JonathanLB, Get sued and you'll figure out the compelling reason you should have done it. If set up properly your movie corp will have no assets in it, all equipment, hard assets will be leased to your movie corp (you'll still be able to get tax breaks if properly structured). Therefore you have no assets in your movie corp in case you get sued. The bigger the success the bigger the target on your back from lawsuits (even without any merit). A second bank account gives you no protection from litigation if its still part of the same entity. I could and may be wrong so talk to a lawyer. Good luck.
Micro Budget Strategies
- Thread starter Imaginate
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JonathanLB
Carbonite Member
Ok as I said, it makes no difference -- my corporation has no assets either. It wouldn't make any difference if it was sued, it owns no equipment, it has no assets besides a bank account that olds barely any money, lol. Any profits are transferred out of the account very quickly. There are more liabilities on the company than there are assets that's for sure 
So I still think it'd work fine.
So I still think it'd work fine.
mainstreetprod
Veteran
None of this is as critical if you have a good insurance policy, which everyone should have anyway. You get sued - it's the insurance company's problem. You would have to be blatantly negligent for the 500K or million liability policy to not cover a loss. A lot of peace of mind for a lousy 500 bucks a year or so.
JonathanLB
Carbonite Member
I carry full production insurance but a feature film would need its own insurance policy, and that's one I'm kind of having to look into because I don't know whether *they* would insist upon insuring a separate entity or if you can insure just the project itself, that part I have to ask about. Ultimately I really don't mind much either way to be honest, but parts of it make me wonder why the "accepted" way to do something is the best way to do it.
For instance, you have $150,000 let's say. Why fund the entire feature's bank account in a separate company immediately? So you know the money is there? Well if I own both companies it doesn't matter. I would think you'd be better off funding pre-production, then production, then post-production, that way if -- god forbid -- something came up and the feature film got sued, they wouldn't be able to go after ANY other money, not the entire amount in the bank account for the whole film, just whatever happened to be there for that stage. In practice it probably makes very little difference unless you somehow got sued during pre-production, which is just weird, I don't know what that would even involve on an indie film. But I'm just saying, it's kind of interesting...
I made sure early on that I kept my companies with no assets, so what I do is I have a lot of equipment that I own personally and I lease the equipment to my production company for a certain fee on each shoot. It's essentially like paying myself for equipment usage, but it establishes what I've actually gotten back on it and I think it's a very solid way to do it so I can sort out what I'm making for my *time* versus what I'm making for my *company profits* versus what I'm making for just my *equipment*...
For instance, you have $150,000 let's say. Why fund the entire feature's bank account in a separate company immediately? So you know the money is there? Well if I own both companies it doesn't matter. I would think you'd be better off funding pre-production, then production, then post-production, that way if -- god forbid -- something came up and the feature film got sued, they wouldn't be able to go after ANY other money, not the entire amount in the bank account for the whole film, just whatever happened to be there for that stage. In practice it probably makes very little difference unless you somehow got sued during pre-production, which is just weird, I don't know what that would even involve on an indie film. But I'm just saying, it's kind of interesting...
I made sure early on that I kept my companies with no assets, so what I do is I have a lot of equipment that I own personally and I lease the equipment to my production company for a certain fee on each shoot. It's essentially like paying myself for equipment usage, but it establishes what I've actually gotten back on it and I think it's a very solid way to do it so I can sort out what I'm making for my *time* versus what I'm making for my *company profits* versus what I'm making for just my *equipment*...
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Has anyone tried to make a low budget indie in a country like Guatamala or somewhere else in South/Central America where you can feed 20 people for $30 a day, labor is $10 per person per day, you can rent a large home (mini mansion) for $500 a month. I'd think you could find indies there, I'm sure they have local film groups. $10K-$20K would go very far in a country like Guatamala if you own the equiptment. Only problem is would it fit in with your script? A Horror movie would be ok, actually probably better off in a foriegn country where there is more interesting scenery and more of the unkown.
Foreign territories for location start making sense when you have needs for large crews, extras, etc. as you need outweigh the cost of getting there with your above the line cast and crew. On the last film I produced, in addition to cast, the set had: director, sound person, makeup, DP, and one PA. If you're film was $250, or met the minimum of film tax credits, you would 20%-40% back by just going to a different state - not another country. You're already ahead of the game!
Michael
Michael
Do filmmakers realize that they have to pay the 20-40% back when the film makes money? It's not like the rebate or credit money is free, it has to be paid back, it does limit risk up front but if your movie makes money you have to pay the 20-40% back.
