The paper "Music Band as a Business and its Documentation" is a good example of a business case study. Formation of a legal entity in the current business environment is a necessity before contracts are issued (Weisman, 2010). As a result, many record labels require that bands constitute a structured organization instead of having individual people. One of the reasons to make a band is based on having an edge on legal issues. The band is able to sue or be sued by its members for actions done, determine the profit-sharing model, and secure financing.
According to Pattenden (2012), making the business a legal entity makes it easier for members to resolve conflicts and even litigate at the court of law. It is unfortunate when the group or band members stop getting along, gets sued or falls into debt without structures to approach these issues (Weisman, 2010). By being a legal entity, the band ensures that legal dispute will be handled by the court based on the agreements made (Angela, 2015). Through limited liability structure, such actions save the band from incurring massive financial losses.
The beginning of bands while starting their music careers have little thought about anything else besides honing their craft, playing out, and practice. Increasing competition among many artists has compelled a number of bands to develop a business plan (Ciraa, 2014). Making a band into a business requires a number of steps. First, the band members should accept it as a business and they need to start treating it as a serious legal business entity. Secondly, the band should set up a business bank account that is separate from the one run by individual members for their personal finances.
Thirdly, a bank account is necessary so that each time purchases such as guitar picks, amps, musical instruments and sheet music are bought; they are automatically recorded on the monthly statements (Angela, 2015). Fourthly, records such as tax filings, receipts and bank statements should be kept, from the due date for filing, for at least three years. In terms of recordkeeping, cash accounting will be the simplest method because one only looks at the dates on store receipts, bank statements and checks to determine if they form part of say 2014 taxes. The band members should understand taxation in detail because sources of money for the band can come from different sources like merchandise, songwriting, recording, teaching, session work, and solo gigs (Weisman, 2010).
Pattenden (2012) argues that keeping track of everything in these activities is important as well as knowing the tax forms required for filing. For example, in the United States one needs to have the identifying number called EIN in order to file tax forms individually and as a group to fill out the partnership tax forms (Ciraa, 2014). Whenever there are employees besides the partner band members, the group will be required to file Form 1065.
Moreover, each band member in addition to the group tax filing will be required to file own Form 1040 alongside Schedule E (Davis-Ponce, 2014). For example, if the band owes about $1,000 in taxes (after tax credits or any deductions) for the year 2014, then they will be required to file Form 1040-ES so as to pay the estimated taxes. This applies to both income taxes for the states and federal income taxes.
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