Episode 76: Turning a Band Into a Business

The dream is the music. The longevity is the paperwork. We dig into the real steps that turn a tight-knit band into a professional, protected business without draining the joy that brought you together. From first royalty registrations to company formation, we walk through the decisions that keep friendships intact and revenue flowing when momentum arrives.

We start where money actually tracks you: collection societies. Learn how to register with your local PRO for songwriting royalties and with neighbouring rights organisations to capture income from recordings played in public. Then we move to your identity. A band name is a brand, so we outline practical ways to check for conflicts on DSPs and file an official trademark with the right government office, avoiding scams and needless fees.

Contracts don’t kill the vibe; they protect it. We unpack interband agreements in plain English: who owns the name and artwork, how master rights are split, and how song splits are decided with clear split sheets. We get specific about recoupment, band bank accounts, spending categories, and voting systems that resolve deadlocks. Lineup changes happen, so we plan for exits, additions, and the difficult what-ifs, making sure rights and income remain transparent.

Finally, we compare legal structures that actually suit bands: limited company, partnership, and LLP. You’ll hear the trade-offs on liability, tax, flexibility and member changes, plus when to stay self-employed versus incorporating. The goal is simple: keep the bond, reduce the friction, and prepare for success before it knocks. If this conversation helps you avoid a fight, a fee, or a missed cheque, it’s worth it. Enjoy the episode, and if it resonates, subscribe, share it with your bandmates, and leave a quick review so we can help more creators build sustainable careers.

Chapters

• 0:00 Welcome And Episode Aim
• 0:51 From Hobby To Profession
• 3:26 Joining The Right Collection Societies
• 5:19 Understanding Neighbouring Rights
• 6:39 Band Names And Trademarks
• 11:18 Why Interband Agreements Matter
• 14:20 Song Splits And Split Sheets
• 16:19 Money, Spending And Band Accounts
• 18:04 Decision Making And Responsibilities
• 19:10 Lineup Changes And Rights
• 21:01 Assets, Inventory And Replacements
• 22:08 Choosing A Legal Structure
• 25:24 Limited Company, Partnership, LLP
• 28:02 Timing The Transition To Full Time
• 30:05 Final Advice And How To Reach Johnny

