If you are interested in starting a band, there are some obvious, and some not so obvious, legal issues that should be addressed by the members from the beginning.
I know, you can't truly be rock and roll if you sell out to corporate America from the beginning. The reality is that forming a formal corporate entity could be beneficial to the members. An LLC or Corporation can shield you individually from personal liability. This means that your personal assets (house, bank accounts, cars) will not be taken if your band gets sued. Entity type is important, and discussions with an attorney and accountant would be advisable prior to forming.
Another way to protect yourself when your stage dive goes horribly wrong is to have the band secure general liability insurance coverage. If you will be packing everyone into an old van to drive to gigs, you should ensure that you have enough automobile liability insurance. Finally, you should ensure that all of your sweet Gibson guitars and Marshall amps are protected under insurance.
The band should consider its name as a branded trademark which should be protected to the fullest extent. There is due diligence on the front end to ensure no one else is using the name in a confusing manner, and then registering the name to ensure that no one else can use it in the future. Federal trademark registration is the only way to secure some remedies for enforcement.
In the corporate formation process, the band should prepare an operating agreement that dictates each member's rights, especially regarding ownership of the trademark, rights to remove members, splits of profits, etc. Most conflict occurs when a member leaves or is forced to leave the band, and thoughtful preparation for that situation will save you significant amounts of time and money in the long run.
If you are a cover band that isn't recording music, then good news, you won't need to obtain music licenses for your performances. It is customary that the event location (bar, club, etc.) will already have a blanket license for music performance. However, you should confirm this for each venue, especially if the location is not a customary music performance space. If you are going to record covers of existing songs, then you will need to obtain music licenses for the performance and recordation (master use and mechanical licenses) and potentially sync licenses if you are making a video. If you are writing your own music, you will need to ensure ownership of each song is addressed under copyright law.
Before dropping the first sick bass line to your epic EP in the studio, you should ensure that every performer (even studio day players), engineers, etc. have signed binding work for hire agreements to ensure proper transfer of copyright ownership in their creative services.
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