subject: Should you start running your band as a business? [print this page] Should you start running your band as a business?
Compared to rehearsing, finding gigs, and other important music business, turning your band into an LLC may not be top on the priority list. But if you want to become a serious contender in today's music industry environment, establishing a LLC may be the best choice in the long-run.
Once you have created a band, you've essentially started a business, of sorts. It is important to know this because if the band were to split, assets would have to be divided among members and this can become an arduous and complicated task. By forming your band as a business, you will likely have more security in case something goes awry in addition to numerous other exceptional benefits.
There's a whole host on great benefits that come along with forming an LLC out of your band (even solo artists!). Things like protecting your personal assets from being seized in a lawsuit to setting contract agreements between band members are just the tip of the iceberg. By creating an LLC, liability only extends to the company and its assets. In addition, by forming contractual agreements between members, you can ensure that if your band begins to see high numbers of record sales that the contract will spell out how much each member receives; you won't spend time arguing about these types of issues if contracts are set up in advance. Since your band will be seen as a company, you'll be able to take advantage of the tax incentives that are offered; equipment, food, gas, and anything that the band buys to further itself can be considered tax deductible.
As there are a number of great advantages to forming your band as a LLC, it is important to talk to your band about this option. If you see your group going far and designating music as a main source of income, now might be the best time to do some research about establishing a LLC. It also would be an excellent idea to consult a lawyer and/or accountant on the specifics about forming a band into a company. They can be more thorough and advise you on whether or not this is the best route for your band.
