How does much does an LLC protect you? at DVinfo.net

Matt Buys · April 20th, 2007, 04:51 AM

I always do my best to get all the proper paperwork filled out but sometimes I worry that some shot of someone's property in the distance or what have you will come back to bite me. Anyone want to take any guesses as to how much an LLC will protect your assets. Not that have any anyway.

Todd Giglio · April 20th, 2007, 08:14 AM

Matt,

I think that if you're worried about being sued because someone's property is in your shot without permission, then I believe that what you need for your productions is Errors & Ommissions Insurance (it can be expensive; I was quoted $5000.00 for my film).

I recently formed my production company (Drawing Chalk Pictures LLC) and what you are protected in depends on what assets and contributions you have put into the LLC. For example, all of my equipment is rented (it's rented from my wedding video business which is a DBA), so that protects my equipment from becoming property of the LLC.

I, too, am learning the in's and out's and I hope the info I'm giving is accurate enough to give you some idea.

Todd

Todd Giglio · April 20th, 2007, 08:20 AM

Matt,

One other thing... if you apply for E&O Insurance you also have to have had your script cleared (Script Clearance) This can cost you about another $1200.00.

Todd

Matt Buys · April 20th, 2007, 12:03 PM

Interesting. The problem with the $6200 insurance is that it would cost as much as all my gear combined so I don't care about my gear. I'd love an excuse to buy more. But I'm wondering if I'm being sued for filming someone's else's property can they get at my bank account, retirement fund, etc., if I have an LLC that produced the film.

Bill Davis · April 20th, 2007, 06:24 PM

You DO NOT want to get this advice from generalists on a newsgroup.

Most of us have limited general business experience in this stuff. i.e I can tell you what *I* do - but that's NO guarantee it's what YOU should do.

Spend the $200-300 for an hour of a quaified attorney's time. Go prepared and LISTEN to their advice.

Expect that setting up an LLC will take from a few weeks to a few months and at least a few thousand bucks. Yeah, you can do it quicker and cheaper. But if you ask ANY financial professional - they'll tell you this is chump change compared to the damage you can do to yourself if you HAVE the kind of legal liability that requires this kind of personal asset protection.

(BTW - I'm two months along the path of setting up an LLC for a particular partnership I'm involved in and I can personally attest it's boring, tedious, annoying -- and necessary as hell!)

YMMV -- a whole LOT!

Don Donatello · April 20th, 2007, 08:11 PM

i have a meeting about the subject in early May ..the info that i get might be different then the same lawyer would give to somebody else ( as assets, business will be different) ..
i had ask the same question and the quick answer was both you ( as individual) and your LLC ( or whatever type structure you have) could be named in a suit ... either way make sure you have enough liability insurance to protect ALL your ASSets and some possible future assets ..
also remember that in some states it doesn't matter what percent of company you own or what percent you were at fault -in the end it comes down to who has the deep pockets ( ability to pay) ...

Nolo press has a couple books on LLC's and one that shows you how to set it up ( has paper work on Cd for most states )
http://www.nolo.com/article.cfm/obje...1/182/245/ART/

Matt Buys · April 22nd, 2007, 07:21 AM

A lawyer down the street has offered to set up an LLC for free. (Lawyer free?) But his specialty is real estate. He seemed to think that an LLC would be a good idea. But I had not considered that I as an individual could be named in a lawsuit while being under the protection of an LLC. I'd be curious how your meeting goes in May and would like to hear what information you glean if you don't mind.

Mike Schrengohst · April 22nd, 2007, 09:26 AM

A real entertainment lawyer is more like $500 per hour and they usually want a retainer. A lawyer doing general practice won't know much in this area.
Clearances in the Film and TV industry are a difficult subject. I suggest reading as much as you can before paying a lawyer. I would also suggest forming a S-corp over an LLC. Again lots of info on each subject is out there.

Bill Davis · April 22nd, 2007, 10:18 PM

One absolute truth in this area is that NO "business type" Corporation, LLC, Subchapter S, whatever can EVER protect you from being sued. Anyone can sue anyone for anything. Period. (it might be proved frivilous later, but you'll STILL have been sued)

Business is complex. The farther you go in it. The more successful you become, the more risk you have. Competent legal advice is designed to limit your risk/legal/financial exposure to the extent possible.

But any attorney will tell you that the basic idea is the more you are (or put yourself) as RISK, the more important it is to have the legal stuff under control.

A solo guy doing weekend weddings might present a somewhat different risk profile than someone shooting a national product ad. Maybe. (I'm not a lawyer, don't rely on me!)

