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FROM THE DESK OF... SHELLY HARRIS |
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by: Shelly Harris / Entertainment Attorney
There comes a (confusing) time in a band’s
career where they have been playing out enough, or have the financial
wherewithal, to record their own CD, either for distribution to the public
or as a product to send out for label shopping purposes. At that point is when many first begin to urgently think
about the legal and financial ramifications of releasing their work to
others, and are overwhelmed about what the proper game plan is for making
sure all the bases are covered. Below
is a list of five important points that should ideally be taken care of
before you begin to release your work to the public, or to label shop the
product: 1) If
you are a band, make sure to be registered with the Secretary of State in
the state that is your “principal place of business.”
I usually recommend registering as a “Limited
Liability Company” or a “Limited
Liability Partnership” for tax and personal liability reasons.
If you are registered in that manner, or as a corporation, you will
need to obtain a new tax ID number for your business entity, and a
separate tax return from your individual ones will have to be filed at the
end of the tax year. (Not a
bad thing, for many reasons, but make sure to keep records for
band-related expenses so you can deduct them.) 2) Make
sure no other band has a trademarked name similar enough to yours to cause
confusion in the eyes of the public.
This is a “gray” area legal standard, so when in doubt, it is
best to go with another name. If
another band has been using the name in public before your band has, they
still have priority, even if they haven’t officially registered the name
with the U.S. Patent and Trademark office.
(They will have to register it before suing anyone, however.)
Unless your name is a very generic one, like “Rockers” (which could not be trademarked), it is advisable to
register your name as soon as possible for a number of reasons, including
deterring anyone from staking a claim to it in the future.
(Even if you are in the “right,” it costs money to defend your
priority.) If you are a band, you will actually be trademarking the name
with your “legal entity” as the owner of the trademark, as mentioned
above, and you will also use its tax ID number rather than any individual
member’s SSN. 3) Officially
copyright all your songs, including the songwriting and performances.
As mentioned in previous columns, their are two different forms for
copyrighting the songs and the performances, but it is possible to
register them all in one copyright IF the performers are the same on all
the tracks, and all the performers are also all songwriters on ALL the
songs on a set of tracks you submit all at once.
Otherwise, at least two different registrations will be required
for a multi-track recording. 4) Make
sure you are registered with one of the performance rights organizations
both as songwriters and as a publishing company. At the least, you will
need to form your own “paper” publishing company, and file a “doing
business as” form with the county clerk and your bank so that you will
be able to cash any royalty checks which will come in the name of the
publishing company. Remember, only 1/2 of any potential royalties come to
the “songwriters” by name; the other half goes to the publisher, even
if the “owner” of the publishing company is the same as the
songwriter(s). You will also then need to register each song you write and
release with the performance rights organization in order to collect any
royalties. You can reach any
of these organizations online, and they will help guide you through the
process and forms, etc. 5) Formulate a written band agreement that provides for who will own the name if a band member leaves, and also how any assets will be split or reimbursed if one or more members leave. Many other terms can be included in such an agreement that will minimize any future feuding and potentially expensive legal battles.
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