Especially in the entertainment industry, workers can sometimes look like employees and sometimes entrepreneurs. It is often difficult to determine which classification to use. Perhaps the most important clause of a site agreement is one that exempts owners from all damages resulting from the use of the locations for filming and further protects owners from any illegal act that may result from filming. In addition, producers usually include a disclaimer in the location agreement stating that all depictions of the location are fictitious and that such a filmography is not necessarily a true reflection of the actual location. That`s why we`ve developed technology that allows you to focus on production while we take care of the paperwork and payroll process. In just a few minutes, you can add your team to your Castifi Producer portal, review the hours worked on set, and submit all this information to one of our payroll providers. To finance a feature film, producers usually set up a production company and sell shares in the business unit. A production company can be any form of business entity, such as, . B a corporation, limited partnership (“LP”) or limited liability company (“LLC”). In general, LLCs are recommended as production units. They are the most flexible in terms of tax treatment and distribution of power between and between members, while offering entrepreneurs the benefits of limited liability.
This means that the personal assets of individual LLC members are protected against the LLC`s debts. To form an LLC, organizational documents must be submitted to the Secretary of State of the founding state along with the filing fee. In some states, such as . B New York, there is also an obligation to publish. Members of LLCs may be individuals or other organizations such as corporations or other LLCs. If your crew drives more than an hour to hire, it is appropriate to provide a gas refund. To determine whether an employee is an independent contractor, the law uses what is known as a “control test.” This test takes into account a number of factors in assessing whether an employer has the right to control the manner and means by which the employee provides his or her services. The basic agreement required for an LLC is called an operating agreement, which sets out the rules that govern the LLC and is analogous to a “shareholders` agreement” for a corporation.
The operating agreement must address key issues such as management control, the scope of the LLC`s activities, the personal role of filmmakers and their fees, as well as the role and obligations of investors, and the priority and allocation of return on investment. Even though many people do not like to discuss the dissolution of a corporation at the time of incorporation, the operating agreement should still address what in the event that the LLC is to be dissolved or if new members need to be added due to death, disability or budget deficits. An exception would be if the crew member had their own “loan company”, in which case that person is an employee of the loan company. Typically, the only team members who usually do this are UPMs, line producers, cameramen, and other highly paid people. If you paid your crew as a CI (excluding taxes), the problem starts when a crew member files for unemployment after completing your shoot and lists you as the last employer. The employment office reviewing the application will eventually determine that there is no record that their alleged employer (your production company) ever registered with them or paid payroll taxes in the system on behalf of that person. The production company must comply with copyright laws regarding ownership, which are highly dependent on whether you were hired by them as an employee or as an independent contractor. The team agreement memo is a form that provides protection between the production company (or financier) and the team. While it`s pretty easy to find a crew transaction memo template online, you need to be careful about using it, as they often use certain clauses and provisions that favor one party over the other. An operating contract is not only necessary for the formation of an LLC, but also an extremely important tool to solve certain problems in writing before the problems materialize into reality.
If the company agreement provides guidance on what stakeholders should do throughout the production of a film, it would eliminate the stress and chaos of figuring out what to do when problems actually arise – and they almost always do. Under vicarious employment contracts, any work you create while you are employed by the production company is automatically the property of the production company. There are no differences of rights or really questions about it. You work for them, the work you do is theirs. Period. Many producers will say that it`s the “duration” that qualifies the person they`ve chosen as an independent contractor – “after all, it`s just a two-day shoot.” .