Registering Quartet as a business?

March 20, 2018, 7:19 PM · So recently I helped to start a quartet for my university. However, the group members and I recently decided that we want to become a separate group outside the school as well.

My first question is, if we decided to do this-how would we register with the state of North Carolina as a business, and what business type should we register as?

The second question is, should we ask our faculty mentor for advice on how to start as a group-or would that get too messy?

Replies (6)

March 20, 2018, 8:15 PM · Here are a couple of websites that might give you the info you need:

https://www.nc.gov/services/starting-business-nc/business-registration

http://blog.sonicbids.com/taxes-101-what-self-employed-musicians-need-to-know

Your local musician's union could be a good resource as well.

Starting a business is time consuming to begin with and requires a lot of maintenance. Before you do this, make sure you know how to file income taxes, keep records, obtain insurance, etc. If you're just going to do a couple of weddings here and there, I'm not sure it's worth it. You have a lot of research ahead of you!

I recommend that you not get into a legal partnership- that's a recipe for disaster. If you decide to do this, have one member of the quartet as the sole proprietor (and responsible for obtaining licenses, filing state and federal income taxes, opening bank accounts, etc.) and pay the other three as contract workers.

March 20, 2018, 8:23 PM · Take Julie's advice. Don't start a business. Remain independent contractors. For weddings and whatnot, one of you will serve as the prime contractor, and handle dealing with the customer and getting checks disbursed to everyone.
March 20, 2018, 8:24 PM · Just out of curiosity, how many v.com teachers/gig musicians have an incorporated business?

Is anyone interested in writing a blog series on the business side of being a working musician-- record keeping, tax info, marketing, etc.?

March 20, 2018, 8:31 PM · Why do you need to register as a business? You can play all the gigs you want to without any sort of registration. One of you needs to be the contractor for each gig anyway--you can designate one person to do this, or rotate the responsibility--the client makes the check out to the contractor and then the contractor pays the other group members. One word of warning: anyone paying the other group members will need to file 1099-misc forms for anyone paid more than $600 in a calendar year.

Regarding asking your faculty mentor for advice: does your mentor also play gigs outside of the university? If you're going to be setting yourself up in direct competition, I don't think it's appropriate to be asking for tips on how to siphon off gigs. If your mentor doesn't play gigs, then ask away, but they may not know much more than you do.

March 20, 2018, 8:41 PM · I teach lessons and play gigs as a significant part of my income. I'm not incorporated; I can't think of a single advantage to going to that much trouble.

Recordkeeping is essential but it doesn't need to be fancy. I have an Excel spreadsheet for my self-employment income (teaching and outside gigs) and another Excel spreadsheet for my quartet account. When a bride, church, or other entity makes a single payment to me out of which I pay other musicians, it gets deposited into my quartet account and disbursed from it. Then at the end of the year I can just go through the quartet spreadsheet to add up how much I paid every musician who played that year, so I can file the appropriate 1099 forms. I do a separate page for each month on the larger self-employment spreadsheet, total each page (allows me to see annual ups and downs in income--December is glorious; July is pathetic), and then total the totals for my Schedule C.

Julie's links are very helpful. If you are going to do this, please be aware that self-employment income is taxed double, at least when it comes to FICA. But do the right thing; report your income and pay your taxes.

March 21, 2018, 7:02 AM · After I retired as an employee I started my own business as a consultant. I spoke to a former work colleague who had done the same thing the year before and on his advice I spoke with his accountant. The conversation was so brief the accountant did not even charge me. I worked that consultancy for 15 years.
The consultancy was in my own name so I did not need to register a "fictitious name." I needed a business name ("Victor Technology") because I dealt with nationwide and international clientele. I also used a "mail drop" as a business and mailing address. I also had a business website.
I opened a bank account in the business's name.
I did not incorporate.
I kept scrupulous records.
I opened an American Express card account in the business name which allowed me to get a 5-year
vehicle in the business name at a 16% discount below the best deal a local dealer would give me. I bought from AmEx personally 5 years later at slightly below the low Blue Book value.
I paid the state and federal income taxes on the "sole proprietorship" on my regular taxes using the proper forms including "self-employment" tax (i.e., both sides of "Social Security")
I only hired another consultant once - effectively what Jen will be doing.
I only got audited once.

Great advice from Mary Ellen.

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