Legal Question in Entertainment Law in Virginia

I'm filming my first feature film in a few months, and the budget is ultra-low ($5,000). This project is so small that I don't plan on setting up an LLC or any other official business entity. It will be produced and financed by myself and two friends, and we will be the owners of the film when it's complete.

Most of the people working on the film are friends, or just involved for credit and the experience. However, I would like to get a couple of more professional crew members to work on the film as well. Is it legal for me to offer them deferred payment if the production isn't an official business entity? In other words, can I just draw up a contract that says they will receive X amount of money after the film earns Y amount of profit? It seems like if the film was financially successful, it would be easy for him to dispute how much money the film has made, and he could argue that I "cooked the books" so I wouldn't have to pay him as much. I just don't want to get involved in any legal trouble down the road if the film makes money.

Asked on 2/23/10, 12:27 pm

1 Answer from Attorneys

Michael Hendrickson Law Office Michael E. Hendrickson

I do not see any particular problem with the legality of this contract

itself as described, however, it could be subject to challenge by one of

the parties for the reason you've suggested or, perhaps, on other grounds deriving from other ambiguities which might not even be apparent at the time the

contract is signed. But that can also be said of many other contracts

involved in the real world of making films or conducting other business activities.

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Answered on 2/28/10, 9:07 pm

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