You`ve written and recorded your demo, you`ve played great concerts, and you can now introduce a lot of MySpace friends, from Watford to Wichita and back. The A&R guys fall on themselves to come and see you, and there`s a major label record deal on the table. What are you doing? Signs? When business partners share the company`s profits and expenses, state laws treat them as a partnership. This applies whether or not you have a registered partnership agreement. A written partnership agreement describes how the partners share the revenues of the partnership. This is particularly important for tax purposes; Single-income services require partnerships to submit revenue returns separately from their partners. The amount taxed on the partners` income depends on each partner`s share of the company`s earnings. The contract should anticipate scenarios that could give the parties the right to terminate the contract. There should be security measures if the label is in liquidation or if the disc is not released, or if a page is contrary to the contract. When recordings go out of print, it is usually because the label has decided that the continued sale (or distribution) of the record is not profitable, i.e. the license agreement with the artist has expired. (Labels can also stop distribution as a sanction if an artist fails to comply with their contract or as a strategic measure if negotiations for a new contract prove difficult.) Record companies can also go bankrupt like any other company, and their masters and copyrights are sold or traded as part of their assets.
(From time to time, they are bought by the artists themselves.) If the record company is in liquidation, you should be able to terminate the contract and recover the rights to your recordings. Otherwise, your copyright could have become the property of believing third parties who are fighting for the remnants of the label that no longer exists. A similar provision, but much more difficult to obtain, is to give the artist the right of termination when the label is sold, merged or taken over. Remember that the label is still required to continue paying the artist for all recordings sold, even after termination. As for the status of publication of this article, each state, with the exception of Louisiana, has its own rules for business partnerships. These rules provide ground rules or a legal structure of what should include a partnership, unless the partners have a written agreement with other provisions. Without written agreement, these general state laws govern your partnership….