jaia Thomas: No, not required to pay both. Foreign fees are for LLC's incorporated in one state and conducting business in another state (ex: LLC A is incorporated in Georgia but conducts a bulk of their business in New York; the LLC may also be required to pay foreign fees in New York). However, if a state is incorporated in one state and only conducts the bulk of their business in that particular state, they will only be required to pay domestic incorporation fees.

Desktop Documentaries: Is it true that an S-Corp is more appropriate for a documentary that is expected to make big profits?

Jaia Thomas: S-Corps are corporations that choose to be taxed under Subchapter S of Chapter 1 of the IRS. S-Corps are more of a tax entity as opposed to a corporate entity. A corporate entity (whether corporation or LLC) must already exist before converting it over into an S-Corp. I wouldn't necessarily say S-Corps are more appropriate for docs expecting to make big profits; S-Corps are more appropriate if you are looking to bring in shareholders, sell stocks, etc...

About Jaia Thomas

The Law Office of Jaia Thomas counsels entertainment professionals and athletes in areas of intellectual property, corporate transactions and new media.

Website: www.jathomaslaw.com
info@jathomaslaw.com

How To Set Up An LLC

Bizee will form your new LLC business for $0. They handle all the admin – you just pay the state fees.

Set Up an LLC quickly and easily through Bizee

The Business Side of Filmmaking

The International Documentary Association (IDA) held a special panel discussion regarding the business side of documentary filmmaking.

As an Associate at Donaldson + Callif, Chris Perez understands the details of LLCs. Here he emphasizes the importance of keeping personal funds separate from production funds.

Disclaimer: The information provided constitutes general information and in no way constitutes legal advice, nor should it be relied upon as such. Consult an attorney to assure the information provided is applicable to your particular situation, transaction or set of circumstances.

Got an opinion on this issue? Leave comments and feedback below.

Comments for I'm working on my first documentary. Do I need an LLC?

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Apr 18, 2020

LLC Question
by: Nick

Does every LLC you create for a film need there own EIN and registered agent?

Say I own my own production company 123 productions LLC. and I am making a doc about goats, so I create and LLC called Goats LLC, can I use the same registered agent and address I did for 123 productions LLC? Same goes with the EIN.

Thanks Nick!

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ANSWER FROM DESKTOP DOCUMENTARIES: This is a great question for a lawyer. Entertainment Attorney Gordon Firemark has been going live on his Facebook page and you can ask him there! https://www.facebook.com/gfiremark

He's also covered the most common legal filmmaking issues in his documentary legal crash course which you can check out here:
https://courses.desktop-documentaries.com/bundles/documentary-legal-tool-kit

Nov 12, 2019

Thank you
by: Rochelle

Thank you for your commitment to educating people about how to create documentaries [creatively and legally :-)]. I have learned so much and I will always recommend your website as well as use you as a primary resource for creating my documentaries.

Mar 14, 2019

Live in the UK...
by: Senar

Hello,

This is an amazing site, and I've got a lot of value from my purchased courses. Quick question: I live in the UK, but my documentary will be entirely shot in the US, and is about a US subject and person. Where do I need to take out my e & o insurance (or personal liability insurance as it seems to be called over here)? Many thanks!

Feb 26, 2018

I do NOT recommend Legal Zoom
by: Shaye B.

I set up an LLC using Legal Zoom and they were absolutely awful. The upsells are ridiculous and you can actually do everything that needs to be done for cheaper. I found two sites where you can fill out your own Articles of Incorporation and get them for a low price or possibly free:

www.legalnature.com
www.lawdepot.com

However, you'd probably want a real lawyer to look over your forms at some point, especially your contracts and the terms on your website.

It may be better to go into SCORE/SBA or the Small Business Development Corp/SBDC. They have fees but they are markedly less than Legal Zoom's.

Nov 08, 2016

re: tax deductions for gear
by: Shawn

Makes sense. Thanks so much for the thoughts -- I'll definitely talk to my CPA.

Nov 08, 2016

tax deductions for gear
by: Desktop Documentaries

Shawn,
Again, this is not my area of expertise, but let's give this a shot. In order to get a tax deduction, you don't need an LLC. You simply need to register with your state as sole proprietorship and get an EIN (SP is cheaper than an LLC but has less protections). Talk to your accountant, but you should be able to get a deduction for your gear through either your documentary company or production company.

Nov 06, 2016

re: When do you need to create the LLC?
by: Shawn

Great - thanks!

As for the gear question, what I meant was, in addition to the documentary LLC, should I create a production company LLC that would have all of my gear in it, so I could write that off?

Nov 01, 2016

response
by: Desktop Documentaries

Shawn,
Thanks for your question. I'm not a lawyer and will try to get one of our guest attorneys to answer your question. In the meantime, seems it would be better to get an LLC sooner rather than later. As for gear, not exactly sure what you're asking. Buying gear can be a tax deduction no matter which company/LLC you choose to list it under. Seems that's more of a tax/accountant question rather than a legal one. But again, this is not legal or tax advice, just opinion from a fellow filmmaker. Let's see if we can get someone knowledgable in this area to help out.

Nov 01, 2016

When do you need to create the LLC?
by: Shawn

First time filmmaker here. I started a documentary in 2015, finished shooting in 2016 and expect to finish post in 2017. When should I create the LLC to protect it -- now or when it is completed?

