Join Richard Stim for an in-depth discussion in this video Should you use a band partnership agreement?, part of Music Law: Managing a Band's Business.
- Start with the proposition that your band is a business, and your fellow band members, as owners, must agree how to operate that business. Your decisions depend, in part, on the legal form your band is using. That is, whether your band is a sole proprietorship, partnership, corporation, or an LLC. You might think, "Well, we're just a band." But once you begin to earn money, enter into agreements, and interact with the public, the government sees you as an entity that is subject to business and tax laws.
If you violate these laws, you cannot claim ignorance as a defense. As a business owner, you're expected to understand the rules. Assuming your band hasn't formed an LLC or corporation, most bands do not, then your band is probably operating as a partnership. The other possibility is that's a sole proprietorship, a band in which one person hires the other band members and tells them what to do. A partnership is a group of individuals who share the risk and profits in a venture, and who each own a percentage of the business.
You don't have to do anything special to form a partnership. It's a categorization that the government imposes on your band, and if there are no agreements amongst the partners, the government will step in with default rules on how you should operate. If your band wants to control what happens, rather than be subject to default legal rules, the partners need to create an agreement. A typical band partnership agreement serves as your band's rule book, because it provides a method for resolving disputes, sets standards for firing and hiring band members, creates a system for dividing band income and expenses, including future royalties, establishes guidelines for when members depart or the band breaks up, and establishes who may use the band name.
Many bands get along fine without a written agreement, especially bands in their early years. These bands often wait until they have a management or record deal before formalizing a written partnership agreement. Whether you want to proceed with a written agreement is up to you, but to help you decide, I've included a simple two-page band partnership agreement with the supplementary materials. The agreement sets basic rules for ownership of the band partnership and other guidelines. I'll explain how to complete this agreement in the next 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