Transcript

SPEAKER_01: 0:14

Welcome to you. You're listening to the music business buddy with me, Johnny Amont, podcasting out of Birmingham in England. I'm the author of the book, The Music Business for Music Creators, available in hardback, paperback, and ebook format now. I'm a music creator as a writer and producer with a variety of credits. I'm a consultant, an artist manager, and a senior lecturer in both music business and music creation. Wherever you are and whatever you do, consider yourself welcome to this podcast and to a part of the community. I'm here to try and educate and inspire music creators from all over the world in their quest to achieving their goals by gaining a greater understanding of the business of music. Okay, so in this week's episode, I'm talking about being in a band and turning that band into a professional business and what that actually looks like. Because I think there's sometimes the hope that sometimes, you know, some kind of major investor will come along and then all of a sudden say, give up your jobs, go full-time, and boom, that can and does maybe happen for some people. But I can't think of anybody that I've ever known where it actually works that way. And actually, it's a bit more of a kind of transitional thing, and you need to kind of know what that looks like, right, so that you can plan for it. So that is the purpose of this week's episode. Let's get going. The first thing to say is this, right? Being in a band is extremely special, right? There is often, or hopefully, some kind of synergy between band members, right? Between the people in that group, and it creates something unique, whether that's on stage or in the studio. Uh, and it's something that can't really be replicated even by the most advanced technologies. Sometimes bands, you know, might lose members and then have to replace those members with other members, but even then you're into a different incarnation of a band, right? There's a sense of maybe fraternity or togetherness amongst a collective that experience so much together. It's a bond, right? It's a band, and a band is a bond, but it's also a business, right? So for a business to operate successfully, it needs to have a market, right? It also needs to know how to reach that market, and even more importantly, it needs to know how to handle that market when it is reached, right? Now, a band is no different than any other business in that respect. Now, it might feel different because it doesn't require a formal uniform or the need to always turn up at 9 a.m. on a Monday, right? It feels much more important than that, doesn't it? Now, it feels perhaps in fact more like the exact opposite of that, and that and in some ways it is. However, when it comes down to making a living from the work that is done, it's actually pretty comparable, right? Because it is a job. And at that point, the hobby becomes a profession and it changes because you've lost that hobby and you now have to kind of have this bittersweet moment, which on one hand is like living the dream, but on the other hand, it becomes really kind of more professional and more structured because there's other stakeholders in place. Now it's difficult to plan for, but it's not impossible to plan for because when you get a better idea of what that's going to look like, it then enables you to start working towards it. Alright, let's start off with some logical steps, right? And that is becoming members of collection societies. So it's crucial that band members are registered with the correct collection societies. So just to be clear, you generally do not need to register as a band, but as individuals with the names, your passport names rather than your stage names or professional names, right? So songwriting band members must be members of the performing rights organization, the PRO, for their country in which they are a resident, right? So the PRO will collect and distribute royalties to songwriting band members for their percentage split of the song copyrights. Now, in most countries, you don't really get a choice as to which PRO you actually sign up with, right? Unless you're located in North America, they have lots of different choices there. But um, like in the UK, for instance, there's only one that's PRS for music. Now, in most cases, all band members must also be registered members of the organization that collects neighbouring rights, which are basically royalties that are due to copyright holders of the master recording when song recordings are used in public. So this applies to both performers and rights holders. It's I I can't recommend it enough, right, to kind of just just check in research the organizations that are relevant to you and your geographical location. In the UK, it's PPL, right? But it's going to be different organisations in different countries. Also note that there are some key differences between those organizations in terms of what they actually collect. So the important differences are between the collection of song copyright royalties and then separately the collection of sound recording royalties for performers that are on those recordings because you could get some band members that did not co-write a part of that song, but that did play on it, and they would still be due a neighbouring rights royalty for that. Let's now think about uh trademarks, right? So band names and trademarks. You know, coming up with you know the name for a band can be well, it depends on who you ask, right? But it can be a pretty fun process or it can be quite lengthy and arduous. Now, while it may be argued that perhaps simplicity is often key, it could also be said that it doesn't actually matter as much as you might think, right? You know, look at the nineties, right? The nineties were a glorious era for like bands that, you know, play brip pop music and indie rock music. Um, and you know, that there were all sorts of different names, right? Like Oasis, blur, pulp. These these are not, these are simple words, right? Simple words that uh that that probably would have been debated for you know many, many, many rehearsal sessions. And actually, you could be arguing, like, did it really matter in the end what they were called, right? Because it was about what they did. It is, after all, something that the