Group Partnership

Wed, 31 Dec 1969 18:00:00 -0600

Group Partnership
by Ben McLane, Esq.

When a band forms, the usual intention is to become a successful recording and/or touring
act and to make a proﬁt. To accomplish this collective goal, the individual members
contribute their time, talents and money. In essence, there is an implied partnership
agreement between the band members. When most people go into business together, there is an
official written partnership agreement. However, the majority of bands - including many who are
best selling acts - have never formalized their relationship. Often this can lead to expensive
litigation when a band breaks up or a member leaves because there exists a
question as to how proﬁts are to be split, or who actually owns the group name. This being
the case, bands should be encouraged to enter into a simple partnership agreement early on
when everyone is getting along. This article will brieﬂy explain the contents of a basic
partnership agreement.

First, there needs to be a name for the partnership. Generally, this will be the name of the
band.

Second, there needs to be an official location selected as the place of business. A band
member's address will do.

Third, the complete name and address of each partner must be speciﬁed.

Fourth, ownership of the group name must be discussed. Normally, the group as a unit owns the
name and a majority of the members performing together can use the name. The common
problem that arises is when a member leaves the band and feels that he or she has the right to
perform under that name. A situation such as this need to be addressed in the agreement.

Fifth, proﬁt splits are very important. In most cases an equal percentage of the net proﬁts
(i.e., after expenses) as well an equal division of any losses is the most equitable approach.
The splits can be different, however, if certain members contribute more than others (such as
songwriting, etc.).

Sixth, leaving member issues need to be anticipated. A way of handling this would be to
allow a leaving member to receive the same percentage for activities he or she participated in
before departing, but no percentage for any future activities of the group.

Seventh, voting is also crucial to any partnership agreement. It is probably best to provide
that any band decisions - such as hiring or ﬁring a new member, buying a piece of equipment, etc.
- be approved by a majority vote. If there is a deadlock situation, this can be overcome by a third
party vote (such as a manager) or by a coin ﬂip.

Finally, every member of the group would need to sign and date the agreement.
As explained above, this is merely a guideline for some provisions that should be in a band
partnership agreement. Obviously, each group situation is different and may require
additional - and perhaps more complicated - terms. Although a partnership agreement might
seem unnecessary when everyone is friendly and there is no money being made, if the band
considers it to be like an insurance policy to prevent possible future disagreements, it can
certainly make any transition in the group happen much smoother and without the threat of a
lawsuit.

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