Module 5.1: Which Structure is Right for Your Music Business?

Choosing between an LLC and a C-Corporation depends on your long-term goals, tax considerations, and the complexity of your business operations.

For most independent artists and small music businesses, an LLC provides the right balance of liability protection, tax benefits, and operational flexibility. However, if you plan to seek significant outside investment or eventually go public, a C-Corporation might be more appropriate.

Module 5.2: Tax Implications for LLCs and C-Corps

Understanding the tax implications of each business structure is crucial for making an informed decision.

LLCs offer pass-through taxation, meaning the business itself doesn't pay taxes. Instead, profits and losses pass through to the owners, who report them on their personal tax returns.

C-Corporations, on the other hand, are subject to corporate income tax on their profits. Additionally, shareholders pay personal income tax on dividends they receive, which can result in double taxation.

Module 5.3: Managing Shareholders and Ownership in a C-Corp

C-Corporations allow for multiple shareholders and the issuance of stock, making them ideal for raising investment capital.

With a C-Corporation, you can issue different classes of stock with varying rights and privileges, which can be attractive to investors. However, this comes with additional administrative requirements, such as holding regular board meetings, maintaining corporate minutes, and following more formal corporate governance procedures.