You are most welcome Cherry. I've had a couple of interviews with the press about film funding in a downturn, but I don't know if they have been published yet. This is a very topical matter at the moment due to the economic circumstances that we're experiencing. Re the donations, we figured £5 is about the price of a pint and packet of crisps (in London), so it's not really a high involvement purchase hehe! Thank you very much for your encouraging words, it really means a lot!

Any more Qs?

Johan Neethling
Producer - Thames Gate Films

www.twitter.com/JohanNeethling

Thanks Johan
Really clear and informative.

Really impressed with the way indie filmmakers are sourcing funding. Although £5 units must be more difficult to manage than higher amounts but as you said people are more inclined to risk it. I'm sure your film is not a risk though.

Good luck admire your entrepenerial skills.
Cherry

You are very welcome Bill! The HMRC guidance is quite daunting but I think this is reflective of the fact that this is a complex area. Let me know if you have any more questions.

For those of you reading this thinking that you quite fancy an Associate Producer credit on The Lost - check out our website at: http://bit.ly/cjj15

J

PS Shorter post this time! hehe!

Johan Neethling
Producer - Thames Gate Films

www.twitter.com/JohanNeethling

Thanks Johan. You helped me grasp some key ideas behind the EIS scheme. The guide on the HM Revenue and Customs website was pretty daunting.

Hi Bill,

Thank you very much for your question. I should be grateful if you could clarify your first question relating to contracts, but I'll make some general comments because I think I understand what you are getting at, BUT before I do that, these are just general comments and you should not apply them to your specific circumstances without seeking advice from your solicitor or accountant. If you need it, I can put you in touch with the relevant specialists!

Right, down to it! And it's a bit of a toughie!

Generally it is a good idea to have in place a contract between the director/producer/writer/any above the line/below the line talent that is attached to the project. This contract will be concluded between the individual providing the services (for example the director) and the production company. This will allow you to define clearly who has what responsibilities, and how duties will be performed by all parties etc (Raindance Premium Members have access to sample contracts on the Raindance members website which is very useful indeed). The fact that they are providing services to an EIS company should not influence the company's status as an EIS company. However, you should consider very carefully how you structure your production company in your group as there are very stringent requirements for EIS qualifications with HM Revenue and Customs in the UK. If I've missed the point of your question let me know, but generally the gist of the story is that you should generally always use contracts to protect both parties.

With regards to your second question, it's worth bearing in mind that when EIS shares are issued to private investors, they have some level (proportionate to the number of shares held) of voting power in the company. There are complex rules in place that look at investors' control over the company in which they invest and it is important to consider these at the outset of the project. The private investor will not be eligible for personal tax relief if they are connected to the company, be that financially connected to the company, or connected by EMPLOYMENT.

In a situation like this, you have to remember that by using a company; there is going to be a divorce between management and control of the entity. The entity may be controlled by the shareholders, but ultimately the producer and the managers will be responsible for the day to day trading aspects of the company. If one of the EIS shareholders want to get involved in the production - ie be employed by the company, they need to consider this very carefully as it might exclude them from qualifying for EIS.

I really must stress this is a VERY COMPLEX area that you should seek specialist advice before embarking on setting up an EIS company.

I hope the above is useful as a general guide, please let me know if you have any further questions.

J

PS Wow! I just previewed this post and it is LONG! Apologies for that!

Johan Neethling
Producer - Thames Gate Films

www.twitter.com/JohanNeethling

Hi Johan,
I believe a contract needs to be drawn up between the film-maker and the investing company under the EIS scheme?

What are the most important things to keep in mind in terms of safeguarding the film-maker's interests/rights when working with private investors?

That's great!
thanks for your reply :)

Hi Tiffany, Thank you very much for your question, one I think many people have been interested in. We've had a fairly decent response to our appeal, but as with all indie films, we can always do with more cash. We've had about 40 donations ranging from £5 to £50. Due to the new nature of the way of raising finance for film, it has been a little bit slower than the traditional methods of film financing, but we're getting there. We've had to start creating an awareness etc and that has taken some extra time.

In case you were wondering, the £25 plus donations have been doing better (surprisingly) but I think this is due to donors getting a special edition of the DVD when it is released, which seems to make sense.

We are still pressing for more cash to get substantially all of the budget in place before we start shooting.

Any more questions let me know!

Johan Neethling
Producer - Thames Gate Films

www.twitter.com/JohanNeethling

Hi Johan, I was wondering how many audience contributions did you have or need in order to fund your films such as "The Lost."

Hi Everyone,

Thank you for visiting this blog! I really appreciate your support, and in order to support you and give something back, I'd be more than happy to field any questions in relation to EIS or UK tax credits (within reason) that you might have!

Don't be shy!

Kind regards

Johan

Johan Neethling
Producer - Thames Gate Films

www.twitter.com/JohanNeethling