If you're looking to start your own record label, you've come to the right place. In this step-by-step guide, we will teach you how to register a record label and get started in the music industry. Keep reading for tips and advice on how to make your record label a success!
But first, you need to understand exactly what a record is, as some people find they do not need to register their business in order to distribute their music.
What Is a Record Label and What Do They Do?
A record label is a company that signs artists and releases their music. The record label typically finances and promotes the artist, and in return, they own the rights to the music.
A record label typically does the following:
- Finances the production of an album
- Promotes the album and artist through marketing and advertising campaigns
- Signs a recording contract with the artist, which gives them exclusive rights to the music
- Oversees all aspects of manufacturing, distribution, and sales of albums
- The record label's main goal is to sign artists that will produce the best music and make the most money.
- There are many different types of record labels, including major labels (the biggest labels in the industry), independent labels (smaller companies that focus on a specific genre or location), and major-independent labels (companies that have been signed by a major label).
Now that you know what a record label is and what they do, it's time to learn how to register one!
How To Register A Record Label
These are the steps you need to take in order to register a record label legally:
Step One: Choose a Name for Your Label
The first step is to choose a name for your record label. This can be a difficult task, as you want to pick something that is unique and memorable. You also need to make sure the name is available, as you don't want to spend time registering your label only to find out that someone else has already taken the name.
The easiest way to check if a name is available is to search for it on the United States Patent and Trademark Office website. If the name is not trademarked, you can use it without any issues.
I would add to check the social media accounts first also, to ensure they are available for the same name. You don't want to start building a brand and then find out someone else has taken your desired username on all of the social media platforms you wanted to use.
If they are all available – grab them now! Even if you do not intend to use them right away or for the foreseeable future, reserve them to prevent anyone else from using them – you never know how big your label could get!
Step Two: File Documents with the Secretary of State
The next step is to file documents with the secretary of state in order to create your business entity. This is how you will be able to register your business as a legal entity, which means it can operate in the United States and pay taxes.
The main types of entities that you can file for are: LLCs (limited liability companies), corporations, and sole proprietorships. Each has its own benefits and drawbacks, so you'll want to research each one before deciding which is the best for your record label.
An LLC is a popular choice because it offers limited liability protection for the owners of the business (usually called members). This means that if something goes wrong with your label – like if it gets sued – the members are not personally liable for any damages.
Most businesses choose an LLC because they are more flexible and don't have to follow all the same rules as corporations.
You will need to file Articles of Organization with your state's secretary of state in order to create an LLC. This document will outline the name and purpose of your business, as well as the names and addresses of all the members.
You can file for an LLC or corporation online, and the process is fairly simple. You will need to provide some general information about your company, such as the name of your business, the purpose of your company, and how long you plan on operating it.
If you are in the UK, similarly, you will need to register as a Private Limited Company through Companies House.
If you are anywhere else in the world, check your local government website for how to register a business and what type of entity it needs to be.
Step Three: Register with the IRS
You will need to register with the IRS as an employer. This will allow you to pay taxes on your business income, and it will also help you track your expenses. You can do this online or by mail, and it only takes a few minutes.
Once you have registered with the IRS, you will receive an Employer Identification Number (EIN). This is a unique number that identifies your business, and you will need to use it when filing taxes or opening a bank account for your label.
Step Four: Get Business Licenses
You may also need to get business licenses in order to operate your label. This depends on where you live and how much money you plan on making.
I would suggest looking into this by searching for “business license for a record label in [insert country]”, as the rules could be different depending on which country you are in.
For example, a quick search for “business license for a record label in California” brought me to this page.
Step Five: Finding Artists to Sign
Now the fun begins! You are probably signing yourself up as the first artist, or maybe you already have a few bands or musicians in mind.
The main thing is to make sure that you have a contract ready for them to sign. Some record labels like Warner and Columbia even require their artists to use specific contracts. You can find some label templates online, or use a lawyer to draft one up for you.
Step Six: Liaise With Local Music Studios
It is your job to ensure your artists have a good experience in the studio. You will need to liaise with local music studios, negotiate rates and timeslots, etc… If you want to record at home then make sure you have all of the equipment necessary for producing superior sound quality for your artists.
You will also be responsible for dealing with any issues that may arise during recording sessions – such as disputes between band members or producers.
Step Seven: Copyright And Royalties
Once you have signed an artist, it's important to protect their music by getting copyright registration for their songs. This will give you the exclusive rights to reproduce, distribute, and perform the music – which is essential if you want to make any money from it.
You can do this through a service like BMI or ASCAP, or by filing with the US Copyright Office.
Royalties are how artists make money from their music. You will need to negotiate with local radio stations, streaming services like Spotify or Apple Music, and other platforms in order to get them played on these channels so that people can hear it – which means more potential sales!
You should also find out how much they charge per play (or download) before signing any agreements so that you can negotiate how much money goes into your artists' pockets.
Step Eight: Marketing and Promotion
We have an entire section on digital marketing, but for the sake of this post, I'll cover some basics;
Once you have released some music, it's time to get the word out! You will need to create a website for your label, promote online through social media channels such as Youtube, Tik Tok, and Instagram, send press releases announcing new releases or tours (if applicable), etc…
You might also want to hire a publicist to help get your music in front of the right people.
Step Nine: Financial Management
One of the most important aspects of running a label is financial management. This includes;
- budgeting and,
- tracking expenses and income
Of course, you can do all of this yourself, or hire someone to help you manage the finances.
There are many tools available for managing your label's money from home like;
Wave Accounting is an excellent choice for a new label because it is free! You can also use their spreadsheet templates to track expenses and income.
There are many other applications that will help with invoicing clients or employees, managing payroll taxes (if applicable), setting up automatic payments such as direct deposits.
The main thing is to make sure all of your books are in order and that you are paying taxes on time.
You should also consider how much it costs to run a record label before committing so that you have an idea of how much cash flow is needed each month!
Step Ten: Tips for Success
Now that you know how to register a record label, let's talk about how to be successful.
Of course, these tips will not guarantee your success but they may help you avoid some common pitfalls that many new labels experience when starting out;
- Don't bite off more than you can chew! You don't need to sign every great artist or songwriter that comes along – focus on finding one or two artists who have potential and build from there.
- Don't take on too much debt early on. Keep your overhead low so that you don't get into financial trouble before things start turning around for the better (this may take some time). A good rule of thumb is not to spend more money than what comes in each month.
- Don't get discouraged! Even if things aren't going well at first, keep working hard until something starts paying off for you because it will be worth all of the effort in the end.