Expert: Dan Pepper - 3/25/2010

Question
Is it absolutely stupid to not form an LLC? Does one have to form a business entity at all? This is in reference to shooting adult video and selling it online as DVD or download or in walk-in shops.

Secondly, I need model release forms but would rather not seek out a lawyer for this and would rather find these forms pre-made online. In this case, what would you say are the most important things the form should contain?

Third, you seem to be lenient on filming in other states, but I read that it's only legal in CA with a film permit, and that sex in exchange for money - no matter what the reason or circumstance, he said - is considered prostitution in ALL states. Do you know why the person would say that and do you still think it's legal to produce adult content in other states?

Fourth, if I WAS to shoot porn in CA, would I need just a generic CA film permit or a more 'specific' permit?

Answer
Dan,

First, I would NOT get into this business without forming a separate business entity.  Without doing so, you're putting your house, car, savings, and any other personal assets of yours on the line.  In other words, you are assuming unlimited personal liability.  Is that worth it?

Second, if you want to find forms online for free, you'll get what you pay for.  For them to be effective, up to date, and compliant with applicable state and federal laws (including 18 USC 2257), I would not bet your business and your freedom on what's floating around the Internet.  If you're going to enter this industry, doing it on the cheap can seriously cost you.

Regarding the legalities of filming outside of CA, a little bit of background is necessary:

In 1988, the California Supreme Court in a case named People v. Freeman. decided that pandering laws could not be used as a "tool to impose a system of governmental censorship of erotic materials."  Effectively, this means that the production of adult content in California is not pandering on the part of the producer, nor prostitution on the part of the performers.

With the explosion of adult content on the Internet since the 1990s, and the fact that very few pandering or prostitution charges were brought against adult performers or producers, it has generally been assumed that such content could be produced in the U.S. without risking these types of charges.

That being said, no other state in the U.S. has considered the decision in the Freeman case, which means we don't have a definite answer how other states will handle it.  New Hampshire and Nevada have certain laws or court decisions which MAY, under certain limited circumstances, permit certain forms of adult content production.  However, it is safe to assume that the more conservative jurisdiction you produce your content, the higher your risk.

Additionally, any adult content that is considered "obscene" under the definition of the U.S. Supreme Court, is also prohibited and illegal.

Lastly, when filming in CA, special adult film permits are obtained at the city level, but you also need to follow CA-OSHA requirements (http://www.dir.ca.gov/DOSH/AdultFilmIndustry.html).