How to Start a Film Production Company

Co-authored by Cinebody

Last Updated: April 29, 2021 References Approved

In the film industry, a production company can grant you a lot of freedom. You'll be able to produce films under your own independent company, free of constraints provided by outside businesses. While anyone can start a production company, and many young filmmakers start a company at some point, the process is fairly complex. However, with a little time and diligence, you can start a production company of your very own.

Part 1

Part 1 of 4:

Establishing the Basics

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Decide what kind of work you want to produce. Another basic aspect of a film production company is your company's vision. This is the kind of work you see yourself producing as a team. Film production companies focus on a variety of different types of films. Spend some time carving out your company's niche before moving forward.
- Do you want to write independent films with a low budget? Or do you want to produce films that will be commercially successful? Will you focus primarily on feature length films, or shorts? Will you consider doing pilots for television programs or do you want to work mostly with movies?^{[1]
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- You should also have an idea of the kind of content you want to produce. Will your films be humorous? Will they be action films? Dramas? Mysteries? The kind of work you produce contributes to your company's identity, which you'll use to brand yourself as you move forward. Make sure you carve out a solid identity before moving forward.
2
Decide on a name. The first thing you need to do before starting your company is settle on a name. As you begin to draft business documents and file paperwork, you'll need to refer to your company as something. Your production company's name reflects your personal brand, so you'll need to pick something that reflects the kind of art you want to produce.^{[2]
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- Filmmakers choose names for production companies for a variety of reasons. Stephen Spielberg's company, Amblin Entertainment, was named after his first feature film. Ridley Scott chose to use part of his name, dubbing his production company Scott Free. Choose a name that's fun, creative, and somewhat unique.
- You should also keep in mind the kind of films you want to make. If you plan on making primarily comedy films, a somewhat silly sounding production company name is to be expected. However, if you're planning on making more serious, artsy films, choose a name that sounds a bit more dignified.
- If you're starting a production company with friends or creative partners, make sure you all agree on the name. Film production can be stressful and creative differences often affect work relations. You should be able to agree on something as basic as your company's name to avoid hurt feelings from the get-go.
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3
Choose your company type. Companies are broken down in several different structures. You'll need to settle on a company type prior to filing any documents regarding your production company. Spend some time familiarizing yourself with different types of businesses.
- Sole proprietorships are the most common business type for people just starting out. This means the business is run by you, the individual, and there is no legal separation between you and the business. While this one of the easiest types of businesses to form, it's not recommended for a production company. A lot of accidents occur on set. You would be fully responsible for accidents and injuries accrued during the making of a movie as the sole proprietor of your production company.^{[3]
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- A better business structure for a production company is a Limited Liability Company, or an LLC. An LLC is a hybrid business structure in that is flexible regarding things like taxes and legal liability and allows for partnerships. Most production companies are initially LLC's. You can own an LLC alone, or you can have multiple owners of an LLC.
- Other structures, such as a cooperative or a corporation, would not be ideal for a young production company. Cooperatives are only operated for the benefit of the owners, and a corporate structure may be too daunting if you're a young filmmaker. The LLC is probably the best option for an early production company.^{[4]
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4
Draft your business plan. Every company, a film production company included, relies on a business plan to function. Your business plan is essentially the blueprints of your company's structure. It outlines how your company functions, your company's policies, ethics, and so on. Before you begin filing paperwork, draft a business plan so you know how production company will function.
- Include a mission statement, which outlines your company's goals and ethics. Your mission statement should also overview how your business was formed, listing the names of all the production company's founders. You should include how you plan to make money from your films, as well as any startup funds you're putting into the business.^{[5]
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- A business plan is a vital document for a production company. If you do not have a background in business or law, you may want to find someone with a law or business degree to help you with your statement. It may also be a good idea to include at least one co-founder of your production company with some knowledge of business.
- It's a good idea to have a business lawyer look over your business plan when you finish the document. This can help you make sure everything in your plan is legally sound.
- You should also keep in mind that, as you continue to form your production company, you may have to edit certain aspects of your plan. Until your company is fully formed, you will be continuously editing and adjusting your business plan.
5
Establish the basic staff. Going into a production company, you will need four basic staff members. You'll need a head of development, a head of production, a head of post-production, and a head of sales. While you do not have to have all of these staff members chosen going in, your founding members should be willing to fill at least a couple of these roles.^{[6]
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- The head of development chooses and assesses scripts. A founding member, such as yourself, should be willing to be the head of development. This is the person who will decide the kind of scripts you produce, thereby establishing your company brand.
- The head of production makes sure films are created on a specific timeline following a specific budget. This should be someone with a background in film production, who also has a knowledge of business finances.
- The head of post-production oversees technical editing when a film is complete. You'll need to select someone who has an extensive background in film editing.
- Lastly, the head of sales and distribution is responsible for helping a film make a profit. You want someone with a strong background in marketing and advertising for this role.

