This document discusses key provisions for group record deals and band agreements. It outlines clauses like the key member clause, rights to leaving members, ownership of the band name, splitting percentages and finances, controlling voting and decision making, adding or removing members, contributions, amending agreements, and what happens in cases of death, disability or dissolution of the band. It also reviews different types of business entities bands can form like sole proprietorships, partnerships, LLCs and corporations to establish ownership and liability structures.

1. 1
Music Publishing
Intro to Music Business
Lecture #9: GROUPS
(Sources include: Passman)

2. 2
Music Publishing
Groups
Special Record Deal Provisions:
1. Key Member Clause: Certain members are identified as “key
members.” If a “Key Member” leaves of breaches the
agreement, then the whole group is in violation. Anyone else
cannot jeopardize the whole group. This benefits both the Label
and the Group.
2. Rights to Leaving Members: Label often has the option to pick
up any leaving member for a same, similar or lesser deal.
A. Make sure this option must be taken in a reasonable time
B. Label can often terminate deal of remaining members
C. Be careful to make sure that neither remaining or leaving
members aren’t burdened by deficit of the other.
i. Should be pro-rated.

3. 3
Music Publishing
Groups
BAND AGREEMENTS:
Make a deal and set out the rules while everyone is friends and
before money clouds everything.
1. BAND NAME: Often the most important asset and something
you spend a lot of time and money to make valuable
A. Band entity owns
A. Leaving members cannot use at all
B. Leaving members restricted as to use
C. No one can use if anyone leaves
D. Any majority can use
E. Key member(s) may have rights to the name
2. What if you don’t have an arrangement?
A. Courts have leaned towards whatever was less likely to
deceive the public. Who is the “essence” of the group?

4. 4
Music Publishing
Groups
Percentages and Finances:
1. Split amongst the members – Any option is possible here
2. Band and “hired guns”
Controls:
Voting can be percentages, even, whatever
Come up with a way to avoid inviting a deadlock if even #.
Adding or Removing Members:
What is required?
What are they entitled to?
Quitting. Can you stop someone from quitting? NO. But you may
be able to have a non-compete
Who can bind the group to contracts or expenses?

5. 5
Music Publishing
Groups
Contributions:
How are member’s contributions treated? Can members be required
to contribute a particular amount? Etc.?
Amendment of Partnership Agreement:
What does it take to make changes?
Death / Disability / etc ?
Often members do not want your ownership to pass to heirs, so
some sort of buyout is needed.
What happens with everything after it comes to an end?

6. 6
Music Publishing
Groups
Types of Business Entities:
Sole Proprietorship
Partnership (General and Limited)
LLC – Limited Liability
Corporation (S Corp / C Corp)
= Single taxation
= Limited liability
If you don’t set up an
agreement or pick an entity,
the State of residence will
often assign those for you.
You want to do avoid that!

7. 7
Music Publishing
Groups
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