D' Bag Guitarist Advise

[bluewine]

It's always tricky how to handle money in semi-pro bands. Usually it is a bunch of friends that just like to play music, money is secondary.

Ok, "usually", I'm not sure. I can speak for my situation.

In my band, we love to play music. However, it's a business and we're not friends. Money is hardly secondary.

We do not employ a band fund. I do have the good people aspect covered and trust.

I mentioned before how more than fair and fast we handle compensation .

 

[guy n. cognito]

I know of a number of bands that are organized as LLCs, or S corporations. It may not be YOUR reality, but it is not at all uncommon among the bands I work with.

I didn't say it didn't happen. I, too, am familiar with a few bands that have chosen to organize professionally. However, those bands, in my experience are largely in the minority, even on a semi-professional level. And, even when bands have taken the steps to organize professionally, their documents rarely are so specific as to address the long-term disposition of funds and assets in the event of band dissolution or the retirement of a member. Usually, it's rare that the documents address the use of assets at all, even without the loss of a member or dissolution of the band. I should mention that this isn't just my experience, but also that of my wife, who is an attorney who has represented dozens of professional bands over the last 15 years.

But I would be curious to hear your experiences to the contrary. Since it is the topic at hand, it would be interesting to hear how, exactly, the organizational documents of the bands you work with address the handling of 'band funds'. Specific examples would be great. I would also be curious to hear how really 'common' it is in your area. Would you opine that the majority of active bands in the Philly area are professionally organized with documentation that specifically deals with the use of shared band assets?

 

[guy n. cognito]

Ah, it really depends on who you hook up with. I've been in the same band almost 20 years, and we've had a band fund for going on 18 of those years. We've also purchased 3 "overkill" P.A.'s, strings, sticks, drum heads, mics, F/X, cables, etc. Not to mention any routine maintenance on anything over the years. Our fund is now well over 25k!! Nobody asked about it for a l-o-n-g while, and our keys player shows up to a gig with all the bank deposit slips, along with the bankbook. When we all took a look, we all just about fell over. Now, we're calling it the "band/gig retirement fund". Like I said, it's all in who you hook up with. The guys in the band are my absolute, best friends. More like immediate family, really.
After parting up/selling the gear when we call it a day, my portion is goin' towards a big block muscle car of some sort.

That's a lot of money. Does your band have professional organization and legal documentation that designates the use of these funds? Obviously, there's no regular accounting for the funds, since you were surprised by the balance. Does the band own the account, or is it owned by an individual member? Finally, what is your reasoning for allowing the fund to grow so large, and keeping it that large at this point?

Of course, I can think of more that a few families that have fought over money.......

 

[bluewine]

Ah, it really depends on who you hook up with. I've been in the same band almost 20 years, and we've had a band fund for going on 18 of those years. We've also purchased 3 "overkill" P.A.'s, strings, sticks, drum heads, mics, F/X, cables, etc. Not to mention any routine maintenance on anything over the years. Our fund is now well over 25k!!

If your band has over 25K in a band fund, your at a level far beyond the band level this discussion is targeting.

blue

 

[Febs]

But I would be curious to hear your experiences to the contrary. Since it is the topic at hand, it would be interesting to hear how, exactly, the organizational documents of the bands you work with address the handling of 'band funds'. Specific examples would be great.

I don't have a lot of time today to respond, but to address your question at least briefly:

In my experience, corporate "organizational documents" (which to me refers to articles of incorporation, bylaws, etc.) do not typically deal with the disposition of specific funds. Rather, the organizational documents authorize the corporate entity to act through its officers/directors/shareholders to develop policies and procedures for handling the entities' funds.

In my band, there are three shareholders. The remaining members of the band are, essentially, independent contractors. The three of us who are shareholders meet regularly (at least once per year) to review the band's financials, and it is at these meetings that we generally review and approve routine operating expenses (telephone, accounting, rehearsal space rental, post office box expense, insurance, etc.). We make a "state of the band" presentation to the other band members once a year which includes providing them with a summary overview of the financials. We have a standing policy that any bandmember can review detailed financial records upon request; in 18 years, no-one has taken us up on that.

Depending on their magnitude, non-routine expenditures can either be approved by approved in advance by e-mail or via an in-person meeting. Some of the things that we've approved recently by e-mail include the purchase of an SM-58 and a mic stand, and the purchase of some band-logo hats and shirts. On the other hand, we are in the process of revamping our website, which involves a much more significant investment. The process that led to that decision was initiated by an e-mail, but resulted in an in-person meeting in which we approved a budget for that website project.

I would also be curious to hear how really 'common' it is in your area. Would you opine that the majority of active bands in the Philly area are professionally organized with documentation that specifically deals with the use of shared band assets?

I have no idea. I never claimed to know how the majority of active bands in the Philly area are organzied or how their internal documentation is structured. What I did claim was that it is not uncommon for the bands that I work with to be organized as LLCs or S corporations, and I know that because the checks they use to pay me say so.

 

[millsbass5]

That's a lot of money. Does your band have professional organization and legal documentation that designates the use of these funds? Obviously, there's no regular accounting for the funds, since you were surprised by the balance. Does the band own the account, or is it owned by an individual member? Finally, what is your reasoning for allowing the fund to grow so large, and keeping it that large at this point?

