By: Tifanie Jodeh, Esq. & Kelmer Messina
When we think of the word “company” we usually imagine huge buildings with thousands of employees running operations that amount to millions of dollars. While this can be one, a company can potentially be formed by one person and even be run from home.
Companies can come in many shapes and forms but, ultimately, a company is a legal entity created with the purpose of conducting business and limiting liability (such as debts and mortgages). A company is a different legal person from its members, meaning their assets and obligations are different from your personally.
In the case of the Entertainment Industry, it has become customary for actors, producers, directors or any other Industry professional to loan out their creative services through what we call a “loan-out” company because of its many advantages.
In this article we will examine 3 benefits of going through the work of incorporating a company, even if you do not run a huge operation with little or no employees. These 3 benefits are:
#1: Forming a company can limit your personal liability. When contracting through a company, the obligations and debts you incur during the course of business become separate from your personal finances.
#2: Organization. Having your personal and business matters separate from one another will make it a lot easier for you to do business. This clear separation can benefit you during dealmaking and also makes it a lot easier for money to go to the right place. Payments and liabilities are directed from your Company to partners, employees or independent contractors
#3: Legitimacy. When working with others in the Entertainment Industry or securing financing, it can give an air of legitimacy and professionalism, ultimately making it easier for them to do business with you. Longevity of your business will make it better for you to secure loans, create good will and build your brand
We can assist you with forming the appropriate corporate entity. It is worth the time to explore your options and find out if it’s the right fit for you and your goals.
If you have questions concerning this topic, or other areas of entertainment, business or corporate law, please email us at Asst@entlawpartners.com or call us at 310-684-3666 to schedule a free initial consultation. .
COPYRIGHT; DISCLAIMER: Tifanie Jodeh is Partner at Entertainment Law Partners dedicated to corporate, business and entertainment affairs.
Entertainment Law Partners is a full-service Los Angeles and Miami area based entertainment, business and corporate transactional law firm providing expert counsel in a wide array of business transactions with a focus on corporate, business, entertainment, media and technology industries.
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