Patryk_Rebisz
Veteran
Anyone here has dealt with creating an LLC? I was told that you need to publish statement about creation of the LLC in county publication. IS that correct?
LLC question
- Thread starter Patryk_Rebisz
- Start date
Barry_Green
Moderator
Every state is different. Figure out what state you're creating it in, then go to the secretary of state's website and look up the requirements.
Tommy K
Well-known member
That isn't a requirement for the state of Delaware where we have our LLC registered. Delaware is probably the easiest state to get an LLC registered and maintained. We use a register called The Company Corporation based in Wilmington DE. They do everything for us. If you are looking for a relatively cheap and no fuss way to form an LLC, I highly suggest you go this route.
Barry_Green
Moderator
But if you form a corporation or LLC out of the state you intend to be doing business in, you're going to have to register that out-of-state corporation in the state you're shooting in. Which may be trivial or it may be expensive.
WhiteMonkey
Well-known member
Legal Zoom - $500
worked for me.
worked for me.
Mark Harris
Pain in the ass
Yes, you have to publish in New York. It's one of those old, useless laws designed to just pad the pockets of cronies. I publish in two Brooklyn neighborhood papers. But get a kit or a lawyer.
Crafters of Light
Active member
Aweitzel13
New member
I'm relatively new to film making, but I'm very experienced on the legal and business side. The actual creation of an LLC is the simple part. Generally, you file Articles of Organization with the state's Secretary of State or other similar office. If you do a quick search on the relevant SOS's website, you can find a number of samples that will help you draw up the necessary paperwork. Most states have a small filing fee - somewhere around $50 for the actual filing. Filing your Articles of Organization is the action that creates the company as a new, legal entity separate from its owners. As part of the process, you have to designate a Registered Agent - that is the person or company located within that state who will agree to accept service of process (accept the papers if you ever get sued) and official notices from the state. If you are registering your LLC in the state in which you are located, you should be able to serve as the company's Registered Agent. If you are going to set up a Nevada or Delaware LLC (and you are not in the state) you can pay a company, such as the Corporation Company, or person to serve as the company's Registered Agent. There are several in Delaware and the typical fee is around $100 per year.
The real challenge in setting up an LLC is not the state filing, discussed above, but the preparation of an Operating Agreement. That is the document that governs the relationship between the members (owners) of the company. This is really the most important part of setting up an LLC and is where the attorney's fees are typically earned. This agreement should describe how the net profits and losses of the company are distributed for book purposes (actual cash) and for tax purposes (which is what entices investors). It should define the member's voting rights. It should govern who has the authority to manage, or make decisions on behalf of, the company, and how a manager or managers can be removed or replaced if necessary. It should discuss how disputes will be resolved. It should discuss whether, and how, members can be removed and how they must bought out. It should discuss things like rights of first refusal and options to buy out members who want to leave the company, and should address what happens to a member's membership interests if they die or get divorced (can a spouse or former spouse get the shares). It should identify a "tax-matters partner" or the person authorized to make tax decisions and work with the IRS if necessary. An Operating Agreement is a very complex document and needs to be thought out well and often with the help of an experienced attorney. My general form is around 65 pages and sometimes gets much larger depending on the size of the deal. This is also where the short-comings of Legal Zoom and other similar companies come to light. They give you a sample form, but it may not be well focused on your specific needs. As their commercial states, they prepare the document at your specific direction, and if you don't know how to direct them, the document won't be what you need.
Once you have these two documents in place, you typically need to complete an IRS Form SS-4 to get an EIN for the company. You will likely need an EIN, Articles of Organization, and Operating Agreement to open a bank account in the company's name. You will likely need to register with your state's business division to get a state tax number that can be used for tax reporting and employee withholdings. Many states or cities also require business licenses, although many don't as well. Also, if you set up the company in a different state, then you need to register the business to do business in the state you are going to operate in. It sounds complicated, but it's not that bad. Other things to consider are whether your state charges a franchise tax or other fee on assets held by LLCs (some are very expensive), how you are going to handle things like unemployment insurance and workers compensation insurance (some times members are allowed to exclude themselves), general liability insurance, property insurance, and employment taxes (in an LLC, the members will have to pay self employment taxes).
Your state, county, or city may also have other requirements you will need to comply with. I am licensed to practice law in Colorado and Kansas, and I used to practice in D.C. as well. However, I have set up film companies in Delaware, Louisiana, New York, California, Utah, Nevada, Michigan, Ohio. The experiences were all very similar, but also very different as well. Another consideration in setting up your LLC is whether you will be eligible for local film tax credits. I once had a client that was intent on getting the very generous tax credits available from the Louisiana film commission, and it required my client (a Delaware corporation) to set up individual production LLCs in Louisiana for each film. A small cost for a big benefit.
