The Importance of a Band Partnership Agreement

by Donald R. Simon, Esq.

A band partnership agreement is an important, yet often overlooked, aspect of running a band.  Like it or not, as artistic, fun, and creative as performing in a band can be, the music business is just that, a business, and it is wise to recognize that and deal with it.  A typical band partnership agreement should address several fundamental group issues, including who owns the bands name and recorded material, how profits and losses will be divided, voting, the process for adding/deleting members, and so on.  These issues are better dealt with at the beginning when everyone is optimistic and excited rather than later when tempers flare and bitterness prevails.

The general law of partnerships presumes that when a group of individuals act together, they do so as a "partnership."  Without a written agreement to the contrary, the law will assume various things about your band, which are discussed further below.  In the case of most musical groups, a written partnership agreement is preferable to general partnership law.  Once a band partnership agreement is created, it can function like a prenuptial agreement and, if need be, help make the break-up process less painful.

The band’s name. Under partnership law, all partners would be equal owners of the name and any associated logo designs, and any current and former member would be permitted to use the name.  Remember that trademark rights are determined based on the "use" of a mark, not on who thought of it or created it first, so each of the members of the group would be an equal co-owner of the group name under trademark law.  The end result under either partnership law or trademark law may be impractical.  A written band partnership agreement would be advisable.

Profits and losses. Partnership law provides that all profits and losses are divided equally.  If this does not reflect your current situation, then a band partnership agreement should be considered.  In most cases, a new group will have a provision in a band partnership agreement that profits are to be shared equally between all members.  Another provision may pertain to revenues following the departure of a member or the demise of the group.

Band Property. Another important financial issue is the question of the leaving member’s share of partnership property, such as band recording equipment or a sound system.  Again, the band partnership agreement might specify a monetary payout to the leaving member if he is terminated, but a forfeiture if the leaving member quits.

Voting. In most cases, each member will have an equal vote and a majority will rule.  You may, however, want a particularly important member to have two votes, or endow the manager with the power to cast tie-breaking votes. A band partnership agreement will be needed for such situations.  The agreement may also provide that certain matters, such as requiring financial contributions from group members or incurring debts on behalf of the band, require a unanimous vote.

Hiring and Firing. Another issue of control ripe for the band partnership agreement is the hiring and firing of band members.  The agreement can line out how votes are calculated and how many votes are needed to fire a group member and/or hire a new member.

Some bands may deal with a band partnership agreement amongst themselves, while others may have an attorney prepare an agreement.  If it is a fairly equal partnership where all members are writing and performing and sharing equally, it is a fairly simple process.  However, in those instances where some members are songwriters and others are not, where one member claims ownership in the name, or another makes significantly larger financial contributions than the others, it can become a complicated process.  Any group of two or more musicians working together would be well advised to create and sign a good band partnership agreement.