Music and Band Legal Issues and Texas Law

With SXSW coming up in Austin in early March, I thought it was interesting to look at Texas law related to music and intellectual property rights.  Granted, most Copyrights are federal in nature (the Article I, Section 8, Clause 8 of the Constitution dictates this), but there are rights above and beyond the Copyrights.  Rather than fully regurgitate, there is an excellent article that was in the March issue of the Texas Bar Journal.  See that article HERE. One of the things most frequently missed is that the ownership of the music Copyright does not necessarily confer the right to use the artist's name and image, which for those producers can be a trap for the unwary.  Which basically is something that is more words to the wise, be sure to get any agreements related to the production of video and music rights in writing.  This includes you venues out there...just because they played at your restaurant and you recorded it doesn't mean you have the right to post same on Youtube.  If you want to post it, make sure you get that right in an agreement (and perhaps ought to be in your agreement related to payments to the band). 

What is a Texas Public Information Report (PIR)?

A Public Information Report in Texas is an annual report made to the Texas Comptroller under Tax Code Section 171.203 by "any corporation or limited liability company on which the franchise tax is imposed even if those businesses are not required to pay the tax". 

The report generally must contain:

• the name of each corporation or limited liability company that the filing business owns 10% or greater interest in and the percentage owned; 
• the name of each corporation or limited liability company that owns a 10% or greater interest in the filing business;
• the name, title, and mailing address of officer or director of the filing business when the report is filed and the expiration date of each of the terms;
• the name and address of the agent for the service of process for the filing business ; and
•  the address of the business’s principal office and principal place of business.

The report must be sent to all of the filing business’s non-employee officers and directors. Finally, a person authorized by the filing business must sign the report and certify that all of the information in the report is correct and that a copy has been sent to all of the required people.

Interesting to note, a public information report is only required of LLC's and corporations (S corps and C corps), but it appears to not be required for other entities, like limited partnerships or limited liability partnership.  Also, it is filed with the Texas Comptroller's Office (not the Texas Secretary of State), for the Comptroller will forward same to the Secretary of State.  The report is mailed by the filing business to the non-employee officers and directors so that said officers have the opportunity to object to their inclusion with a sworn statement disclaiming the role (to avoid potential imposed liability).

(Drafted by Eric Rupe; Edited by Marc L. Lippincott for the firm.)