Stephanie Iken, Attorney at Law

Forming an LLC is one of the smartest moves a musician or band can make, but the real protection comes from what you do next: writing an Operating Agreement. Think of it as your band’s constitution. It sets out who owns what, how money flows, and what happens when creative partners disagree or decide to move on. Even if you trust everyone you play with, a written agreement keeps things professional and protects friendships down the road. Here is what every musician should know about drafting an Operating Agreement that fits your music business.

1. What Is an Operating Agreement?

An Operating Agreement is an internal document that explains how your LLC will operate. It defines each member’s role, ownership percentage, responsibilities, and voting rights. It also describes how decisions are made, how profits are shared, and what happens if a member leaves. In Florida, an Operating Agreement is not required by law, but it is essential for musicians and bands. Without one, the default rules in the Florida Revised Limited Liability Company Act will apply, and those may not match what you want.

2. Start with the Basics

Every Operating Agreement should include the name and purpose of the LLC, for example: “The purpose of this LLC is to manage and promote the music and business activities of the band known as The Gulfside Tones.” It should also include the principal office address and the names of the members. You can include stage names for clarity.

3. Define Ownership and Contributions

This is where most music groups go wrong. They never put on paper who owns what. Your Operating Agreement should answer who owns what percentage of the LLC, how those shares were determined (money invested, equipment provided, songwriting contributions, or equal split), and what happens when new members join or someone leaves.

Example: “Each member owns an equal 25 percent interest in the LLC. New members may be added with unanimous approval and must sign an updated Operating Agreement.”

4. Explain How Money Will Be Handled

Money is one of the biggest causes of tension in bands. Clarity prevents conflict. Include how income from gigs, streaming, and merchandise will be collected and divided, whether expenses like studio time or travel are paid before profits are split, who can access the business bank account, and how members will be reimbursed.

Example: “Net income shall be distributed quarterly to members in proportion to ownership interests, after deduction of agreed-upon business expenses.”

5. Outline Management and Voting Rights

Decide how your LLC will make decisions. Florida allows LLCs to be member-managed (everyone votes) or manager-managed (one or two people handle daily operations). You can structure it so each member gets one vote on major decisions, while day-to-day tasks like booking, social media, or accounting are delegated. A majority or unanimous vote may be required for big changes such as adding members or signing contracts over a certain amount.

Example: “All members shall have equal voting power. Decisions requiring more than $1,000 in spending must be approved by a majority of members.”

6. Plan for Departures, Disputes, and Dissolution

Every band changes. People move, lose interest, or take different creative paths. Plan for it now while things are good. Include how a member can withdraw or sell their ownership, whether remaining members can buy out that person’s share, and how the group will handle intellectual property such as recordings or trademarks if the LLC dissolves.

Example: “Departing members forfeit rights to future earnings unless otherwise agreed in writing. Upon dissolution, all assets shall be distributed proportionally according to ownership interests.”

7. Address Intellectual Property and Creative Rights

If your band writes songs, creates artwork, or records music under the LLC, specify who owns those rights. This prevents disputes about who owns the songs or masters later.

Example: “All intellectual property created through the LLC, including recordings, compositions, and visual materials, shall be owned jointly by the LLC unless otherwise agreed in writing.”

8. Include a Choice of Law Provision

It is easier to decide which law applies to potential disagreements before they happen. Even a simple sentence can save thousands in legal fees.

Example: “We agree that any disagreements will be decided under Florida law, and any court case must be filed in Pensacola, Florida.”

9. Sign and Keep It on File

Once everyone agrees, each member should sign and date the document. Keep a copy with your other LLC records and review it whenever membership changes.

The Bottom Line

An Operating Agreement is more than paperwork. It is a plan for how your music business will run. It protects relationships, ensures fair treatment, and helps your band focus on what matters most: creating and performing. If you are forming an LLC for your music career or band, it is worth having a Florida attorney review your Operating Agreement before everyone signs. A little guidance upfront can prevent a lot of problems later.

About the Author
Stephanie Iken is a Florida attorney who helps musicians and creative professionals understand and protect their rights. Her work focuses on practical legal guidance that helps artists build sustainable careers.

Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship.