Join Richard Stim for an in-depth discussion in this video Putting together a band partnership agreement, part of Music Law: Managing a Band's Business.
- The basic band partnership agreement included with this course addresses common band issues. Feel free to modify it. If your band wants a more sophisticated agreement, for example, one that incorporates song writing ownership, you can add those requirements into the basic agreement or create a more detailed agreement with an attorney's assistance. There's also a more comprehensive band partnership agreement in my book, Music Law. When your band prepares the agreement, include the names of current member partners.
You'll also need to create a name for your band partnership. Most bands usually use the band name and add the word partnership at the end. For example, The Smashing Pumpkins partnership. Using the basic agreement, you can enter information about who owns the band name. If your band is unsure about who owns the name, I discuss those issues in the next video. Next, the profits and losses clause establishes that band members who will share all profits equally.
If you want a different division, strike this section and write your own arrangement. Some bands agree ahead of time about the voting requirements for important issues. For example, adding or firing members. Typically, these matters are decided by unanimous or majority vote. If a majority vote is required for some issues and it results in a tie, the band can agree ahead of time to designate one person as the tiebreaker. If your band requires a unanimous vote for expelling a band member, the party to be expelled would not be entitled to a vote.
The partnership agreement contains a leaving members clause that guarantees that the partnership will stay in effect even if a member leaves. It also states that a band member may voluntarily quit the band and that a leaving member is entitled to a share of the net worth of the partnership, as well as the share of royalties. For most bands, this payout is easy to agree upon. But if your band has 1,000s of dollars of equipment, or record deals generating royalties, you may need the assistance of an accountant to determine the leaving member's share.
Signing the agreement doesn't create a band partnership. It formalizes and establishes rules for the existing partnership arrangement. Now for example, if a disgruntled ex-member attempts to use the band name and doesn't have a right to do so, the other band members can use the agreement to enforce their rights. In addition, a disgruntled ex-partner can't drag you into court because you have now all agreed to use mediation and arbitration. If you don't want mediation and arbitration, remove those sections.
Also, if you decide to add a new member or if an existing member leaves, there are additional issues to consider. If new band members will become partners in your band partnership, they should also sign the partnership agreement. Keep in mind, you don't have to make every musician who plays in your band a partner. The partnership can hire musicians as employees or contractors for various purposes. For example, to play on a tour or a series of recording sessions. One thing you should be aware of however is that a partnership also creates the potential for personal liability.
I'll talk about that in an upcoming video.
It starts with what it means to be the manager of a band, and what types of business structures are available for bands. Once you've decided on a business structure, you can create a band partnership agreement that covers voting rights, postbreakup scenarios, new members, and terms for resolving disputes. Richard also exposes potential sources of disputes, like ownership of the band name, songs, equipment, and recordings. He includes advice on negotiating solid band contracts and managing financial basics: taxes, income, cash flow, and bookkeeping. Finally, he'll address how to protect your work, including your copyrights, band name, and songs, and explains how to find a lawyer—and save money on attorney fees.
DISCLAIMER: This course is taught by an attorney (or other instructor) and addresses US law concepts that may not apply in all countries. Neither LinkedIn (including Lynda.com) nor the instructor represents you and they are not giving legal advice. The information conveyed through this course is akin to a college or law school course; it is not intended to give legal advice, but instead to communicate information to help viewers understand the basics of the topic presented. The views (and legal interpretations) presented in this course do not necessarily represent the views of LinkedIn or Lynda.com.
- Putting together a band partnership agreement
- Working out ownership disputes
- Limiting band liability
- Protecting your copyrights and band name
- Hiring a lawyer