by Tyler Middleton

In February, we kicked off our column with common questions asked by artists. This month, attorney Tyler Middleton of Graffam Middleton joins us for Q&A to dig deeper into the nuances of business structures for artists.

Q: When should I formalize my business structure?

A: Every artist is different and will have varying circumstances that will determine when and how to formalize. For many of my clients, the question often comes up when they are first approached with an agreement. Having a formal entity enter into the deal can be advantageous to insulate the artist personally. It is always best to take a look at the agreement’s specific impacts, in conjunction with your broader career goals, to make this decision.

Q: Which type of organization is the best fit for me and my work?

A: Common options include the general partnership, limited liability company (LLC), and corporation. Each will present pros and cons that may be significant depending on your situation, so it’s important to meet with an attorney to help you choose a structure that moves you toward your goals. In Tennessee, when two or more people engage in a venture, the default position is that you have formed a general partnership. One advantage to this kind of entity is largely a practical one—there is no formal filing requirement or fee. On the other hand, partners in a general partnership are not protected from personal liability, so the savings may not justify the potential personal risk. Many organizational structures are designed to keep the artist’s individual assets separate from their professional ventures. For example, if an issue arises while an artist is on the road, her touring company would take on the potential liability, while her personal money and property, as well as assets related to her songwriting and recording career, would be protected.

Q: What common mistakes should I avoid?

A: It is important to take charge of your creative career, avoid being too casual about how you manage your business, and be diligent about its professional health. Make sure that you consult with a professional advisor regularly so that they can help you make decisions about how to organize your business and spot any potential issues before they happen. Investing in those resources on the front end saves you from spending significantly more time and money to correct mistakes down the road.

Tyler Middleton’s legal practice focuses primarily on the representation of recording and performing artists and creative companies in all areas of the entertainment industry. Tyler has served as a board member of the Nashville Film Festival since 2008. She proudly volunteers for the Volunteer Lawyers & Professionals for the Arts.

For more about the Arts and Business Council of Greater Nashville visit their website at www.abcnashville.org.

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