Do I really need to form a separate LLC for each film I make?
Every independent filmmaker who consults me about starting a new privately financed project asks me whether it’s really necessary to form an LLC for the Picture, or whether she can do it under her existing production company. My reply is nearly always, “Yes. It's necessary. Each film should be its own LLC, or at least some kind of entity.”
WHAT IS AN LLC?
Before I explain the need for the entity, let’s just be clear about the meaning of the term “LLC”. LLC stands for Limited Liability Company. LLCs are a relatively modern entity type. Prior to the 1980s many equity-financed business ventures used a multi-layered approach involving a corporation acting as the general partner of a Limited Partnership insulating investors from liability. This became unwieldy and in response, many States adopted LLCs. At first, most jurisdictions required LLCs to have multiple members, but many (including California, where many films are made), an LLC can have as few as one member.
There are a few reasons for forming an LLC, and in the case of most independent film projects, all apply