Pros And Cons Of Llc

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First off if I was looking to raise $250,000 dollars for a movie. I 'll first have to make sure I have a good idea for a movie, something that will be marketable and catch the attention of a large demographic group. This way investors and studios will be interested in helping to fund my movie. After i have come up with a good idea, it 's important that i put it onto a script. A script is important because that will be the blueprint for my movie.
Now to rasie money ill will start off with small investors before approaching the bigger ones. That means approaching people i already know the “Rule of Three” to get small amount of money. People such as, friends, family, and small time filmmakers like myself. These are the people that believe in
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Here comes Limited Liability Company or LCC. LCC is a business form that will protect the investor 's investment. It is a form that will combine the taxation of partnership or part of a proprietorship with a limited company. But there are some cons about LLC. Even though it is an contract it is still not a iron clad. There still a chance that there investment won 't make there money back. So the most important information i need to inform all the investors before they do put money in my film is that film is a risky business. Investors must be inform of “Statement of Risk”, that means there 's a chance they will lose money. In addition, to working with investor i will have to put in place the Private Placement Memorandum (PPM). This helps me avoid certain kinds of states and federal rules. It informs what the investors will get such as, legal tax insulation, proper insurance, invitations to premiere sets, on screen credit of special …show more content…
I just can 't have the investors and studios just give me cash up front when i ask for it. Never take the money yourself. First, I will need to apply for an EIN (Employer ID number) from the IRS. Second, open up two bank accounts call “Escrow Account” and “Segregated Account”. An escrow account is basically an account that won 't allow me to release money until all certain conditions are met. And segregated account is saving not checking account under the name of the production company i am working for.
Once i have received money from investors and studios i will need to make sure i spend the money correctly and safely. Theres two ways i can spend the funds. There’s the “production funding process”, which means i don 't spend any of my funds until i have raised 80% percent of it first. This way is the safest way but it is a much slower process. Second is the “development funding process”, that means i spend as i go. It is more risk but it 's a much faster process.
Overall after all the development process is done. I will have somewhere around $251,000 dollars total from friends, family, investors, and

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