Just starting out; should I operate as a sole proprietorship, DBA or LLC?
I want to shoot some amateur video content; I have a few ideas for some shoots that cater to some relatively under-served niches but that can also have some potential for broader appeal outside their niche.
I am an absolute newb at this; I'm just an individual with no experience in this area and no connections. However, I've spent the past few months deeply researching and have some preliminary infrastructure set up to pursue this. I've drawn up what I consider to be a fairly air-tight model release form after reading dozens of model releases for both adult and mainstream work (willing to let a lawyer inspect it). I've drawn up templates for 2257 Affidavits, and found a cheap, really reputable third-party Custodian of Records service that caters to a lot of adult sites. I set up 2 safety deposit boxes at different banks to store hard copies of any/every document I need for this endeavor; I have cameras, lighting, video editing software; all I need is my first model and a place to shoot The only question is, should I start out as an individual sole proprietor, a DBA or an LLC? My business plan is to set up a clip store. As I'm building up my clip store, I'll also start a few porn Tumblr blogs and link to a bunch of other porn blogs while also occasionally providing some free content and links from my clip store. Further down the line, if I can generate a decent amount of revenue (I have no delusions about getting rich off of this), I'll pony up the money to have someone build me a website; I've already designed what the site would "look like," but I just don't know how to build a functional website as that is something I have no experience with. I have $11,000 of my own money saved up; I'm willing to pour in another $20,000 over the next 2 years before I absolutely have to start making money back. I intend for this to be entirely self-financed at the start, as I don't want to start out in debt or take out loans. For this strategy, would it be best to start out as an individual sole proprietor, a DBA or an LLC? |
Best strategy? Ask a lawyer. You are presumably in NE. Shoot an e-mail over to Colin at Wasteland and maybe he can recommend one around Boston. This is not the place to ask.
YNOT has LAJ who can turn you on to someone. |
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No financial institution lender will lend on a new porn business, most won't will touch porn. So, you can max out your credit cards or mortgage your house to raise working capital ...
A LLC or a Sub Chapter S or Schedule C Corporation will protect your personal assets from tort liability (lawsuits). It costs $10.00 in my county to file a DBA, use a generic sounding business name and open a bank account. Make some money then spend some incorporating. One tip: You can get investors together to file a corporation as the founding principals , but you cannot solicit new investors for an existing corporation without having a securities offer approved by the state you are incorporated in and any state that you sell the shares in. So, a lot depends on your personal financial position and your future funding options considered. |
Do a DBA, and then see if you can sell some content first.
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A DBA is step number one, but remember after you fill out the DBA paper work the city you write down on the application will be calling for your business license and tax prepayment.
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you start up a single member LLC.
the benefit is that you can combine your business into your personal federal taxes on schedule C. & you have the legal benefits of an LLC that is separate from your personal affairs. So if someone sues you, it would be the LLC on the hook not your personal name. if you are really savvy, start up your LLC in delaware, its cheap, they protect your identity, & if your state has high fees for small business, you can avoid that bullshit. there are 3rd party companies that do all the ppwork for you, just google delaware LLC & start reading up. after the LLC is set up, get a lawyer with 2257 experience to draft up shoot contracts for the LLC, ensure they include a hold harmless clause. You should have the lawyer also create a 3rd party production agreement so you can hire shooters to shoot for you & convey the shoot copyright to your LLC. GL. |
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Tax pass through can be accomplished with a LLC or a Sub chapter S corporation -- get advice from an IRS enrolled accountant or a CPA. Using a foreign corporation (not in your state vs. a domestic corporation) is a fallacy. If you are a foreign corporation, doing business in your state, you will need to register as a foreign entity and pay taxes according to your state's laws, on you in-state revenues and assets -- so it may cost you more in the long run. A Delaware incorporation will not obscure your identity either-- in most cases your filing of the foreign entity in your state (to operate legally) would require the officer's names to be listed if that is the procedure for domestic corporations. Here is an example from Massachusetts http://www.sec.state.ma.us/cor/corpd...3950c11348.pdf Quote:
There is no national (nationwide) incorporation in the USA (period). Stop the comic-book advice ... |
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If you have anything of value I wouldn't conduct any business till you speak with an attorney. |
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The corporation code is a "license to work law" for the legal and accounting community ... |
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Question; you wouldn't happen to be based in Connecticut, are you? |
All great advice here; thanks again. I had figured that I would eventually have to form an LLC at some point in the future; I just wasn't sure if I should start out as one or transition into it later on down the line. Until then, it's sounding like the DBA is the way to go.
Just one last question; my town's DBA filing includes a section where you have to list the nature of business you hope to do. Has anyone else encountered those before? If so, what did you list? I'm thinking of listing "Photography/Videography" or "Web Entertainment;" accurate but vague. |
Find out from a licensed attorney in CT if it's lawful to produce porn for distribution in CT;
Criminal Jury Instructions 7.4-1 Producing porn is only explicitly lawful on California and New Hampshire that I am sure of. Contracts that are for an unlawful purpose are set aside and nullified in a court of law. Describe yourself as a web developer or a plain videographer (graphic arts?). You would not put down dog and cat photographer, would you? |
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