Don’t C-Inc. Your Business
Company, Inc. or whatever your chosen business name isn’t worth the cost of maintaining and incorporating as a C-corporation. I’ve recently spoken with numerous small business owners, including record labels who were previously advised to open a Delaware C-corp, bad idea. C-Inc. (I made this up but pronounce it “sink”) is not a great idea for new businesses.
See, most entrepreneurs on their first journey in business ownership only need a simple business structure, such as a sole proprietorship or limited liability company. The rules of owning or creating a corporation in the music business can cause significant upfront costs, long-term financial pain, and unwanted complicated paperwork for new small businesses. This, is why you should not incorporate your business.
C corporation losses (when they don’t make money) provide no benefit to the business owners. Often, new owners of c corp’s believe they can offset their personal income with the corporations, not true (unless your an S-corp). Therefore, this set up provides no benefit to the small business owner or producer.
Consult a professional tax accountant before starting online business registration by yourself. Most professional accountants will give you a free consultation where this question can easily be answered.
In short, unless you’re planning on having more than 100 owners or shareholders of your business, a C-corp is excessive for your small music business, so don’t do it. Don’t C-Inc. your business before you can get it out of the dock.