Music Business

The music business can be tricky! I would like to take this opportunity to share some of my wisdom with you. I spent dozens of hours and thousands of dollars working with a top notch accountant and lawyer to make sure that I did everything right. I created my own CD and performed my own live music for nearly a decade.

Music and creativity are very dear to me. I want to see your band or music project succeed! If you’re really serious about making it the music business, it’s not enough to write great music, record it professionally, perform live and promote it. You also need to understand the music business.

I am not writing this to lecture you or sell you on a music business program. However, I do care about musicians doing things ‘the right way’. This means protecting your music, lyrics and artwork. It also means setting up your band as a business. Promoters and labels will take you more seriously. Plus, there are tremendous financial advantages!

DISCLAIMER: Tax and legal laws are always changing. I am not a lawyer or accountant and am not responsible for keeping the information below up to date and accurate. Please seek professional legal and accountant services.

Did you know that are many benefits if you set up your band as a company?

You could get tax write offs for every dollar that your band spends, which puts more money back in your pocket.

This includes all of the following and more:
  • All of the equipment that you purchase
  • Every mile that you drive for band related activities - performances, promotion, music stores etc
  • Recording Studio Time
  • Lawyer Fees
  • Merchandise
  • Artist Fees 

Just as a quick ‘for instance’, if you spent $4,000 in one year on all of the above activities and you had a summer job that earned you $4,000, you would end up paying NO TAXES for that calendar year (saving you around $1000). The reason that this law exists is because the government promotes small business and the expansion of the economy. Your band is a small business!

When you set up your own company, there are also liability protections. For instance, if someone sues your band for injuring themselves at your concert, stealing their music/lyrics or any other reason, that person can only sue you for the money that your band has earned (not money from your other job).

Here are the instructions for creating your own company in the State of Michigan:

Pick a name for your company (probably the name of your band or project)

Go to State of Michigan website first to search for names to make sure that it's not taken.
http://www.dleg.state.mi.us/bcs_corp/sr_corp.asp
 

Then, apply to have a Limited Liability Corporation set up on the State of Michigan website.
http://www.dleg.state.mi.us/dms/results.asp?docowner=BCSC&doccat=LLC&Search=Search 


Download, fill out and turn in these 2 forms along with a $25 check (unless they changed the cost):
901-MICH-ELF APPLICATION
700 - ARTICLES OF ORGANIZATION 

Call the State of Michigan Corporations Division if you have any questions about filling out the forms at (517) 241-6470. 

After you have a business, then apply for an Employment Identification Number (EIN #) through the IRS. http://www.irs.gov/businesses/small/article/0,,id=97860,00.html

Please feel free to contact if you have any other questions.  I’m happy to help.

I wish you all the best luck in your music goals and dreams!

Russ Meuchel
Ember Recording Studio Owner
russ@emberrecording.com

 

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