Nothing to pay back for shooting a small horror film in Guatamala and it's dirt cheap, $200 a day buys 20 people, $30 a day feeds all 20 people. 30 days there, 26 working days of 20 people (one day off a week) with food is only $5980 vs $200 a day per person x 20 people x 26 days + $100 for food per day ($2600) in the us = $106,600.
Anyway, just something to think about if you have a little movie with 5 american actors, all you'd have to pay is airfare for them about $500 each, they stay at the mini mansion you rent and film in for $500 a month. $20k could buy a lot of locations and crew there.
Nothing to pay back for shooting a small horror film in Guatamala and it's dirt cheap, $200 a day buys 20 people, $30 a day feeds all 20 people. 30 days there, 26 working days of 20 people (one day off a week) with food is only $5980 vs $200 a day per person x 20 people x 26 days + $100 for food per day ($2600) in the us = $106,600.
Anyway, just something to think about if you have a little movie with 5 american actors, all you'd have to pay is airfare for them about $500 each, they stay at the mini mansion you rent and film in for $500 a month. $20k could buy a lot of locations and crew there.
Barry_Green
Moderator
Not sure what you're talking about? State film incentives are not "loans", they're incentives that don't have to be paid back to anyone.
He he he, yea, there is a catch but you can hire armed security guards for $500 a month.
Seriously, it's not that bad. My aunt and uncle who have been traveling around the world on their sailboat spent a year there in a town called rio dulce. Other parts are a haven for columbian cocaine dealers. Large groups are good but again, my and and uncle spent a year there and loved it, they never had a problem, were never robbed, people were friendly as you could want.
Seriously, it's not that bad. My aunt and uncle who have been traveling around the world on their sailboat spent a year there in a town called rio dulce. Other parts are a haven for columbian cocaine dealers. Large groups are good but again, my and and uncle spent a year there and loved it, they never had a problem, were never robbed, people were friendly as you could want.
In 2007 or 2006 (have to check passport) I spent a few months in Chiapas, Gauti and Honduras. Rio Dulce has a lot of whore houses and is pretty safe (tons of yachts). The day I got into xela Guatamala one of the kids from the hostel was shot during a random border run. Antigua was getting dodgy as the gangs from Guati city had discovered the town(a few months earlier they had taken over a hostel for a few hours and it was not good). I spent about 18 months in the last ten years south of the border and I never had any problems. I don't know the quality of the actors you'll be able to wrangle but it could be a hell of an adventure.
Most the crime there is from gangs killing other gangs, samething happens in East LA. Rio Dulce is no more dangerous than St. Louis or Los Angeles but yea, for $20k a guy good get some serious production value there, about what would cost $200k here. Just thought I'd throw it out there. It's not for everyone or every movie but if a guy has most or all the gear needed he can ship it down in a create (insured 
) put up a small cast from the USA in a mini mansion for $500 a month and have a paid crew of 20 people fed for 26 days for $5980.
Anyway lots of other countries that are 10 times cheaper to shoot an indie in than the USA.
) put up a small cast from the USA in a mini mansion for $500 a month and have a paid crew of 20 people fed for 26 days for $5980.Anyway lots of other countries that are 10 times cheaper to shoot an indie in than the USA.
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When your movie makes money don't you have to pay your tax credit back into the system from its profits?
Or was that part 181 that went away I'm thinking of?
Ahh, thanks Barry and Michael for straightning me out, I do know a lot of states are going to do away with incentives for filmmakers and most will cap them, the Governor of MA Deval Patrick recent budget proposal includes a $50 million cap on the film tax credit for the next 2 years, a cut of $75 million. Which means it could now be on a first come, first served basis so if the first in line eat up all the money, then there's nothing left for the rest of the filmmakers. This comes after their analysis of the MA incentives for Shutter Island revealed they only got back 15 cents on every dollar about average with other states.
Did you see the independent study from U MASS on tax incentives that was published a few weeks back? It shows a different ROI. I live in MA and have been following all of this very closely. But I agree a cap would limit or remove chances for local independent to take advantage of the incentive once the funds are depleted. And it won't take many large productions to do that. So in the end, fewer films coming to the state and no money left for local filmmaking for incentives. Not a bright prospect.
Michael
Michael
I didn't read that one but an in house report was conducted by the state that showed Shutter Island returned 15 cents on every incentive dollar. I'm sure the numbers vary widely with an in state production company and and out of state one like Paramount.
I thought you did too.