Film production companies can be structured in a number of ways, mostly determined by financial circumstances. Many startups can't subside on their "in-house" creative projects alone, at least in the beginning, and depend on offering script, production, and post-production services to commercial and corporate clients.
Information on various business structures are described in chapter 3. Following is a synopsis of the most typical film production company types:
This is how many filmmakers begin, typically working out of their home with limited resources. When Frey Hoffman of Freydesign Productions in Chicago created his company in 1997, he had little more than a business card and computer.
"I didn't even formally legalize it." says Frey. "Basically I came up with a logo and put it on a business card and that was about the extent of it. And a strong desire to work in film and video."
There is no need to legalize a company if it is a sole proprietorship bearing your name (e.g., John Doe & Associates or Jane Smith Productions), but if you use a fictitious name you must go through a simple registration and announcement process that is offered by most local newspapers.
In this situation, two or more creative minds come together to form a company. An agreement should be signed between the partners to avoid assumptions about roles and responsibilities.
In 1995, longtime friends Kerry Rock and Georgina Willis formed Potoroo Films in Sydney, Australia, with the goal of making experimental short and feature length films.
"We initially had a partnership agreement drawn up," says Kerry. "The first partnership agreement was about who was responsible for each task. We also made sure we had all the business side of the company lined up, like copyright issues, as we realized we needed structures in place for taxes and other such things. As soon as you start making films, even shorts, you have to be more business oriented and have all those pieces in place."
Sometimes filmmakers form a short-term company, such as a limited partnership, with the goal of completing a specific independent film project, which is necessary when working with investors. When screenwriter/director Jerry Vasilatos set out to shoot his first feature Solstice in Chicago, he formed Nitestar Productions to have a company through which to operate during production.
"When I started making the movie I wasn't formally a corporation," explains Jerry. "I was just a guy making a movie and had to be under the banner of a production company, as it really helped in terms of working with vendors and distributors."
After Solstice was complete, Jerry decided to formalize his company as a corporation. He has since directed, edited, and produced multiple projects through Nitestar Productions, Inc.
With finances out of the gate or built over time, some film production companies are able to offer a full array of services, from scripting and production to post. As such, they typically form a type of corporation. These companies usually make their profits on client services to help offset the overhead of equipment and staffing.
MotionMasters of West Virginia depends predominantly on corporate clients while producing a unique slate of documentaries on the side.
"I've always enjoyed working on the corporate side of video productions because you get to learn a little bit about so many different types of businesses or industries," says MotionMasters' president Diana Sole. "So from an interest level I think corporate work can be very stimulating. It also gives you the ability to practice your craft and make a living while you're doing it."
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