As a songwriter, you are your own publisher on any works you’ve written. As a publisher, you may want to set up your own publishing entity with your PRO. A “personal publishing entity” is just a name you assign to the publishing “company” you already “own” as a publisher of your works, and affiliate with your PRO just like you affiliate yourself as a writer. There are a few reasons to create a personal publishing entity, and a few key things to note when you’re deciding whether or not doing so is right for you:
Collecting your publisher’s share
Performance royalties are divided right down the middle into a writer’s share and a publisher’s share. If you do not have an outside publisher representing your works, you are entitled to both shares. Some societies (such as ASCAP) will not pay out the publisher’s share unless there is a publishing entity on a song. In that case, you will want to create a publishing entity in order to collect the other half (publisher’s share) of your performance royalties.
If you do have a publisher or publishing administrator like Songtrust, they will collect your publisher’s share on your behalf and pay it out to you, so having your own entity is not necessary. Other things to note:
- Your society may charge a fee for you to create and affiliate a publishing entity. For example, BMI charges $150 for an entity owned by an individual, and ASCAP charges $50 (it is worth noting that there is also a $50 charge to affiliate as a writer with ASCAP, and no charge to affiliate as a writer with BMI).
- You can not collect your publisher’s share at a different society from where you are affiliated as a writer. Example, if you are affiliated as a writer with BMI, you need to create your publishing entity at BMI as well.
Starting a publishing company
If you want to be a publisher on behalf of writers other than yourself, you will need to have your own publishing entity/entities in order to collect the publisher’s share on behalf of those writers. Since you can only collect the publisher’s share on behalf of a writer from the same society where the writer is affiliated, you may need to create multiple publishing entities - one at each society where your writers are affiliated.
Please note that many societies have criteria that must be met in order to affiliate as a publisher for writers other than yourself, such as having a certain number of commercially released works in the society’s territory, or a business entity in the territory.
Liability protection and tax purposes
Some writers choose to create a publishing entity to separate their publishing income from their personal income. If you were ever to be sued for copyright infringement or something similar, this would protect your personal assets - like a house or car - from being seized. Additionally, your business would be taxed on your publishing revenue, not you personally.
However, in both of these scenarios, you will still need to create a formal business entity with your local government, in addition to affiliating your publishing entity with your PRO.
You may have heard personal publishing entities referred to as “vanity publishers”. In the case where you have a publisher or publishing administrator collecting your publisher’s share on your behalf, having a personal publishing entity is essentially unnecessary in terms of royalty collection, and therefore only acts as an additional publishing company name that appears on your PRO’s website and your royalty statements. Some writers prefer to have that name there, and that’s a personal preference!
Ultimately, creating a personal publishing entity isn’t as daunting or as complicated as it may seem. It’s mostly up to your personal preference, especially if you have a publisher handling your administration. At the end of the day, having one neither helps nor hurts you, so just be sure to understand what your personal needs are and decide from there.
To make sure you’re collecting all of your mechanical and performance royalties globally, register for Songtrust as your publishing administrator today!