Showbiz Management Advisors, LLC 

(602) 708-4981

The Right Way To Do Hollywood Accounting!

SETTING UP AN LLC

BENEFITS OF AN LLC

Forming an LLC can limit your liability and your taxes. However, operating an LLC requires a lot of responsibility. And, that is where Showbiz Management Advisors plays a major role. You are creative and want to make a movie. And, the last thing you want to think about is forming a corporation, paying expenses, making payroll, paying taxes and reporting to investors. We take care of you so that you can focus your efforts on making a great picture.

Forming an LLC affords its members limited liability and pass-through taxes to its members individual returns.

By forming an LLC instead of a corporation, you get all the benefits of forming a corporation but you avoid a few drawbacks that you would run into if you formed a corporation. Specifically, when you form a corporation, you subject yourself to double taxation and excessive paperwork. Both of those annoyances can be avoided if you form an LLC.

How do LLCs work? The LLC allows for multiple owners, or members. Additionally, there is a managing member, who also enjoys the rewards of limited liability and is typically the person responsible for managing the business.

The profits or losses of the business pass directly through to the owners' personal income tax returns, on their Form 1040. The LLC files a Form 1065, and then lists each member's taxable profit on Form K-1. In other words, the LLC itself does not file taxes.

With an LLC, the bottom-line profit of the business is not considered to be earned income to the members, and therefore is not subject to self-employment tax. But keep in mind that the managing member's share of the bottom-line profit of the LLC is considered earned income, and therefore is subject to self-employment tax.

Members are compensated using either distributions of profit or guaranteed payments. A distribution of profit allows each member to pay themselves by merely writing checks--whenever they need the money (provided the business has the available cash). However, as a member of an LLC, you are not allowed to pay yourself wages.

BENEFITS OF AN ARIZONA LLC

Although a writer/producer can create an LLC in any state, we encourage you to create an LLC in Arizona. Since we are located in Arizona and experienced in movie production, we can process all of your paperwork in an expedited manner at a fraction of the cost.

Here are the steps we take to create your LLC:

Step 1 - Reserve your name - we electronically check available names on the Arizona Corporation Website. If the name is available, we reserve it. This allows us 120 days to hold the name and file the necessary paperwork to complete the process. By reserving the name, you are assured that no one else can use the name elsewhere in the State for any other reason.

Step 2 - File Your Articles of Organization - based on conversations with you and your major members (those who own at least 20% of the interest in the capital or profits of the LLC) we file your Articles of Organization with the Arizona Corporation Commission in Phoenix, AZ.

Step 3 - Publish Your Filing - Once your filing has been approved and processed by the Arizona Corporation Commission, we prepare your filing for publication in a newspaper of general circulation in the county of the known place of business in Arizona, as filed with the Commission, for three (3) consecutive publications.

Step 4 - Submit Affidavit of Publication - An affidavit from the newspaper, evidencing such publication must be delivered to the Commission for filing within 90 days from the date your filing was approved.

Step 5 - Apply for EIN - We help you prepare a Federal SS-4, an application for Employer Identification Number. Similar to a Social Security Number, the EIN is used on all State and Federal tax returns for identification purposes.

Step 6 - Open Bank Account - Assist you in setting up a business checking account with a local bank.

CALL (602) 708-4981

TO SEE HOW WE CAN HELP YOU MAKE YOUR MOVIE!