Nestorl
Forum Replies Created
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Hello Dustin, let me just reiterate some of what Debe explained.
1. Although some treat crews as independent contractors (IC), under most conditions they will be your employees. The IRS use specific tests to determine the status of these type of workers, and production crews usually fail this test. In particular, crews are not independent contractors if you are in charge of what they do. That is, if you direct and provide instructions, then they are not IC (you can provide specifications, but not direction). The other test is a test of ‘essential functions’. That is, do the service provided by the IC is essentially the service provided by the company? For example, are you a law office that calls its lawyers IC? That would be a NO NO. In our case, if the IRS comes after you then you would have to say that the work of your IC is no essential to the work you offer. This may or not may be true depending on the crew type. For example, if you are a videographer and offer services to videotape a wedding, then it would be difficult to make an argument that the camera man is not an essential component of your services and therefore could be called an IC. There are many other rules usually known as the Common Law Factors (IC have their own tools, own hours, etc). Google it and you will be able to read about it.
But in conclusion, you will be saved treating your crew as employees unless they are incorporated and you are therefore hiring the services of the company and not the individual members.
2. Yes, you should register your company as an LLC. You can and should use the LLC even for your self produced projects since it will provide you with some liability protection. Filing requirements will change by state, but LLCs have minimal filing requirements. Most LLCs are registered in Delaware (you should consider this too). If you register your company as a Delaware LLC you will pay a yearly flat tax fee of $200 (plus federal and your own state’s). There are no other filing requirements after the initial registration (no board meetings, no shareholder meeting minutes, etc). Regarding tax, this will also depend on your state, but you will file federal and state taxes even when you have losses. The LLC uses pass through taxation, which means that the LLC does not pay taxes: you do. But when the LLC has losses, the losses also pass to you, which may be a benefit. Taxation of LLC is complex since you will be paying self-employed taxes, etc, so an accountant should be used.
3. You do not get taxed on Revenues (the 20K you charged). You only get taxed on profits (the 4K). You need to keep clear records of your business expenses (including all invoices and receipts), which your accountant will use to calculate your yearly tax. Consider investing $200 on Quickbooks pro. It is extremely easy to use and will keep your business numbers clean.
If you choose to incorporate in Delaware, I can recommend someone for you. We have incorporated a couple of companies in DE and have gone through the process several times.
Cheers, Nestor.
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Nestor L. Lopez
Executive Vice-President
Explorart Films
http://www.explorart.com——
Statements presented in the message are statements of opinion only and should not be considered legal advice. Please contact a qualified entertainment attorney. -
Hello Blueriver, you should consider forming your company as a Limited Liability Company (Assuming your are in the US). A LLC will provide you with the protection you need while giving you the flexibility to structure the company anyway you want it. LLCs are extremely easy to form and have limited yearly filing and corporate compliance requirements (no need for stockholder meetings, etc). Most states will require each LLC to have at least 2 members (owners), so you will have to add a partner to your company (wife, son, daughter, sibling, etc). Members do not have to have equal share or be equally involved in the company. For example, you can give your partner 1% of the company and you can structure it as a traditional LP (limited partnership), with you as the general partner and your partner as a limited partner (who will have no vote or role in the business). You do not have to form the LLC in the state you are located. In fact, most LLC in the US are registered in Delaware because of Delaware
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Hello Greg. Non-compete clauses are governed by state law, and I understand that in most cases the state courts refuse to enforce them unless they are written with extremely clear and narrow wording(duration, geographical location of band, type of work that is included, etc). Most of the time, these clauses are a waste of ink, but you should ask you attorney as to whether they are enforced in your state. I have one in file if you want it. email me t info @ explorart.com. Cheers,
Nestor L. Lopez
Explorart Films
http://www.explorart.com -
hello Mus Man. There is a discussion about this issue by Mike at hdforindies.com and the full explanation is at:
https://www.xlr8yourmac.com/archives/nov05/112305.html#S20166
It seems that this is not a recommended solution and most people just suggest upgrading to FCP5
Regarding the PCIe card, Atto will be shipping the new FC42ES on Dec 20th. The drivers for the new quad are already out.
Nestor.
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Thanks Kevin. I just did some research and you are right. Now, what do you use, or what would be a high-end solution to do titles/Subtitling on a MacOS/FCP system? Thanks. NL