Why do Bands Need a Partnership Agreement?


Musicians are mostly concerned with the creative aspects of running a band.

 It can be difficult to bring up the business aspect of forming a band when things are rolling smoothly and people would rather not be a “killjoy.”

Ultimately, bands are businesses and the sooner that bands discuss the legal aspects, the more time that bands will have to focus on the creative aspects. 


Your Options

There are different agreement options that bands can operate under like forming a limited liability company (LLC), a corporation, or a partnership agreement. They can be differentiated based on varying levels of liability.

LLCs are basically partnerships that protect members from personal liability. Corporations provide more protection than partnerships and LLCs. They shelter personal assets but are very expensive to set up.

Generally, most bands enter into a partnership agreement because a partnership is the easiest and most cost-friendly to set up and operate. 


What is a Partnership?

A partnership is a group or association of two or more people who decide to create a business together and where all income and debts are shared equally by the partners.

Simply put, a group of people can come together and decide to start a business as partners. When creating a bank account, most banks only ask for a partnership agreement and a federal tax ID number.

In a partnership, each member is reliable for the actions of the whole band. Profits and expenses are shared equally. An important note is that if one member becomes reliable for a situation, the whole band and each individual member can also be personally reliable. 


Partnership Agreement

A partnership agreement is a contract between the band members that addresses how the business will be run. It can help maintain and clarify members’ level of commitment to the group. It also delegates roles and assigns responsibilities.

Since the agreement will be an officially signed contract, members should allow ample time to discuss the specifics of the contract without distraction. Members should also make a list of topics that they would like to cover, then go over the specifics and make compromises if needed.

After necessary revisions are made, members should have a lawyer review the agreement and make more revisions if needed. Finally, members should sign the agreement to tie the knot. 


What Should be Included in a Band Partnership Agreement

When discussing a partnership agreement, topics concerning creative, business, money, and membership decisions should be mentioned. Example topics that should be discussed are: 

    Who owns the right to the band name?

    Who owns which songs?

    How are business decisions made? Who makes them? Are votes equally distributed? Or do some members have more say?

    Who has what responsibilities within the band? 

    Where does the income go? How will expenses be paid off? 

    What happens when a member needs to leave? Can the remaining members still use the same band name?

    How can the partnership agreement be changed? 


Why You Need a Partnership Agreement

Bands need a partnership agreement to operate without potential liability. It is often easier to take care of legal issues earlier on by detailing mutually agreed solutions, rather than waiting until actual issues arise to discuss how to settle the dispute.

Establishing an agreement will allow members to be able to focus on the music aspect and keep the band together harmoniously


Need a Partnership Agreement for your band? Contact Sam Mollaei, Esq., music lawyer, via email at sam@mollaeilaw.com or via phone (818) 925-0002. 


Sam Mollaei

Business & Entertainment Lawyer in Los Angeles