Setting Up an LLC
Unless you are making a feature film for less than $5,000, then spending $200 on setting up an LLC, or Limited Liability Company is a requirement for several reasons.
For one, it gives you a layer of personal legal protection in case anything goes wrong, and chances are something will go wrong. If something horrible happens, you and your personal assets are safe and protected.
Second, it gives you a clear financial advantage, both from a budgeting perspective and from a taxation perspective. As the owner of an LLC, you are saving thousands of dollars in taxes and are able to deduct all sorts of different expenses that are related to your movie or to movie-making in general.
And third – it protects you from surging insurance prices on future projects if anything does go wrong and you become the subject of a claim. This is the equivalent of paying higher rates on health insurance because you have a pre-existing condition.
Setting up an LLC should be one of the first things you do once you decide to greenlight your film. It also gives you the power to set up a separate bank account, which makes you more budget-conscious, responsible, and transparent with your funds.