Are you a musical artist performing and collaborating with other musicians? If so, then you should have a written agreement between the members of the group addressing, at least, the issues in the checklist below. You might even want to consider forming a corporate entity for your group, which will protect your individual assets from liability related to group activities and address the issues below as well. (Note: A solo artist can benefit from the protection of a corporate entity.)
A Band Agreement is to a band what a prenup is to a marriage or a will is to an individual…it addresses some important (and sometimes difficult) issues so a plan is in place — outlining how things will go, who is responsible for what, and who gets what — just in case the unexpected or unimaginable happens. The Band Agreement should be negotiated towards the beginning of the relationship, when everyone is happy with everyone else. Perhaps even more importantly, if your band doesn’t have its own written agreement, then state or federal laws may determine your band’s business relationship by default. As with most relationships, if you wait until there are problems (or your band starts making money), it could be much more difficult (if not emotionally and financially draining), if not impossible, to resolve these issues.
- Who are the members of the band?
- Is one or more band member(s) the “owner” of the band and the other “band members” really just employees or hired hands?
- What happens when a new member is hired or an existing member leaves the band?
- How can band members be fired?
- Can a member quit at will?
- What if a member becomes disabled or dies? (This may be important so surviving spouses/parents are(n’t) involved with the group’s business.)
- What are the members’ responsibilities, relationship, etc.?
- What is required of each member?
- Does a member need permission from some or all of the other members to perform with another group while he’s a member of the band?
- What if the band breaks up or decides to go their separate ways?
- Who will pay/get paid for what?
- How will band profits/debts be distributed? (Royalties, performance fees, etc.)
- Do some members receive/contribute more than others?
- Who will keep track of band monies?
- What will happen when one band member contributes more time/money than expected?
- Will band members receive payment for projects completed and/or be responsible for debts incurred prior to leaving? (Does this change depending on whether the person leaves or is removed?)
- Does the band have to “buyout” the leaving member?
Acquisition of Assets
- How will the band acquire gear/assets? (Instruments, PA system, lights, van, merchandise, website/domain name, social media accounts, etc.)
- How will band business decisions be made? (Hiring/firing lawyers, managers, agents, spending band money, signing with a record label, etc.) Majority vote? Unanimous vote? Veto power? Tie-breaker? Majority vote for some decisions and unanimous vote for others?
- How can the band agreement be changed?
- Who owns the songs band members write? How is songwriting credit determined? Will the Band Agreement govern this issue, or will ownership be determined on a song-by-song basis in a separate songwriting split acknowledgement? (Note: You may want to seek advice on copyright law prior to deciding this, as those who write the songs get the publishing royalties. By the way…the U.S. Copyright Act will determine this if you don’t agree on the splits in a signed document.
- Who decides which songs to perform/record?
- Who decides what gigs to play?
- Who decides if everyone has the same haircut and wears the same outfit on stage?
- Who owns the band name?
- How about websites/domain names, social media accounts and other media related to the band?
- What happens to the band name if the band breaks up or a band member quits/is fired?
- Who, if anyone, can still perform using the name? (Everyone must still be involved? The key player(s)/founder(s) must still be involved? No one can use the name?) (Note: You may want to seek advice on trademark law prior to deciding on a name and/or to determine if you want to apply for a federal trademark registration for the name.)
- Partnership – Partnerships are easier to set up, but expose you and your personal assets to liability. You may want to start as a partnership and convert to a corporation once things get going. (Note: Unless a band has formed a corporate entity or created a written partnership agreement, state partnership laws will govern the bands’ business relationship.)
- Corporations and Limited Liability Companies – Corporations are somewhat more expensive to set up, but provide more protection and shelter your personal assets. A Limited Liability Corporation (LLC) provides the flexibility of a partnership with the limited liability of a corporation.
This checklist provides some business and legal issues you should consider if you are engaging in activities in the music business as a musical performing artist. However, the list is not exhaustive, is not necessarily in any particular order, and not every item on this list is necessarily appropriate for your particular situation. Please consult with an Attorney who has music industry experience for advice regarding your particular needs and issues. You may also want to engage the services of a Certified Public Accountant (CPA) to help you with tax preparation and entity-related decisions.