Of course, I can think of more that a few families that have fought over money.......

Nope, no designations, or documentations. Why would we? We all agreed from the get-go what the fund was for. There's no one in the band with a drug or alcohol dependency. Everyone has their heads screwed on pretty straight, and there's no egos. We all own the account, and one person takes care of it. Why not let the fund grow? In this case, more IS better. We're just 4 best friends who trust each other to the extremes.
Hell, about 7, maybe 8 years ago, I had gotten laid-off work for a few months, and my hot water heater blew and warped the floors in my laundry room. I came to our Saturday night gig bitchin' & moanin' about how I was gonna have to find a way to pay to have it fixed. The following Monday morning, a contractor knocks on my door and wakes me up, wanting to look at the room in question for an estimate. I told him I couldn't afford it, and that I never called him in the first place. Come to find out, the guys got behind my back at the club, and planned to make arrangements with a contractor to have it done for me. All for free. I tried for months to give 'em the money back, and they absolutely would not take it back, once I started back to work. There's nothing that I wouldn't do for any one of 'em. We've helped remodel each others houses, put swimming pools in back yards, whatever. Far too many people go into a band and treat it like a business. When we first got together, we approached it so we could have a damn good time first, and then the money would come. And, for a band that never had big-time aspirations, we've wildly succeeded. Mission accomplished on our part.

 

[JohnMCA72]

Well sure, John. Let's explore that issue for a moment.

When doctors form partnerships, they traditionally form a Professional Corporation or LLC. That document is usually dozens of pages long and is crafted by an attorney charging thousands of dollars for the service. Yet, even with all this protection, doctors will still disagree over the management of their partnerships, and sue each other on a regular basis. Even if they don't disagree, they employ individuals and accounting firms who's sole job it is to manage their money and their partnership, costing tens of thousands or more per year

Any other professional group would be the same. The civil courts are full of individuals that have disagreed with the management of their company or partnership to the point that they sue.

Musicians, on the other hand, rarely go to such lengths to document such agreements. If they bother documenting it at all, it's via email or some other sort of self-generated format that is virtually unenforceable. The money is self-managed, usually by a single member of the band. The partnerships that musicians form (you call it a 'band') rarely last for very long, and are usually pretty unstable. The pages of this board, as well as any other musicians board, are littered with stories of stolen and misappropriated band funds. You're posting in one of those stories right now.

So, please continue to pretend that you are on the same professional level with those professions you listed above, but reality is substantially different your assumptions.

If you conduct yourself like a pro, you get treated like a pro.

 

[Slade N]

have an band fund agreement? get it in writing

if you play the gig...get paid, in full that night...unless youve come to an agreement before the gig

 

[pato1357]

Here's a question for the peanut gallery: If a band has $4000 in the band fund and one guy quits or is fired, should he get to take his share of the band fund?

Yeah I had this problem. My old band had a bank account where we would put all our money we made at gigs and our band leader was the only one with access..

I ended up quitting the band on not very nice terms and wasn't on talking terms with anyone. I didn't end up chasing the money as I didn't think we had that much money in the account anyway but they also started selling cds which I was on where I didn't see any money either.

They got a new bassist but they broke up a few months after.. I can only assume that the new bassist pocketed the money I earned.

I will never do a band fund again, all it does is create conflict.

 

[stagebanter]

EDIT: ah, I see all my discourse about "set up an LLC and treat this like a legitimate business if you are making any real sort of money" has already been covered. carry on.

P.S. That is totally the way to go. If you aren't doing this with your band, you might have trouble.

BTW: an LLC is the best because it gives you total flexibility as far as your tax structure is concerned. your operating agreement can be as short as one page and if you can't afford a lawyer you can get a good one fixed up at Legalzoom.

 

[fourstringdrums]

Band funds are fine if they're administered properly.

+1 We have a band fund. When we actually do have a gig that pays, 100% of what we get goes into the fund. Our thinking is that it is to fund our next CD, merchandise etc.. and when we get to a point where we're earning money past those basic needs, then it will go toward each member. Right now we're not earning a ton so this makes sense.

 

[glocke1]

Im not so sure $300 bucks is worth the trouble of suing over, maybe in small claims court, but that costs money also I believe.

You may just want to chalk this one up as an expensive lesson...

Having been in similar situations, Ive come to the conclusion that bands funds are a bunch of BS. Way too easy for someone to get screwed. The only exception would be if your band earns enough money to justify getting a business account of some type, and by enough money I mean at least $500.00 per gig or more.

 

[theduke1]

Band funds Blow! I would go to his house and tell him you can pay me the money I have coming, or I can take it out of your@@@ your choice. Your on an Island dude how from can he run???

 

[Fishheadjoe]

My band gigs twice a month... we get paid at the end of every gig. Our singer takes care of band expenses and posts to Drop Box an Excel spread sheet which shows all of our expenses... web site annual costs, rentals, poster printing etc...
There is no band fund per se, we simply pay out the expenses for that gig, right then and there. And since most of us don't carry "exact change", some times the band is up a few bucks, some times it's down a few... but we never let expenses run beyond our next gig... simply not fair to the singer who puts out his own money, expecting to re-coup from the band after the gig.
So far, it has worked very well!
Fishheadjoe