Creating new entity for media production; advice on type of business to register as?

Discussion in 'Growing and Managing a Business' started by rcmedia, Jun 17, 2011.

  1. rcmedia

    rcmedia
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    Hello-

    New user here looking for advice! Thanks in advance for reading and any responses.

    I co-own a partnership business ran as an LLC that I will be signing over to my business partner and then starting a new business on my own.

    I will be doing video production and other media work and I was wondering what the best route would be to go in the type of business to register for. I'm leaning toward an LLC because for purposes of lawsuits and such. The way the world is today people are sue happy and I don't want to get caught in a situation where a client, by some off chance, might be unhappy with their end product enough to try and clean me out for everything I have.

    I will be running the business myself and plan to hire accountant services to take care of all the stuff I don't like to deal with.

    Would LLC protect me best, or is there another recommendation I should be registering as? I suppose the binding contracts I require to be signed with clients could clearly state that they agree that in the event of equipment failure or other act of god that's out of my control that the only amount responsible to reimburse is the amount up to the cost of the production?

    Thanks very much for your time!
    -Ryan
     
  2. Fergal

    Fergal
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    Welcome to Business Advice Forum Ryan. Could you please tell us what state / country the business will be located in?
     
  3. rcmedia

    rcmedia
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    Sure, thanks!

    I'm in Washington State, USA
     
  4. ArcSine

    ArcSine
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    Ryan, most likely an LLC would be a good choice. You're indicating that liability and asset protection score pretty high on your Importance-O-Meter. An LLC will give you the insulation you're looking for (comparable to that of a corporation) while simultaneously being a pretty simple and efficient vehicle from a tax standpoint.

    Given your motivation, I'd suggest a brief discussion with an attorney who practices in the area of corporate and LLC law in Washington state. LLC statutes (the rules and regulations that govern LLCs) are state-specific; every state has their own LLC rules, and there are diffs among them.

    Similarly, creditor / debtor issues and liability issues are generally governed by state laws. Hence, an attorney practicing in WA can look at your details and then verify that a WA LLC will provide the kind of liability firewalls you want, given the nature of your business activity and the type of contracts and agreements you'll have with your clients.

    Also, while LLCs and corporations provide pretty good protection in and of themselves, it's usually a good idea to supplement that with (1) insurance protection, when and as appropriate for the situation; and (2) carefully drafted contracts and agreements. Along with entity selection, these make up the 'Big 3' of protection. If written agreements will play a significant role in your business model, an attorney can help you tighten up the wording and thereby cover #2.

    Cheers!
     
    • Like Like x 1
    #4 ArcSine, Jun 20, 2011
    Last edited: Jun 20, 2011

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