Starting a record label necessitates knowledge of the music industry, business connections, and marketing savvy. With the disruption of the music industry in the early twenty-first century, owing largely to declining sales of physical music recordings and internet piracy, it is now easier and less expensive than ever to launch your own record label. A record label's primary business functions are to find artists, produce and promote product, and distribute it through online, broadcast, and physical sales outlets.

Legal Requirements for Establishing a Record Label:

Very first step is to choose a suitable brand name and logo for the record label in order to establish a distinct identity and to approach artists about joining your label.

The following step is to launch a website in the name of the registered record label and begin sharing music albums via social media.

The crucial step is to promote the label, which can be accomplished through social media and other commercial advertisements. The first and most important step is to meet all of the legal requirements for establishing a record label.

What Exactly Do Record Labels Do?

Record labels are analogous to investors. They fund you because they see potential (like angel investors) or because they have already seen how effective you are and want to help you advance. Simply put, guess it depends on your agreement with them, the label will be responsible for making strategic decisions in your career and will invest money to ensure those choices pay them back.

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They will also take over certain aspects such as marketing, promotion, tour management, and so on, with the majority of the costs being borne by them or sponsors tried to bring on board by them.

Most significantly, they’ll want you to produce more music and promise them a set number of albums over a set amount of time in exchange for a ‘x’ number of years of music licensing.

Depending again on where you are in your career, a solid record deal will include a considerable amount of give and take. When you first start out, you might find yourself at the bottom end of the bargaining scale, but as your audience and popularity grow, you will unquestionably be able to bargain better.

Although under Indian law, the record label is entitled to 50% of the royalties resulting from ownership of the sound recording itself as the publisher of your song, there is no hard and fast rule or formula that would apply to what proportion a record company is entitled to. However, you and them can discuss this in your contract.

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 a 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.

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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.

Conclusion:

To sum it up, you have a number of options to choose from. Additionally, the competition is extremely open now that streaming services and the internet are so popular, and there is no talent shortage.

If you find any difficulty in getting the paperworks done by yourself, it is always better to seek the help of experts who can do the legal work for you.

Vakilsearch being the best legal service provider in India, is the right choice to seek help. They will do these legal paperworks without causing any difficulty.