The Benefits of Making Your Band a Business

While your passion for music is most likely what started your career, the business decisions you make along the way will ultimately guide it. As a professional musician, the success and longevity of your career depends heavily on both minimizing your personal financial burden as well as combating any legal dilemmas that you may face along the way. The business structure you chose for you or your band is essential in accomplishing these goals. There are three main types of business structures to examine when setting up your band’s business: a sole proprietorship or general partnership structure, a corporation, or a limited liability company (LLC). Your preferred entity choice will depend on your specific situation and long term goals.

In a sole proprietorship or general partnership, the business income and losses may be reported on your personal income tax returns, and the band’s legal liability may be attached to the individual members. In terms of dealing with band debt, contracts, and general liability to outside parties, each member in the band shoulders the burden as an agent of the band. For example, if one member runs up the band’s credit card, all members might be held personally accountable. Raising money for new gear or to go on tour would most likely occur through a loan with your personal credit at stake. On the other hand, sole proprietorships and general partnerships are attractive for the simplicity and informal nature of setting up and running your business. There are little formalities for corporate record keeping, voting, and even holding meetings.

Forming a corporation for your band is also a viable choice since you can sell shares in the band, allowing you to raise money for your band. Additionally, as a corporation, the legal liability of the band is most likely separate from your personal liability. For instance, if the band is forced to breach a contract, the corporation will most likely be liable instead of you as an individual. However, forming a corporation is costly, time consuming, and requires extensive managerial and financial record keeping. You are also required to adhere to other formal requirements such as shareholder and director meetings which may be burdensome for you and your band members.

Another effective business structure for many musicians is one that has the flexibility of a sole proprietorship or a general partnership as well as the limited liability and economic benefits of a corporation. A limited liability company (LLC) is flexible and cost effective for bands and operates under fewer corporate formalities. You and your band should consult with an accountant to discuss the added tax benefits of forming an LLC as well.

Creating an LLC for your band may also help avoid problems if the group dynamic changes or deteriorates. During formation, the band members will anticipate the band’s future business needs and address these needs in the Operating Agreement. The Operating Agreement governs the business and legal procedures of the LLC by addressing such issues as who controls the use of the material, performance rights of former members, and voting rights of new members.

Bands that are serious and form a solid entity can help level the playing field when dealing with larger record labels and recording companies by giving off a more polished and professional appearance. Additionally, you are defining your business and instilling confidence and credibility with people and businesses, such as financial and lending institutions.

Whether your band forms an LLC, general partnership or corporation, you should meet with an attorney to discuss the benefits of each. Together, you can identify a business structure specific to your terms to help you succeed in both the world of music and business.

Post written by: Pete Blair

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This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law.  Jamie Pruitt Law does not endorse any website contained in this blog and makes no guarantee or warranty regarding any website or the authenticity of such site.  Unauthorized copying, alteration, display or distribution of any material is prohibited.

Artists and Commissioned Works

Generally, when an artist creates a work, he or she is the sole owner of the image and all rights associated with it.  However, there are some exceptions with regard to commissioned works.

 

Certain types of works an artist creates may belong to the commissioning party or, in some cases, the artist’s employer.  When a work is specially commissioned, or a “work made for hire” and there is an agreement classifying the commissioned work as such, the artist may not own the rights associated with that piece.  The “works made for hire” provision may apply to employees who create the work within the scope of his or her employment.  Additionally, employees that work for recording companies or motion picture production studios may also be creating work for hire.  Other works for hire include translations, manuals, test materials and other supplementary material.

 

It is important to protect yourself before signing any agreement involving your potential rights to artistic or creative work, or entering into an employment relationship based on your artistic or creative talents.  To learn more about your rights and works made for hire, contact Jamie Pruitt Law for assistance.

 

Post written by: Noor Kazmi 

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This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law. Unauthorized copying, alteration, display or distribution of any material is prohibited.  

Emergency Assistance for Artists

The City of San Diego Commission for Arts and Culture sent out the following information for artists who may have been affected by the recent wildfires.

 

“All of us at the City of San Diego Commission for Arts and Culture sincerely hope that you were spared any damage or loss as a result of the recent wildfires.  If, however, that was not the case, we are working with the San Diego Foundation to identify and bring to you whatever resources are out there.  Following is some information from a few national organizations that have contacted us thus far.” 

 

MusiCares

MusiCares was established to provide a safety net of critical assistance to music people in need.  MusiCares wants music people to know that we are there to help.  Assistance may include funds for basic living expenses such as; shelter, food, utilities, cell phones and transportation; medical expenses including doctor, dentist, hospital bills and medication; clothing and toiletries; relocation costs; insurance payments and more. 

 

How to qualify:  Five years professional experience in the music industry and/or credited contribution to six commercially released recordings or videos; loss of or damage to housing due to the effects of the recent fires.  Call (800) 687-4227 toll free or go to: www.musicares.com.

