An important part of becoming a music professional involves making sure that your business and legal obligations are in order. If you plan on taking your music career far, it is in your best interests to be knowledgeable of the steps you need to take in order to start a business in the music industry. Starting a record label or music production company is not rocket science. However, there are specific steps you need to follow to get set up properly. These simple steps will help you get your music production business or record label on the right track.
1. Establish Your Business Entity
You will need to determine what type of business entity you want to establish. Your options are: Sole Proprietorship A sole proprietorship is owned by a single individual who is responsible for all the debts and claims against the business. Partnership A partnership is where 2 or more people cooperate to run a business enterprise. Limited Liability Company A Limited Liability Company is formed by filing the appropriate documentation with the state government. These entities have the option of being taxed as a corporation or partnership. LLC’s have become very popular in recent years among entrepreneurs because of the protection they provide against claims and liabilities. Corporation (S- Corporation or C- Corporation) In a corporation, the business is considered a separate entity from its owners. Carefully consider the differences between S-Corporations and C-Corporations if you are looking to start this type of entity. To register your business online, you can visit your Secretary of State’s website.
2. Obtain An Employer Identification Number From The IRS
Obtaining an Employer ID number is simple. It can easily be done online. Apply For Employer ID Number
3. File your State’s Business Tax Application
You will need to file the appropriate state business tax applications with your State’s Department of Revenue to register for sales, withholding, corporate taxes, and other non-property taxes. You should also consider applying for a Retail Merchants Certificate with your State Department of Revenue where applicable.
4. File Any Necessary State License Applications
File state licensing applications with the appropriate agencies for your business. If you need assistance, research your state’s information center.
5. Register with the State’s Department of Workforce Development
If you have employees or foresee yourself hiring employees in the near future, you will need to register a state unemployment insurance account.
6. Obtain Worker’s Compensation Insurance Coverage
You will need to establish worker’s compensation insurance coverage for potential employees. You can either get insurance from a private carrier or become a qualified self-insured employer by the Worker’s Compensation Board.
7. Obtain A Local Business License From Your City /County Clerk
Obtain this license where required.
8. File for an Assumed Business Name Certificate
An assumed business name or doing business as name needs to be filed in the city/county recorder’s office if you are doing business in a name other than your registered entity’s name. For example: If you started a business called Joe Maxims Club House and you do business through a website called JMclubhouse.com, then you would need to file for an assumed business name certificate for the website.
9. Contact Local City/County Planning & Zoning Commission
To ensure your business location (e.g., recording studio, record label’s building) is in compliance with zoning regulations, you should contact your local city or county planning & zoning commission.
10.Obtain Environmental & Construction Permits
If you plan to build a recording studio or your record label’s building from the ground up, you will need to obtain environmental & construction permits first. Visit your State’s Information Center if you are unsure of how to proceed forward.