public, you know, become accustomed to in due course, right, without really questioning it. So there's no set or standard kind of global solution to picking or protecting a band name. However, there are some kind of logical steps that can be taken in doing so. So let's just split this into two pieces, right? So, first off, searching through, you know, the DSPs, Spotify, Apple Music, etc., to see whether another band has already taken that name is a fairly simple but quite effective initial step. Now, the next step is to potentially trademark uh that name and the logo with that name. Now, applying for a trademark involves a few steps, and it's advised to kind of just to ensure that you are actually contacting the correct organization to help you. Because if you Google something like how to trademark a band name, you're gonna get loads of sponsored ads, you're gonna get a load of um companies out there that are not legit, you know. So you've got to be really, really careful. Your government will almost certainly have a trade and industry department, which is usually the place to look to. So if your trademark is to be protected by law, it will need to conform to a jurisdiction and have some form of government authorisation to it. So, for example, in the UK, uh the Intellectual Property Office is the only official body that actually registers trademarks. So there are plenty of companies in existence that will gladly, you know, take your money for trademarking applications and may even give you a nice looking glossy certificate that looks formal and official when actually it's really rather meaningless. So trademarking is a business, right, that involves many scams. So you you only need to just do that quick search on Google, right, just to see how true that is. Now, obtaining a trademark for a band is also not necessarily something that you need to hire a lawyer for because the application process is usually relatively straightforward. So uh in the UK, for example, um, the UK Intellectual Property Office is available to handle questions relating to uh the process and you know, in other geographical locations, there will usually be a subsidiary department of government that handles the administrative aspect of trademark applications, and generally the key steps in the process kind of look like this, right? You decide upon a category of business because a trademark does not generally cover you to trade under every sector, right? So you then categorize your goods and services, known uh very often as classes and terms, uh, and then check to see whether anyone else has actually registered a similar trademark, which you can usually check on that government website. You then apply to register the trademark, and the application should also uh include the details that you want to register, such as the band name, uh associated logo, etc. Um, and the person or company details of the registered applicant. I'll come back to company details in a bit because there's some other stuff to think about there. And then you pay a fee, right? And it's roughly sort of 200 to 250 quid, right? Um, so if you need extra classes, you do have to pay a little bit extra, but if it's for a band logo, band name, you don't usually need extra classes, so you shouldn't really be looking to pay any more than about 250 quid, roughly speaking, depending upon where you're from. Um, you can either run a full application or you know pay very often an initial fee to receive feedback before completing the process, which just kind of negates the risk a little bit. And then if you're successful, which you usually are, then the trademark is usually published in some form of trademark journal for a period of time, maybe like three months. And if it's not challenged by any party during that period, the trademark is then officially registered, and then you get an official uh certificate. Now, that process that I've just outlined there will vary dependent upon where you're based. So it's always good to research the correct protocol for trademark uh and applications in your country. That's generally how it works in the UK, and it's not too dissimilar to how it works in other countries around the world. Alright, so for a band to be a business, right, there needs to be some kind of formally uh accepted company structure around it, right? So just uh imagine it, imagine this scenario, right? So imagine kind of working for a company, right, um, where you have no contract, right? The company has no boss, no rules, no agreements between staff members, no corporate structure, and you have no idea what will happen to you if that company goes into liquidation, right? That's no different from being in a band that doesn't have a some kind of contract between them. So I am going to bring up the elephant in the room, the thing that bands don't often like to talk about, and that is the subject of interband agreements, right? So they're often referred to as band agreements or internal band contracts. Um, interband agreements, they're created fairly early on in the band's career as a crucial uh step, right? But they're also quite rare, right? Many bands will kind of often say, you know, we don't need something like that, or like, you know, you know, what's the point of having something like that? We're friends. But others might say, oh yeah, we probably should have to have something like that, but then don't always take the step to actually do it. It could be perceived as somewhat unnecessary or maybe a bit cringy or embarrassing to have to have something so formal to represent like a working relationship between a friendship group. It can also sometimes just come down to innocence, right? Of not really understanding the business of music or what that entails, but it can create a lot of problems further down the line if you're not careful. What I've found is that one of the things that makes bands a little bit more reluctant to kind of have that conversation is often to do with song splits, right? So songwriting splits are one of the biggest killers of bands, right? At the start of a band's life, it's not about the money usually, you know, but that changes over time, you know, very often. It it doesn't change because people get greedy, but often because they need to just make a living, right? And there's nothing