Video production company- LLC or Sole Proprietor

[610bob]

I would like to start a, I guess it would be called a video production company. But I am a bit dumbfounded on where to start. I have a youtube channel now that is growing that will become my company's major product. My expected income would be from youtube ads and patreon. But I also would like to look into making youtube commercials, product videos, and product how to videos for companies. Long term, I want to make short films and fictional video series.

From what I have learned, most youtubers do a sole proprietor. But I am unsure if this is the wisest decision. Especially since I would like to do work for other companies in the short term for income. And maybe long term if that is where the money is.

But I have also heard that an LLC won't protect me that much since somone could still sue me personally. But I'm not sure how true that is or how much of an issue it would be.

I would appreciate any guidance you guys can give me. If it matters, I live and will form the company in PA. Thanks.

[vangogh]

An LLC offers some protection, but not every protection. That's why it's a limited liability company. You can still be sued personally depending on your situation and how separate you can keep your personal life and your business.

Do you have assets to protect right now? Do you own your home? A new car? If you don't have a lot of personal assets, you probably don't have to worry about protecting them just yet. You can start as a sole proprietor and work on building the business and then at some time in the future you can still set up the LLC. I don't mean to imply you shouldn't start an LLC now, but I wouldn't spend too much time agonizing over the decision. Get the business going first. You can change your business entity whenever you want.

[turboguy]

With the type of work you are doing it probably is not going to make a lot of difference. As Vangogh mentioned even if you have an LLC it isn't total protection. If you do something like pay for some personal things with a company credit card or mix funds between the business and personal use it can potentially be enough to "pierce the corporate veil" allowing them to come after you individually. Also if you make false statements and do things that are fraudulent or illegal they can come after you.

Without being in the same business as you are it seems to me that the two ways someone could come after you would be wanting a refund if you did shoddy work or failed to deliver the work you were paid to do and if that was the case they probably deserve a refund. If you were something like a tree removal company that had the potential to cut down a tree that would fall on someones house or on a person killing them then protection is very important but I can't see it being an issue in your business. If once your business is running and you want it to be an LLC for tax purposes you can convert it to an LLC any time.

[610bob]

Vangogh and turboguy Thanks for the responses. I don't have any large assets like a home or a car. But keeping personal and business expenses may be difficult. The videos that I do right now center around projects that I build for myself. For example, I am making components for my jeep. I turn the process of that into a video. Since the parts that I use are required to make the video, I would like to claim part of those expenses as business expenses. Would this be a problem with an LLC?

turboguy I would be mostly concerned with a company suing me because they dislike a product review (non sponsored review), regret a video that they approved, or if I shot on location and someone trips over a light or something. Probably not a high risk. Especially if I get a contract that would cover such things. But I am a bit paranoid.

[turboguy]

As far as the parts asking an accountant would be the best option. My feelings are that it is borderline. You can probably deduct the parts and if you would happen to get audited, which is not all that common unless you are a high earner or file a return with red flags, the odds are about 50-50 of them allowing it. If you gained personally from the parts then it may be questionable but you have a good case for it being deductible.

As far as someone tripping over a light you really should have insurance which would cover that. As far as the reviews if they are factual then you should have no problem. I haven't seen Consumer Reports sued over their reviews.

[610bob]

Ok, I'll ask an accountant about the logistics of that. Thanks. As far as an llc. It seems like it may be best to grow into an llc rather than go for the expense right now. But I wonder. Does an llc give any benefits to protecting a company name over a DBA? I know it's not a trademark. Just curious if it would help protect my business name.