Archive for the ‘Venues’ Category

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Non-Profit and Tax-exempt: What’s In a Name?

Wednesday, August 29th, 2012

By Robyn Guilliams

What is the difference between a “non-profit” organization and a “tax-exempt” organization?  I hear these terms used interchangeably – do they mean the same thing?

Great question!  These terms do not mean the same thing.  All tax-exempt organizations are non-profits; however, not all non-profits are tax exempt.

When an organization wishes to be classified as “non-profit”, it must register with a state – usually the state in which it operates.  Every state has different classifications for non-profit organizations.  For instance, New York and some other states have a type of business classified as a “Not-For-Profit Corporation.”  Other states have corporations that are classified as “Non Stock Corporations.”  What all of these corporations have in common is that they do not have any owner, and the business of the organization is run by a board of directors.

Once an organization formally registers as a non-profit company with the state, the organization can request federal tax-exempt status with the Internal Revenue Service.  If granted tax-exempt status by the IRS, an organization will not have to pay federal taxes on its income (provided that income is related to the organization’s “charitable mission”), and donations made to the organization generally will be tax deductible for the donor.

States often have additional requirements for organizations to qualify for tax-exempt status.  Some states will grant tax-exempt status automatically to organizations that have been granted federal tax-exempt status, while others require the organization to complete a separate request.

Some businesses elect to become non-profits without also being tax exempt. They do so for many strategic, marketing, and organizational reasons. However, the important take-away here is that not all non-profits are tax exempt. A tax exempt non-profit is subject to far greater government oversight and operational restrictions than a regular non-profit. Unless a non-profit organization is granted tax exempt status by the IRS, that organization is subject to the same tax and filing obligations as any other business!

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For additional information and resources on this and other legal and business issues for the performing arts, visit ggartslaw.com

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. GG Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

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THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, For Profits, Law and Disorder: Performing Arts Division, Non-Profits, Presenters, Taxes, Venues | Comments Closed

Can I Cancel If They Perform In My Backyard?

Wednesday, August 22nd, 2012

By Brian Taylor Goldstein

Dear Law & Disorder:

After we booked an artist, the artist’s agent booked them to perform two weeks later at another venue 25 miles away from us. It’s a smaller venue that charges less for tickets than we do. This will impact our sales. Can we cancel? I was told that exclusivity was industry standard.

Was there a booking contract? What did it say? If the contract provided your venue with a period of exclusivity or restrictions on when and where the artist could perform before or after your engagement, then the artist might be in breach of the contract. (Remember, unless the agent is acting as a producer, your contract is between you and the artist.) On the other hand, if there was no booking agreement or if the booking agreement didn’t provide you with any period of exclusivity or restrictions, then you probably would not have the right to cancel. If you fail to negotiate something (a commission rate, cancellation terms, licensing rights, etc.) “industry standard” will not provide the missing terms. Unvoiced assumptions and expectations do not become contractual arguments. To the contrary, if you fail to negotiate something, the missing terms remain missing and unenforceable.

I’ve said it before, but it always bears repeating: there is no such thing as “industry standard”—least of all in the performing arts industry. In this case, in my personal opinion, I would certainly consider it unprofessional for either an artist or an agent to intentionally book an engagement that directly competes with an already booked engagement, and I suspect I am not alone in that perspective. However, I also suspect it would be far from easy to obtain a consensus as to whether or not a smaller venue 25 miles away necessarily constitutes a “competing venue.” Regardless, contractual terms are not written by majority opinion. Neither “common industry practice” nor my own personal opinions rise to the level of contractual obligations. Without a contractual requirement specifically prohibiting the artist from performing within two weeks at another venue 25 miles away from you, you would be the one in breach of the contract should you decide to cancel for that reason alone. It would also be equally inappropriate for you to coerce or otherwise suggest that the artist breach his or her contract with the other venue in order to accommodate your concerns.

My advice would be for all parties concerned to consider an appropriate adjustment of some kind. Perhaps there is still time for one of the dates to be moved, or there can be a reduced engagement fee, or even a joint marketing strategy. Assuming that this was an unanticipated outcome by all of the parties, the primary objective at this point needs to be to preserve the relationships between the parties and find a way for both engagements at both venues to continue as planned.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ggartslaw.com

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. GG Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Artist Management, Arts Management, Contracts, Law and Disorder: Performing Arts Division, Liability, Presenters, Venues | Comments Closed

Generic Forms: A Prescription For Trouble

Tuesday, May 1st, 2012

By Brian Taylor Goldstein

HELLO –

How can an organization that presents music programs, and puts some of them on the Internet, find a good general release form for artists/speakers to sign?

The tricky part about forms is not finding them, but choosing which one is right. There are lots of sources for good general release forms—the Internet, formbooks, colleagues, etc. We provide a list of formbooks that we recommend on our website www.ftmartslaw-pc.com. However, to select the right form, you need to know what you need.

