A record label serves as a brand to promote certain bands. Digital record labels are record labels that exist only online, or where physical CDs and other material products endorsed by the bands are not the main function of the record label. Operating a digital record label online is much like running a regular, old-fashioned mail-order record label. The only difference is that there is no physical product.
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Choose a form of business for the record label. The three basic business forms are sole proprietorship, partnership and corporation. Choose sole proprietorship if only one person is responsible for the label. Choose a partnership if there are two or more people involved, sharing equal risks and rewards. Choose a corporation to set up the record label as its own separate legal entity. This is done to limit the owners' liability and is much more complicated. Most record labels begin as either sole proprietorships or partnerships.
Register a P.O. Box with the local post office. This is only if a physical mailing address is needed for the record label.
Register the record label as a business with the county clerk's office. This involves a small fee and verifies that there is no other business using the same name in the state. Then open a new bank account for the record label.
Obtain a tax ID number. Go to a local library or IRS office and request a tax ID application form. Fill out the form and mail it in to receive a tax ID number. Use this number when filling out forms for tax purposes to identify the business. A tax ID is not required if the business is a sole proprietor, however.
Obtain a retail license. This is necessary in order to sell records directly to other people. Contact the state Department of Revenue office and ask for a retail license application form.
Join a performance rights group such as BMI or ASCAP. Visit their websites to sign up as a song publisher.
Start a free blog. Blogger, Blogspot and Wordpress are three places who offer free blogs. This serves as the record label's website and method of contact.
Send messages to unsigned bands in the local area or anywhere else in the world. Ask them if they would like to be on your record label. Post links to each of the bands that agrees on the record label blog.
Publish the bands' music online using Reverb Nation, Last FM or Route Note. These sites allow record labels and artists to set up and maintain an online music merchandise website.
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