Intellectual Property Law
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Dear Ioanna, name is XXXXX XXXXX my goal is to provide you with Excellent Service,
1. Do you have a written Investment Agreement with this investor ?
2. If so, does the Agreement specify at what intervals the investor will make his deposits and in what amounts ?
3. What does the investor receive as a return on his investment ?
4. Does the Agreement address the issue of default by either party ?
hello Andrea. Thank you for your time.
1. No, I haven't signed any kind of papers with him so far. He said that I'll get paid for my screenwriting and directing work through the LLC once it's established.
3. The rights to the final product, and any profits that might come in. I assumed that this is supposed to be written into the LLC paperwork? or should I have some sort of investment agreement with him beforehand?
4. We haven't discussed that. Is that supposed to be spelled out in the LLC Operating agreement, or in a different legal document beforehand?
Hi, Ioana, Thank you for your additional information,
If you do not have anything in writing signed by you and the investor which sets forth the rights and obligations of the parties, there is no way that you can hold the investor liable for anything. And, the investor can back out of your verbal agreement at any time and argue that since there is nothing in writing there is no way he knew what his obligations were, at what intervals he was supposed to deposit his investment, what the return on his investment would be, how he would be paid, etc. Without a signed written Agreement with the investor, before production even starts, there is no way to protect yourself.
It appears that the project would be headed for disaster from the starting gate. Unless there is a written Agreement, there would be no way that you could even sue him for the money because a Judge would have no way of knowing what the rights and obligations of the parties were or whether either party was in breach of the Agreement.
You stated that the investor would have the rights to the finished production and all the profits therefrom. Maybe I am missing the point, but what would be the purpose of putting on a production, bearing all the responsibility and all the headaches, if you do not have the opportunity to share in the profits of its success. By giving this away to the investor, what are you left with in the end?
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thank you Andrea
just to answer your question, we haven't actually decided yet what the investor is supposed to get on his return. I just assumed that basically he is "buying" himself a film, the producer and I get paid a fee for the work and that's it.
You should never give away all the rights to a film, a play, or anything of artistic value. It is best to give only a percentage of the net profits, never the product itself. If it becomes absolutely necessary to give something of the product, always be sure that (1) it is a very small percentage, leaving you with at least 75% ownership and control; and (2) It should be in exchange for something else. Always hold more than just a 51% majority. Please be kind enough to rate my service as Excellent Service so that I can receive credit for assisting you, otherwise I will not receive credit for researching your question and furnishing you with Answers and information. Thank you for understanding,
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