Legal requirements for starting a record label in India

Last Updated at: Dec 23, 2020
Legal requirements of starting a record label in India

The company which records music and videos are known as record labels. It engages in a wide range of functions in the music industry which includes recruiting new artist, publishing albums and enforcing the copyrights. Generally, these record labels are formed as Limited Liability Company (LLC). The important function of a record label is marketing its brand to reach its targeted audience. There is heavy competition for starting a record label company and it involves planning the business, marketing its label, finding contacts in the film fraternity and getting all legal compliances done.

Legal requirements for starting a record label:

The first step is to find a suitable brand name and a logo for the record label to create a unique identity and to approach artists to be a part of your label. The next step is to start a website in the name of the registered record label and start to share the music albums through social media. The important step is to promote the label which can be done through social media and other commercial advertisements. The first and foremost step is to comply with all the legal requirements for setting up a record label.

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List of legal compliances:

1. Contracts – The contract is one of the essential elements. These contracts are in the written form. A contract strengthens the bond between the owner of the record label and the artist. A contract must contain the percentage of profit sharing, royalties, ownership rights and also promotional guarantees. Both the parties clearly agree to the service provided.

2. Music license – The record label has to obtain music license to safeguard its music album from duplicating by the competitors. Only after obtaining the music license, the record label company can sell music in the market and protect it from copyright infringement.

3. Distributing license– The main purpose of starting a record label is to distribute the music album. For this, the particular record label has to secure a distribution license for selling the records in outlets. For this distribution, the brand has to seek both physical and digital distribution.

4. Sample clearance certificate– As an owner of a record label, he/she has to provide sample music. For that, he has to obtain a sample clearance certificate from the publisher of the composer to record the samples. It is necessary to sign an agreement with the music publisher or the composer if you are set to use those samples in the mainstream medium other than the purpose mentioned in the agreement.

5. Producers agreement– If the label is produced by the outsider, then the agreement should be signed between the record label owner and the producer stating the cost of the recording session, the advances made and also about the royalties. Along with that, the agreement must mention that the credits will be given to the producer either in the beginning or at the end of the album.

6. Permission forms- The record label owner has to get a liability release form or permission letter from the concerned person. If an image of any individual outside the group is portrayed or the work you use is already owned by someone or the logos or slogans used by you already exist. In these scenarios, the owner has to get authorization from the concerned person.

7. Copyright and trademark certificates -Before the record label starts to distribute the music, it has to file for the copyrights of the songs. Both for the original and cover score, the information about the usage of the song along with the copyright notices should be obtained. If the credits are not given properly for each song, it will lead to copyright infringement. The owner should file form SR for copyrighting a master song, Form PA for an original song on the record and Form VA for artwork ( if you want to copyright). The name, logo and slogan of the record label should be filed for a trademark for getting a separate identity and to enjoy the legal rights.

8. Insurance – Usually the owner has to be insured for various purposes as he tends to face many unforeseen situations. He has to ensure that the record label covers General insurance of the company, health Insurance of the employee, Liability Insurance to protect them from the creditors. If there are any overhead expenses, the insurance bears those expenses and business owner’s policy group insurance.

The following documents should be submitted for running a record label company