John Doe just received his certificate from the Oregon secretary of state. He is the proud owner of a new Oregon business entity.
The bottom line is this: Don't lose out on the benefits of a business entity by not taking time to maintain it.Bob Jamieson contacted me some time later and asked me to meet with one of his A & R guys. Maybe he had a chance to reflect on our meeting and my ideas. I took the meeting. I forget the guy�s name, but I remember that every few minutes, he�d supress a yawn. After that, there were no more discussions or meetings with RCA.Some diligence is required to maintain a valid Oregon corporation, limited liability company or other business entity, but the consequences of neglecting necessary maintenance can be devastative. Team up with a good attorney and accountant, follow their counsel, and become confident that the business entity will survive for as long as needed.� This �game change� of marketing music �product� and producing cheap music may work for a while, but it will never exceed the sales of music based on the talent and cultivation of musicians and songwriters like Dylan, Elvis, Beatles, U2, Eagles, AC/DC, and other standard artists.� Return to classic A & R practices by scouting and cultivating gifted artists and bands in the classic Rock �N Roll genre. In other words, follow the same process that yielded The Dead, Lynard Skynard, Cream, Buffalo Springfield, YES and the like.� Finally, according to the design of the pitch, I would be the one to clarify the business model and implement it for the record company.The pitch I delivered seemed simple enough. Here were my notes:It seems like radio formats go through cycles rather quickly. The Smooth Jazz station turns to Alternative Rock seemingly overnight. The Lite FM station to 24 Hour Sports, and so on. The only genre that�s consistent is Classic Rock. For example, try the following on your next road trip: As you flip through the stations notice the variety in every radio market. Now, find the classic rock station in each market. I guarantee that it�ll be prominent on the dial and easy to tune in. To me, this means that there are plenty of people listening and that there is a great demand. You�ll rarely hear a new song from a new band. You may also notice that these classic rock stations play the same stuff, over and over. In terms of my pitch, this meant that the business had abandoned a large market. Like a grocery store selling the same line of food year after year, because the people used to like it. Instead, why not, give them something �new and improved� and still sell the classics? Perhaps the new line of product will even become the staple of the future!Happily, it is not difficult (though perhaps boring and tedious) to care for and maintain a business entity. Necessary corporate formalities are found in the Oregon Revised Statutes governing each of the Oregon business entities, but common sense will also be helpful.� My proposed musical model would be Classic Rock of the 70�s and 80�s. My expectations would be that songs by these newer bands would satisfy the older, say, AC/DC fan, and would be Classic Rock radio friendly. In fact, these stations could play these new songs today among the many other classics on currently on their playlist.* All of the entity's signage, advertising materials, invoices, letterhead and any other form of written communication directed to third parties should clearly show the name of the business entity, and not a personal name.* Keep current any registered agent and other corporate information with the Oregon secretary of state. A corporation could miss important notices if addresses are not up to date.* As necessary, and in some cases required, the business entity should hold annual and special meetings evidenced by written minutes of actions taken.Dustin Moyes is an attorney in Sussman Shank LLP's business group. Contact him at 503-227-1111 or dmoyes@sussmanshank.com.� The aforementioned �standards� so easily generates money year-after-year, that the music industry has the ability to focus on developing new artists. However, it rarely operates outside the proven revenue generators of the past.* Ensure that the business entity has enough capital to carry on the business for which it was formed. Undercapitalization is a factor considered by courts in alter-ego cases.
Dustin Moyes is an attorney in Sussman Shank LLP's business group. Contact him at 503-227-1111 or dmoyes@sussmanshank.com.
Author: Dustin Moyes
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