Category Archives: Kamal Moo

Band Agreements

In my experience, most musicians just want to make music and not be bothered with the business aspect of running a band. But, like it or not, at its most basic level, a band is a business. It has income and expenses that need to be tracked, taxes that need to be paid, and business decisions that need to be made. And, just like any business, it’s very important that the members decide early on how the business will be operated. Should the band form a business entity like an LLC or a corporation? Or, should they operate under a more informal structure such as a general partnership? Most bands opt for the partnership option because it’s the easiest to set up and operate. This article will discuss the pros and cons of operating your band as a partnership.

What is a partnership?

Legally speaking, a “partnership” is an association of two or more people who engage in a business enterprise in which all income and and debts are equally shared by the partners. This basically means that a group of people get together and start a business. By default, the law says that each partner shares equally in all the profits and expenses. So, if your four person band makes a net profit of $1,000 in a single year, the law will view it as each member individually making $250 regardless of how much they’re actually paid. Along the same lines, if the same band takes out a $10,000 loan to buy a tour van, then each member will be personally on the hook for the loan.

Similarly, each member is also personally liable for the actions of the band. So, if your lead singer stage-dives and accidentally knocks out a fan’s teeth, then, you guessed it, the band can be sued and each member is personally liable for the costs of those dentist bills. This is one of the downsides of a partnership and why it’s wise to consider forming another business entity — for example, an LLC (“Limited Liability Company”) which protects its owners from personal liability.

How do I form a partnership?

To form a general partnership, in most states you just need to get together with your partners and start doing business. To open a bank account, many banks only require a signed partnership agreement and a Federal Tax ID number (which you can get from the IRS website in a few minutes).

What is a partnership agreement?

A partnership agreement is a contract between the partners setting up how the business will be run. So, when the time comes, all the members of your band should sit down and decide a few important things, such as who can write checks from the band’s bank account, which decisions require a majority vote, how much start-up much money each member will invest in the band, etc.

What if someone leaves?

Another important issue is how exiting members will be treated. Will they still have the right to use the band’s name? Will they still get artist royalties? Most bands don’t like to think about any of the members leaving, but the simple truth is that many things can happen: members can get married, get jobs, get thrown in jail. It’s important to figure out how to deal with members who leave the band.

I know this article may seem like a giant buzzkill, but it’s worth taking the time to address these issues in the beginning stages of your band’s career. Believe me, once money and success become involved, it’s much harder to get all this sorted out. Please contact our firm for a consultation if you need help setting up your band’s business.

Note: Kamal Moo is a California licensed attorney. The information contained in this article is not legal advice. Reading this article does not create an attorney-client privilege. You should consult with an attorney if you need legal advice: www.Johnson-Moo.com.

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What Does A Music Publisher Do?

Imagine you’re a prolific songwriter and you spend about 20 hours a day doing what you love: writing songs. Realistically, the precious free time you have will be spent eating, sleeping, and trying to fight off insanity due to lack of sleep. With that kind of schedule, you won’t have much time to pitch your songs to artists, managers, record companies, etc. But, if you’re talented and/or lucky, a music publisher will come to you and say: “Hey there, Mr. (or Ms.) Songwriter, you should let me take care of the business stuff for you so you can dedicate all your time to writing songs.” Then, after you’ve signed the deal, your new music publisher will start pounding the pavement to try and make money with your songs.

What Are the Types of Publishing Deals?

There are three main types of music publishing deals: 1) the traditional publishing deal, 2) the co-publishing deal, and 3) the administration deal. Here is a brief rundown of how each is structured: With a traditional deal, the songwriter assigns 100% ownership of his songs to the publisher who splits the income with the writer 50/50. With a co-publishing deal, the songwriter assigns 50% ownership to the publisher and the income is split 25/75 (25% to the publisher, 75% to the writer). With an administration deal, the songwriter retains 100% ownership of the songs and the publisher is usually paid between 10%-20% of the income.

How Does A Music Publisher Make Money With Your Songs?

Short answer: licensing. When you create a song, the law automatically grants you certain rights, and companies have to pay for those rights if they want to use your song. For example, if a singer records your song and her label releases it for sale, then you will be paid “mechanical royalties” for each and every copy sold. If your song becomes a radio hit, you’re entitled to collect “performance royalties” from the radio stations. If a movie or TV show licenses your song, you’ll receive a “sync license” fee from the production company. These are some of the most common types of licenses and they can generate a lot of money, especially if a song is a runaway hit.

What Should You Look For In A Music Publisher?

When looking for a publisher, there are a few things you should consider. Some of the 800 lbs. gorillas, like EMI or Warner/Chappell, represent thousands of songwriters and have catalogues that contain hundreds of thousands of songs. These publishers have relationships with a wide variety of companies that they can pitch your songs to. However, some writers may feel more comfortable working with smaller publishers who can give them more personal attention and creative guidance. So, it all really depends on your personal preference.

Additionally, most publishers will offer advance money to entice writers to sign with them. The size of an advance generally depends on the popularity of the writer. When I was in college, I interned with a major music publisher that signed a big name songwriter/producer and paid him a multi-million dollar advance. Publishing deals of that size are extremely rare, but it goes to show that they can be very lucrative.

Overall, a solid music publisher can help advance your career by opening doors and generating opportunities that you might not have gotten otherwise. But, like any business deal, be sure you feel comfortable with the terms they are offering and consider whether the deal makes sense for you. And, of course, it’s always a good idea to consult a knowledgeable attorney before signing anything.

Note: Kamal Moo is a California licensed attorney. The information contained in this article is not legal advice. Reading this article does not create an attorney-client privilege. You should consult with an attorney if you need legal advice: www.johnson-moo.com.

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