Before we jump into this article, you might be wondering what exactly a partnership is? A partnership is essentially a contract you can enter with other members of your band that binds you together with the common goal of creating and selling music. Partners are ultimately responsible for each other, so it’s a good idea to clarify the roles and responsibilities of each partner in an agreement unique to your band’s situation. Partnership agreements can help mitigate risk and give solutions to problems your band might face in the future.
Drafting a partnership agreement might not be the most exciting part of being in a band, but I can assure you they will come in handy in the long run. Here are 5 tips to consider if you’re thinking about constructing a partnership agreement:
- A band is automatically a partnership, so why not make it suit your needs?
If you’re earning income as a band and don’t have a formal written partnership agreement, the law will automatically recognise your band as a partnership. This means you will be subject to general laws and obligations unless you otherwise agree to your own terms. These general laws might not best suit your band’s needs or future endeavours. So why not avoid this entirely and take back your autonomy? Writing down and formalising your own partnership agreement will make sure that everything that you agree is on your own terms.
- Have the hard conversations early
One of the most difficult things about constructing a partnership agreement is that it requires you to have some difficult conversations. Brett Oaten, principal lawyer at Brett Oaten Solicitors, notes that there are so many bands who tend to ignore early band tensions in the hope that they will be resolved later.
It is crucial that bands dive in and have those difficult conversations and construct partnership agreements now rather than later. At the beginning of your band’s career, the stakes are not as high. There might not be a lot of money circulating, and each band member is yet to commit and huge amount of time or effort. By creating partnership agreements early on, you might uncover band tensions that dictate whether you even want to be in a band with particular people. So, as Brett Oaten suggests, suck it up. Have the hard conversations today and construct a partnership agreement early. You might be grateful you did down the track.
Learn more about music lawyer and mentor Brett Oaten
- Your band is a business – so treat it like one.
I get it – legal stuff is boring. And it’s incredibly uncool to refer to your band as a business. But that’s exactly what it is. If you want your business to be successful, you need to put in the planning and work early. Adopting this, albeit uncool, mindset will help structure your approach to your band’s success. If you get the difficult and boring work done early, its out of the way and provides you with a framework for how your band will operate. It frees you to do what you actually got into music industry to do and get on with the cool stuff. No one wants to be caught up in the same arguments with band members about how things should be operating.
- Think about every scenario and have a plan in place
When entering any sort of business venture, you need to ensure that the terms of the agreement are clear and encompassing of every issue that may arise. The following prompts to are designed to help get you thinking about what the exact terms of your partnership agreement should be:
Who are the band members?
Often if you go to a live gig, there can be up to 10 people on stage performing music. But does that mean they are all technically members of the band performing? Some of them might only be session musicians. You need to clearly establish who the parties of the agreement are (i.e. who are the band members) early in the agreement to establish which people need to actually adhere to the agreement.
Who makes the decisions?
Most bands operate as democracies. If this is the case for your band, you need to make it clear. Some decisions might be considered more important than others, like borrowing large sums of money. Do different rules apply in these situations? Must there be a unanimous decision in some circumstances? What if your band has an even number of band members who don’t agree? Does a founding member of the band have more say? There are no set rules and lots of options available to you. Whatever you decide, just make it clear.
How do you divide income?
Bands receive income from lots of different revenue streams – record sales, publishing, live performance, merchandise etc. It’s beneficial to look to each revenue stream separately on its merits. Some revenues might be easier to split than others, such as merchandise or live performance. It becomes difficult when discussing publishing and song writing, because usually only one or two people will be considered principal song writers. This can create tension in a band when other band members claim to be working just as hard and yet are receiving less income. How will you split those costs to ensure everyone is happy with their earnings?
Do you have conflict resolution plans in place?
Band members come and go all the time. Do you have a process set out for determining when partners come and go? Who makes these final decisions about who is in the band? If a partner has a grievance, how do you approach that? What if someone gets sick on tour? If a partner refuses to perform, what conflict resolution processes do you have in place?
In the context of constructing a partnership agreement, precisely itemise what your band members do so that you can get the big picture for how everything is being dealt with. Regardless of whether you have a manager who is responsible for the flow of business, it’s very important early on to have a list of everything that a band member is responsible so that sense of fairness permeates through to the application of your partnership agreement.
For more ideas of what to include in your agreement, check out Darren Sanicki’s course on Preparing for a Partnership Agreement
- Seek Specialist Advice
Some people are great ‘bush’ lawyers. But most are not. As Brett Oaten notes, specialisation is the hallmark of civilised society. It’s always a good idea to have your drafted partnership agreement overseen by a legal professional. Partnership agreements may be time consuming, but they are overall pretty straightforward. A legal professional can offer a new perspective on your agreement by providing advice centred on why you need to include certain things, what the ramifications of the agreement are, and what will most benefit you and your band.
Drafting a partnership agreement will ensure that your band operates exactly on your terms. For more info, check out our related legal courses today!