1099 v LLC and publishing

[RSGill]

I'm a beginner in the sync licensing world and have been researching how best to set myself up on the business side of things and have a question regarding publishing.

Can I keep myself as an independent contractor (1099) and register as publisher with a PRO (just for my own works) or am I required to use an LLC business entity in order to collect $$ on the publishing side?

Thanks in advance!

[annayarbrough]

Not sure about the others, but BMI allows you to register a publishing company as either a sole proprietor or LLC

[jaywilliams]

I'm a beginner in the sync licensing world and have been researching how best to set myself up on the business side of things and have a question regarding publishing.

Can I keep myself as an independent contractor (1099) and register as publisher with a PRO (just for my own works) or am I required to use an LLC business entity in order to collect $$ on the publishing side?

Thanks in advance!

Not sure about the others, but BMI allows you to register a publishing company as either a sole proprietor or LLC

Actually its even easier than that as BMI allows you to register with no publishing company. They will show the Publisher as "Manuscript" and allow you to allocate 200% for the writers share.

So to answer the original post, Yes, you can 1099 it.

If its advisable to create an LLC for your songwriting is a separate question and I'd love to hear others' insights on that one!

Jay

[cosmicdolphin]

If you are planning to get your music signed by Libraries via Taxi or otherwise then the Library will take the publishing so there is no need to set up a publishing company

[annayarbrough]

So to answer the original post, Yes, you can 1099 it.

Yes; you can sign up as a sole proprietor on either front—whether you want to claim your publishing as excess writers clearance or set up a publishing co. Their publishing company option has both SP and LLC options.

I’d be curious to hear from others on the LLC front also. I know people who do both. I guess it would depend on the capacity of what you do. And how liable you’d like your personal assets to be in regard to whatever that is.

[jazzstan]

An LLC makes sense if: (these apply to U.S. folk)

a) you will be earning significantly more than the Social Security Tax limit ($137,700 for 2020)... AND you have a payroll service to get the tax filings done correctly. Assumes your incremental tax savings are greater than the costs of having an LLC. (Min state tax on corporations = $800 here in California, plus bi-annual filing fees.)

b) you NEED the professional liability protection in case you are taken to court and sued, and if so, you should probably also have liability insurance (minimum is about $2500 per year).. or an add-on policy to your homeowners policy.

c) you are paying a bunch of other people with 1099s.. in which case you run into the Dynamex independent contractor mess ("AB5" law in California)... in which case you'll need to become their employer, with taxes and insurance and HR compliance. And don't ever miss a payroll tax due date!!!

I've had an LLC for my business consulting CFO practice for 8 years, and now that I'm winding down and headed toward retirement, I'm in the process of doing all the (pita) paperwork to close it down.

For all of the reasons above, if you are a composer putting music into libraries - I would say you probably don't need and LLC. You can still form a publishing company (I have one) as a DBA soleproprietership and file on a schedule C.

Final note: If you want to deposit checks in a name other than your own name, you will likely need to have a DBA filed in your local jurisdiction. Banks have gotten a lot fussier about that in recent years.

~JazzStan (aka your resident curmudgeon)

[AnneHouse]

Great question, Thanks for the real life answer, Stan!

[akira]

An LLC makes sense if: (these apply to U.S. folk)

a) you will be earning significantly more than the Social Security Tax limit ($137,700 for 2020)... AND you have a payroll service to get the tax filings done correctly. Assumes your incremental tax savings are greater than the costs of having an LLC. (Min state tax on corporations = $800 here in California, plus bi-annual filing fees.)

b) you NEED the professional liability protection in case you are taken to court and sued, and if so, you should probably also have liability insurance (minimum is about $2500 per year).. or an add-on policy to your homeowners policy.

c) you are paying a bunch of other people with 1099s.. in which case you run into the Dynamex independent contractor mess ("AB5" law in California)... in which case you'll need to become their employer, with taxes and insurance and HR compliance. And don't ever miss a payroll tax due date!!!

I've had an LLC for my business consulting CFO practice for 8 years, and now that I'm winding down and headed toward retirement, I'm in the process of doing all the (pita) paperwork to close it down.

For all of the reasons above, if you are a composer putting music into libraries - I would say you probably don't need and LLC. You can still form a publishing company (I have one) as a DBA soleproprietership and file on a schedule C.

Final note: If you want to deposit checks in a name other than your own name, you will likely need to have a DBA filed in your local jurisdiction. Banks have gotten a lot fussier about that in recent years.

~JazzStan (aka your resident curmudgeon)

Thanks Stan,

I was planning to setup an LLC but my income level isn't there yet. After reading your post, I'll take your "Final Note" and set up a DBA name. If I start making $$$, I'll revisit the LLC. Just curious, are you closing down the LLC because it reduces your costs? If you are earning lots of royalties (over $137K), would you still close it down?

Also, I live in San Diego so the AB5 affects me too! I heard there is an exception for musicians coming soon and I'm waiting for the official declaration.