No LLC? Then You’re Not a Record Label—You’re a Liability (Here’s Why)

You think you started a record label—but without an LLC, you didn’t start a business. You started a liability. Every song you release, every artist you sign, and every dollar you make is tied directly to you—your name, your assets, your future. One wrong move, and the whole thing can collapse. This ain’t about red tape. This is about protection, power, and playing the game right—before the game plays you.

So, if you've ever thought that the government and the banks want you to fail, you're probably right—they don't benefit from everybody succeeding. They want to keep you in debt and in need. Truth is, they need a few people to succeed; it's just that if they taught everyone how to succeed, there would be no need for them. The difference is that I actually care about your success and truly want to see you live the musical life of your dreams.

In this episode, I'm going to help you understand why you need to be in the group of people who succeed, whether you're new or already seasoned, and why an LLC structure is for everyone who wants to make over $14,000 a year in this business.

An LLC will open up so many opportunities for you to win — you just need to understand what it's going to do for you in the music business.

Over the past 9 years, I've come to the conclusion that every artist, producer, writer, engineer, video director, and graphic designer are independent contractors. However, most still look to the major labels as employers instead of business partners, believe it or not. This is what power can do, but when I started realizing that every entity who disperses royalties to music creators asks for a W-9, it hit me that you can either do this yourself or as a music business owner — but the question is, why would you operate as yourself when you could be a business? If I operate as a person, I have to accept every single liability, but if I operate as a business, it gets to accept the liability — hence the Limited Liability Company (LLC). You need to understand Personal Protection, Asset Protection & Leverage, and Monetary Protection & Leverage so you totally get why this is necessary. Let's jump in.

Personal Protection

Most artists will create music and distribute it quickly because of instant gratification from the love of the people and a desire to get money without any regard or concern about how to proceed properly with these distributors. Entering into a contract with a distributor as yourself is risky, but an LLC reduces that risk significantly.

The real reason you're operating this way is because you don't understand the risks that you've brought upon yourself. You also don't realize that the more money you make, the more problems you will have very soon — so we have to fix this for your personal protection.

When I was producing records for Baby Rose Early, we put out an album that had tons of samples on it. Independently with no fanbase, we generated about $1,500. We got a takedown notice from Tunecore, and they shut down our account and took our money. We did it again with United Masters, generated about the same amount of money, and boom — like clockwork, they took our album down and took the money. Even though we didn't have a company for distribution, the risk was still on us. I asked myself then, what would have happened if we would have gotten sued for damages? At the time I didn’t know I just knew what to do to make the distribution look like amateurs did it.

When you operate as yourself, you can't sign an artist to you. You are liable for all sample infringements even if you lease the beat, interpolations (meaning if you replayed songs, not covers), and if you don't show up for a performance that a club booked you for — and if they paid half, it's even worse. All of this plus more.

Once you create the LLC and start doing business with it, all of the liabilities are directed to the business and away from you. Talk about insurance! While there are multiple forms of it, this is the first level. We'll talk about two more forms of insurance an LLC can create for you in a sec.

I used to believe I could wing it until I got my first check and it would all work itself out, but sometimes that doesn't happen until you have to go through the fire like I did with this content business.

The LLC is not complicated to create — you just need to know what to do with it and how to create and use it properly for the music industry. Now that you understand personal protection let’s talk about protecting the assets which is the music.

LLC Asset Protection & Leverage

As an artist or self-run label owner, we think that if we didn't sample anything, we have nothing to worry about—except now the music is at risk of our personal mishaps. In addition to that, if we don't protect and secure the musical assets in the business, we can't leverage them for more cash.

We all want to keep life simple with less paperwork—that's how you got in this situation. You also don't know what you don't know, but as you grow, everything requires paperwork and more of it, and you'll actually be happy to do it when you start to see the money potential.

So if you don't protect the musical assets, your personal mishaps can cause your musical assets to be used to settle a debt or legal conflict, in addition to you being pulled into the chaos of something happening from the music side, as we talked about earlier. We can't leverage the assets for cash in the business—say from a publishing company, investor(s), or a larger distributor—if there is no proven legal ownership in a company for the musical assets. So now we've just cut our growth.

I learned this when Baby Rose signed her deal with her original label, Human Resources. I was pushing for the label to buy out the sampled-based album from us so we could release it properly and she could settle some debts—and mainly so I could get paid; however, the management didn't see it as a good idea until after they parted ways with the label. So it was a loss for me, but I knew that leveraging my musical assets in this way was possible due to my original thoughts during the Tunecore takedown months.