Hope this helps, and good luck.
** This post is for informational purposes only and does not constitute legal advice nor does it create an attorney/client relationship. Sorry to have to sound like a lawyer, but you know how this world is now.
The real challenge in setting up an LLC is not the state filing, discussed above, but the preparation of an Operating Agreement. That is the document that governs the relationship between the members (owners) of the company. This is really the most important part of setting up an LLC and is where the attorney's fees are typically earned. This agreement should describe how the net profits and losses of the company are distributed for book purposes (actual cash) and for tax purposes (which is what entices investors). It should define the member's voting rights. It should govern who has the authority to manage, or make decisions on behalf of, the company, and how a manager or managers can be removed or replaced if necessary. It should discuss how disputes will be resolved. It should discuss whether, and how, members can be removed and how they must bought out. It should discuss things like rights of first refusal and options to buy out members who want to leave the company, and should address what happens to a member's membership interests if they die or get divorced (can a spouse or former spouse get the shares). It should identify a "tax-matters partner" or the person authorized to make tax decisions and work with the IRS if necessary. An Operating Agreement is a very complex document and needs to be thought out well and often with the help of an experienced attorney. My general form is around 65 pages and sometimes gets much larger depending on the size of the deal. This is also where the short-comings of Legal Zoom and other similar companies come to light. They give you a sample form, but it may not be well focused on your specific needs. As their commercial states, they prepare the document at your specific direction, and if you don't know how to direct them, the document won't be what you need.
Once you have these two documents in place, you typically need to complete an IRS Form SS-4 to get an EIN for the company. You will likely need an EIN, Articles of Organization, and Operating Agreement to open a bank account in the company's name. You will likely need to register with your state's business division to get a state tax number that can be used for tax reporting and employee withholdings. Many states or cities also require business licenses, although many don't as well. Also, if you set up the company in a different state, then you need to register the business to do business in the state you are going to operate in. It sounds complicated, but it's not that bad. Other things to consider are whether your state charges a franchise tax or other fee on assets held by LLCs (some are very expensive), how you are going to handle things like unemployment insurance and workers compensation insurance (some times members are allowed to exclude themselves), general liability insurance, property insurance, and employment taxes (in an LLC, the members will have to pay self employment taxes).
Your state, county, or city may also have other requirements you will need to comply with. I am licensed to practice law in Colorado and Kansas, and I used to practice in D.C. as well. However, I have set up film companies in Delaware, Louisiana, New York, California, Utah, Nevada, Michigan, Ohio. The experiences were all very similar, but also very different as well. Another consideration in setting up your LLC is whether you will be eligible for local film tax credits. I once had a client that was intent on getting the very generous tax credits available from the Louisiana film commission, and it required my client (a Delaware corporation) to set up individual production LLCs in Louisiana for each film. A small cost for a big benefit.
Hope this helps, and good luck.
** This post is for informational purposes only and does not constitute legal advice nor does it create an attorney/client relationship. Sorry to have to sound like a lawyer, but you know how this world is now.
Last edited:
Aweitzel13
New member
By default, an LLC is taxed as a partnership. For this option to work, you have to file an IRS form 8832, election to be taxed as a corporation, and then you have to file an IRS Form 2553, election to be taxed as a small-business corporation (S-Corp). It gives you the tax benefits of an S-Corp over an LLC, while allowing you to maintain the flexibility of ownership and management that an LLC offers.
** This post is for informational purposes only and does not constitute legal advice nor does it create an attorney/client relationship.
smelni
Veteran
to answer patryks original question - yes there is a publication requirement in NY - and not only do you need to publish in 2 places - but the state has to TELL YOU which places to publish in - and one is always a certain law paper (cant remember exactly which one) - that one is fairly expensive. If you just publish in any two - then you havent satisfied the requirement. Expect to spend at least 1000 dollars on this - i have done it several times - hurts everytime.
if you dont do it, you are still a legal entity and you wont get fined or anything. But you cannot take legal action against anyone else (as your llc) until you do. You can defend yourself against legal action though
as always - disclaimer, I am not a lawyer so make sure you verify what I am saying
if you dont do it, you are still a legal entity and you wont get fined or anything. But you cannot take legal action against anyone else (as your llc) until you do. You can defend yourself against legal action though
as always - disclaimer, I am not a lawyer so make sure you verify what I am saying