By John Snyder
Republished with permission from Artist House Music

You’ve decided to form a band. Let’s get your business in order. What are the most important things you can do to make sure that you don’t trip yourselves up down the road? What can you do now to make sure that when you hire lawyers and accountants you don’t have to pay later for them to fix business mistakes you could have avoided? Here are 20 questions to ask yourselves before you get too far.

1. Appoint a Band Administrator: One band member needs to be responsible for keeping track of the papers and information relating to the band’s business, such as receipts, bank statements, payments, approvals for licenses, etc. This doesn’t mean that the band appoints someone to make decisions on behalf of the band, just to make sure that there’s one person to communicate the band’s decisions to the outside world and share in the burden of keeping track of the band’s business. You should also decide what rules you are going to follow amongst yourselves to make voting decisions about spending money, contracts, tours, hiring/firing, etc.

2. Band Agreements/Business Organizations; Accountants. If the band has (or thinks they have) already signed a band agreement or formed a business organization, then ask to see copies of all agreements and formation documents. If not, it is a good idea to prepare some baseline band agreement to cover key issues such as leaving members and how decisions are made, who can sign checks, etc. This is also a good time to consider getting the band an accountant or bookkeeper familiar with tour accounting and receipt-intensive travel.

3. Tax Returns: A common mistake that bands make is to have all income paid to one band member, which usually results in unnecessarily complex adjustments at tax time. You should find an accountant in your geographical area who is familiar with music issues and band accounting and take a meeting with that accountant (preferably a Certified Public Accountant, that special kind of accountant who has passed licensing examinations).

4. Insurance: Many bands overlook the importance of insurance, often until it is too late. Even if they don’t overlook it, they don’t fully understand why their coverage may be lacking. From hard experience, we assume that insurance companies exist to deny coverage, so we are somewhat obsessive about this issue. We ask that the band meet with an insurance agent experienced in music industry insurance and get a report from that agent about the coverage the band has compared to what the band needs. In the early days, the band may not have sufficient monies to both get insurance and set up limited liability entities. We always recommend insurance in this case.

5. Legal Names of Members and Professional Name of Band: Each member should provide the member’s full legal name. This will be necessary for contracts, registration of copyrights, etc. It is a good idea to have a list of each member’s cell phone and email so you can give that to anyone who needs to reach you, particularly on the road or in case of emergencies.

6. Date of Birth and Nationality: First, you want to know how old the players are so that if someone is under the age of 18, you will be prepared for any issues in your state relating to age of consent (usually for contracts) and employment law (performing in clubs that serve alcohol, for example). Often this involves having a parent or guardian available to sign off on any written agreements. Many states have court procedures that can allow minors to have special rights to do business or make contracts, such as “emancipated minor” laws or “judicial ratification” of contracts. Do not assume that these laws apply to minors in your band without talking to an experienced labor lawyer familiar with your state. It’s also handy to have each member’s date of birth available for any copyright registration applications you file (such as Form PA for musical compositions) because the U.S. Copyright Office often requires applicants to include the year of birth. If you are going to be touring outside of the U.S., be sure you consult an experienced immigration lawyer before you commit to any contracts.

7. Passport: If the band is planning to tour internationally—including Canada and Mexico—each member (and any crew traveling with you) must have a valid passport. You should get a photocopy of the inside pages of the passport (in case of loss or damage and for
immigration forms). It may also be useful to calendar the expiration date of each passport so that you can quickly know if one member’s passport is set to expire. There are services that can turn around a passport renewal in 24-48 hours, but they are expensive. There is also an expedited passport renewal process at the Passport Office in Rockefeller Center in Manhattan, but that, too, is an expensive process. While it may not be your job to keep track of these things once the band gets a manager in place, it is well to have the information at hand.

8. Instrument(s) Played, Brand and Inventory: While band members will know who plays what, it’s useful to have a written record of who plays what so you can give it to someone else (such as a manager). Also, having information about the instrument(s) and brand(s) that a member uses could prove useful in strategizing for sponsorship opportunities. We also recommend having the band complete an inventory of instruments for insurance purposes (including serial numbers if available), complete with photographs or video of the instruments. This visual record is especially useful with customized, rare or one-of-a-kind instruments.

9. Split Sheets: Song splits are probably the most sensitive conversations that a band has together. Attorneys are well advised to give the topic a wide berth, other than to make sure it gets done. This is another one of those discussions that is better had before the band is making money.

10. Performing Rights Society Affiliation: There is a bit of strategy involved with affiliating with a performing rights society in the U.S.. All the societies have a creative staff. The decision to affiliate with a particular society should be made after the artist/writer has taken some meetings with the performing rights society and decided if there’s more love coming from one than another. Most of the time we like to wait until the music is fairly well formed and the band has gelled into a working unit before approaching the societies. In more experienced bands, the writers will already have an affiliation, so it is a good idea to know this in advance for purposes of servicing the creative staff with new music, competing for slots on compilations and festival shows, etc. The major U.S. performing rights societies are the American Society of Composers, Authors and Publishers (www.ascap.com), Broadcast Music, Inc. (www.bmi.com) and the Society of European Stage Authors and Composers (www.sesac.com). (SESAC is a now based in Nashville, TN, despite the “European” reference in its name).

