- Setting up a music record label with an LLC that funnels into a trust fund requires careful legal and financial structuring. Here’s a step-by-step guide:
Register a Name🧑🏾💻
- Step 1: Form Your LLC (Limited Liability Company)
- 1. Choose a Name – Ensure it’s unique and available for registration.
- 2. Register the LLC – File formation documents with your state’s business authority (usually the Secretary of State).
- 3. Get an EIN – Obtain an Employer Identification Number (EIN) from the IRS.
- 4. Operating Agreement – Draft an agreement outlining ownership, management, and profit distribution.
Banking 🧑🏾💻💰💰📲
- 5. Business Bank Account – Open a dedicated business account.
Trust Fund 💰⚖️💰
- Step 2: Structure the Trust Fund
- 1. Choose the Type of Trust
- • Revocable Trust (allows changes)
- • Irrevocable Trust (protects assets from lawsuits/taxes)
- 2. Select a Trustee – A reliable individual or institution to manage the trust.
Beneficiaries 💸⚖️💸
- 3. Define Beneficiaries – Who will receive the funds (e.g., heirs, artists, charities).
- 4. Draft the Trust Agreement – Work with an attorney to structure it properly.
- 5. Fund the Trust – Transfer assets or set up revenue streams from your LLC.
LLC Linked Trust
- Step 3: Link the LLC to the Trust
- 1. Make the Trust the LLC’s Owner – The LLC can be wholly or partially owned by the trust.
- 2. Assign Revenue Flow – Structure contracts so profits flow into the trust.
- 3. Update Operating Agreement – Reflect the trust’s ownership and management.
- 4. Tax and Legal Compliance – Work with an accountant to ensure proper tax treatment.
- Step 4: Operate Your Record Label
Artist Contracts ⚖️
- 1. Sign Artists & Contracts – Establish agreements with musicians and producers.
- 2. Distribute Music – Use platforms like DistroKid, TuneCore, CdBaby or direct distribution.
- 3. Market & Promote – Build branding, social media presence, and partnerships.
- 4. Manage Royalties & Revenue – Ensure payments are properly allocated to the trust.
- Would you like recommendations for specific trust structures or legal professionals to assist?
Publishing Music
Music publishing is the process of protecting, managing, and monetizing the composition (melody and lyrics) of a song—not the sound recording. If you write songs (even if you also produce or perform them), music publishing ensures you get paid when your work is used commercially.
Here’s a clear step-by-step guide to music publishing:
🎼 STEP-BY-STEP MUSIC PUBLISHING GUIDE
1.
Understand What You’re Publishing
- You’re publishing the composition (lyrics + melody), not the actual recorded performance.
- You can be:
- A songwriter (writes lyrics/melody)
- A composer (writes music)
- A producer (creates the instrumental)
- Or all of the above.
2.
Register with a Performing Rights Organization (PRO)
This is essential for collecting performance royalties (radio play, live shows, streaming, TV, etc.).
U.S. Options:
You’ll register as:
- A Songwriter/Composer
- A Publisher (you can register your own publishing company, or use a publishing admin service)
🔒 If you don’t register as a publisher, you’ll only get 50% of your royalties. PROs split performance royalties 50/50 between songwriter and publisher shares.
3.
Register Your Songs
- After joining a PRO, log in to their portal and register each song:
- Song Title
- Writer(s) and Publisher(s)
- Splits (percent ownership)
- ISWC (International Standard Musical Work Code is assigned)
4.
Use a Publishing Administrator (Optional but Helpful)
They’ll register your songs worldwide and collect royalties you can’t easily get yourself.
Top Publishing Admin Services:
- Songtrust – Global registration + royalty collection
- CD Baby Pro – For independent artists
- TuneCore Publishing Admin
- Sentric Music
5.
Get an ISRC Code (for Recordings)
This is for the sound recording (not composition), but you need both if you’re self-releasing:
- Assigned via DistroKid, TuneCore, CD Baby, etc.
6.
Register with a Mechanical Rights Organization (for streaming/downloads)
- U.S.: The Mechanical Licensing Collective (MLC) – themlc.com (free to join)
- Worldwide: Publishing admin services will handle this
This collects mechanical royalties from streaming platforms like Spotify, Apple Music, etc.
7.
Sync Licensing (Optional)
Want your music in movies, ads, or TV?
- Sign up with a sync licensing agency (like Musicbed, Audiosocket, Artlist, etc.)
- Or pitch directly to music supervisors
- You must own or control the publishing and master rights
🧠 Music Publishing Rights You Need to Track
Right Type Who Pays? Collected By Performance Radio, TV, venues, streaming ASCAP/BMI/SESAC Mechanical Streaming, downloads, CDs MLC (in U.S.), Publishing Admin Sync Film, TV, ads Direct licenses Sheet music, lyrics Publishers or Licensing Agents ✨ Bonus: Set Up Your Own Publishing Company (Optional but Smart)
You can set up your own publishing entity with ASCAP or BMI to collect the full publisher share (50% of royalties):
- ASCAP: Costs $50
- BMI: Costs $150
🎯 Summary for Independent Artists
Action Tool/Platform Join PRO ASCAP, BMI, SESAC Start a publishing entity ASCAP or BMI Register your songs Through your PRO Collect global royalties Songtrust, CD Baby Pro, MLC Get ISRC codes for recordings DistroKid, TuneCore, CD Baby Pitch for sync opportunities Musicbed, Artlist, Taxi, etc. Let me know what kind of music you make, or what you’re trying to do (release music, license beats, etc.)