Only YOUR lawyer can help you asses YOUR risk

That's the real bottom line here.

Scott Jaco · May 5th, 2007, 04:37 AM

Quote:

Originally Posted by Matt Buys

I always do my best to get all the proper paperwork filled out but sometimes I worry that some shot of someone's property in the distance or what have you will come back to bite me. Anyone want to take any guesses as to how much an LLC will protect your assets. Not that have any anyway.

I do event videography and I've thought about doing this myself. My clients sign contracts stating that they cannot hold me liable for more than the deposit amount. This however, does not protect me if I plug my camera in to a bad wall outlet and burn the venue down. My equipment insurer sells liability coverage for this sort of thing.

Having a corporate shield is nice but it doesn't protect you if you plan to break the law. You can still go to jail just like the guys at Enron if you defraud people.

My situation is simple, I'm not doing huge video shoots with 50 man crews. I'm not selling a product that could make someone sick like a skin cream or diet drink formula. With the exception of video gear, I have no assets like property/investment portfolios to protect.

Liability for my type of business is minimal.

Is incorporating really worth the upfront cost/hassle?

You have to keep meticulous records. Keeping business & personal money separate, keeping time table records for meetings & work hours, renting equipment to yourself, making sure your assets are not actually owned by your company ect.

I know the state of California charges an $800 setup fee to start, and then there are the attorney’s fees, which ensure that you do everything correctly.

If you think it's worth it, do it. It must be nice to call yourself the CEO of a 1-man corporation.

Steve House · May 5th, 2007, 08:09 AM

Quote:

Originally Posted by Scott Jaco

...
My situation is simple, I'm not doing huge video shoots with 50 man crews. I'm not selling a product that could make someone sick like a skin cream or diet drink formula. With the exception of video gear, I have no assets like property/investment portfolios to protect.

Liability for my type of business is minimal.

...

OTOH, people at events have been known to trip over lightstands or cables connecting soundman to camera, get caught on film with their lover and their spouse see's em, get burned on a hot light, get knocked over by a camera op pushing in on a shot with his eye glued to the viewfinder ... you get the idea. Liability can lurk in the most unexpected places.

Scott Jaco · May 5th, 2007, 09:50 AM

Quote:

Originally Posted by Steve House

OTOH, people at events have been known to trip over lightstands or cables connecting soundman to camera, get caught on film with their lover and their spouse see's em, get burned on a hot light, get knocked over by a camera op pushing in on a shot with his eye glued to the viewfinder ... you get the idea. Liability can lurk in the most unexpected places.

I understand what you are saying. Isn't it amazing that our society is like this? No accountability for ones own actions. Just imagining what you describe is a bitter pill to swallow.

Bill Davis · May 5th, 2007, 10:34 AM

Or not, Scott.

It's just as easy to see it as "Hey, all of these situations have occured in the past, and society recognized the need to set up a SYSTEM to protect honorable people from both personal harm and business-related liability"

How about a system that combines various levels of liability protection via business form - with a robust insurance market to protect those with business risks from the extraordinary costs that might be incurred if serious stuff goes wrong.

Which kinda describes the world we work in, doesn't it?. ; )

April 20th, 2007, 04:51 AM	#1
Matt Buys Major Player Join Date: Aug 2006 Location: Asheville NC Posts: 426	How does much does an LLC protect you? I always do my best to get all the proper paperwork filled out but sometimes I worry that some shot of someone's property in the distance or what have you will come back to bite me. Anyone want to take any guesses as to how much an LLC will protect your assets. Not that have any anyway.

April 22nd, 2007, 09:26 AM	#8
Mike Schrengohst Major Player Join Date: Apr 2006 Location: Dallas, TX Posts: 355	A real entertainment lawyer is more like $500 per hour and they usually want a retainer. A lawyer doing general practice won't know much in this area. Clearances in the Film and TV industry are a difficult subject. I suggest reading as much as you can before paying a lawyer. I would also suggest forming a S-corp over an LLC. Again lots of info on each subject is out there. __________________ Mike Schrengohst dvd.pro@verizon.net

April 20th, 2007, 08:14 AM	#2
Todd Giglio Major Player Join Date: Sep 2005 Posts: 265	Matt, I think that if you're worried about being sued because someone's property is in your shot without permission, then I believe that what you need for your productions is Errors & Ommissions Insurance (it can be expensive; I was quoted $5000.00 for my film). I recently formed my production company (Drawing Chalk Pictures LLC) and what you are protected in depends on what assets and contributions you have put into the LLC. For example, all of my equipment is rented (it's rented from my wedding video business which is a DBA), so that protects my equipment from becoming property of the LLC. I, too, am learning the in's and out's and I hope the info I'm giving is accurate enough to give you some idea. Todd

