The afrobeat in Nigeria has recently gained global attention and recognition, and this has given rise to the attraction of investors both locally and in the diaspora.
An important sector of the Nigerian music industry has contributed its quota towards promoting talented artists and that is the record labels.
In this article, we will be considering what you need to know about setting up a record label in Nigeria. If you are interested in owning a record label, you should consider reading this.
WHAT IS A MUSIC RECORD LABEL
A Music Record Label is a group or an institution that is in charge of promoting and marketing a performing artiste. They are the link between the artists and listeners i.e. the fans. They are in charge of building a successful and viable music career for their clients i.e. the artiste.
LEGAL CONSIDERATIONS FOR STARTING A RECORD LABEL IN NIGERIA
Apart from other important factors such as; capital and marketing considerations, there are legal considerations that ought to be taken into account by anyone who is considering starting a record label in Nigeria.
1. Registration with the Corporate Affairs Commission
A music record label like all other legal businesses is required to register with the Corporate Affairs Commission (CAC) as either a limited liability company, sole proprietorship, or partnership.
Registration of a record label with the CAC is very important as it validates its legal existence and recognition in Nigeria.
2. Registration of recording or musical works with the Nigerian Copyright Commission
The Copyright Law 2022 is one of the major pieces of legislation that is tasked with the responsibility of all production and distribution of works, that are eligible under the Act. In Section 2 (1) (b) of the Act, musical works as well as sound recordings fall under works that are eligible for copyright.
There are two categories of copyright embedded in a musical work, which are:
i. Copyright in the musical composition i.e. the artiste.
ii. Copyright in the sound recording i.e. the record label.
Under the Act, precisely Section 87(1) the Nigerian Corporate Commission is given the authority to register a person whose work is eligible for copyright be it a musical work or a recording. The Act also provides for the formation of a group called the “Collective Management Organisation” which applies to the commission for the approval to operate in respect of one or more works mentioned in the Act as eligible.
The Commission agrees only when it is satisfied that:
i. Such a company is incorporated as a company limited by guarantee;
ii. Its aims and objectives are to negotiate, grant copyright licenses, collect royalties on behalf of the copyright owners, and distribute these royalties;
iii. It represents a number of copyright owners in works protected under the Copyright Act;
iv. It also complies with the rules and regulations of the commission.
Afterward, the organization will be endorsed. The Musical Copyright Society of Nigeria is the Collective Management Organisation responsible for record labels and other works.
3. Draw up Music Record Label Contracts or Agreements
Every record label must have relevant contracts in place particularly contracts between the label and any artist it wishes to sign in. The aim of such a contract is to define and govern the relationship between the artist and the record label.
4. Secure your record label’s trademark
Where a record label has a distinctive mark, symbol, label, or words, that it intends to use, it is ideal that such a label secures it as a trademark.
Registering a trademark has many advantages. We highlighted the benefits of trademark registration for startups in this article, and that applies to record labels as well.
The Music industry has over time become a goldmine where a variety of talents are identified, groomed, and used as a source of income but there are legal risks which should be avoided at the initial stage of setting up a record label. It is therefore a necessity to seek proper counsel from a legal practitioner in Nigeria or an entertainment lawyer before setting up a record label.
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