Okay, time for a lesson on business side of “film business”. As many of my faithful readers know, I was a broker in the 1990’s which helped because I had to know and understand investment laws of what is and is not legal. I recently saw something so glaringly illegal and stupid it blew my mind.
Some complete idiot was soliciting investments in a video on YouTube. Now that alone is bad enough, nonetheless illegal. The Securities and Exchange Commission frowns on any kind of public request for funds, but a flat out sales pitch? Ridiculous! Kids, you cannot state you are looking for investors in any public forum without an Initial Stock Purchase, which is sanctioned and monitored by the SEC. Don’t be stupid.
It gets better. In this same video, the complete imbecile also GUARANTEES a return on investment. Investing 101 – there are no guarantees and it is illegal to promise money back. This can put you on the hook for their investment without the protection of a corporation or you can go to jail for fraud.
I have not researched this, but I would bet money this moron hasn’t even incorporated his film “company”. Now, we’ve all gone through these phases of making up a name and start using a production company name without the little technicality of actually forming a legal corporation with a Tax ID number. That’s where everyone starts. Once you turn 22-23 years old, that starts to wear thin and it’s time to grow up. Spend the $30 bucks and register a company name with your state, or Delaware as many corporations do (because they are very lean on lawsuits against Corps).
Now if you are asking for money for your film company and your company doesn’t legally exist or have the proper paperwork filed with the state treasurer or SEC for specific types of Limited Liability Corporations to sell shares; You are breaking the law. In this day and age of investment fraud being so rigorously investigated and all eyes are against people playing with money – DON’T DO IT. DON’T BE AN IDIOT.
Talk to an attorney. Set up your corporation properly and don’t ever ever ever ever ever promise or guarantee a return on investment. That is fraudulent and you will screw yourself over.
