The first step in forming a production company is to create a business entity, such as a limited liability company (LLC), limited partnership (LP), or corporation. There are many advantages to setting up a business entity:

•  You can divide the financial risk among several people. The members, partners, or shareholders of a business share in the company’s profits and losses.

•  Your company is considered a legal person, and as such can enter into contracts, bring lawsuits, and hold intellectual property rights, such as the copyright to a film.

•  You can separate your personal finances from the company’s finances.

•  You may die someday, but your company doesn’t have to. Some kinds of businesses can last forever, ...

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