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How to Start a Record Label

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How to Start a Record Label: Choose Your Business Structure and Label Name

Many indie labels skip this step, at least initially, but it is a good idea to have your record label set-up as a legal business entity from the start. You will need to be an actual, legal business if you want a business bank account or credit card, and it certainly makes tax time a lot more manageable. Likewise, if you are applying for business loans or other kinds of funding, you will need to be a legal business.

The names and specifics of various business frameworks differ from country to country, state to state and city to city (for example, sole proprietorship, LLC, Corporation, etc). You will need to spend a few hours with your computer or at the library to learn about the law in your area and to print up the forms you need to set up your company. There are a few general guidelines to keep in mind that apply everywhere:

  • If you are starting the label with other partners, you will need a partnership agreement that details the percentage of ownership each partner has, how each partner can leave the business, how decisions will be made in the partnership and so on. Depending on where you live, the laws associated with your business structure may dictate your partnership agreement, or you may need to devise a separate agreement.

  • For most indie labels, the best business structure is one that is simple and that protects the partners from personal liability should something go wrong in the business.

This is also the time to figure out how the company will operate, such as who will be responsible for which tasks and how people will be paid. If there are issues not addressed in the paperwork to set up your business, then write up a separate contract detailing this info.

Of course, now is also the time for a label name. Do a little online research to make sure your name isn't already taken.

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