kind of wrong about that. So the early days can often be the fun times of freedom and self-expression and dreaming and planning. And drafting an interband agreement, you know, is the last thing often, you know, that's kind of on anyone's mind. But this is actually the right time, right, to draw one up. Um and in order to kind of succeed, you must be prepared for that success. And that means knowing what the steps into professional musicianship will actually look like. So let's have a think about the things that should actually be in a you know, an interband agreement or a band agreement. So in a perfect world, a lawyer would draw a contract for the band. However, you know, that can be expensive and the agreement not need, it doesn't need to be like overly formal, right? It just needs to be legally binding. And if it's not in writing, it's not legally binding usually. So there are plenty of like interband agreement templates available for free on the internet and uh, you know, and can guide a kind of you know, uh a band towards what theirs might want to look like, right? But these are the key things to kind of have a think about. First off, the band members, the agreement should include the names and the addresses, the current addresses of all members, right? Then comes who actually owns the band name, because you know you could argue the band, right? But it also covers the permission for the use of the band name in the future and how many of the original members of the band must be present in the lineup for the name to actually be used. Uh, this aims to prevent multiple uses of the same band name being used, um, because we often see that now, right, with a lot of legacy acts where the same band name is being used by different incarnations of the band. It's really heartbreaking. It usually happens because they didn't get this sort of stuff figured out earlier on in their careers, right? Um, a collective agreement on the rights to the recorded music is also important, um, as is the artwork, by the way. That's really overlooked sometimes. So, in most cases, there is an even split, perhaps, between band members on recording rights. Um, this relates to the income generated by the master recordings, by the way. So, an outline of how songwriting splits works in the band is different because many interband agreements state that you know each individual song must have its own split sheet, um, as the writing credits can vary from song to song. So, that's going to be different from the recording, right? It could be that the recording is just split evenly amongst all members, and then the songwriting might be different song to song. So, some band agreements could state that all songwriting is split evenly between band members. Um, it does there's no right or wrong on that, by the way. You know, others state that songwriting is the exclusive right of specific band members. Um there is no right or wrong. It it just it just matters that there is something in some form of agreement moving forward, even if it's just let's just do a split sheet for every song by song. I I know that sounds a really unglamorous, unsexy process, but believe me, your stakeholders, your investors will thank you for this, right? And so will your lawyer one day. Um banned income, okay, and expenditure and uh uh general spending, right? So often uh income relates to collective income, right, that the band generates that sits outside of let's say songwriting royalties. So a banned bank account should also be applicable here. Now, the key things to agree on are how funds will actually be split once expenditure is actually recouped. So the percentage split between band members and the percentage that will remain in the account, right? So it's also important to agree on how financial decisions will be made, right? For example, you know, would uh should it be a band member vote system or something like that, right? So categories of outgoing expenditure should also be agreed upon. So that's things like you know, marketing or rehearsals, uh, PR costs, bills, merchandise, travel, accommodation, insurance, by the way, as well, of course. Um it's also important to remember the difference between personal costs and band costs and actually draw a kind of uh an understanding between the two. Um also decision-making processes, um, you know, in general, you know, this this partly relates to the previous point, right? But also regarding financial choices. So it it's also it also relates to creative and and also business direction. So some kind of system should be established and agreed upon in writing for how band-related decisions will actually be made. Now, this can be especially difficult, right, for bands that have an even number of members because there's, you know, there's no possibility to assign a casting vote, right, if you've got like four people in a band, unless you've got a three against one or something. But if you've got two people and then another two people, right? So there has to be some kind of system that's agreed upon by all parties. Another thing is band member responsibilities, right? A kind of a code of conduct of sorts should be in place. That I've I've never seen many of those actually in band inter-band agreements, but you know, uh, there needs to be something perhaps sometimes to kind of just consider it because certain band members, you know, they might get learning, they might step out of line. And, you know, is there, you know, is there something that should be done about that? Should there be a band vote or a band meeting about it or whatever it might be? Okay, let's talk about changes to band members. By the way, I do appreciate how incredibly difficult and awkward that is to have in a contract. But let me the reason I'm telling you the this now is because if you don't do this as a band now and then you turn professional, you will have to do this at some point. It'll be clauses in contracts with managements, with booking agents, with record companies. So it's better to get this stuff out of the way. So changes to band members. Now, if the band wish to vote for a member to leave, a fair system should be agreed as to how that will be done. Hardly any bands ever do that, right? So this often relates to the previous point about responsibilities and conduct, but