Also, I purchased camera equipment. Should this be covered under the same doc LLC or a production company LLC? Does that need to be cover the year purchased?

Many thanks!

Oct 18, 2015

Copyright Question
by: Desktop Documentaries

Regarding how to copyright your documentary idea, here's advice from entertainment attorney Jaia Thomas:

www.desktop-documentaries.com/how-do-i-copyright-my-documentary-idea.html

And here's some additional insight:

www.desktop-documentaries.com/how-to-pitch-and-sell-my-documentary-idea-to-a-tv-network.html

Good luck with your project, sounds like you're on the right path!

Oct 18, 2015

Copyright
by: Filmmaker

Hello,

I am need of some updated information on copyright.

I created a project for a documentary (docudrama 3-part miniseries) which as far as support is concerned is going extraordinarily well. By far, the most appealing documentary I have created to this date. It also has secured funding which would have to be through corporate sponsors and private donations (the production has moved many people to want to support it in many ways and we expect most of the budget to come from donations). I have worked for major networks and production companies but this is my first independent production which I created and will exec. produce.

The project is in writing (treatment, budget, business plan, etc). I know there are two things I should do before going any further:

1) Create a LLC that will allow donations. I already have a LLC but will have to see if it can be used for this project.
2) Copyright the project ---and that's where my doubts are.

How should I go about it? What are the first steps to register copyright? Can I copyright an idea of a documentary? How can I protect the concept and project?

I know there will be quite a buzz around this project so I'd like to protect the content and format. Later, when we begin shooting, I know I will have to get clearances for everything. That I am experienced with. But as my work has always been for a corporation or company I never had to think about registering content and copyright for a project. Legal departments handle it.

I am grateful for any help you can give.
Thanks!

Mar 06, 2015

lawyer
by: Desktop Documentaries

I suggest speaking with a lawyer about question #3.

Mar 06, 2015

co-filmmakers' copyright issue
by: Anonymous

Thanks a lot for your yesterday's reply. I should have mentioned that the film has already been made now, but with no contract signed between me and my co-filmmaker yet. By nature we are equal copyright owners. Now he would like both him and me to assign our rights to a LLD which is solely under his name, the reason he gave is 1. he is the main financier 2. a LLC makes commercial sale easier. Which I am not very keen to follow.

You haven't answered my 3rd question yet, if we remain individual copyright owners (without assigning to his LLC), in that case he refuses to give his consent to entering film festivals/commercial sales, can I do that alone? Any potential risk/copyright infringement I might run?

Thanks a lot.

Mar 05, 2015

LCC vs E&O Insurance
by: Desktop Documentaries

Goodness, are you sure you want to work with this producer? Sounds like there's already some mistrust there.

In any case, to answer your questions.

No, you do not need an LLC to compete in film festivals or to get distribution. An LLC is something that protects your personal assets in case someone sues you regarding your film.

Something you should look into is E&O insurance. Check out this clip from attorneys Michael C. Donaldson & Lisa A. Callif, authors of Clearance & Copyright, 4th Edition: Everything You Need to Know for Film and Television

What Is E&O Insurance And When Do Filmmakers Need It

Mar 05, 2015

co-filmakers' copyright issue
by: Anonymous

I am co-making a film with another person. I am director, he takes producer role. Now he would like both me and him to assign copyrights to a LLC that is solely under his name (one of the terms specify that he can overwrite my name at one point). I see pitfalls in the contract despite that I am not from a legal background, anyway.

My questions:
1. Can we compete in film festivals without the existence of a LLC? 2. Also, can we sell the film to distributors without a LLC?
3. In the worst scenario, as director of this film, do I need his consent to be able to compete in film festivals (because I am afraid, he will pull out if I don't assign copyright to his LLC)

Thanks!

Aug 09, 2013

LLC for film, production company or BOTH?
by: Anonymous

I am setting up an LLC for my first documentary. I am wondering if it is better to set up an LLC under the name of my documentary or my production company.

Or is it better to set two up - one for my productin company AND my documentary. I will be making other documentaries in the future and have read that it is good to have the production company LLC as a manager of each of the film LLCs. That sounds smart, but in NYC anyway, it costs $200 to set up the LLC and then around $1500 to run the announcement of the LLC in two papers for six weeks. So, I want to protect myself legally in the long run, but also wondering if it is recommended to spend this extra $1700+ at the outset for a second LLC?

Thanks for any thoughts!

Apr 30, 2013

My Non Profit Documentary
by: Conscious awareness

Hi I am putting together my first non profit documentary for which I will be filming across and in a few different states which type of LLC would I need?

Nov 26, 2012

LLC clarification
by: Desktop Documentaries

No, the name of the LLC can be anything you want. For example, the name of your documentary could be XYZ documentary. The name of your LLC could be Flower Media. You just need a legal entity to represent your documentary. In fact, your LLC production company could represent numerous documentaries, however, it's safer to have an LLC for each film so that if someone sues you for XYZ film, they can't touch the assets of your other films.

Good luck!

(We are filmmakers not lawyers, so please confirm anything you read on this site with an attorney or contact Jaia directly via above info)

Nov 26, 2012

Does the LLC need to be the name of the Documentary?
by: RuthlessMemories

or should the LLC be the name of the company producing it?

just need that part clarified for me, thank you.

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