Starting label and publishing company as same or different LLCs?

[initialsBB]

I'm starting a small label and setting it up as an LLC. For the publishing company, can it just be the same entity as the label, with the same name and operated under the same LLC? Or should it be registered as a separate company with its own name?

What are the advantages or disadvantages to each approach, assuming I'm not worried about liability, selling off the publishing business, or whatever other reasons big labels have for keeping these things separate.

[AwwDeOhh]

I'd contact a tax attorney and/or an accountant in your specific area. LLC's are different from State to State.

There may be certain tax implications by doing it either way that should be discussed with someone knowledgeable of the law in your State.

[initialsBB]

thanks. I'm not really concerned about the taxes. Minimum corporate tax in CA is $800 a year, so starting a second LLC would cost that much extra. But I'm more concerned about how the P.R.O.s work. Everything I've read says that you need to start a publishing company. What I can't figure out is if and why that company needs to be separate from the label. I can understand why bigger labels would set things up that way, but I don't see why it's strictly necessary, and maybe it's not.

The other option is that I can create a separate DBA under the same LLC if a separate name is required. But is that even necessary?

[AwwDeOhh]

If it's just you, do set up a pub.
I'd just leave it there for the time being though. You can call yourself a Label, as if you're doing it all yourself, you will be serving all those functions. But IMO, i don't see the need to complicate your tax forms by juggling two seperate companies... even if they only exist on paper.

[gainstages]

i'd say set up a single company, keep your books easy. if you feel its valuable, set up a seperate DBA owned by your company, and use that DBA as the "marketing name" for that portion of your services.

Ie: if you set up an LLC called XYZ Records, you could have all business functions - marketing, studio production, publishing, all under that. Then if you feel its worth it, set up a DBA, call it ABC Publishing or whatever, and just use it more as a marketing tool. if its helpful to have a separate website and link them do it, but unless you are doing a LOT of business i'd just keep the actual books the same... just my opinion, insert legal disclaimer here ___________

[initialsBB]

yeah, thanks. that's what I decided to do. I'm going to use my existing llc from my day job and just create DBAs for the label & publishing.