Music Business

Business Entities (3)

The Music Telegraph | Text 2019/02/26 [14:30]
Music Business

Business Entities (3)

The Music Telegraph| 입력 : 2019/02/26 [14:30]

 



 

Business Entities (3)

 

 

General Partnership

In a partnership, each of the partners has an undivided interest in all of the partnership property. Essentially, each partner owns the assets in common with the other partners and has a duty to each of the other partners to take care of that property and not to dispose of it without the consent of the other partners.

 

 

Each person who is a partner may act on behalf of the partnership and that act binds all of the partners in the partnership. Each person in the partnership is liable for the business obligations of the partnership incurred by any of the partners. In other words, if your partner signs a business commitment to pay for advertising for the business, you as a partner are responsible with the other partners for making payment. On contact actions, the creditor can sue all of the partners, but cannot single out any one partner to sue exclusive of the others. A tort claim (inflicting harm on another person or property) for injuries is different. If, for example, a partner runs a car through a record store display window while delivering records in the normal course of partnership business, each partner is severally (individually) liable and the storeowner could sue any individual partner or all the partners in the partnership.

 

 

The creditors of the business can take the personal assets of the partners, but only after all of the partnership assets have been taken and the personal creditors of the individual partners have satisfied their claims out of the partners’ personal assets. For example, the business creditors must exhaust all of the property and money of the partnership before they can look to your car, stereo, or instrument, and the person you still owe for the car, stereo, or instrument has to be paid before the business creditor can claim any of these prized items. Some States’ laws will allow certain “necessary” property of the debtor to be exempt from creditor’s claims, such as food and clothing.

 

 

Death or withdrawal of a partner (or some other specified event set out in a partnership agreement) will dissolve the partnership. By written agreement, however, the partners can provide that the partnership will continue despite a partner’s death or withdrawal. In that case the agreement establishes distribution rules to determine how the departing partner is to be compensated (this is called a buy out) and how the partnership is to continue without the decreased or withdrawn partner.

 

 

As with a proprietorship, a partnership must file a fictitious business name statement (if all the partners’ surnames are not in the partnership name) and publish a doing-business statement in a local county newspaper. You also must file a form SS-4 with the Internal Revenue Service to obtain an employer identification tax number even if you do not employ anybody. These forms can be obtained by writing your regional Internal Revenue Service center. The performing rights organizations, such as BMI, ASCAP, and SESAC, ask publisher members to include their employer identification tax numbers on their membership applications. You also must secure any local licenses or permits required.

 

 

In a general partnership, all of the partners participate in the control of the business. Partners may agree among themselves to assign specific duties to each other according to ability. Voting on business decisions may be equal, or may be weighted according to capital contribution (money and property contributed to making the partnership work), or on some other basis.

 

 

The profits, losses, and risks are shared equally among the partners unless they agree to a different division.

 

 

At income tax time, the partnership files an informational tax return, describing losses or profits, but the partnership itself pats no taxes. Rather, the losses or profits are passed through to the individual partners for reporting on their individual tax returns (thus, a partnership is often described as a tax conduit) and again, unless the agreement provides otherwise, losses or profits are shared equally. As with a proprietorship, the partners must file quarterly returns and personal income tax prepayments.

 

 

On dissolution of the partnership, the assets of the partnership are liquidated (turned into cash) and the creditors of the partnership are paid first. The balance of the liquidated assets, if any, is distributed to the partners, first to cancel any loans of each of the partners to the partnership, secondly to return any money or assets contributed by the partners, and finally to the partners according to they share profits.

 

 

 

Joint Venture

A joint venture is a form of business relationship consisting of an association of two or more persons, partnerships, or corporations or some combination thereof, for the purpose of accomplishing a single or limited series of business transactions for profit rather than carrying on a continuous business. A venture is a partnership with respect to all the applicable rules discussed above and the terms of the relationship should be governed by a written agreement. Examples of a musical joint venture include recording a single album project, producing one video, or promoting a concert.

 

 

 

Limited Partnership

A limited partnership is another form of partnership that functions as a financing vehicle to raise capital to fund identified business goals. A limited partnership consists of a least two people, corporations or partnerships, or some combination thereof. A limited partnership requires at least one general partner, whether a person, another partnership, or a corporation, and one or more limited partners as investors. The limited partners contribute capital but take no part in the management of the business and have no liability beyond the amount of money that each of them contributed to the partnership. Should a limited partner become involved in the management of the business then he or she would lose this limited liability status. Generally, the limited partnership is for an established duration and must be set out in a written limited partnership agreement.

 

 

 

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