Friday, August 26, 2011

Incorporating Touring Activities

I have just been reading articles about the horrible tragedy at the Indiana State Fair, where five people died when an outdoor stage collapsed. One article pointed out that this was at least the third such incident this summer.

I am often asked why I advise artists to incorporate their touring businesses. This is the main reason: liability. Undoubtedly, there will be lawsuits arising from the Indiana State Fair and undoubtedly the artists involved will likely be sued – even if they had absolutely nothing to do with the accident. Even if the artists ultimately prevail in court they still have to go through the necessity of dealing with the potential liability. The purpose of incorporating is to create a shield between this potential liability and your personal assets.

This is a real threat. Several years ago one of my clients managed a hugely successful country artist whose touring corporation was routinely sued for every person who slipped and fell or got hit with a random bottle of Wild Turkey at their concerts. On another occasion I represented a band that chose to tour without any type of liability protection. When a belligerent drunk got himself beaten up at an outdoor festival that they appeared at, they had to endure more than a year of costly litigation before the case was dismissed. They had to live with the uncertainty that their personal assets (houses, etc.) were at risk.

The liability protection afforded by proper corporate protection is a good first step in managing the risk inherent in touring and performing. The cost is negligible compared to the benefits and peace of mind such protection can provide

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