Anyone run a Single-Member LLC?

thefilmgeek

thefilmgeek

I'm going to be starting up my LLC soon here, and it's going to be just me, Single-Member.

I was curious if anyone already ran one or has experience with being in one. I have a friend helping me set everything up, I was just wondering about some legalities for a single-member LLC.

I've been reading some court cases online of judges kind of bypassing the LLC status liability protection for the single-member for whatever reason.

My main concern is to ensure I'm protected personally from any lawsuits brought against my film that is produced under the LLC production company.
 
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LLC

EvsFX08 said:
That's not what this website states http://www.selfemployedweb.com/s-corp-vs-llc.htm
nor does the IRS see it that way- http://www.irs.gov/pub/irs-pdf/p3402.pdf

Pass through taxation- Profits and losses are reported on individual tax returns. but I do agree with contacting a lawyer, I can not claim to know all the ins and outs of these two.
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I checked out both of these links and neither have anything to do with the point I was making. I was not speaking of taxes, I was addressing the "liability" issue which seemed to be the main concern of the original poster.

You are correct in thinking that with an LLC profits flow directly to the member and are usually reported on a Sched C on his/her personal tax return. Just as in receiving a dividend or salary from a corp though, this is not considered to be commingling of funds. I have several LLC's and write checks to myself out of them, but I never use an LLC business account to pay a personal bill and vice versa.
 
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Filing Tax Return

If your earned income is less than $8950 you do ot have to file a federal tax return. However, ther are some exceptions to this, and one major one for someone who has an LLC is this;

If you have over $400 in self emplyed earnings you must file.

Getting the LLC book is a good idea, but I would really recommend consulting a lawyer in the state you reside. there are all kinds of issues in setting up an LLC. You could do something wrong like not having the wording exactly right and it would come back to bite you later. Its worth having one review the paperwork IMO for a couple hundred bucks.
 
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All the websites I've visited say setting up an LLC doesn't require a lawyer, it's something easily you can do. I'll soon have several books on the topic that come with apparently solid operating agreements (written by lawyers for the books).

I can't really afford a lawyer, just the 35 bucks I spent on books.
 
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Suggested Book

I agree that setting up an LLC is easy. I have set up about a dozen of them here in SC. The forms are right on the Sec. of States site, you fill it out online, and send two copies in with your $110. Voila! LLC established.

One book I will suggest that covers corporations and LLCs and that applies particularly to film, is John W. Cones "43 ways to finance your film". Good book. He discusses the particulars, advantages, and disadvantages of LLc's and corps.

Good luck.
 
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S-Corp is the way to go. Not an LLC. S-Corps pay no taxes, so there's no double taxation. Taxes are only paid (by shareholders) when dividends are paid or when salaries are paid (to employees or contractors).
 
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Blade_Jones said:
S-Corp is the way to go. Not an LLC. S-Corps pay no taxes, so there's no double taxation. Taxes are only paid (by shareholders) when dividends are paid or when salaries are paid (to employees or contractors).
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Yes, but I believe there are strict guidelines by the IRS on how compensation is awarded with S-corps. From the literature I've read, in an S-Corp, compensation has to be directly proportional to the shareholders stake, in other words, if you have 4 people as shareholders, you can't simply divide the compensation up by 4 unless you can prove each person did actually invest 25% equally. An LLC allows for compensation to be distributed as the owner sees fit without regulation. So, there's pros and cons to both.
 
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When I was starting out, I contacted lawyers for the arts in my state. I was able to get a lawyer to work with me and set up an LLC (the right way) for a very nominal cost.

I would suggest checking with your state to find out if they offer a similar program.
 
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