in addition to also how decisions will actually be reached. So, what happens if a band member decides to leave on their own accord, right? The rights to any share of the songwriting and recording royalties will still be due to that specific member. But it would create a sense of transparency to actually acknowledge whether any income streams should continue, right? So if the band is signed to a record company, it's worth gaining a solid understanding of whether the agreement that is in place means that that any individual members of the band are actually signed to the label in addition to the actual entity of the band. That's an aspect which is often overlooked. Um, this is going to sound awful, but it has to be considered. What also happens in the event of a death of a band member should it needs to be agreed upon, right? Um again, this is the kind of thing that a lawyer would usually do, but if you can think about this stuff, it saves money and it saves time to kind of just think about it. So in some cases, things like assets and intellectual property can be transferred according to how the band member has set up their legal beneficiaries, right? But in other cases, a death is treated in the same way as a band member that leaves. So it could be perhaps stated that in the event of a death of a band member, the band will vote on the suitable course of action, and that's often a good kind of amicable thing to set up. Another thing is this band assets, right? It's important to keep a log of the assets in inventory that's actually owned by the band as opposed to the individuals, right? So that's things like maybe like PA equipment, lights, uh, mutual band equipment, uh, also maybe even just cash assets. So an agreement should be in place as to what happens to those things if a band member leaves. Now, if the worst case scenario there and a band member does leave, you then need to consider the replacement of band members. So the agreement system that had previously been somewhat established, perhaps hopefully by the band, could also dictate then how a new member is recruited if that then becomes a necessary requirement. So to summarize on this, an interband agreement has kind of two primary aims, right? First, it helps the band to cement their working relationship and agree on how problems will be dealt with before they actually arise. Uh, and the second is it really just helps the band to identify some of the key issues relating to the mechanics of how the music industry functions around them and just to narrow down their goals also moving forward. Um in addition, it can help to educate band members on the workings of the business that they're getting into so that they're not kind of you know surprised further down the line, let's say, you know, um there are many bands that, you know, fall out when agreeing on terms, and and as this is gonna sound awful, so I'll say this carefully, but as heartbreaking as that is to witness, it's actually far better that an unhappy band member leaves sooner rather than later, right? Another outcome often seen during sort of negoti negotiations and discussions is that non-songwriting band members become aware of their lack of songwriting copyright royalties if if that is what is agreed. Now, many songwriting band members are afraid of that happening, but it's far better to actually make non-songwriting members aware of what they're getting into from the outset. Now, there's no right or wrong, you know, in terms of what should be agreed. Um, it's just down to the band to do to agree on that as a unit. And if they can't, then just find a system of how they agree on it, right? Now, the document it doesn't need to be written with, you know, legal jargon or laminated or anything like that. It just needs to kind of make sense to all band members and it needs to be signed and dated by those band members so that they can move forward and build their career together. Alright, let's talk about the legal structure of a band, right? So, one of the key aspects to consider as a band is when and how to turn professional, right? So for some, this is when they sign a record deal or a publishing deal or a management deal. For others, it'll be when they gain their first sync deal or do their first tour, right? It's difficult to kind of pinpoint a particular time when that starts to happen because it's usually more of a kind of gradual process than a sudden one, right? So one common observation is that many bands are geared up, you know, for the professional pursuit in terms of mentality and ambition and prepared to work hard and ready to put the time in and all that kind of stuff. However, it's not the same thing as being prepared for it from a business perspective. So it's important to consider the legal structure of the band when it is a business, right? So what that looks like in terms of legal structure and sort of company formation will depend on where the band is located in the world, right? I know I keep saying that, but it's true, right? So it's advisable to seek the support and advice of an accountant, right, when taking those steps. But let's just explore the basic overview. Uh, using I'm going to use the UK as an example, because that's where I am, right? So a band can choose from the following company structures in the UK, right? And this won't differ hugely in other countries, right? So, first off as a limited company, right? So it's often the most suitable choice for bands. There are there are running costs, right, involved with being a limited company, and there are costs involved with setting up uh so that the company formation is actually correctly registered under the recognised legal framework with Companies House and HMRC. But a limited company needs at least one director in its initial sort of incorporation, right? But band members will become shareholders of the company, and shareholders' agreement must then be put in place to govern the system for making sort of major decisions together with the sort of the splits between the shareholders. So in many cases, there's even an even split of the company shares between band members, but there needn't be, right? It could be that all members of the band are actually directors, but again, this is optional, right? If there's uh if there's one director in