Quote:
Originally Posted by DJ The Kid
|
the existence of corporations dates back to creating them so when they fail loss is not distributed to owners
the nature of a corporation is that safety. however, this is exploiting that...
Quote:
|
Hollywood sets up a separate corporation for each movie with the intent that this corporation will take on losses. The studio then charges the "film corporation" a huge fee (which creates a large part of the "expense" that leads to the loss). The end result is that the studio still rakes in the cash, but for accounting purposes the film is a money "loser" -- which matters quite a bit for anyone who is supposed to get a cut of any profits.
|