The way you're going to do this is you're going to copyright your musical assets (sound recordings and your percentage of the musical works, i.e., songs) and stash them into the LLC. Now the music is protected and liabilities are removed from you, and the music is also protected from your personal mishaps.

Once you do this, you'll naturally see the power you have in what you own because your musical assets are now known to the government as you being the original creators, and they have insured your composition with a $150,000 statutory damage insurance policy to be pursued by you the defendant if any infringements arise against your protected works. We can also do deals properly with those investors, distributors, publishers, and labels as business partners instead of employees—and believe it or not, some artists somehow still sign themselves directly to the majors. I don't know why.

You might think this process is complicated, but it's not. LLC creation is simple, and copyright registration is simple—both take about 10 minutes to complete, and 3 minutes for the copyright if you have all of the information (i.e. split sheets).

So far, we've covered your personal protection, asset protection and asset leverage, but now we've got to dig into monetary protection and leverage. However, if you need help with starting this process, I've got every step laid out complete with my funding partners in my 60 Day Record Label System beneath this video.

LLC Monetary Protection & Leverage

The worst thing you can do with the proceeds of your music money is to commingle it with your personal funds, especially when you've made a lot of money. I've done this myself at tax time, and it is not fun to detangle bank statements in a time crunch.

Most artists get stuck at this point when they don't open a business bank account and establish a relationship with their local bank. This bank is going to give you access to capital immediately and later on as you grow.

When I started this channel, this happened to me. I opened a business bank account after that tax season, then I started operating out of it. I would later get a business credit card to protect the money in my bank account from debit card and credit card scammers. My bank account is as old school as you can get. It's not hooked up to anything and I write checks — I use my credit card for protection, rewards, and funds which was the immediate capital the bank gave me.

I explained this system to my clients on how to get the money for as cheap as possible to scale their business, and they did it on cash and credit cards. It's totally possible to do; you just have to hustle and be quick on your feet. This artist became known as Kennedy Ryon, a buzzing indie singer-songwriter from Atlanta, Georgia.

I also took that account and separated it into different accounts using a cash flow analysis process to separate my profit, taxes, operating expenses, and payroll. This allowed me to get more leverage from my bank that I will mention in a second.

However, get down to your local bank after you've created your LLC and tell them you want an account with them. If you are ready to make some plays with your record company and you know for sure you're going to have some profitable returns, you can go for the business credit. Don't use it if you can't pay it back in 12 months because your label will go bust if you don't. Ask me how I know.

Once you do all of this stuff, you will be in the game and people will wonder how you got up and running so fast.

I used to believe it was impossible to get funding from a bank like Russ talks about until I did it with my bank on a line of credit. It was incredible. I got the money for as cheap as I could get it! Way more than a credit card and payments super affordable. Understanding this, I was able to secure affordable funding partners for you all inside of my 60-day record label course.

Again, it's not hard — once you start the process, you will begin to see the power. All you have to do is start.

Here’s what you can do!

Create the LLC, register the copyrights in your business name as the claimant, open the bank account, and get the funding. The point of this is to truly understand a proper business structure that runs a record label. It will take you some time, but I can get it down to 60 days flat or less for you. You can grab a copy of the 60-Day Record Label System beneath this video today to get it done ASAP, or you can take your time running into walls and messing things up along the way like I did until I figured out the flawless way to do it. So flawless, that I have never gotten a refund request for this product because it didn't work. If you're serious about making this happen, click below and let's get started.

You can do this!

The system works, and you don't have to have the knowledge to do it because I'll take care of that. All you need is your time. When you pair it with the system, you will enhance your skills in this game 10-fold and end up way ahead of many in this game. You don't need perfect conditions. You just need to start with what you've got — and watch how far that can take you.

What’s it going to cost to keep doing it your way

Eventually, the risk of it all will begin to pile up. The first thing to hit you hard will be taxes, the second thing will be lost leverage, and then it will stockpile from there — arguments with creative agreements that won't push through because they want to do business with a business. The invisible opportunity loss will begin to eat away at you because you won't know why it's happening. Then you think the industry just doesn't vibe with you when in reality, you're not playing the game the right way. The game was set up to be played by its rules, and those rules can be bent if you generate enough power in the game. Remember, the government wants you to succeed, but they just aren't going to tell you how — you have to find the rules to the game from the sage within the game.

At the End of the Day

If you should create an LLC or not because maybe you heard too much or you just didn't have enough information, you should now have enough to make the ultimate successful choice of creating one to become the self-sustaining artist you've wanted to become.

Music Money Makers: if you make music, you should always make money. Log on to musicmoneymakeover.com, grab the 60-Day Record Label System complete with funding, join the Music Money Makers Community, grab the free stuff, and watch this next video right here! Peace!