It's been a while since I've looked at this, but ...
You also have the ability to set up either a joint partnership (if more than one of you wants to be listed as owners) or a sole proprietorship. Either of these would give you a separate TaxID number, which would then allow you to open a separate bank account in the name of the band, file taxes independently of personal taxes, and have your thing recognized as a business by anyone who wants to do business with it.
The disadvantages compared to an LLC (or S Corp) are that you do not limit your liability, so you are personally on the hook if the band cannot meet an obligation. Probably not a big deal doing museum typewriter shows, more of an issue if you're juggling chainsaws at a preschool. And you don't have the same flexibility of who is an owner - SP or JP is stuck with the same owners (I think).
The biggest advantage to JP or SP is that they are easier and cheaper to set up and run. We started one for our tiny record label (that makes no money) and after setting the thing up for maybe $200 state and federal fees, it doesn't require more money. The taxes are potentially doable w/out having to hire an accountant, but keep in mind that doing your own accounting is hard. I do it for our label and it sucks. (But doesn't cost anything.)
Double check any of this before you dive in, but it sounds like SP or JP might be what you want.
= Justin
Re: Band bank account
12Thanks Justin! This is pretty much in line with what I learned in this video:
https://artsandbusinesscouncil.org/choo ... -practice/
… but your description I think frames the choices well in a band context, whose needs are unique, even among artists.
I have a call with the fellow who did that video and I’ll see if the lightweight partnership thing would work.
Here in MA the LLC thing has an annual $500ish fee for the yearly report, plus a minimum excise tax of $450 or so. I did this once for my real job (software) and it was annoying even on a “pro” level. Having an option for the band that doesn’t eat 20% of what we make a year has some appeal.
Thanks man.
https://artsandbusinesscouncil.org/choo ... -practice/
… but your description I think frames the choices well in a band context, whose needs are unique, even among artists.
I have a call with the fellow who did that video and I’ll see if the lightweight partnership thing would work.
Here in MA the LLC thing has an annual $500ish fee for the yearly report, plus a minimum excise tax of $450 or so. I did this once for my real job (software) and it was annoying even on a “pro” level. Having an option for the band that doesn’t eat 20% of what we make a year has some appeal.
Thanks man.