Forming Your Own Publishing Company
If you think your original music will be performed publicly and generate performance royalties, then you should form a publishing company for your songs. Registering with a Performance Rights Organization (PRO) such as ASCAP and BMI as simply a songwriter will result in you not receiving your full share of performance royalties. The entire process of setting up a publishing company for either yourself or your band is not that expensive. Of course, as we say in the book, we recommend talking to an attorney to find out what method is best for you.
We'll talk about two ways to create a publishing company - setting up one for yourself asa sole proprietorship and setting up one for your band (incorporating, forming an LLC, etc. - basically "forming a company"). Note - you can form a company for yourself even if you're just one person. We're just breaking up the information in this way. However, as we say in the book, taking the steps to form a company gives you added benefits in the eyes of the law, shielding you from certain liabilities. If you have any questions about this legalese, please talk to an attorney or accountant.
1. SETTING UP A PUBLISHING COMPANY AS A SOLE PROPRIETORSHIP (ONE INDIVIDUAL)
If you're a solo artist/songwriter and want to form your own personal publishing company in the United States keeping track of any money or losses you make through your own personal income taxes, then you can follow these steps. Note that you can also create a legal entity for yourself as well (that is, create an LLC or incorporate yourself). The steps below are if you want to take the easiest route and create a "sole proprietorship". If you have questions, talk to your attorney and/or accountant.
Step 1: Determine who the Publisher will be. Pick a PRO. We discuss what PROs are and why you would want to associate yourself with them in the Your Rights chapter of The Indie Band Survival Guide.
Step 2: Pick a Name for the Publishing entity. Come up with a name for your publishing entity. This will be your assumed name. Example: John Doe is a songwriter and he chooses to name his publishing entity as "Doe Publishing". Many are already taken and so you should have a few alternates you like ready to go.
Step 3: Join a Performance Rights Organization as Both Songwriter and Publisher. When you join you should join as both a songwriter (author) and a publisher (see the Your Rights chapter of The Indie Band Survival Guide). Note that registering as a songwriter is rather straight-forward. It's just that if you register your songs and don't associate them to the publisher entity that you own/control and your songs generate performance royalties, then you'll miss out on half of the money that could have been coming to you.
Each PRO will have its own paperwork for you to fill out before they can accept you as a publisher within their system. As a "sole proprietorship" you can usually register as yourself (but using your assumed name that you choose) and your social security number. That way, when you get paid as a publisher they can report to the IRS who they paid. It's also here where Step 2 comes in since typically the PRO will request you give them a few names for your publishing entity since they need to make sure it’s completely different than any other ones they have on file. Once they've verified all your paperwork, you should be approved as a publisher within their system.
Step 4: File a D/B/A Statement (“Doing Business As”) Once you join the PRO as a publisher, you will need to declare to the world that you’re doing business under the fictitious name you created for your publishing entity. You’ll need to fill out a DBA form with your local county clerk, pay a fee, and publish a classified ad in your local paper announcing the fact that you are now doing business as your publishing company (note that they may have a different method of having you publicly announcing this fact). This is more of a formality that the county clerk will need to explain to you since the odds of anyone reading your ad in today’s world and making the connection to you and your new publishing company is slim.
Step 5: Register Your Songs Each PRO has its own method for registering songs. Typically, they have you do this online. Most PROs ask for the title of the song, running time, whether it's copyrighted with the U.S. Copyright Office, etc. They also want to know who the songwriters are and who the publishing company is that is associated with your song.
Again, if you don’t register your songs you won’t receive any royalties should your songs get caught up in their surveys of airplay. And, if you don't register your songs and associate them with you as the publisher, you will lose half of the performance royalties coming to you. So, registering your songs correctly is an important.
Step 6: No Need to Set Up a Separate Bank Account. As a sole proprietorship, there's no need to set up a bank account under your assumed name. If any performance royalties are owed to you, the PRO will issue payment to you under your D/B/A. Given this is income, you'll need to report it correctly on your taxes. Talk to an accountant for more information.
2. SETTING UP A PUBLISHING COMPANY FOR YOUR BAND (MANY INDIVIDUALS)
If you'd rather form a company for yourself or have multiple partners (such as sharing control, profits, and losses with members of your band) to handle publishing, then the following steps should be followed:
Step 1: Determine who the Publisher will be. To register as a publisher, the PRO will require your band be it’s own legal entity and have its own tax ID number. That is, you'll need to incorporate the band or create an LLC. You can't create a "sole proprietorship" for many people; only the creation of a company will allow this. As we state in the Your Rights chapter of The Indie Band Survival Guide, you should contact an attorney and accountant to create such a legal entity. If you have questions, talk to your attorney and/or accountant.
Assuming you create a company, the steps are similar to the above:
Step 2: Know the Name for your Publishing Company Your publishing entity's name will be whatever your legal entity's name is. However, you're not just stuck with the name of your company since companies can also "do business as" and have a fictitious name. You will need to check the rules and fees for setting up a company D/B/A with the State in which you're company was incorporated or LLC'd.
PROs are sticklers for having unique names for the publishers they track, so if your company name is taken (which is possible since they handle publishing companies from 50 states - not just yours), then you may need to D/B/A.
Step 3: Set Up a Bank Account Once you set up a publishing company, the PRO (or anyone who wishes to license your songs) will make checks out to your publishing company. However, you won’t be able to cash them unless you open a business account under the name of your publishing company. Unfortunately, this is usually the most expense part of this process since banks tend to charge more fees on business accounts or require a minimum amount of money to stay in the account.
Step 4: Join a Performance Rights Organization as Both Songwriter and Publisher When you join you should join as both a songwriter (author) and a publisher (see the Your Rights chapter of The Indie Band Survival Guide). As noted above and in the book, registering as a songwriter is rather straight-forward. It's just that if you register your songs and don't associate them to the publisher entity that you own/control and your songs generate performance royalties, then you'll miss out on half of the money that could have been coming to you.
Each PRO will have its own paperwork for you to fill out before they can accept you as a publisher within their system. They will ask for the details of the company and want to see proof that it is in fact a legal entity. This will include getting your entity's tax ID number (think of the tax ID number as a legal entity's social security number).
Once they've verified all your paperwork, you should be approved as a publisher within their system.
Step 5: Register Your Songs As noted above, each PRO has its own method for registering songs. It's when registering your songs that you'll want to associate each one with your publishing company. Again, if you don’t register your songs you won’t receive any royalties should your songs get caught up in their surveys of airplay. And, if you don't register your songs and associate them with you as the publisher, you will lose half of the performance royalties coming to you. So, registering your songs correctly is an important.
For more information about Rights & Royalties Organizations like PROs, copyright, trade marking, music licensing, and a ton of practical information about getting heard, distributed, publicized, and winning fans worldwide, get the book, The Indie Band Survival Guide. Of course, all the music resources, services, sites, and tools you need to do-it-yourself - open and free - can be found right here at IndieBandSurvivalGuide.com