Legal Questions When Creating a Musical Group or Band

Like it or not, law permeates our society including the arts. Musical groups find themselves surrounded by legal questions. Frequently, default legal decisions were made early-on that are virtually impossible to currently reverse. This comment briefly and incompletely lists a few legal questions that every new musical group or band should consider. It does not address financial or taxation issues. As is well known, the traditional music business model has disappeared. People have become accustomed to free music. What are they willing to pay for? There are dozens of potential revenue streams to consider that are beyond the scope of this comment. Always consult an experienced entertainment law attorney as well as marketing, media, taxation, and financial professionals in specific situations.

This list of legal questions is presented to start your thought process and is not an exclusive list. For convenience, I use the term "band" throughout to refer to any musical group.

A. What has happened before this band was formed?
Are there preexisting management, recording, production, or membership agreements that a band member has? Are they written or oral? These need to be examined and addressed. How do they impact the current situation? Are there potential group names that are already owned?

B. How was this band formed?
Is there an oral, written, or implied agreement? Is there a member who is managing the schedule, signing checks, and making overall decisions? Does one individual control (band leader model) or does there seem to be a partnership? Does a formal business entity, such as a limited liability company (LLC), need to be created? If a partnership is created, it should be written to prevent "selective memory" and to clarify a variety of issues. Individual partners may have personal liability for partnership debts, even if not created by the individual. Are band members considered partners or at-will work-for-hire employees? Is a band member like any other business employee? Do these individuals have any ownership rights in their contributions to the band's success? What contracts does the band have with supporting personnel such as booking agents, producers, drivers, session musicians, videographers, etc.? These arrangements and contracts may become critical in situations involving member expulsion, admittance, and music and video ownership situations. A smile and a handshake agreement may be expensively inadequate in lost time, loss of creative energy, emotional distress, and financial cost. It is crucial to realize that the band is a business venture.

C. Does the band have an attorney, accountant, and insurance agent?
It is easy to think that these professionals are unnecessary; however, just think of the risks associated with driving. A band's CPA needs to be familiar with band accounting and may offer helpful advice concerning the deduction of expenses (for example, clothing and hair styling) and the tax status of band members as partners, employees, or independent contractors. Commercial insurance on band equipment, the bus or van, and overall general entertainment liability insurance may well be worth the expense. Note that ordinary insurance may not cover commercial activities and commercial uses of equipment. What exclusions and deductibles are in the insurance policies? Does the performance involve pyrotechnics or other hazardous activities? Do all performance venues have adequate and up-to-building-code emergency equipment, exits, liability insurance, etc.? If a performance is outside, how are weather related issues to be addressed? How is venue security provided? Do you need off-duty certified peace officers? Think about hazards, likely audience behaviors, and overall safety. Well known tragic events have occurred at concerts.

D. Are all of the band members legally adults and lawfully in the U.S.?
It may be necessary for a parent or guardian to sign contracts on behalf of a minor. Employment legal issues and the lawful entry into venues that serve alcohol must be considered. It may be possible that state law allows a minor to be "emancipated" or enter into certain entertainment contracts. May the minor lawfully "work"? Passports, visas, and work permits may be necessary if foreign travel occurs. Determine the legal status of these and other related issues in advance.

E. Do band members have wills and what happens to ownership and creative rights in the event that a band member divorces, becomes disabled, is expelled, or quits?
Should buyout provisions be created? Does the band agreement address these issues and how are individual band members addressing these issues? Having spousal or ex-spouse claims against the band will be personally and legally draining.

F. Have you made a careful and complete inventory of all instruments and equipment? Models, serial numbers, and detailed video and photographs may become important. What is owned by individuals or the band? Does everyone agree concerning ownership? Keep this inventory up to date as changes occur.

G. How are songs written and who owns what segments or lyrics?
So-called "song splits" - who wrote what part or added what instrument or put together a production track - may become both a copyright issue and a financial issue. Obviously, copyrights should be secured on all songs and possibly segments of songs. Without going into detail, suffice it to say that the band, writers, and producers need to agree on how creative contribution and ownership is documented. Who contributed what segments or other materials may additionally become relevant in a copyright infringement situation. Be certain that any third party outsider contributions are made under a work-for-hire contract. This should transfer the outsider's intellectual property rights. Think of not only musical composition and session musicians, but artwork, album covers, and design activities generally. Will the band, its members, or its performances be filmed? What person authorizes filming and who owns this video? It goes without saying that all proposed contracts and memorandums of understanding need to be reviewed by an experienced entertainment attorney. Do you understand the positive and negative features, as well as the future implications, of a proposed contract? Don't rush.

H. Will the band and individual members affiliate with a performing rights society or publishing company?
Exercise due diligence concerning the many possibilities. Additionally, do you understand the significance of an International Standard Recording Code (ISRC) and a Universal Product Code (UPC)?

I. Has the band trademarked its name, logo, catch-phrases, distinctive makeup designs, overall appearance, or other identifiers?
There may be more intellectual property than you think. Think about everything that is "distinctive." Copyright, trademark, trade name, and trade dress law apply. Who will own these rights? Educate yourself concerning the major points of contemporary entertainment law and finance including the legal right of publicity, cease-and-desist letters, licensing, and the legal and practical remedies for unauthorized music and t-shirt sales and bootleg tapes. There are many excellent sources of entertainment law, finance information, and overall media savvy. Perhaps it is best for fan loyalty and the overall business to allow or even encourage some live performance or rehearsal recording by fans. Is there intellectual property that should be freely provided? What will "delight and amaze" fans? Ask them. How does one provide a human personal touch in this age of mass media? What strategic model is best, given your target audience? If the band is a "tribute band" (performing songs from or in the style and/or name of another famous group), a set of legal issues exists that is beyond the scope of this brief comment.

J. Has the band acquired domain names and other social media identifiers?
Who will own these? How will they be used?

K. How are band members to be admitted, expelled, or otherwise leave?
Best to agree well in advance of problems. How are decisions to be made? What acts may lead to expulsion? What happens when rehearsals or performance dates are missed? What happens when alcohol or illegal drug usage interferes with professional abilities? What happens when there are creative disputes or personality clashes? What happens in the event of unlawful behavior and will there be a distinction between misdemeanors and felony offenses? Must a band member give notice prior to leaving the band and what penalties are to be assessed if the required notice is not given?

L. Are band members affiliated with a music performance union or should they be?
Do you understand the benefits of union membership?

M. Are band members allowed to engage in other outside musical projects or artistic endeavors?
May individuals identify themselves as band members while undertaking these projects? How much time must be devoted to band activities versus outside activities?

N. It is a mistake to think that we, band members, are all friends and there will never be a disagreement. Likewise, it is a mistake to believe that we don't need all this legal and financial "junk" or that it pours cold water on our energy and creative spirits. A long protracted battle will drain much more creative energy than thoughtfully made agreements and protected intellectual property. It is a mistake to think that professional advice is too expensive; however, don't hesitate to negotiate the cost of professional services. Ignorance is extremely costly.

This comment provides a brief and incomplete educational overview of a complex topic and is not intended to provide legal, accounting, taxation, or financial advice. Always consult experienced professionals in specific situations.