Benefits of an LLC for Music Producers

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RicoMakezHits

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What are the benefits of starting up an LLC as a music producer?

It is common knowledge that LLCs provide extra protection against personal assets, etc, but as a predominately online music producer, why would you start an LLC? No real "recording studio" or anything like that. Just someone making beats out of their home selling it.

Do guys just do it for tax purposes?
Does it protect your name against others with the same name (Don't you need a trademark..?)

Again, what are the benefits? I've been doing as much research as possible, but when applying it to the lense of a music producer, I'm trying to see what I should do to become more official other than just getting my copyrights.

So many questions, so little time. :p
 
RicoMakezHits said:
What are the benefits of starting up an LLC as a music producer?

It is common knowledge that LLCs provide extra protection against personal assets, etc, but as a predominately online music producer, why would you start an LLC? No real "recording studio" or anything like that. Just someone making beats out of their home selling it.

Do guys just do it for tax purposes?
Does it protect your name against others with the same name (Don't you need a trademark..?)

Again, what are the benefits? I've been doing as much research as possible, but when applying it to the lense of a music producer, I'm trying to see what I should do to become more official other than just getting my copyrights.

So many questions, so little time. :p
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You can register an LLC, or just register a DBA (doing business as) with your local government authorities (city hall). The LLC will require you to file through the state, where-as the DBA only needs to be registered locally. However, a DBA is essentially a sole-proprietorship which means that if somebody sues your company, they have access to all your personal assets. An LLC insulates your personal assets from lawsuits against your company.

As for your name, if you register an LLC, you will have limited protection on the name (in your state) for doing business under it unless as you said, you file for a trademark on it as well with the USPTO. A DBA will protect your name essentially only in your own city.

As for benefits, both your LLC and DBA would be pass-through entities which means that you claim all profits and losses on your personal tax return, so there is essentially no tax benefits. Although, one benefit is that you'll be able to open a bank account with your business name and keep your taxes easier to figure for the business at the end of the year.
 
So would you be better off without LLC? Does LLC even make a difference? When should a producer register for LLC?
 
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