Whenever Marvel Studios chooses to push a film or series into development, Disney creates a new limited liability company to serve as the operating entity behind each respective production. It is through the formation of these entities that some are alert to new projects in the works, often trying to guess which characters from each company name might come to life. Earlier this year, some speculated that Disney’s new Blind Faith Productions, LLC could potentially be a Daredevil project and behold, months later one brave The Disney+ series was reported to be officially in the works.
However, why would a group like Disney want to operate dozens of different companies? As a former Marvel lawyer puts it, it involves separating the liabilities of one project from the next.
“Each project (motion picture, TV show, etc.) should ideally be set up through its own entity, primarily to separate any liability associated with that project from the company or its other projects,” attorney Paul Sarkar told ComicBook.com. The concept of such limits of liability is a fundamental principle of corporate law. Corporations (and LLCs) exist as separate legal entities, in the legal sense, they are individuals, and they can enter into agreements and be sued. To encourage people to invest in corporations, we limit investors’ liability to the amount of their equity in the corporation (or LLC). There are exceptions to this, of course, if entities are being used as a sham or are not complying with all legal requirements. ,
Often, these limited liability companies are created early in development, long before the project begins and casting begins in earnest.
“I would say that when LLCs are formed is somewhat flexible, but it is usually at the beginning of the project, so that is before you hire a dedicated writer for that project,” Sarkar says. “Sometimes they will use the same LLC for multiple projects or multiple seasons of TV shows, because each entity has a cost to build and maintain, so at a certain point that becomes a factor (for example, A company like Disney wouldn’t want to manage 50,000 entities).”
Sarker hosts the podcast better call paulA weekly show covering various aspects of entertainment law.
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Reference from comicbook.com