Most bands start because the members enjoy playing music, being musicians, and enjoying time with their bandmates. However, at some point, bands attain a level of success and, at that point, the band members should begin to think of their band as a business. That is the time to incorporate your band and become serious about the business of music. At Cordero Law, we are in the business of helping musicians and music professionals form their corporations properly and keep them in good standing year after year. Here are some of the top benefits of incorporating your band in New York.
- Protecting personal and family assets — when incorporated, your band becomes a separate legal entity that has the ability to borrow money and enter into contracts; as a separate legal entity, debts and obligations of the incorporated band are obligations and debts of ONLY the corporation; in this manner, creditors cannot seize the personal and family assets of the band members to satisfy the obligations and debts of the incorporated band.
- Reputational enhancement — forming a corporation is a strong signal to record labels and production companies that your band members are serious about your music and are business savvy; incorporating is a means of gaining respect in the music industry.
- One key to success — musicians and artists succeed for more reasons than the power of their music; being serious about the business of music and having the respect of your music industry peers is another key to success and, as noted, incorporating provides this key.
- Makes your band immortal — corporations can literally last forever; more practically, incorporating your band allows for band membership to change over the years without affecting the band’s continued existence; incorporating covers unexpected eventualities like death, disability, and/or divorce.
- Ability to create a credit score/rating for the band — as a separate legal entity, an incorporated band can begin to build and create its own credit score/rating that is separate and distinct from the scores/ratings of the band members; this will make it easier for the band to rent equipment and enter venue contracts particularly if members of the band have low personal credit score because of debt issues like student loans or if band members have personal bankruptcies on their credit reports.
- Tax benefits — under the tax codes, corporations have certain tax advantages not available to individuals like the ability to write off and depreciate capital expenditures; examples include expensive instruments and sound equipment.
- Obtaining lender financing — like all revenue streams, royalty payments can be used as collateral for lender financing; incorporating your band facilitates possible lender financing; typically, this type of financing is not available for individuals.
- Attracting investors — for similar reasons, incorporating your band might attract investors; investors invest in business vehicles like corporations.
Contact an Experienced New York Business Lawyer Today
For more information, contact the business, entertainment, and IP lawyers at Cordero Law. We can provide advice and counsel and can get your New York corporation established. Our approach is to provide top-tier legal services by working with our clients rather than simply working for them. Our law practice focuses on the music industry. Contact us via our online Contact Page or by calling (212) 960-8890.