As a professional artist, you are more than just a composer, painter, writer, musician, or performer. You are a business, and it’s important to treat yourself as such—to help limit your personal liability in professional matters, and to take full advantage of the many benefits provided to businesses.
1. Establish a brand identity.
By creating a separate identity or entity, you will help establish your trademark and ultimately protect your brand. This can also help build business credibility with banks, vendors, and your clients.
Individual artists might consider obtaining a “doing business as” (DBA) certificate—which allows you to advertise and present yourself by one name, but give notice to customers that you’re the one behind the altered identity. For example, you may know singer-songwriter Peter Hernandez better as Bruno Mars.
2. Protect yourself if the band breaks up.
In Texas, creating a partnership has no formal steps; if you aren’t careful, you may find yourself in a partnership when you really don’t want to be. Just know the general default is that all partners share profits and losses equally, and are considered responsible for other partners’ actions.
To organize a partnership that makes sense for your circumstances you’ll want choose the right business structure, enter a partnership agreement that establishes everyone’s share of the profits and losses, as well as establish ownership rights for any property purchased during the partnership. Otherwise, your $10,000 instrument may be the band’s property and not your own—and you may have an equitable share of the profits for the pleasure.
3. Limit your personal liability.
Let’s say your band’s drummer trashes a hotel room. Having the right business organization won’t protect the drummer, but it may protect other band members. This could allow the hotel to pursue legal action against the drummer and the band as an entity—not the individual members—and possibly allow the band to recoup any of its losses from the drummer. A business organization can also protect the owners and partners of studios and venues—be it recording, art, video, and the like—when a guest slips and falls (and cannot get up).
4. Ensure ownership is attributed correctly.
Want to protect your intellectual property? The right organization can assist in establishing authorship, whether it is a question of employee contribution or works made-for-hire, as well as assigning any copyrights to others. An organization can also assist in licensing and publishing management; with the appropriate partnership agreement, you can make sure credit and royalties are attributed the right way.
5. Receive tax benefits.
Organizing as a business will help keep your business and personal expenses completely separate, helping you enjoy various tax deductions. With the correct type of entity, you can effectively manage and reduce your tax liabilities.
By choosing the type of organization that best suits your individual goals and needs, you can establish yourself as a business and begin taking advantage of every benefit available—including protection of intellectual property and personal assets.
Carl Wilson, of the Law Office of William C. Wilson, is happy to provide this information.