How to Set Up a Record Label in the UK

Updated February 21, 2017

It has never been easier to set up a record label in the United Kingdom. Since the introduction of the Companies Act in 2006, starting up a new business is simpler than ever and with the increasing popularity of the Internet, getting new music out to fans and critics alike is as easy as clicking a mouse. If you've got music to sell or know someone who has, you can bypass the gatekeepers in the traditional music business.

Decide on the type of company your record label will be. There are three viable options in the UK: sole trader (where you work for yourself); partnership (where you and some others work cooperatively, as self-employed people); and private limited liability company (where the company is a separate entity and if the venture goes bankrupt, you won't have to pay its debts). Each has its advantages, so choose whichever best suits your particular circumstances.

Register your company. For sole traders, this means contacting HM Revenue and Customs and requesting a form to notify them that you are self-employed. For partnerships, contact a local solicitor and draw up a partnership agreement between yourself and your partners, then inform HMRC. For limited companies, visit the Companies House website and complete Form IN01. The cost of limited company registration is 20 pounds.

Set up a business bank account. Most banks have introductory offers where deposits and accounts do not cost you anything for the first few months; which is an advantage when getting your business up and running. A business bank account is essential for maintaining separate and easily scrutinised accounts, which makes the end-of-year taxes and profit/loss reporting much easier.

Sign up with Phonographic Performance Ltd. This gives you a "catalogue code" that allows you to register each track your artists release through your label. The advantage of this is that whenever a track is played, the PPL is paid a royalty. If you are registered with them, they pass on your cut of the royalties to you. Consider also signing with the Mechanical Copyright Protection Society, for the same reasons.


Set up a website to allow fans to purchase music directly from you; either on CD or as a direct download. This has the advantage that your artists' fans can get music from you at any time, and you won't have to deal with distributors, record shops or other middle men. That's not to say you shouldn't try to get your artists' work onto the high street but it adds another important revenue stream.


Have a solicitor draw up a standard contract you can use when signing up artists to your label. This will ensure that everything you agree to is above board and will minimise your chances of losing out if something goes wrong. Be sure to stick to the agreements you make in each contract, however, as damages for loss of earnings through breach of contract can be high.

Things You'll Need

  • Internet connection
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About the Author

Based in the United Kingdom, April Kohl has been writing since 1992, specializing in science and legal topics. Her work has appeared on the Second Life News Network website and in British Mensa's "LSQ" magazine. Kohl holds a Bachelor of Science in physics from Durham University and a diploma in English law from the Open University.