The Business of Music: Band Agreements

MICHAEL DUBOFF, entertainment lawyer at Edwards Creative Law

Being a musician is a business. If you’re in a band, one of the most important elements of organizing your business is having an effective band agreement.

Without an agreement among the members of your band, whether verbal, written on a napkin (is that still done?), texted, or with a formal drafted agreement (which is the form we would recommend it takes), key issues will need to be negotiated to prevent future problems between members and maximize profitably and efficacy of the band.

In Manitoba, the law governing partnerships is the Partnership Act that states if your band isn’t incorporated, it will likely be deemed a partnership. Subject to some exceptions, the Act states that any partner can make binding obligations on behalf of the band, all partners are jointly and severally liable for the band’s obligations, and each partner is entitled to share equally in the capital and profits of the business. If these rules are not to your liking, an agreement among the band members will override these statutory provisions.

Preferably, instead of relying on the rigid terms of the Partnership Act, the band will have a meaningful conversation about key issues early on that can be incorporated into a band agreement. For example, how difficult do you think it is to have a discussion about the ground rules of kicking a band member out when you’re not on speaking terms with that person? It’s better to have a process before the jilted former member uses their leverage to get more than they would have otherwise received under a reasonable band agreement. The following are some questions your band should consider discussing.

General Structure: Is everyone a partner in the band partnership? Should anyone have more control or authority compared to the others?

Member Responsibilities: What are each band member’s responsibilities? How much time is expected for rehearsal? Who’s responsible for applying to FACTOR or registering songs? Without a booking agent, who’s responsible to book gigs? What about managing social media accounts?

Control / Decision Making: Are decisions relating to the band made by majority, unanimous agreement or otherwise? Does anyone have more votes than anyone else? These decisions may relate to hiring or removing persons (manager, booking agent, lawyer), binding the band in agreements or money and property decisions.

Money: What is your structure for profits from different band activities; they don’t need to be distributed equally or the same way. Recording and performance funds may be an even split while publishing and merchandise might not be. Who Band Assets: What property (such as instruments, sets, and equipment) is owned by individuals and what’s owned by the band?

Band Name: You might not think it, but often, a band’s biggest asset is its name! Have you ensured no one else is using the name? Have you registered the name under the Business Names Registration Act? Have you registered for trademark protection? If a partnership carries on business under a name other than the names of the partners, there is a legal obligation in Manitoba to register the business name. If not, you could be fined, among other issues. Note: a business name registration does NOT grant exclusive rights to the business name! Does anyone have more control regarding the band name? May the band only use the name if everyone is still performing together?

New and Former Members: Who has the authority to add members to the band? How much money, if any, is owed to a former band member? If there’s a one-time payment relating to the net asset value of the band at the departure time, how is that calculated and what’s the payment schedule? If there’s an ongoing commitment, what’s the formula regarding royalties and any other income from recordings made while the former member was a member? How many members does it take to kick someone out?

Dissolution: What triggers the partnership’s dissolution? Upon dissolution, what happens to the songs, profits, property, name, and who’s responsible