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Creating Cinematic Excellence: The Strategic Role of an LLC in Video Production

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Any time you launch a video production company, you’re inevitably taking on some risk. Video is a famously competitive, volatile, and litigious field, all of which create roadblocks to ongoing success.

The good news is that there are some simple steps that any video production company can take to mitigate risk and optimize success. One of the most meaningful actions is to establish your business using the right legal structure. And for a majority of video production companies, that means registering as a Limited Liability Company, or LLC.

What is an LLC?

The LLC format is one of the most popular business structures in the country. Since the 1970s, it has become common across countless industries and verticals.

When you register your company as an LLC, you’re creating a new legal entity. In other words, the LLC is its own thing, not just an extension of its owner. What this means is that you can keep your personal assets distinct from your business ones. Similarly, you can separate personal and business liabilities.

There are other elements of the LLC, but the long and the short of it is this: LLCs offer some of the legal protections you’d get from incorporation but with much more flexibility and lighter regulatory burdens. It’s a great “middle ground” for small and medium-sized businesses, including video production companies.

The Benefits of the LLC for Video Production Companies

In fact, LLCs offer a number of specific benefits for video production companies. Consider just a few of them.

Personal Wealth Protection

One important implication of the LLC is that it allows you to keep personal assets, including family savings accounts and retirement investments, safely distinct from the business itself. So, if your video production company is hit by a lawsuit, your personal assets are off the table. Given the litigious nature of the video world, this is no small thing.

Tax Flexibility

LLCs also enjoy some leeway with respect to how they report to the IRS. By default, LLCs report on a pass-through basis. However, they can opt into corporate taxation if they feel it is advantageous. Since video is such a fluid industry, this type of flexibility can be invaluable.

Administrative Ease

Something else to keep in mind is that establishing and operating your LLC is fairly simple and straightforward. There’s not nearly as much required as there is with a Corporation. Again, fluidity is incredibly valuable in an industry that changes all the time.

Credibility

Finally, keep in mind that not just any company can register as an LLC. This designation automatically confers some credibility, making it much easier for your video production company to get loans and bring on board investors.

Behind the scenes of video production in the big studio with professional equipment such as camera tripod and crane

Registering Your Video Business as an LLC

To take advantage of these benefits, you’ll need to follow a few basic steps to register your LLC.

Crucially, the guidelines look different from state to state. Forming an LLC in California is a little different from forming one in Colorado or Tennessee. With that said, the basic trajectory usually looks something like this:

  • Choose your state. Technically, you can register in any state, but the most financially advantageous option is almost always to register in your home state. Rule of thumb: Always register your LLC in whichever state you’re generating money.
  • Pick a name. Make sure your LLC has a name that isn’t already in use by another LLC in the same state. Often, you’ll have access to a searchable database, letting you confirm that the name you want is still available.
  • Select a Registered Agent. A Registered Agent receives legal correspondence on your business’s behalf. This may be an individual or an institution. Often, LLCs hire third-party Registered Agent services, which can cost less than $100 annually.
  • File paperwork. File Articles of Organization with your state, also paying whatever nominal LLC filing fee is required. The amount will vary by state.
  • Create an Operating Agreement. This document functions as a charter for your LLC and can help you avoid costly legal disputes down the road.
  • Claim an Employer Identification Number (EIN). You can get this number for free from the IRS website. You won’t necessarily need it on day one, but you will need it before tax season or your first payroll.
  • Set up a bank account. Ensure that your video production company has a bank account that isn’t connected to any personal accounts.

Establish Your Video Business as an LLC

The bottom line: There is much that you can do to establish the long-term success of your video production business. One of the most impactful options is to register it as an LLC. Follow these guidelines to get your video production LLC up and running, and to enjoy all the advantages that an LLC provides.


Author Bio

Amanda E. Clark

Amanda E. Clark is a contributing writer to LLC University. She has appeared as a subject matter expert on panels about content and social media marketing.

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