Legal Question in Business Law in California
I am in California and am currently making payments To the State and IRS for back taxes (about 2300 to the feds and 4000 to the state) I am starting up a film production company to film my first movie in the spring of 2011. I will be raising money for funding in the next few months and setting up a bank account. Is there a way to set this up and not jeopardize the investors money?
2 Answers from Attorneys
If you are starting a production company, you should form it as a business entity that will have it's own tax ID #. The money you raise does not belong to you, but is the money the inestors are investing in the project. I am assuming that the Federal and State tax payments are a personal liability and tied to your SS#. Please feel free to contact me to discuss alternatives for beusiness entities.
I don't think Feldman's advice will protect you, since a sole proprietorship TIN is tied to the owner's SSN. The IRS and FTB will immediately know the connection. I suggest you form a LLC or S-Corp. That is the only way to assure the money is segregated.
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