 

Actors Fund of America

The Fund can provide emergency financial assistance for: Shelter, Food, Clothing, health insurance premiums, and initial resettlement support.  Actors Fund staff members are also available to help in a variety of ways including: assisting with applying to FEMA and other disaster-related benefits; help in navigating the FEMA process; working with the displaced to find both temporary shelter and permanent housing; emotional support and trauma counseling.

 

Those in the entertainment industry in need of services or support should contact The Actors Fund at 323.933.9244 or visit: www.actorsfund.org

  

Society of Singers

SOS helps singers who have financial needs resulting from personal, family, or medical crises.  Charitable grants may be provided for basic needs including rent, utilities, medical/dental expenses, substance abuse rehab, psychotherapy and HIV/AIDS treatment.  Grants are always paid directly to creditors.  

 

Applications must be submitted with 5 years of career documentation, current income verification, current bank statements and tax returns, and copies of bills.  To request an Application for Assistance please call toll-free, 866.767.7671 or visit: www.singers.org

 

Craft Emergency Relief Fund

CERF accomplishes its mission through direct financial and educational assistance to craft artists, including emergency relief assistance, business development support, and resources and referrals on topics such as health, safety, and insurance. CERF also advocates, engages in research, and backs policy that supports craft artists’ careers.  Call 802.229.2306 or visit: www.craftemergency.org.

 

Jazz Musician’s Emergency Fund

Call  (212) 245-3999 or visit: www.jazzfoundation.org.

 

-Jamie T. Pruitt

Jamie Pruitt Law 

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This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law.  Jamie Pruitt Law does not endorse any website contained in this blog and makes no guarantee or warranty regarding any website or the authenticity of such site.  Unauthorized copying, alteration, display or distribution of any material is prohibited.

 

 

 

 

The Informed Artist

Artists who exhibit their work should be well-versed on contract terms to ensure their interests are being protected, as well as their art.  All exhibition contracts should contain a provision that dictates who holds the financial responsibility for damage, destruction, or theft of showcased art. 

When negotiating contract terms, artists should ask questions.  Has another artist had a piece of work destroyed or stolen?  What kind of security measures will be taken to protect the art?  Who will have contact with, and transport the art?  Artists must be knowledgeable of the conditions they face before entering into a final contract. 

Additionally, if an exhibitor’s insurance does not cover an artist’s work, the artist should contemplate personally insuring the pieces.  In order to confirm the value of an insured piece, an artist should have the art appraised to avoid disputes in the event a claim must be made.  Artists should also document and take pictures of every piece that is loaned to another to display.

-Jamie T. Pruitt

Jamie Pruitt Law  

Advertising Material:
This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law.  Jamie Pruitt Law does not endorse any website contained in this blog and makes no guarantee or warranty regarding any website or the authenticity of such site.  Unauthorized copying, alteration, display or distribution of any material is prohibited.

What’s in a dba?

A trade name, assumed name, fictitious business name or dba (doing business as) is required when an individual is doing business for profit under a fictitious name.  In the County of San Diego, if required, a fictitious business name statement must be filed within 40 days of first transacting business with the County Recorder.  The statement may be filed in person or by mail and the fee is $25 for the first business name and owner and $5 for each additional business name or additional owner.           

Do you need to file a fictitious business name statement?  A fictitious business name is, as defined by the San Diego County Recorder’s website, a business name that does not include the surname of the individual owner and each of the partners or the nature of the business is not clearly evident by name.  If a corporation uses any name other than the exact corporate name that is filed in the articles of incorporation, then it is considered a fictitious business name.   

If you are forming or already running a business, make sure you remember to evaluate the need for a fictitious business name statement.  You should also make yourself aware of any published notice requirement and expiration of fictitious business names.  

-Jamie T. Pruitt

Jamie Pruitt Law 

Advertising Material:
This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law.  Jamie Pruitt Law does not endorse any website contained in this blog and makes no guarantee or warranty regarding any website or the authenticity of such site.  Unauthorized copying, alteration, display or distribution of any material is prohibited.

 

Spread the Word

Welcome to my blog!

Many different issues and interesting situations arise for business owners and artists throughout their careers. This blog is intended to provide a forum to post ideas, comments, interesting articles and web pages that address various issues business owners and artists may face. No confidential information will be revealed and most of the posts will relate to preventative law ideas and modern legal procedures and ideas.

Litigation is a stressful, complicated and expensive process. I desire to help readers of this blog expand their knowledge of legal issues so they may look to the future and protect themselves from unnecessary litigation. I will label posts according to topic and relevance. The topics will cover a wide range of business formation, business planning and art law issues.

Knowledge is power. Please keep yourself informed of issues that relate to your business. You will always have more to learn and different ideas to research. If you find any topic particularly appealing or relevant to your business, please expand your knowledge by continuing your research. Continue to explore the Internet for a wider variety of resources and do not rely on this blog as your sole source of information regarding the issues or ideas discussed.

I look forward to maintaining this blog and being a part of your online community. Thanks for reading.  

Very Truly Yours,

Jamie T. Pruitt
Jamie Pruitt Law
 

Advertising Material:
This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law. Unauthorized copying, alteration, display or distribution of any material is prohibited.