There’s a lot of reasons why anyone would want to start a record label. More importantly, being a record label boss will boost your credibility in the music industry.
In continuation of our series on “How to Start an Indie Record Label,” the focus will be about creating a legal persona for your business. Let’s break it down into smaller chunks that you can quickly implement;
1. Choose a Name For Your Indie Record Label
This is going to be the identity of your indie record label. You know that your name can make or mar the success of your indie record label. For a start, research your competitors and understand how they came about their name.
More than ever before, the identity of a record label is now more critical than ever. Think of your record label name as your shop window. It would be best if you were sure that your chosen name is still available. Here’s a tool to carry out these checks. You can compile a list of names and ask for the opinions of friends.
An essential angle to registering your indie record label is choosing the legal entity it’ll assume. You have an option of being a sole trader, partnership, or LLC. It would be best if you weighed the pros and cons of these options before making a choice.
2. Register Your Indie Record Label With the Government
The specifics of registering a business is dependent on where you are in the US. However, it’s generally simple.
Your best bet to registering your indie record label will be through LegalZoom. It’s either you register as a sole proprietorship or as an LLC. To stay on the right side of the law, you need to know everything to know about registering a business and all those nuances.
We won’t assume that a record label boss will be lazy with research but turn to a qualified attorney if you are. They will be willing to take the burden off you, and you’ll be avoiding a lot of mistakes also.
Still, you can count on LegalZoom to bring home the trophy at about $500. Remember that you’ll be registering two companies; an entertainment and a publishing company.
3. Join a Performance Rights Organization
As a record label, you’ll need to join a PRO being a vital part of the music publishing value chain. Being a music publishing company, part of your livelihood is dependent on these PROs.
We’ll suggest three performance rights organizations, ASCAP, BMI, and SESAC, all in the top 10 PROs. While we’ll suggest SESAC, becoming a member there is quite challenging. Then your next option will be BMI.
With the right PRO, you are sure that all royalties are recouped from all broadcasts and performances. They serve as the middlemen between you and the music users.
In reality, PROs perform three functions; licensing the use of the music that originates from your indie record label, monitoring the license used in line with the set rules, and collecting all the royalties payable from the use of the license.
Since you are going with BMI, visit the BMI website and locate the “Contact Us” button. Putt a call through an office nearest to your location. Your options are Nashville, London, NYC, Los Angeles, Atlanta, Puerto Rico, and Austin, Texas. Ask for the “Writers and Publishing Company” packets.
In filling out your packets, put down your personal information either as an artist or a talent. You don’t necessarily have to be a content creator, but you can have your writers publishing. As for your publishing company, attach the name and EIN associated with your publishing company submitted to Legal Zoom.
4. Set Up Membership With The Harry Fox Agency
Let’s set something straight first; the Harry Fox Agency isn’t a PRO like BMI, SESAC, or ASCAP. What the Harry Fox Agency does is meet the mechanical and digital licensing needs; we are talking about licenses for recording and reproduction of your intellectual work for CDs, ringtones, digital downloads, lyrics, and every other thing as it relates to your music.
In simple term, the Harry Fox Agency help you collect royalties from streaming platforms, digital download outlets, and any sale of physical CDs.
While The Harry Fox Agency, established in 1927, might be the most popular name involved in collecting mechanical licenses, there are other independent music administrators.
Setting up membership with Harry Fox Agency is pretty simple. Just go to Harryfox.com and get started.
5. Open Bank Accounts
Yes, you’ll be opening two bank accounts; one for your entertainment company and another for your publishing company. You need to open a dedicated business banking and credit account for personal assets protection for your record label.
It’s a case of not mixing business with pleasure. If your indie record label is sued, your assets will be at risk if you don’t operate a separate business bank account.
At this point, opening a bank account will not be a hassle. You have all of the requirements expected of you by any bank.
6. Trademark Your Record Label Logo
In 2016, a Chinese court ordered a Chinese company to pay significant damages to the trademark owner.
In the US, a business automatically owns the copyright to their work. However, a trademark of your record label logo helps you sleep better at night. When anyone uses your logo, you can institute legal action against them.
To trademark your logo, go to USPTO.gov. You might need a lawyer to get it done correctly, but we have a cheat sheet. Got to the USPTO database, search for Jay-Z and P-Diddy. You’ll have an idea of how their logos was trademarked for Rocafella and Bad Boy.
That’s precisely how yours should also be, with an adjustment to the description to reflect your peculiarities.
