Hey everyone, I'm new to the forums! I'm starting a production company with a director friend of mine. I'm thinking of forming it out of state (I'm in Los Angeles) and then apply as a foreign LLC to do business in California. This way I won't have to pay the $800 fee until the company is completely ready. Does anyone know how long it takes for a foreign LLC to be approved after the paperwork is filed?
Foreign LLC in California
- Thread starter Dession
- Start date
I'm sure Nevada and all of the other states are nowhere near as slow and bureaucratic as California. Just be sure to have a mailing address and phone number in the other state, otherwise a litigant will just pierce your corporate veil. Also accountants and attorneys are telling people to go with S-Corporations these days. I don't know the finer points as to why. Just look into it.
Also a lot of people in this forum just have a knee jerk reaction to incorporate. If you are doing a really low budget movie is it really necessary to incorporate? You are going to have your shoots insured, so what are you worried about getting sued for? Do you even have money to sue for?
Also a lot of people in this forum just have a knee jerk reaction to incorporate. If you are doing a really low budget movie is it really necessary to incorporate? You are going to have your shoots insured, so what are you worried about getting sued for? Do you even have money to sue for?
I can talk to an accountant and see what they say about an LLC vs. an S-Corp. I did some research and a LLC seemed like it might be more of a fit, but I'll double check.
I more want to create the production company so we can be a legitimate business. We are going to start advertising and offering services to help people create projects with our equipment/crew and eventually when we raise enough funds start working on our own projects. I'm also going to be buying a lot of equipment this year and I'd love to be able to write those off and which ever other business expenses will arise. And no I don't really have money to sue for
. You're probably right though, the shoots will be insured so it may not make sense to incorporate right now in the beginning stages.Seeing as you're in LA too, what's a good insurance company for films that isn't too expensive?
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When you say "foreign" do you mean out of country?
I have several Nevada LLC's.
I honestly don't remember how long it took to file the papers. Are you
on a strict time line? Do you need the papers quickly? I suspect they
offer expedited service for a fee.
When do you need the final paperwork to be filed?
I honestly don't remember how long it took to file the papers. Are you
on a strict time line? Do you need the papers quickly? I suspect they
offer expedited service for a fee.
When do you need the final paperwork to be filed?
I'm not strict on the timeline at all. My plan is to create a Nevada LLC/S Corp, get a bank account for the company, then gather our funds, buy more equipment with the business bank account, and then apply as a foreign LLC/S Corp in California so I can start doing work here.
I don't want to initially file in California due to the $800 fee that is due 4 months after creation. I want to have a little more buffer room to get everything settled (in case it takes more than 4 months) and make sure we're ready to make money straight out of the gate. I'm curious about the timing because I don't want to negotiate a job, then have to wait over a month before I can legally do work in CA.
The Filmmaker's Resource (West Hollywood, CA on Sunset Blvd) insures indie film shoots. Ask camera rental places for names of other companies that insure shoots.
If you want to write off investment in the movie (as a stock loss) then incorporating DOES have value.
But I see a lot of people shooting shorts or microbudget movies who just worry about liability and so they incorporate like it's a religious ritual that MUST be done. But you don't need to have insurance for everything "business". You're probably more likely to get into a fight with some homeless guy outside a 7-Eleven than to get sued for big bucks making an indie movie. What ARE YOU going to get sued for that would be devastating to your wallet that would cause you to close shop? The only thing I can think of is copyright or trademark infringement? So do a script clearance... sanitize your script... create fictional products to use in your movie. If your movie actually were to get picked up for distribution then you'll probably need errors and omission insurance anyway. Anyway my point is that for most low budget productions, incorporating is overkill if liability is the reason for incorporating.
Sounds like a fine plan.
In my experience it will take less time to complete the filing
than it will to gather funds. You could start the process right
away.
Are there any other states that charge a massive mandatory $800 a year tax? California is great at scaring off business.
I've seen $200 in another state (can't remember which one). But as far as I can tell no other state gets close to $800. If you're a corporation in CA you don't have to pay the $800 for the first year. I don't know why LLC's must pay it within the first 4 months of starting up, and then again whenever April 15th hits.
The $800 is only delayed. You'll pay $1,600 the next year. There's also lots of other fees and crap. When I had my S-Corp it cost me about $1,500 a year to maintain it. I made the mistake of listening to a lawyer who wanted to make money off of me. He pretty much painted this picture that you MUST incorporate if you want to be in business or you could easily lose everything. Not true at all. Lawyers don't make money if you don't incorporate so don't listen to them.