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Why Your Music Band May Need An LLC

In the beginning, things are great with your band, spending long afternoons jamming in your living room in Livermore and playing gigs in Pleasanton.  The last thing you ever think about is needing a business lawyer for musicians.  One does not need to look too far into music history to find examples of how bands can get themselves involved in complicated legal matters.  Perhaps the court case in which Roger Waters battled his ex-bandmates in Pink Floyd throughout the 1980s over the legal rights to the band’s signature inflatable pigs is an extreme example, but there are plenty of times when bands in Oakland and beyond could use some professional legal advice, such as when it comes to forming the band as a legal entity.

LLC Can Be the Best Entity Type for a Band

When you apply for a federal tax ID for a business, whether you are in Hayward or anywhere else, you must choose an entity type.  Common types of business forms in California include partnerships, corporations, and sole proprietorships.  California even has the option of a B corporation (in which B stands for “benefit”), where some of the company’s profits automatically go to a philanthropic cause.  Limited liability company (LLC) can be a very good choice for companies that are just starting up and don’t have a lot of capital; this includes most bands.  Here are some of the advantages of using an LLC as your bands business entity:

  • LLC is one of the business entities that allow you to avoid double taxation;
  • An LLC can be relatively inexpensive to establish;
  • The California LLC may be the most flexible of all the entities. You can structure the California LLC to operate in just about any manner you choose.   You can chose the tax status of the LLC and the management structure for the LLC.
  • Best of all, the LLC entity can be structured so that it safeguards your band members against heavy personal financial losses. If the LLC goes out of business, as long as the members have not personally guaranteed the LLC debts, the members as individuals cannot be required by law to use their personal assets to pay its debts.

In other words, an LLC is a low-risk, affordable way for a band to go professional.  But you should consult with your business attorney to help you make the final decision and to help you get the LLC properly structured so that it accomplishes the goals that you seek.

Contact JGPC Law for Business Matters Related to Your Band

Jim Gulseth and the other attorneys at JGPC Business & Corporate Law may or may not be able to carry a tune, but we can definitely help your band avoid personal liability for business debts and other legal hassles.  Contact JGPC Business & Corporate Law at (925)463-9600 for advice about establishing your band as a legal business entity.
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