Legal Question in Entertainment Law in California

Is a Fiscal Sponsorship subject to securities law?

Hi, and thank you in advance for your

time. Our film is being financed

through a Fiscal Sponsorship with a 501

(c)(3), which means that the

contributions are tax-deductible and

are not ''investments.'' However, if we

were to offer profit sharing as an

incentive to contribute to the film,

would that fall under securities law?

Can we draw up a private contract

between us and the contributors for

some form of profit return, even if we're

not ''selling shares'' in the film?

Thank you again for your help.

Best,

JR


Asked on 8/31/06, 4:41 pm

2 Answers from Attorneys
H.M. Torrey The Law Offices of H.M. Torrey

Re: Is a Fiscal Sponsorship subject to securities law?

You are welcome, and the answer to your questions really depend on how everything is structured paperwork wise. If you are not selling public shares, but rather investment joint venture or limited partnership type returns, then a custom profit sharing agreement should legally suffice. If you would like prompt, affordable legal assistance in drafting what you need, contact us directly for a free phone consultation.

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Answered on 8/31/06, 4:58 pm
Christopher M. Brainard, Esq. C. M. Brainard & Associates - (310) 266-4115

Re: Is a Fiscal Sponsorship subject to securities law?

I think if you offer profit sharing you may well be running afoul of the 501(c)(3) criteria as well as protentially running afoul of the securities acts -- i.e., they are investments. Among other things I am on the board of directors for a film funding company, you sound as though you need a good attorney and I am available for hire.

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Answered on 8/31/06, 5:17 pm


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