place, that's what matters to begin with, right? The shareholders own the company and the directors are responsible for running the company. That's how it looks on paper, right? So there are also running costs involved with having a business bank account, right? And it's also worth considering that corporation tax would also be due by the company or the band, if you like. Now, the upside is reduced responsibility for business debts, right? So salaries can be paid, if you like, by the company to the band members, and directors' dividends can also be paid out as sort of bonuses. Um legislation will dictate changes to the thresholds for taxable income over time, right? It is something that goes up and down. Um, but once a uh you know a variable threshold of company income has been met, the company will need to be registered for VAT as well, right? Value-added tax, which is which also has its advantages and disadvantages that should probably also be considered. Um, another structure is a partnership, right? So instead of running the band business as a legal structure with like directors and shareholders, it could also operate under a partnership agreement, which effectively means that the partners both own and run the business. Now, a partnership requires multiple owners, which is a factor that could make it suitable for bands. Um, however, a partnership is only suitable for a very kind of watertight group, which can be difficult to ascertain in the context of bands and the music industry, right? No matter how tight the friendship is. And this is because if one partner incurs debts and makes bad financial decisions on behalf of the band, then all of the partners will become liable and not just that one particular partner who caused any of the problems that got them there, right? So that's something to consider with a partnership. Now, there's also a limited liability partnership or LLP. Now, this is rather kind of like think of it as a hybrid between the last two models we looked at, right? So limited liability partnerships don't have shareholders or directors, but instead have an unlimited number of members. So the members of an LLP can all sort of take part in the management of the company, um, but they also have reduced personal responsibility for business debts. So members must all be like appointed at the point of formation, as in when it sets up, but other members can also be appointed at a later date. So you know that that makes it a strong and pretty flexible model for bands that change their lineup further into their careers, for example. Um now, this issue may not be at the forefront of band members' minds when they start their venture together, i.e., you know, what happens if this person leaves and we get somebody else in? Like that's not often something that's in the mindset when you start a band, but the implications of a change in the lineup must be considered because it will change um uh quite differently dependent upon the structure. So a limited liability partnership is often a favorable choice for bands for that reason. Okay, so you know, on the transition, right, of being a full-time band, if you will, right, setting up a band as a business, it's a big step, right? But it's it's a necessary one in many cases. And it's worth noting that individuals uh can be uh self-employed, right? We we we call them sole traders in the UK, but self-employed or freelancers and remain responsible for their own sort of tax payments until the band is ready to become a company. It's also worth remembering that band members may have other sort of non-music jobs before or or or sometimes during, or sometimes maybe even after that transition is made. Because within a band, it it's more than likely that band members will each have their own circumstances to consider. So the point in which some people in the band turn professional and the point in which other band members turn professional and go full-time into something is not only something that will differ but something that needs catering for and strategically kind of planning out. Okay, so that's kind of a bit of a summary on that subject. Um, I hope I haven't put anybody off, by the way. The whole point of doing this, right, is uh this episode is to help bands to figure out what that transition looks like to from taking that band from you know a hobby project into a professional project. Now, you invariably you will have to think about things that I've mentioned there, and it's just it's better to do it early on than further down the line. I I would be as bold as to say that many of the problems that music and entertainment lawyers actually try and uh unpick and unpack and battle with are things that probably should have been agreed upon far earlier in a music creator's career. Um so you know, it if you don't think about this stuff kind of now, there will be a point where you do have to think about it. Now, it could be argued that it's a lot easier to do that when there are accountants and lawyers and managers involved, but also it doesn't always work like that because you know you you you have to build that team around you anyway to turn professional, and those people, those professionals, they're going to come in and out, right? And they're gonna come at different times. There's no kind of hard and fast black and white rules on when to work with an accountant or when to work with a lawyer, it's variable, it always has been, it always will be, but the The point is that there's an accountability that comes with being in a band when you're a business, and it's a different level of accountability when you are a band that is a business, and it needs thinking about sooner rather than later to avoid any of those unnecessary problems. I hope that makes sense. Okay, feel free to reach out to me, right? If you've got any questions, if I can be of any support, don't be a stranger. I'm here, I'm easily found. My name's Johnny Amos, and this is the music business buddy, right? You just put those words into Google, you'll find me, right? Okay, that's enough from me today. I wish you well. Thank you for listening. Don't forget to rate the podcast and all that kind of stuff. I appreciate you being here. Uh, until next time, everybody, may the force be with you.

SPEAKER_00: 30:47

The music, business body.