What is an Artist Loan Out Company?

An artist loan-out company is a legal entity established by an artist for tax purposes and protection from liability. This type of company allows an artist to conduct their business affairs through a business entity which limits their personal liability. These are typically formed as a corporation, LLC, or partnership, and are owned or controlled by the artist. The company enters contracts with clients to provide the artist’s services. The loan-out company manages the artist’s finances and provides the artist with tax deductions and other benefits that would not be available to the artist as a sole proprietor. 

What are the steps for opening and operating an artist loan-out company? 

The process for opening and operating an artist loan out company differs based on the jurisdiction. However, the general steps stay the same. First, an artist must choose to form the loan-out company as either a corporation, an LLC, or a partnership. Then, the artist must register their business with the correct government agency. This involves filing articles of incorporation or organization and obtaining an Employer Identification Number (EIN) for taxes. The business should then open a separate bank account for the company to separate business finances from personal finances. Once the company is fully established, an artist can use the entity to begin entering into contracts for their services. 

What are some of the tax benefits obtained from an artist loan-out company? 

Loan-out companies provide several tax benefits to artists. Artists can get tax deductions for business expenses such as equipment, travel expenses, and office expenses by operating through a loan-out company. When an artist loan-out company distributes income to an artist, it is done in a manner that minimizes tax liability. A loan-out company can also set up a 401K plan or IRA plan for an artist creating tax-advantaged savings for their retirement. Any assets owned by an artist loan-out company can be taxed at a lower capital gains tax rate than ordinary income. Finally, a loan-out company can defer income from one tax year to another which helps the artist manage their tax liability and cash flow. 

Does the artist loan-out company need to be for a single artist, or can it administer more than one? 

An artist loan-out company can administer the business affairs if a single artist or multiple artists. The structure and operation of the company depends on the needs of the artists involved. When there are multiple artists, then the loan out company will be more complex so that each artist is properly and fairly represented. This can include structuring the entity with multiple managers or a board of directors with a representative for each artist. 

EPGD Business Law is located in beautiful Coral Gables. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Silvino Diaz

Silvino E. Diaz’s practice ranges from Civil and Commercial Litigation to Entertainment and Intellectual Property Law. Silvino has earned a reputation as one of Puerto Rico’s foremost advocates for independent musicians and artists. As a result of his sustained commitment to creative industries, he was named Professor of Intellectual Property Law at Atlantic University College (Guaynabo, PR) – the Caribbean’s leading digital arts institution – where he spearheaded the “Introduction to IP” course for both the graduate and undergraduate programs, and was appointed by the Office of the President to develop an Intellectual Property graduate curriculum, where he served until moving to Miami in 2017. He is the founder of the service known as Starving Artists, where he offers innovative business and legal counsel for artists and creatives.


*The following comments are not intended to be treated as legal advice. The answer to your question is limited to the basic facts presented. Additional details may heavily alter our assessment and change the answer provided. For a more thorough review of your question please contact our office for a consultation.

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