Non-Profit Productions

[John Griffin]

A buddy of mine and I are in the process of producing a fire safety show for the fire department that we work for and will air on a local cable channel. We will be using our own equipment, software, etc. We do have a name that we will use in the credits ie produced by so & so. Do we really need to register or any process since this is for public safety. I guess there could be a chance of someone wanting to buy a copy of a specific episode, but I don't see it.


Thanks,
John

[Steve House]

Originally Posted by John Griffin

A buddy of mine and I are in the process of producing a fire safety show for the fire department that we work for and will air on a local cable channel. We will be using our own equipment, software, etc. We do have a name that we will use in the credits ie produced by so & so. Do we really need to register or any process since this is for public safety. I guess there could be a chance of someone wanting to buy a copy of a specific episode, but I don't see it.


Thanks,
John

Register for what purpose? Are you talking about registering copyright, getting a business license, registering a business name, filing taxes, clearing music, getting investors, what?

AFAIK, the fact your production is on a topic related to an issue of public safety isn't relevant to anything legalwise.

[John Griffin]

So let me ask it this way. Since this is all done for non-profit do we need to register a DBA within our county? Its not the fire department itself producing the show. If there is a chance of people wanting to purchase a copy of an episode, isn't there something we need to do? The music is taken care of license wise, just want to cover all the bases.

[Chris Davis]

That all depends on your county/state. Personally, I wouldn't bother with it. Where I live, you don't need to register if you're using DBA in your name, you only need to register if you're operating completely under a ficticious name. Using DBA in your name means you are operating under your own name (i.e. John Griffin DBA Fire Starter Productions.) DBA means "doing business as", which says "I'm conducting business under my own legal name, but you can call me XX".

Like I said, it depends on your local. Registering my name cost $25 for the filing fee, and about $150 for the required legal publication in the newspaper. Hardly worth it if you're just making a one-time freebie video.

If I were you, I'd just use my own name. In the credits, just say "Produced by John Griffin and Bob Johnson" and don't worry about it.

[John Griffin]

Chris,

Thanks for the reply. And this is going to be a monthly show, we hope if all goes well. But what if someone wants to buy a copy?

Thanks,
John

[John Miller]

If this is all you ever intend to do then you are probably OK - presuming you aren't deriving any income.

However, if you and your friend start to do this more often and do derive income, then it becomes more complex. If it were just you then you could simply operate under an assumed name and manage your taxes etc on your personal 1040 tax return. Registering with your county can be helpful getting services from other institutions. e.g., I am registered with my county ($15 or so total) because I needed a DBA certificate to get a digital signing certificate for the software I develop and sell.

Operating as you and your friend, you can't go this "sole proprietor" route and will need to form some kind of corporation - an S-corporation or a limited liability company (LLC). This is what my wife had to do when she set up her company with one other person.

[Steve House]

Originally Posted by John Miller

If this is all you ever intend to do then you are probably OK - presuming you aren't deriving any income.

However, if you and your friend start to do this more often and do derive income, then it becomes more complex. If it were just you then you could simply operate under an assumed name and manage your taxes etc on your personal 1040 tax return. Registering with your county can be helpful getting services from other institutions. e.g., I am registered with my county ($15 or so total) because I needed a DBA certificate to get a digital signing certificate for the software I develop and sell.

Operating as you and your friend, you can't go this "sole proprietor" route and will need to form some kind of corporation - an S-corporation or a limited liability company (LLC). This is what my wife had to do when she set up her company with one other person.

Partnerships don't necessarily require incorporation or LLC status to be valid, though it may be advisable. All it needs is for the two parties to agree to become partners. In a simple partnership each individual assumes full responsibility for the liabilities of the business, just as in a sole proprietorship.

[Chris Davis]

You are obviously not running this as a business. From my understanding of the IRS definition of an income generating hobby, this fits. Even if you sell a couple copies, your expenses will far outweigh your income.

Just because someone gives you money for a specific task or product does not automatically make you a business.

As scary as the IRS may seem, we are not the Soviet Union. We do not need to inform the authorities of everything we do that may generate a few dollars.

If you and your friend sell a copy or two, just split the cash or buy a beer.

[John Miller]

Originally Posted by Steve House

Partnerships don't necessarily require incorporation or LLC status to be valid, though it may be advisable. All it needs is for the two parties to agree to become partners. In a simple partnership each individual assumes full responsibility for the liabilities of the business, just as in a sole proprietorship.

Agreed but not wise. My wife's company manages business interests in the music industry. Upwards of 90% of the nightmares she has to resolve stem from not formally entering into a legal partnership. Doing so makes it much easier to keep the business and personal assets from becoming co-mingled.

[John Miller]

Originally Posted by Chris Davis

We do not need to inform the authorities of everything we do that may generate a few dollars.

Well, actually, yes you do. The United States is probably the most stringent when it comes to taxation on income. It wants to know about every penny you have earnt - onshore or offshore - for any reason.

Income from a hobby must be reported on your tax return. You can deduct expenses related to the hobby up to an amount equal to the income from the hobby but only up to 2% of adjusted gross income.

Oh, and in true Soviet style, the IRS decides whether it is a hobby or not.

[Chris Davis]

Yes, of course you declare your income. Plus you can deduct your hobby expenses up to the amount of your hobby income. But you don't need to obtain permits or form an LLC to have a hobby. Unless your hobby is handling toxic materials.

[Steve House]

Originally Posted by John Miller

Agreed but not wise. My wife's company manages business interests in the music industry. Upwards of 90% of the nightmares she has to resolve stem from not formally entering into a legal partnership. Doing so makes it much easier to keep the business and personal assets from becoming co-mingled.

Agreed - was just pointing out that a formal partnership agreement doesn't require (or imply) incorporation of the resulting enterprise.

[John Griffin]

So the basics from this conversation are since we are not trying to earn a profit with this we are good to go and call us what ever we want for now as long as there is no one else around with same name. If for some reason this takes off in other directions, then the DBA and other tax work will need to take place. If we do sell some copies, which will probably just cover the cost of materials and shipping, then good for us on getting the word out to the public, they actually watched the show!

Any corrections welcome.



Thanks,
John

[Steve House]

Originally Posted by John Griffin

So the basics from this conversation are since we are not trying to earn a profit with this we are good to go and call us what ever we want for now as long as there is no one else around with same name. If for some reason this takes off in other directions, then the DBA and other tax work will need to take place. If we do sell some copies, which will probably just cover the cost of materials and shipping, then good for us on getting the word out to the public, they actually watched the show!

Any corrections welcome.



Thanks,
John

While it depends on your jurisdiction you usually don't need a DBA in order to earn money on your projects or even have them as your primary source of income. Every freelancer and independent contract worker does it and not all, not even most in my experience, operate with a DBA. It may be true that in many locations you may need a DBA and/or a business license if you are operating as a retail business soliciting work from the general public, especially a brick-and-mortar storefront, but that's not what it sounds like you're doing here. Freelance creative professionals are not retail merchants.