As a songwriter, you are the publisher of any works you’ve written until you grant that right to another person or company. And as a publisher, you may want to set up your own “personal publishing entity” with your local society (PRO or CMO). This is simply a name assigned to your status as the publishing company for your own works, and you affiliate as a publisher with your society in a similar way that you affiliate yourself as a writer.
Here are a few reasons to create a personal publishing entity, and a few key things to remember when you’re deciding whether one is right for you.
Collecting Your Publisher Share
Performance royalties are divided right down the middle between the writer and publisher shares. If you do not have an outside publisher representing your works, you are entitled to both.
Some societies (such as ASCAP) will not pay out the publisher share unless there is a publishing entity claiming a song. In that case, you need to create a publishing entity to collect the other half (publisher share) of your performance royalties.
If you have a publisher or publishing administrator in place like Songtrust, they will collect your publisher share on your behalf and pay it out to you, making your own entity unnecessary.
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 cannot collect your publisher share at a different society than where you are affiliated as a writer. For 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 to collect the publisher’s share on behalf of those writers. Since you can only collect the publisher 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 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 business entity with their local government as well as a publishing entity to separate their publishing income from their personal income for liability protection and for tax benefits. Note that you do not have to create a business entity in order to create a personal publishing entity at your society, but without the business entity registration you may not receive these benefits.
You may have heard of personal publishing entities being described as “vanity publishers.” Because creating an entity is not required when you are registered with a publisher or administrator, some consider it frivolous to do so, and therefore use this derisive term.
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 and don’t need the entity to collect. At the end of the day, having one neither helps nor hurts you. Just be sure to understand what your personal needs are and decide from there.
To make sure you’re collecting all your mechanical and performance royalties globally, register for Songtrust as your publishing administrator today!