BY BYRON PASCOE
Don’t be another band horror story. Have that awkward conversation before it’s too late.
Being a musician is a business. If you’re in band, one of the most important elements of organizing your business is having a band agreement.
Without agreement among the members of your band, whether verbal, written on a napkin (is that still done?), texted, or with a formal agreement written with the help of an entertainment lawyer (shameless plug), some key issues will need to be negotiated at a time when perhaps not everyone is acting reasonably, or you may need to rely on the law, which may not provide appropriate solutions for your situation.
In Ontario, the law governing partnerships is the Partnership Act. If your band isn’t incorporated, it will likely be deemed a partnership by the Act. Subject to some exceptions, highlights of the Act include that any of the partners can make binding obligations on behalf of the band, all partners are jointly liable for the band’s obligations, and each partner is equally entitled to the band’s property. This may not be what you want, but an agreement among the band members overrides the Act.
Instead of relying on the Act, the band should have a meaningful conversation about key issues early on. It’s easier to talk about the division of money when there isn’t any. Why talk about how to kick someone out when you’re not on speaking terms? It’s better to have a process before the mad former-member uses their leverage to get more than they would have otherwise had under a reasonable band agreement.
The following are some questions your band should consider discussing. Blame me for bringing it up. Make some decisions, and if you want help formalizing the agreement, contact an entertainment lawyer.
Regarding the general structure, is everyone a partner in the band partnership? Does anyone have a lot more control compared to the others? Is this reasonable?
Regarding responsibilities of the band members, what are each person’s responsibilities? How much time is expected for rehearsal? Who’s responsible for applying for FACTOR and Ontario Music Fund, and registering songs with SOCAN, MROC, ACTRA RACS and/or SoundExchange?
Without a booking agent, who’s responsible to book gigs? Without a social media person, who’s responsible for managing Facebook and Instagram? Without an external manager, who’s responsible for whatever they do (just kidding, they do a lot)?
Regarding control and decision-making: are the key decisions made by majority, unanimous agreement, or otherwise? Some of those key decisions include hiring and/or replacing a manager, booking agent, accountant, and lawyer; binding the band in contracts including exploitation opportunities; check-signing authority; deciding which performances to accept and other general business decisions.
Regarding the music, what’s the formula to calculate songwriting percentages and performance rights royalty entitlements? Who may administer the music?
Regarding the money, what’s your structure? Profits from different band activities don’t need to be distributed equally or the same way, but should be structured. Who decides what expenses are incurred? Do all hard costs get paid before the members receive payment for their services? If money is required for expenses, must everyone contribute equally?
Regarding the band’s assets, does anyone have more control regarding the band name? May the band only use the name if everyone is still performing together? May any majority of the members performing together use the name? Does the name follow a specific person, whether she’s in the band or not?
Regarding new and former members, who has the authority to add a member? If someone wants to voluntarily leave, what notice must be provided? How many members does it take to kick someone out? How much money, if any, is owed to a former band member and what’s the payment schedule? What happens if a band member gets sick, disabled or dies?
Finally, what triggers the partnership’s dissolution? Upon dissolution, what happens to the songs, profits, property, name, and who’s responsible for administering all of this?
The potential of making a lot of money and/or wanting to kick someone out may end up killing your band if the awkward conversations about money to membership didn’t happen proactively. Don’t become a band horror story. Instead, have the conversation, focus on the music, and enjoy a successful career.
Byron Pascoe is a lawyer with the Ottawa-based Edwards PC, Creative Law (www.edwardslaw.ca), which provides legal services to Music, Digital Media, Game, TV, Film, and Animation industry clients. Byron works with musicians and music companies to assist with record label agreements, publishing contracts, distribution deals, producer agreements, band agreements, etc.
This article is for general informational purposes only and is not to be construed as legal advice. Please contact a lawyer if you wish to apply these concepts to your specific circumstances.