Updated: Mar 23
Written by: Rusheed "Portiay" Nash
It's the norm to operate as a recording artist without officially forming an entity. Whether a Limited Liability Company (LLC) or registering for a Doing Business As (DBA), especially as a new artist. It's important to note that there are some costs and formalities associated with forming an LLC or registering for a DBA. Costs can vary depending on your state and the specific business structure you choose, so it's important to determine what's best for your situation.
A DBA is a simpler and less formal business structure. It allows a sole proprietor or general partnership to conduct business under a name other than their legal name. This is often used by musicians who are just starting out, and who want to set up a bank account and establish a brand name without the formalities of setting up an LLC.
On the other hand, An LLC offers personal liability protection for the members of the company. This means that if the LLC incurs debt or is sued, the members' personal assets will not be at risk. For example, if someone sues you for copyright infringement, you could be held personally liable for any damages. Additionally, an LLC can have multiple members, which can be beneficial for a band or group of musicians.
Both DBA's and LLC's have their own benefits, so it's important to weigh the pros and cons of each option and consult with a lawyer or accountant to determine which structure is best for your situation.
In summary, you may not have the cash from sales and shows just starting out so holding off from creating a legal business structure is not a bad idea. When you start making money DBA might be a good step being that it's a simpler and less formal structure that does a good job of separating your personal information from you artist or band identity. LLCs are great for establishing personal liability protection and for bands or groups that may require a more formal approach. It is important to consult a lawyer or accountant to determine which structure is best for your specific needs.