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Post by drbill on Jun 8, 2017 20:23:10 GMT -6
Is anyone here having to indemnify their publisher, record company, library or other clients in the contracts for creative works that they create? I would imagine many of you are.
For those who are, are you purchasing Errors & Omissions Insurance? Any thoughts on that? I've tried to avoid it for years, but.....
Things have gotten to a point where my contracts are getting very "pro publisher / library / record co" at MY expense as of late. I'm starting to feel like if I don't either incorporate, put all my personal assets in a trust, or get E&O Ins., I'm skating on thin ice....
My clients want to be indemnified, they want their clients indemnified, and their clients clients indemnified. But of course, they want the music for peanuts. Now....they want to know if there are any loops or even sample libraries involved in the composition / recording - like a string or brass library, etc. that I may have used. They want to see the EULA's for each sample library product, and even companies like Spectrasonics are clamping down on composer stems where their sounds are used in other peoples compositions. It's getting crazy, and if things continue in form, I can see craziness and finger pointing with the ultimate blame falling on composers / creatives in the near future.
We live in a very litigious society........ Lawsuits - the last music industry income stream?
Would love to hear any of your thoughts.
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Post by c0rtland on Jun 8, 2017 20:30:02 GMT -6
I'm so sorry
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ericn
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Balance Engineer
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Post by ericn on Jun 8, 2017 20:59:50 GMT -6
Oh my Bill, honestly sit down with a good lawyer, you will learn more than you will from any insurance agent.
In the end I'm sure these policies are esoteric enough that they are all
Underwritten by Lloyds, no mater how it's packaged, I would refer you to my contacts in the entertainment insurance world, but they have all jumped ship to the evil side of the street, risk management for the big guys.
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Post by Tbone81 on Jun 8, 2017 21:14:18 GMT -6
Form a S Corp. Its a great idea. Its pretty easy these days and will give you some asset protection if you ever get sued. That's what I did about 15 years ago. My business changed in the last few years and now I make much more money doing other, none music, things so I eventually dissolved the corp and now work as a sole proprietor.
Also, forming a living trust is a great idea for everyone. It's another layer of asset protection and will provide for a seemless transfer of your assets to your next of kin when you pass away. Name someone you trust, like one of your kids/wife etc, as an executor in the case of your death. Not to get too morbid here but I've known more than one person who passed away in there 30's/40's, unexpectedly, and left a world of shit (debt, probate, collections etc) to their wives/kids/loved ones etc. simply because they had that "Hey I'm young, I can bother with that when I'm older" attitude.
As for E&O insurance, I don't know much about it specifically but the premiums are a tax write off, so if you need it, yeah why not?
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Post by drbill on Jun 8, 2017 21:23:28 GMT -6
Thanks guys. Just got the name of 2 great entertainment lawyers in LA. Expensive, but probably money better spent than on insurance.
The SCorp is a good idea. An option, no doubt - although I've resisted that over the years.
The living trust? A no brainer. My wife has been after me to do that for years.
I gotta prioritize.
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Post by Tbone81 on Jun 8, 2017 21:38:19 GMT -6
Dr Bill, I spaced out when I was writing my last post but if you end up going the S Corp route then you'd be better off forming an LLC. Same asset protection as a corp but you can run it as a sole proprietor. So you don't have to elect officers, issue stock, or do any of the other pain in the ass things that make running a corporation by yourself difficult.
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Post by Tbone81 on Jun 8, 2017 21:38:29 GMT -6
Dr Bill, I spaced out when I was writing my last post but if you end up going the S Corp route then you'd be better off forming an LLC. Same asset protection as a corp but you can run it as a sole proprietor. So you don't have to elect officers, issue stock, or do any of the other pain in the ass things that make running a corporation by yourself difficult.
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Post by drbill on Jun 8, 2017 21:56:38 GMT -6
Dr Bill, I spaced out when I was writing my last post but if you end up going the S Corp route then you'd be better off forming an LLC. Same asset protection as a corp but you can run it as a sole proprietor. So you don't have to elect officers, issue stock, or do any of the other pain in the ass things that make running a corporation by yourself difficult. Thanks man! That's what I was thinking. Looks like I'm due for a complete financial, insurance and legal restructuring. Ugh. |
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Post by drew571 on Jun 9, 2017 5:42:38 GMT -6
You can also open an LLC and be taxed as an S-corp. This recommendation from my accountant is the best way I've found for tax purpose.
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ericn
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Balance Engineer
Posts: 14,937
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Post by ericn on Jun 9, 2017 6:46:50 GMT -6
Thanks guys. Just got the name of 2 great entertainment lawyers in LA. Expensive, but probably money better spent than on insurance. The SCorp is a good idea. An option, no doubt - although I've resisted that over the years. The living trust? A no brainer. My wife has been after me to do that for years. I gotta prioritize. And find a good accountant who knows the entertainment biz as well! Remember there is not one simple solution, you have to find what fits you, there are always trade offs! |
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Post by 79sg on Jun 9, 2017 9:38:52 GMT -6
Thanks guys. Just got the name of 2 great entertainment lawyers in LA. Expensive, but probably money better spent than on insurance. The SCorp is a good idea. An option, no doubt - although I've resisted that over the years. The living trust? A no brainer. My wife has been after me to do that for years. I gotta prioritize. And find a good accountant who knows the entertainment biz as well! Remember there is not one simple solution, you have to find what fits you, there are always trade offs! Bill, I'd start with your CPA on what type of structure (LLC, etc.)you might want to consider from a tax/liability standpoint then proceed to the very expensive per hour attorneys that can show you how to protect your assets. I won't give legal or tax advice here as I'm not licensed / qualified to do so but do own a couple of companies (not music related) and have been down this road. I do carry E&O insurance for one of my companies, it's expensive and the deductible to choose from can be 10,25,50,100k, etc. but it's a necessity "just in case". It doesn't matter what business you are in anymore it is getting harder and more expensive every day. Might have to buy a powerball ticket for Saturday. |
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Post by NoFilterChuck on Jun 9, 2017 9:53:03 GMT -6
Thanks guys. Just got the name of 2 great entertainment lawyers in LA. enjoy that drive to and from lol |
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Post by keymod on Jun 9, 2017 10:03:19 GMT -6
Dr Bill, I spaced out when I was writing my last post but if you end up going the S Corp route then you'd be better off forming an LLC. Same asset protection as a corp but you can run it as a sole proprietor. So you don't have to elect officers, issue stock, or do any of the other pain in the ass things that make running a corporation by yourself difficult. Yeah, both my electrical contracting business and the studio are set up as LLCs with me as sole proprietor. Nice that my sister-in-law is my CPA. |
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Post by drbill on Jun 9, 2017 10:03:38 GMT -6
Thanks guys. Just got the name of 2 great entertainment lawyers in LA. enjoy that drive to and from lol I do. Well, at least until I hit the basin. |
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Post by drbill on Jun 9, 2017 10:05:23 GMT -6
I had an awesome CPA / Tax attorney for years, but he finally retired. Found another that seems really excellent. So yeah, good places to start looking.
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Post by wreck on Jun 9, 2017 15:09:38 GMT -6
Yep - LLC is the new way. Very simple, effective and should be much less expensive if you hire an attorney than a setting up a Corp.
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Post by c0rtland on Jun 9, 2017 20:14:48 GMT -6
S corp is the easiest way I found to deal with liability and tax savings. it is more expensive as far as getting the taxes worked up every year but has payed for itself many many times over in tax savings every year. Very happy I did that years ago.
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