www.charlesjeromeware.com " Here to make a Difference."
The music and recording industry business can be complex A line does exist between the artistic side and the business side of the industry. Attentive legal counsel is crucial; and legal challenges present themselves commonly. A good start for anyone entering the business is to establish a sound business infrastructure. And, the consumer has options to choose from, such as sole proprietorships, partnerships, and corporate structures such as limited liability entities (LLPs, etc.), subchapter S, etc.
When choosing a business structure in this industry, keep in mind there is an array of liabilities to keep in mind. A " liability" is a debt or circumstance in which someone is held responsible for by law. Interestingly, the most common legal/business structures in the music and recording industry business are, in order, (1) the sole proprietorship , (2) the partnership, and (3) the corporation. Each of these presents both advantages and disadvantages.
In the SOLE PROPRIETORSHIP, you are the business; you operate the business, and you make all of the decisions of that business. You have relative freedom and independence to run your business. A major disadvantage is that when things go wrong (e.g., you are sued, etc.), you are personally liable for debts, damages, judgments, repercussions, etc.
In the PARTNERSHIP, the terms of the partnership agreement will dictate the extent of your freedom, independence and liability. This business/legal structure is generally good for music groups such as bands, etc. But, again, there are still potential liabilities for the partnership and for each member of the partnership personally.
In the CORPORATION, a great deal of personal liability can be avoided. A corporation, in essence, is a fictitious legal entity operating as a business. When sued or other claims are made, only the corporation's assets can be held liable liable for any debts incurred.
{ For an initial courtesy consultation, contact the firm, Charles Jerome Ware, LLC at (410) 720-6129. ]
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