Part 2

Part 2 of 4:

Filing Paperwork

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Apply for a business loan, if necessary. When starting a film production company, you'll need a certain amount of money for equipment and other expenses going in. Many people fund these costs through online outlets like GoFundMe or put in their own money. This may not be enough money, however, to get your business going. You may have to apply for a business loan to front some of the early costs for your production company.
- You will need to present your business plan to get a loan. You will also need to run a credit check on you and your partners, which you can easily do using online outlets. There is usually an application form you must fill out, detailing the reasons you're applying for a loan as well as some information on your personal background. You'll also have to present a variety of legal documents, such as your own income tax reports, that vary by bank.^{[7]
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- Some banks want a resume submitted with an application for a business loan. Your resume is meant to highlight your experience in business management. A good resume can increase your chance of obtaining a loan. If you have a co-founder with a background in business, including his or her resume in your documents can increase your chances of being accepted.
- Depending on the bank, you may have to offer something up as collateral. The type of collateral varies greatly on your personal background and the bank where you're applying. If you have a strong business plan and good credit, you may be able to avoid putting up collateral.
2
File an operating agreement. The first step to legally forming your production company is filing an operating agreement. This is an agreement that lays out the basic structure of your business. You will usually register your business name with the state, along with an operating agreement. Where your register varies by state and county, so check with a local courthouse.
- Your operating agreement should lay out the basic structure of your business. What is the hierarchy of your production company? Who is in charge? What are individual responsibilities?
- You should also include how money is distributed. In the event one of your films makes a profit, who gets paid what percentages of that profit? How is payment distributed? Do you issue checks, for example, or do directly deposit funds into contributors' accounts?
- Your operating agreement is a legal document. You should absolutely not file the agreement before having it looked over by a lawyer. In fact, it's best to have a lawyer write the document for you for a fee. It's a good idea to find an entertainment lawyer or at least a lawyer with experience working with film production companies. There are a lot of unique challenges that go into the legality of making movies and TV shows. Some of the start-up money you gather from loans, personal investments, and other funding can go towards paying your lawyer's fees.
3
Choose a registered agent. In order to legally create a company, you'll need what is called a registered agent. A registered agent is a third party who accepts legal and tax documents on behalf of your company. This is to assure that your company does not evade taxes, lawsuits, or other documents of the sort. Almost every state requires you have a registered agent for your business.^{[8]
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- Select someone you trust as your registered agent. You can act as your own registered agent in some states, but this puts a lot of pressure on you and may make your business look less than professional. Choose someone you trust and you see as responsible. An old colleague from business school who lives in your state may be a good registered agent, for example.
- Most states legally require you to select a registered agent. Even if your state is not specifically require this, it's recommended you do so. Without a registered agent, you could potentially fall out of good standing with your state. This could result in business documents being rejected upon filing.
4
File your Articles of Organization. The Articles of Organization sound like a daunting legal document. However, they're actually a fairly simple form that provides basic information regarding the members of your company. You'll have to provide names and addresses, as well as the location of your business. This is where you'll list your registered agent.
- Like your operating agreement, where and how you file varies by state and county. You can call or stop by a local courthouse to ask.
- Some states may have filing fees. Make sure you know these fees before leaving to file your paperwork.
5
Get employee identification numbers (EIN). You and your founders will all need an employee identification number issued by the IRS. This helps identify you for tax purposes. How you apply varies by state, so ask at the courthouse when filing your other documents. The process is usually fairly straightforward. There should be a form you fill out with basic information, like your name, social security number, and so on.^{[9]
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Part 3

Part 3 of 4:

