How to Form a Corporation that will Act as a SAG Signatory
November 29, 2009
When a production company wishes to employ Screen Actors Guild (SAG) performers, the company must agree to follow various SAG rules related to the employment to SAG performers. By doing so, the corporation becomes a SAG “signatory”. This article outlines the corporate actions that must be taken by a production company that wishes to become a SAG signatory.
Step One. First, a corporation must agree to abide by the terms of the Producers-Screen Actors Guild 2002 Codified Industrial and Educational Contract and the 2008-2009 Extension to the 2005 Memorandum of Agreement (collectively, the “SAG Agreement”). In California, this can be accomplished by (1) the corporation entering into the Agreement, and (2) the shareholders and directors authorizing the corporation to do so. SAG requires “incumbency” provisions in its resolutions (i.e., a specific corporate resolution that identifies the person who is authorized to sign the SAG Agreement on behalf of the corporation). A copy of the SAG Agreement is contained in the following packet of materials, Full Ind Sig Forms (e-mail). For a form of Joint Written Consent of the Shareholders and Board of Directors, see jtwrittenconsent.
Step Two. For corporations, the production company should complete the SAG Company Information Sheet. Doing so will require a copy of the company’s Articles of Incorporation, as well as the names and addresses of the officers of the corporation (i.e., President, Secretary, Treasurer, and Vice Presidents, if any). A California corporation must have a President, Secretary and Treasurer. For more information, watch this video “What Officers Are Required?” http://www.eminutesonline.com/what-officers-are-required-watch-video/
When a performer joins SAG, she is required to comply with Global Rule One, which states that “No member shall work as a performer or make an agreement to work as a performer for any producer who has not executed a basic minimum agreement with the Guild which is in full force and effect.” By becoming a SAG “signatory”, a production company is permitted to hire SAG members for its projects, and, in exchange, obligates itself to comply with SAG policies (e.g., nondiscrimination), pay certain taxes and make various contributions on behalf of SAG members participating in the company’s projects (e.g., Social Security, tax withholdings, unemployment insurance and disability insurance payments, and payments to the Screen Actors Guild-Producer Pension and Health Plans).
Similar authorization and documentation is required for limited liability companies (LLCs) and limited partnerships (LPs) that wish to become SAG Signatories. For more information about the basic differences between LLCs and corporation, watch this video “Should I form a LLC?” http://www.eminutesonline.com/should-i-form-an-llc/
Can Your California LLC Avoid the Annual $800 Franchise Tax?
October 4, 2009
When a newly formed LLC elects to dissolve, on the other hand, the process is far simpler and the LLC does not need to pay the $800 annual Franchise Tax if certain requirements are met. A newly formed LLC can file a Certificate of Cancellation Short Form (LLC-4/8) and the $800 Franchise Tax will be waived if the following requirements are met:
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The Certificate of Cancellation is being filed within 12 months from the date the Articles of Organization were filed with the Secretary of State;
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The LLC has no debts or liabilities (other than tax liabilities);
- The assets of the LLC have been distributed to the person entitled thereto, or no assets have been acquired;
- The final tax return or a final annual tax return has been or will be filed with the Franchise Tax Board;
- The domestic LLC has not conducted any business from the time of filing the Articles of Organization (including opening of a bank account and depositing any funds into such bank account);
- A Majority of the Managers or Members voted to dissolve the entity; and
- Any investments received from investors have been returned to those investors.
Looking to cut costs? Start with your LLC
August 25, 2009
Virtually everyone these days is looking for ways to save some money, and the first place to look for California investors should be your LLC.California notoriously taxes LLC gross revenue. Read more
California Cracks Down on Deadbeat LLCs
March 25, 2009
Prior to 2009, California did not impose any suspension or forfeiture penalties for LLCs that failed to pay their annual franchise tax, any associated penalties, interest, of failure to file a return. Consequently, unlike corporations, LLCs were able to continue to operate without consequence for not following the statutory tax prescription.That has all changed. Read more
Debunking the Myth of LLC Poison Pills
March 25, 2009
The celebrated psychologist Sy Kosis is sued for malpractice. After a trial, Sy’s patient has a $1 million uninsured judgment against him and then begins turning over every stone to find Dr. Kosis’ assets. It turns out that Sy owns a 25% interest in a LLC that owns an apartment building. Can the creditor grab Sy’s interest in the LLC? Read more
Do Single Member LLCs Provide Limited Liability Protection?
March 25, 2009
One of the single most important reasons why people form business entities is liability protection. In the eyes of the law, single member limited liability companies, despite having only one member, provide the exact same protection as limited liability companies with more than one member. Read more
LLCs Ain’t For Everyone
March 25, 2009
Not all types of business ventures are created equally in California. A California LLC or a foreign LLC registered to do business in California may not engage in a business which is registered, licensed or certified. Accordingly, professional LLCs are prohibited in California. Read more
Series LLCs – Better Choices Available
March 25, 2009
What is a Series LLC? A Series LLC is a LLC just like any other LLC, but the Operating Agreement of a Series LLC creates separate “series” of assets that are partitioned and protected from other assets held by the LLC. The idea is that the liability of each asset owned by the LLC is only enforceable only against the assets that are held in the same “series”. Read more
Theatrical Production LLCs and the New York Publication Requirement
March 25, 2009
New York requires that all domestic and foreign limited liability companies and limited partnerships publish a copy of the articles of organization or a notice related to the formation of the company in two newspapers. Read more
New York’s Irrational LLC Publication Requirements Hurt Business Owners and Benefit Special Interests
October 20, 2008
In New York, a Limited Liability Company must publish, within 120 days of its formation, a notice in two general-circulation newspapers (one daily, one weekly) in the county where the LLC was formed. The notice has to run once a week for six weeks and include a number of facts concerning the company and its formation. If an LLC doesn’t fulfill the publication requirements, the company’s authority to do business in New York can be suspended. Read more