11. Publishing Company: Do the writer members of the band have a publishing or administration deal or are you self-published? Multiple publishing deals in the same band are less frequent problems for independent artists, but it does happen, and it can add a layer of complexity when shopping for a new publishing deal. Keep in mind that if the writers have affiliated with ASCAP, BMI, or SESAC as a writer, their publishing company must follow the same affiliation. Another wrinkle comes with writers who are affiliated with foreign societies (e.g., SOCAN, MCPS-PRS). If you have a foreign society writer or co-writer on your songs, you should consult with your U.S. society or an experienced music lawyer to determine how to handle your affiliation and registrations.

12. SoundExchange Artist or Copyright Owner: Featured recording artists and bands that own their own sound recordings should register with SoundExchange, the U.S. performing rights organization for sound recordings. Registration forms are available on the SoundExchange website (www.soundexchange.com) and membership is free. It is a good idea to check the PLAYS database (which can be done online with a simple registration) for any titles of your band’s recordings to see if the recordings are already included in the database or are mis-

13. Marital Status: Common problems arising from marriage that require planning include divorce (and the state law community property issues) and heirs (if a member dies). The band might be stuck dealing with the (sometimes resentful or surly) widow or widower.

14. Trademark the Band Name/Logo: While there’s nothing new under the sun, you should do your best to come up with an original name for your band. There may be other bands using the exact same name. Don’t assume that the other band using your name is not important—we have heard excuses from “we’ve heard the other band will break up” or “the other band hasn’t logged into their myspace account in three months.” You should seek the advice of an experienced trademark attorney to register your band’s name for trademark.

15. Myspace and Domain Names: Many bands think that if they have a Myspace page they don’t need to get a domain name, too. It is better to secure rights in the band’s domain name, even if they just have the band’s domain point to a Myspace page for the moment.

16. ISRC: Any sound recording copyright owner can apply at no charge for their own Registrant Code that will allow them to generate their own International Standard Recording Codes, or ISRCs. A Registrant Code is issued by the Recording Industry Association of America (www.riaa.com). This is an important thing to have because the code designates the copyright owner of the sound recording concerned and is frequently required by CD duplicators as well as online music retailers. It is a very common practice for artists who do not have their own ISRC to use someone else’s ISRC when making their tracks available online. Realize that the ISRC you give may well create some implication of ownership (which can be rebutted, but need not be there in the first place).

17. Aggregator: It is almost required that an independent artist sign up with an aggregator in order to have their works serviced to many online outlets. Realize that mere servicing does not do one thing toward making the artist less of a needle in a bigger haystack online.

18. Pre-existing Contracts: Ask for copies of any contracts the band have previously signed and any music industry contracts any of them have signed before they joined the band.

19. Union Membership: The two principal music industry unions are the American Federation of Musicians (“AFM”) for musicians and the American Federation of Television and Recording Artists (“AFTRA”) for vocalists. Any artist who has recorded a major label album has likely already joined one or both unions. Knowing whether a musician is a union member is important because union membership carries with it various restrictions such as a minimum fee to perform at recording sessions (i.e., union scale), as well as payment of royalties such as the Music Performance Trust Fund and the Special Payments Fund. If you have any band members who play or sing on union sessions with any great frequency, they probably are or should be members of one or both unions. AFTRA in particular has very good health insurance available for near-free if the AFTRA member does over a certain threshold of work through the union (currently approximately $20,000 per year).

20. Side Projects: All major label deals and many independent record deals require the exclusive services of their recording artists. You should know what other recording projects, if any, the individual band members have committed to and if there are any restrictions. This issue may also come up when a musician signs an artist management contract or a merchandising deal. There are many more than twenty questions for new artists to answer about their business, but we think these are a good place to start.

Other resources:
Austin Music Foundation (www.austinmusicfoundation.org)
Tipitina’s Foundation (www.tipitinasfoundation.org)
American Federation of Radio and Television Artists (www.aftra.com )
American Association of Independent Music (www.a2im.org)
Arts+Labs (www.artsandlabs.com )
ASCAP (www.ascap.com )
Association of Independent Music (www.aim.com)
Rep. Marsha Blackburn (www.house.gov/blackburn )
BMI (www.bmi.com)
Copyright Alliance (www.copyrightalliance.org )
Coolfer (www.coolfer.com)
Dean’s List (http://home.earthlink.net/~deankay/DeanKay_TheDean%27sList.html )
Rep. Lloyd Doggett (www.house.gov/doggett )
Andrew Keen (http://www.cultoftheamateur.com/ )
Kings of A&R (www.kingsofar.com)
Loyola University http://mondaynightforum.wordpress.com
Nashville Songwriters Association International (www.nashvillesongwriters.com)
PPL (www.ppluk.com)
The Register (www.theregister.co.uk )
RIAA link for ISRC Registrant Codes
(http://www.riaa.org/whatwedo.php?content_selector=whatwedo_is_r_c_codes )
SESAC (www.sesac.com)
Songwriters Guild of America (www.songwritersguild.com)
U.S. Copyright Office (www.copyright.gov)