Forming Your Company

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Consult an attorney. As your business becomes official, you should make a point of consulting a business attorney. As you begin to hire staff and plan for films, you'll want a legal professional on your side to make sure you're following laws and regulations. You can ask film peers for attorney recommendations or look for an attorney online. Check reviews to make sure any attorney you hire has a solid reputation.^{[10]
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- You'll want to ask your attorney information about hiring staff. How you legally hire a person varies by state and a qualified attorney is necessary to walk you through the process. In the early ages of your company, the last thing you want is to face fines or legal repercussions due to improper hiring practices.
- An attorney can also help you with a variety of copyright issues involved in film. He or she can help walk you through how to copyright a script and protect your intellectual property.
- Keep your budget in mind when hiring an attorney. Rates vary from attorney to attorney, but legal fees can get expensive. Make sure you select an attorney within your company's budget.
2
Hire a Certified Public Accountant (CPA). If you're running a business, you need an accountant. An certified public account (CPA) can help you manage your finances and navigate tax season. Unless someone on your team has experience in financing, do not attempt to do accounting on your own. Business accounting can be tricky and you do not want to accidentally file something incorrectly.^{[11]
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- Meet with a variety of accountants before selecting one. You should also read reviews online to make sure any accountant you hire has a solid reputation.
- Choose a CPA with a background in entertainment financing. Funds are distributed to a wide range of people on a film set, and you'll need an accountant who can help make sure you're giving everyone involved in a film a fair cut of any potential profit you make.
3
Hire the necessary staff. If you want to make movies, you'll need a staff. How big your staff is varies depending on the type of films you're making. Very small, independent films may be able to get by with a staff of 10 people or less. Here are some general areas where you may need to hire staff for a film:
- You may need to hire writers if you're not producing your own scripts.
- You'll need to hire a technical crew to help set up set and deal with breakdowns of equipment.
- If you're not doing your own editing, you'll need to hire film editors.
- Actors and actresses are obviously important. You will need to host auditions and hire talented people.
- You will also need people to assist on set with things like make-up, costume, script supervision, and so on.
4
Open a company bank account. Once your company is legally created, you'll need to open a company bank account. It's important you have a bank account for your company for the safekeeping of funds for movies and other projects. You can simply go to a bank and ask about applying for a company bank account. As long as your production company legally exists, the process should be fairly straightforward.^{[12]
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Start a website. You need to be online in order to generate interest in your company. You should secure a domain name that's close to your production company's name. You should hire a web designer to create a professional looking website for your company. If you have someone on your team with experience web design, you can also ask him or her to design your site.
- Get on social media as well to market your film. You should have a Facebook and Twitter page for your production company in order to generate public interests.

Part 4

Part 4 of 4:

Establishing Your Company

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Consider producing shorts. When you're beginning to establish your film production company, consider initially producing short films. Short films are brief films, usually 10 to 15 minutes in length, that are cheaper and quicker to produce. Many big film festivals, such as Sundance and South by Southwest, have a short film category. If your film does well at a festival, you can potentially get noticed by an agent. Your production company may be able to get funding or theater distribution for bigger projects.
2
Use the internet to your advantage. The internet provides exciting new opportunities for young filmmakers. You can upload your content for free on YouTube and, if you generate a following, you may get your content picked up for television.
- Make sure to include your production company name at the end of all your videos. This way, you'll help people remember your company.
- Copyright content before posting it online. This will prevent your content from begin stolen.
3
Apply to festivals. One of the best ways for production companies to get noticed early on is to apply for festivals. Big film festivals include things like South by Southwest, Tribeca Film Festival, and Sundance. You can also try for smaller festivals in your area, which may be less competitive.
- Applications vary by festival. Usually, you just send in a copy of your film along with a possible submission fee.
- Prepare yourself emotionally for rejection. The film world is very competitive and you'll likely get far more rejections than acceptances.

Expert Q&A

Question

What is the first thing to do when starting a business?

Cinebody
Video Production Gurus
Cinebody is a Denver-based computer software that helps companies create professional video content using the combined power of user smartphones. Their user-directed content software empowers brands to create instant, authentic, and engaging video content with anyone on earth.

Cinebody

Video Production Gurus

Expert Answer

The first step to starting your own production company is a desire to start a company. Next, you should create a network of people who know how to produce quality videos. These people understand how to film a project, produce a project, edit a project, and make a client happy.
Question

How can I create a film studio like Marvel Studios?

Community Answer

Follow all of these steps, then over time (hopefully) your business income will grow large enough to afford the stuntmen, green screens, etc. that Marvel uses. If you're interested in making action movies, I recommend starting with action-shorts to make sure it's a passion of yours.
Question

What types of insurance does a film production company need?

Community Answer

Insurance would be required to cover the sets (because they would be quite expensive), plus insurance to cover the cast and crew, especially stuntmen!