April 20th, 2007, 08:20 AM	#3
Todd Giglio Major Player Join Date: Sep 2005 Posts: 265	Matt, One other thing... if you apply for E&O Insurance you also have to have had your script cleared (Script Clearance) This can cost you about another $1200.00. Todd

April 20th, 2007, 12:03 PM	#4
Matt Buys Major Player Join Date: Aug 2006 Location: Asheville NC Posts: 426	Interesting. The problem with the $6200 insurance is that it would cost as much as all my gear combined so I don't care about my gear. I'd love an excuse to buy more. But I'm wondering if I'm being sued for filming someone's else's property can they get at my bank account, retirement fund, etc., if I have an LLC that produced the film.

April 20th, 2007, 06:24 PM	#5
Bill Davis Trustee Join Date: Jan 2004 Location: Scottsdale, AZ 85260 Posts: 1,538	You DO NOT want to get this advice from generalists on a newsgroup. Most of us have limited general business experience in this stuff. i.e I can tell you what I do - but that's NO guarantee it's what YOU should do. Spend the $200-300 for an hour of a quaified attorney's time. Go prepared and LISTEN to their advice. Expect that setting up an LLC will take from a few weeks to a few months and at least a few thousand bucks. Yeah, you can do it quicker and cheaper. But if you ask ANY financial professional - they'll tell you this is chump change compared to the damage you can do to yourself if you HAVE the kind of legal liability that requires this kind of personal asset protection. (BTW - I'm two months along the path of setting up an LLC for a particular partnership I'm involved in and I can personally attest it's boring, tedious, annoying -- and necessary as hell!) YMMV -- a whole LOT!

April 20th, 2007, 08:11 PM	#6
Don Donatello Hawaiian Shirt Mogul Join Date: Nov 2001 Location: northern cailfornia Posts: 1,261	i have a meeting about the subject in early May ..the info that i get might be different then the same lawyer would give to somebody else ( as assets, business will be different) .. i had ask the same question and the quick answer was both you ( as individual) and your LLC ( or whatever type structure you have) could be named in a suit ... either way make sure you have enough liability insurance to protect ALL your ASSets and some possible future assets .. also remember that in some states it doesn't matter what percent of company you own or what percent you were at fault -in the end it comes down to who has the deep pockets ( ability to pay) ... Nolo press has a couple books on LLC's and one that shows you how to set it up ( has paper work on Cd for most states ) http://www.nolo.com/article.cfm/obje...1/182/245/ART/

April 22nd, 2007, 07:21 AM	#7
Matt Buys Major Player Join Date: Aug 2006 Location: Asheville NC Posts: 426	A lawyer down the street has offered to set up an LLC for free. (Lawyer free?) But his specialty is real estate. He seemed to think that an LLC would be a good idea. But I had not considered that I as an individual could be named in a lawsuit while being under the protection of an LLC. I'd be curious how your meeting goes in May and would like to hear what information you glean if you don't mind.

April 22nd, 2007, 10:18 PM	#9
Bill Davis Trustee Join Date: Jan 2004 Location: Scottsdale, AZ 85260 Posts: 1,538	One absolute truth in this area is that NO "business type" Corporation, LLC, Subchapter S, whatever can EVER protect you from being sued. Anyone can sue anyone for anything. Period. (it might be proved frivilous later, but you'll STILL have been sued) Business is complex. The farther you go in it. The more successful you become, the more risk you have. Competent legal advice is designed to limit your risk/legal/financial exposure to the extent possible. But any attorney will tell you that the basic idea is the more you are (or put yourself) as RISK, the more important it is to have the legal stuff under control. A solo guy doing weekend weddings might present a somewhat different risk profile than someone shooting a national product ad. Maybe. (I'm not a lawyer, don't rely on me!) Only YOUR lawyer can help you asses YOUR risk That's the real bottom line here.

May 5th, 2007, 10:34 AM	#13
Bill Davis Trustee Join Date: Jan 2004 Location: Scottsdale, AZ 85260 Posts: 1,538	Or not, Scott. It's just as easy to see it as "Hey, all of these situations have occured in the past, and society recognized the need to set up a SYSTEM to protect honorable people from both personal harm and business-related liability" How about a system that combines various levels of liability protection via business form - with a robust insurance market to protect those with business risks from the extraordinary costs that might be incurred if serious stuff goes wrong. Which kinda describes the world we work in, doesn't it?. ; )