Film Investment Tips
How Investors Can Make Sure They Get Their Money Back No Matter film Sells or Not?
We talked with many investors ( the scams ones who pretended to be investor on investor websites are not included) and they usually ask what happens if the film or TV doesn’t sell? Here is the latest law about the latest Regulation D exemption which protects their investment in other words they get their money back no matter what.
Regulation D under the Securities Act provides a number of exemptions from the registration requirements, allowing some companies to offer and sell their securities without having to register the offering with the SEC.
“Some companies” can offer and sell securities without a registration, and it is all based on Regulation D. The benefit of filing for exemption is that it will allow investors to take advantage of the Tax Cuts and Jobs Act tax deductions that are available to support film and television productions. This is a great benefit that we can provide to our investors by properly setting up a securities offering. Because they may ask what happens if film or TV doesn’t sell, well this will provide security. So according the law the investors will have the right of rescission, meaning that the investors will have the right to get back their money, even years after the movie is produced. So they get their money back if the production doesn’t sell which is highly unlikely.
SEC-lingo “Registration” means the same thing as “IPO.” The SEC usually deals with really big companies that are raising billions of dollars. Companies that want to “go public” or conduct an “IPO” are required to “Register” their securities with the SEC.
Companies that comply with the requirements of Regulation D do not have to register their offering of securities with the SEC, but they must file what’s known as a “Form D” electronically with the SEC after they first sell their securities. All this work is basically done to keep investors happy. Investors want to know what producers are going to do with the money, what is expected of them, what is expected of the producer, and what they can do if the film or television project ends up not making money.
If done correctly, complying with securities laws answers a lot of investor questions and provides a framework for how to compensate them if there are profits, and how to let them take tax deductions if there are losses.
