Here at Station 1 Records, we’re dedicated to not only helping our artists achieve their goals and produce the best possible product, but to helping all artists as they move into the professional world of music. For that reason, we’ve set up the Artist Business Services Suite (ABS Suite), a one-stop shop for assistance with everything it takes to go from hobbyist to professional musician.
Here, you will find routinely updated resources for better managing your music career and advice on what steps to take next. If you can’t find exactly what you’re looking for here, our Director of Operations, Thomas Kutz, is a licensed attorney in the state of Iowa and can help with all your business and legal needs at a cost greatly reduced from traditional legal and business planning firm pricing. This is just another great service Station 1 offers to all our brothers and sisters in the music community, regardless of whether or not you’re on our roster.
Please note that by using any of the attached templates or forms you’re doing so at your own risk. The law is different in each state, and while we want to help you out, we take no responsibility for discrepancies between these example forms and the governing law of your individual jurisdiction.
Do I need to form a business entity for my act?
It’s always a good idea to protect yourself when you’ve begun playing music with the intent of generating some revenue. There are multiple business classifications out there, but the three most common for musicians are a sole proprietorship, a partnership, or a limited liability company (LLC).
A sole proprietorship doesn’t require any filing or forms, it’s also the most risky. A sole proprietorship doesn’t separate the individual person from their business interests, as such all of the individual’s personal assets are at risk. While this may work for a lot of people, it’s not the best policy, particularly if you’ve started producing revenue, and you’re making purchases for the express purpose of conducting business (ie- making music.)
A partnership is for two or more parties conducting business together for the purpose of making revenue. Partnerships can form entirely on their own, in the legal sense, when two or more parties start working together for money, this is considered a de facto partnership, and the basic premise is every party has equal say, equal stake, and equal take. The safer route, is to document everything, and file the necessary forms with the state.
However, as with most things in life, odds are you’re not all equals in how you came together, perform, or service the band. Therefore, it’s best to execute a simple partnership agreement which lays out guidelines for ownership, revenue splits, and decision-making. I’ve attached a template for such an agreement below, and while it won’t solve all your problems, it will help clear up a lot of things:
An LLC is a more complicated business entity to draw up, and will generally be significantly more customized than the partnership agreement I’ve produced above. An LLC, while also removing personal liability, has the added benefit of being able to fit into multiple tax schemes. If you’re interested in forming an LLC, please don’t hesitate to contact us, and we’ll get you on your way!
We wrote and we’re going to record a song, is there anything we should know?
Oh, so much more than can fit on this page! First things first, are you hiring session musicians or are the composers going to be playing everything? If you’re hiring session musicians, make sure they execute a “Work for Hire” waiver prior to recording. This document states that they have no claim to any ownership or rights associated with copyright, as they were acting as a third party contractor during recording, and the work product was paid for through other compensation.
You’ll also need some split sheets once you get into the session. These sheets pro rate the ownership share of the song and respective publishing for the underlying composition. On the attached template there are slots for all musicians, composers, and the producer if necessary.
You’ll most likely also need to execute a producer agreement. Once again, these can be really unruly documents with a lot of rights and points at stake, if you’re not comfortable going over one of these yourself, please contact your attorney or another resource, such as us, straight away and with plenty of time so you don’t need to delay recording.
What is a Performing Rights Organization (PRO)?
PROs monitor performances of your music. These are the folks that help make sure you get paid the royalties you’re entitled to for performance of your material. BMI, ASCAP, and SESAC are the big three. If you haven’t registered with one yet, do a little research, find out which one you like, and register quick!
Do I need to copyright all this? How?
Once you create something and put it out into the universe, you have an automatic copyright, congratulations! Too bad that won’t necessarily protect you as much as you’d hope. The safest way of protecting your intellectual property is by visiting the US Copyright website at www.copyright.gov and registering your material. Don’t forget, there are two copyrights for every song!
Someone offered me a contract/I need a contract drafted, what should I do?
The simple answer is have an attorney look at/draft it. That’s going to give you your best breakdown and options and consequences. I would ALWAYS advise you to seek out an attorney when you need a contract drafted, they’ve studied the law for years and know exactly how to get you the product you’re looking for.
However, if you want to review the contract on your own, the four big things to look for are: (1) What is being offered? (2) How much is everyone being paid? (3) How can a party breach this agreement? And (4) What are the consequences for breaching?
There’s a few hundred other factors to consider, however, so make sure you’re completely confident in your understanding the document before you sign it, because once your name is on that dotted line, there’s no going back!
I have another question you didn’t answer! What about budgets? Accounting? Taxes? Tours?
Shoot me an e-mail and let’s set up a meeting to talk! Don’t worry about paying for a quick consultation, we’re not interested in taking your money for meeting up over coffee, but if you need any business planning or legal work done, we can offer you some highly discounted rates compared to traditional law firms.
Thomas L. Kutz, JD, MA