Legal Issues and Band Names

Ausmusic; Excerpts by S.Simpson & C. Seeger's 'Music Business' (Warner Chappell)
30/11/2004

Business Registration

In order to trade as a business you first need to register your preferred business name with the Corporate Affairs Office in your state. An application has to be completed along with a registration fee.

Registering a business name will allow you to open a bank account in the business name and trade as a business.

This is obviously desirable when dealing with retailers and receiving cheques made out to a business rather than an individual.

Band Names

Usually most bands will register their band name as their business. This does provide a form of ownership to your name, however it does not give you exclusive rights to that name.

“Generally speaking you do not” own” a name. You do however acquire the rights in it by using it and establishing a “goodwill” in your reputation in the name… The greater your reputation, the greater your claim to ownership.”
Music Business.

You can take your band’s name one step further and register it as a trademark, however this quite formal and a very complicated and expensive process of registration.

APRA

Whenever one of your songs is performed in public by whatever means ( radio, TV, live) the right to do so must be granted and a fee subsequently collected. The Australasian Performing Rights Association is a non-profit organization that performs this function on behalf of it’s member composers in Australia.

APRA has reciprocal agreements with similar societies around the world to collect royalties in other territories. Therefore by become a member of APRA your material can basically earn you money anywhere in the world it is performed or broadcast. To the independent artist this won’t mean much in the short term, however if your career does advance to an international level it will become a very important source of income.

It is strongly advisable to register with APRA once you start to play live and/or release any material on recorded format. Details on registration are too lengthy to go in to here but information can be obtained from APRA offices.

Taxation

There are a number of areas of taxation that will affect you as a band throughout your career. Some of these include income tax, sales tax and the all important tax deductions.

Income derived from a band will need to be claimed and obviously incur income tax at some stage. This is where it is advisable to seek the services of a qualified accountant, preferably one with music industry experience.

There are numerous tax deductions that can be claimed whilst earning an income from a band. Everything from haircuts to magazines, and obvious purchases as musical equipment. All this needs absolute attention to detail and that’s where an account is worth the money.

Sale tax can also become very relevant in your career especially when you are looking at manufacturing and releasing a CD.

When purchasing all the “ ingredients” for your release ( the product itself, printing, packaging, etc…) each wholesaler is going to quote that sales tax has to be paid. This can be avoided, thankfully.

Because you are releasing the product yourself you are essentially a manufacturer and therefore can claim sales tax exemption as it will be paid as the retail end when the consumer purchases your product.

You will have to contact the Australian Taxation Office where they will determine your sales tax exemption and issue you with an exemption number.

Like any business, with the product you sell yourself you will have to allow for sales tax in the price and keep a record of total sales for your taxation at the end of the financial year. Once again this is where your accountant comes in.

Insurance

Once you have started working with rehearsals, playing live and hopefully getting out on the road a touring, your expensive equipment becomes your lifeblood.

The loss or damage of this equipment can be very detrimental to your band’s commitments, not to mention your hip pocket.

That’s where insurance comes in!

Most people are very surprised at how inexpensive insurance can be considering the replacement cost of your equipment.

“As a broad rule of thumb, equipment will cost about 3% to 4% of the value of the insured property.”
Music Business.

Most insurance companies offer cover for fire damage, accidental damage, theft including theft from a locked vehicle.

The other of insurance you may need to look at when you are starting out is public liability insurance.

Public liability insurance protects you in the case where an audience member may be injured during a performance.

This is relevant especially if you are organizing your own gigs at local halls or parks, etc… however, in a venue situation, the venue itself will have public liability insurance but this does not protect in a situation if something goes wrong. If the band is found negligent the venue’s insurance does not cover this.

Musician's Union

The Musicians Union protects the needs of musicians.

The MU has branches in Melbourne, Sydney, Brisbane, Adelaide, Broken Hill, Launceston, Hobart and Perth. Its federal office is also located in Sydney.

The union provides legal advice, draft contracts, venue vetting, a booking agency, organizes initial free consultation on any matter, cheap rates on insurance and offers a superannuation scheme.

The union has been often criticized for lack of creditability in the rock area, but that is changing. Over 60% of membership is now classified in the rock genre, and the union will increasingly be seen to be more effective as musician’s use their vote to elect appropriate representatives.

Annual membership to the union is generally inexpensive and can be easily worth the expenditure if ever you need their services.

Membership may also be required when working in situations where union are enforced. This includes TV appearances and in the area of international supports.

MUSIC INDUSTRY
INFO SHEETS
190 294 1020
THE ANSWER TO ALL
YOUR QUESTIONS

EXCERPTS TAKEN FROM THE
WARNER CHAPPELL PUBLICATION…
MUSIC BUSINESS
BY SHANE SIMPSON & COLIN SEEGER