Change, like everything else, may be good or bad. Sometimes the loss of a band member is a sad event. Other times it’s a relief. Here are a few things to keep in mind before your band goes through a change.
1. Who keeps the name of the band, logo, and service mark? These are generally shared by all members during the initial run of the band. If a key member leaves then there may be a dispute with regard to whom owns these properties. In general, it’s routine for band members to retain a right to expel a member by the majority vote of all the members. The member being expelled generally has no vote.
2. Individual assets purchased by individual members are typically the property of the member who purchased the assets. Assets purchased with band assets are partially the assets of the band. So, if band assets are used to purchased a $1,000 instrument and 1 of the 4 members in a band wishes to leave the band, then the other members may have to reimburse the departing member $250 for his share of the asset.
3. The rights to writer royalties typically stay with the writers. These are not necessarily lost upon exiting a band, but you can negotiate around that. For example, a song writer who leaves may lose a certain percentage of royalties for each year of absence. This, like all contractual matters, is entirely negotiable.
4. the rights to performance income, merchandising, endorsements, and similar assets are generally shared equally by current band members.
5. Exiting members generally have a right to a valuation of the assets of the band upon their exit. This may be done by an independent third party to prevent existing band members from low balling a member.
6. In general, new band members are introduced upon the unanimous consent of the band but contractors may perform with the band upon the vote of the majority of the members.
7. New members may receive 100% of their equitable share of performance income, but typically need to prove themselves before they receive similar shares in other streams of income. Much like in corporate law, there are generally one year lag periods for new members to satisfy before their interests fully vest.