Too late to form an LLC...than what?

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Productionspaceguy

So three filmmakers out of pocketed a no-budget feature (credit or cash). All cast & crew were paid "on deferment" by written agreement.

One filmmaker paid for 63% of the cost, 1 paid about 28% and 1 paid about 9%. Now they are thinking about an LLC with an Operating Agreement reflecting such expenses -- but is it too late to form an LLC?

And if so, what CAN they do?

Advise please!!!

Thanks!

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I don't think it is too late for LLCs . . . but it may be costly to set up after the money has been spent. The primary reason for LLCs is protection of personal wealth in the event someone sues the filmmakers. Otherwise a simple business deal would be enough.

Are you about to be sued? Disgrunted investors, cast or crew?

You may need to speak to a lawyer as suggested.
 
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GuerrillaAngel said:
I don't think it is too late for LLCs . . . but it may be costly to set up after the money has been spent. The primary reason for LLCs is protection of personal wealth in the event someone sues the filmmakers. Otherwise a simple business deal would be enough.

Are you about to be sued? Disgrunted investors, cast or crew?

You may need to speak to a lawyer as suggested.
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Nope. No law-suit or disgruntled cast/crew. The three filmmakers fronted the money out of pocket. No investors. The question of points-ownership was raised, and since there was only a verbal agreement made between them, the LLC concept was asked about. They are pending post-production, now.
 
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An LLC will require a membership agreement, sure, or you could just do a notarized ownership share agreement if that's all you are after.

Seek an attorney.
 
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With such a low budget, though, why are you worried about an LLC now that production is done?
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I agree. No point in giving money to the state and lawyers for an LLC. Nobody is going to sue. If the movie were to get picked up for major distribution then errors and omissions insurance would cover trademark / copyright lawsuits.
 
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Productionspaceguy said:
Nope. No law-suit or disgruntled cast/crew. The three filmmakers fronted the money out of pocket. No investors. The question of points-ownership was raised, and since there was only a verbal agreement made between them, the LLC concept was asked about. They are pending post-production, now.
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There is a specific reason to form an LLC. Is that really what
the three filmmakers feel they need? If they do, then form
one. If it is worth the expense to them, they should do it.

It's difficult to really know what the issue is based on your
posts. I get the impression the three "investors" feel they
need a written agreement defining what the actual contribution
was, the agreed upon ownership and how any profits will be
distributed.

They do not need an LLC for that. They need a written agreement.
 
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You should form an LLC specifically for each and every project. It's not too late and LLCs are CHEAP to get. Go through the secretary of state and it takes literally like 3 days especially if you file online express.
 
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Actually, that's not quite true. Anybody can sue for anything at any time. Whether they can win a lawsuit is another matter. If the filmmakers have all their clearance paperwork in order then the chances of losing a lawsuit is near zero.
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Sure, but this is overkill paranoia. I disagree with this "conventional wisdom" that every filmmaker must always form a corporation, especially for low budget films. In California it costs about $6,000 a year to form, and properly and legally maintain a corporation for about 4 years.
 
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