A “release” is just another word for “permission”, and, like all other contracts, it memorializes an agreement between two parties. So, in order to know what form you need, you need to know what permissions you need and what permission the other party is willing to grant. For example, if you are presenting a music program and you want a form through which a musician will give you the right to record their performance and place it on the internet, you will want a form that addresses the following issues: (1) Is the musician expecting to get an extra fee in exchange for granting permission?(2) Do you want to place the entire performance on the Internet, or just excerpts?(3) Will you be posting the performing on your own website or on other websites such as YouTube?(4) Can you leave the recording up indefinitely, or will the musician be able to tell you to take it down? (5) If there is more than one musician performing, such as a band or ensemble, will you require a release from each performer or does one person have the right to grant permission on behalf of everyone else? and, perhaps most importantly, (6) Is the musician performing his or her own music? Remember: unless the musician is also performing music he or she wrote themselves, they cannot give you permission to record it. You will need to get that permission from the composer as well as from the musicians.

There is no “generic” permission form or release that will apply to everyone in every situation. Any form or any contract is only “good” if it addresses all of the elements of your specific circumstances and successfully communicates the understanding between the parties and covers all of the necessary. It may not surprise you to learn how often I have been contacted by someone who found what they believed was a “generic” form, filled in the blanks, and found out too late that it didn’t give them the rights or permissions they needed for their specific circumstances. So, when it comes to forms, don’t go for the generic…go for the prescription you need. Before you go hunting around for the right form, first figure out what you need, then start reading and editing forms and until you get the one that fits just right.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, Contracts, Copyrights, Law and Disorder: Performing Arts Division, Licensing, Music Rights, Recordings, Venues | Comments Closed

Do We Need ASCAP/BMI Licenses?

Wednesday, April 18th, 2012

By Brian Taylor Goldstein

Hello Law and Disorder,

We have met numerous times at conferences, (I love going to your sessions!) and you have been very helpful with questions about our presenting contracts. We also rent our facility and I now have a question about that side.  We recently received a letter from BMI stating that a few of our rental clients have not paid their licensing fees and that we are now responsible for the fees. Can they do that?  We have it stated in our rental contract that the user is responsible of ASCAP/BMI fees, is that enough to get us out of it? If BMI can hold us accountable for the artist fees how do we protect our self in the future? I appreciate your advice, thank you.

Thanks for coming to our sessions! As for your question: Yes, they can do that! As the owner/operator of a performance space/venue, it is your legal responsibility to ensure that necessary rights and authorizations have been obtained with respect to all copyrighted music which is publicly performed in your venue. (Actually, your legal responsibility is not limited to performance rights, but extends to dramatic rights as well as any other required rights and licenses which pertain to music, images, trademarks, recordings, images, or other protected rights or materials being used or performed in your space.) In other words, while there is certainly nothing wrong with requiring your “users” to be responsible for ASCAP/BMI fees, that will not relieve you from ultimate responsibility if they fail to do so. In fact, there is no contract, release, or any other document which will protect your venue from liability should one of your users fail to obtain the necessary authorization or licenses they need for their performance. However, there are several things you can do to better manage your liability and minimize your risk:

First, you’ll not only want to ensure that your contract states that the user is responsible for all licenses and authorizations, but you’ll also want your contract to state that the user will “hold harmless and indemnify” your venue if they fail to obtain the necessary licenses and authorizations. In essence, this means that the user will have to reimburse you for any costs and expenses you incur if you are required to pay for licenses, incur legal expenses, or suffer any other damages or losses because your users failed to obtain the rights and licenses they were supposed to. (They’d probably have to do that anyway, but an indemnification and hold harmless provisions makes that obligation explicit.)

Second, there are many venues which require users to produce “proof” that they have all of the required licenses prior to the first performance date as a condition of being allowed to use the space. This gives you a chance to assess whether or not the appropriate licenses have actually been obtained.

Third, you should obtain your obtain your own blanket licenses directly from ASCAP and BMI, as well as from SESAC. These three organizations issues blanket licenses directly to venues such as yours to ensure that any music from their catalogs is properly licensed for public performances. While this will require you to keep a running account of all music publicly performed at your venue as well as to incur the license costs yourself, you can pass the costs along to your users through your rental fees. Its also the best and only way to ensure that your legal responsibility as the owner/manager of the venue is being met, at least with regard to performances licenses. You’ll still need to make sure your users obtain the other right and licenses they may require for their performances.

Lastly, I would consult with other venues of similar size and nature to your own and see if they already have licensing policies and procedures that you might be able to adopt for your own use. There’s no need to reinvent the wheel where others have already rolled it up the hill—just beware of any venue that tells you either: “We just ignore all of that stuff and haven’t been caught yet!” or “Those rules don’t apply to non-profits.” Run away!

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

Tags:, , , , , , , , ,
Posted in Arts Management, Contracts, Copyrights, Law and Disorder: Performing Arts Division, Licensing, Music Rights, Non-Profits, Presenters, Venues | Comments Closed

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