The basic agreement necessary for an LLC is called an operating agreement, which sets forth the rules that govern the LLC and is analogous to a “shareholders’ agreement” for a corporation. Members of LLCs can be individuals or other entities, such as corporations or other LLCs. In some states, such as New York, there is also a publication requirement. To form an LLC, organizational papers must be filed with the secretary of state in the state of formation, along with filing fees. This means that personal assets of individual LLC members will be protected from the debts of the LLC. They are the most flexible in terms of tax treatment and allocation of power among and between members while still providing the benefits of limited liability for the business owners. Generally LLCs are recommended as production entities. A production company can be any form of business entity, such as a corporation, a limited partnership (“LP”) or a limited liability company (“LLC”). In order to finance a feature film, producers generally form a production company and sell interests in the business entity.
Rights purchase agreements and screenplay option agreements, writer "work for hire" or collaboration agreements and co-production agreements are among the many types of contracts necessary to engage talented individuals to develop a script for production. Agreements that are commonly needed during this period are those for the purchase of rights, the development of the script, and the hiring of writers to finalize the script. The development stage can last for many years, as rights are acquired and cast and crew are slowly assembled. The early stages of pre-production are often called “development”. Pre-production refers to the period of a film before production and shooting begins when those in charge of getting the film up and running finalize the rights and the script, get financing in place, put together the cast and crew and prepare for production. Agreements need to be set in place with your production team, cast and crew even from before principal photography begins.