You may have noticed that we have high standards for what it means to have a "big screen experience" around here. You're free to make your own compromises of course - we all do - but we'll keep trying to point you toward a more immersive and high fidelity experience. Here's a few things to consider.
SMPTE recommends you sit at a distance 2 to 4 times the screen height - THX gives a little more leeway. Here's a good diagram you may have seen posted here before.
BIG has made measurements of common recliner theater seats and concluded that 6.5 feet is the minimum distance between rows of seats. Let's pick 7 as a rounder number and allowing for better movement between rows for crowds and kids. If your room is 20 feet wide, you can probably fit 4 or even 5 seats in a row - again assuming the normal recliners. That means that to properly seat 12, you need three rows. (can you see where this is going yet?
) Not knowing exactly how big a screen you need, let's back the first row up from the screen 12 feet. (that's distance to eyeballs) That puts the second row at 19, and the third at 26. I can tell you already that this pushes some of the seats out of SMPTE recommendations, because the rear is more than twice the distance of the fronts, but I'll press on for the sake of the thought experiment. For the third row to be within 4x screen height, you'll need a 6.5' tall screen. At the paltry aspect ratio of 1.78:1, that screen is 11.6 (ish) feet wide. 75 square feet of screen is a lot of screen, and even with a black diamond screen, you'll need a lot of lumens to fill it. See what I'm getting at?
The audio conversation goes a similar way. Providing complete surround coverage to that many seats will mean things like more than one speaker per channel, which will mean expensive outboard audio processing (to be right), not to mention filling that space with reference level sound will mean a lot of sensitive loudspeakers and a lot of amplification.
Honestly, I don't think there are more than a handful of private homes with cinemas of the caliber (size and quality) I'm talking about - so understand that I'm deliberately pushing the limits. My own theater (under construction) will seat about half that many, in about a quarter the space, but I'm still shooting for a reference level experience in all 6 seats. I hope to do it for about $20,000, all told (including construction materials, not counting pizza and beer budget for my friends who help).
If you're designing from scratch, and shooting for high quality, start with a budget and work first with overall dimensions and optimized audio, then fill in a screen and projector that are appropriate for the space.
Edit: well now i see your response to BIG above, and much of this is moot, but it's still relevant in some ways.