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How to start a record label: a practical checklist

Starting a record label is simpler than it sounds. You form a business, agree terms with your artists, sign up with a distributor and keep careful records. The hard part comes later: paying people correctly and keeping track of every release across every store. This is a general checklist for the US, not legal or tax advice.

Updated November 2, 2026

Short answer

To start a record label, decide what you'll do for your artists, set up a business such as an LLC, and sign a written agreement with each artist before you release anything. Then choose a distributor that handles several artists, get UPC and ISRC codes, and register as a recording owner with SoundExchange. Claim a label team on Spotify and keep a list of every release.

What to do, in order

  1. Decide what your label does

    Write down what you'll pay for and handle, such as recording, artwork, marketing or distribution, and what you'll keep in return. This shapes every deal you make.

  2. Set up the business

    A sole proprietorship forms automatically but leaves your personal assets exposed. An LLC is registered with your state and generally protects them. The US Small Business Administration says total LLC registration costs are usually under $300. Check your name is free, and consider a separate bank account.

  3. Put every deal in writing

    Each agreement should say who owns the recordings, how long the deal lasts, how money is split and what happens if either side leaves. Have a music lawyer review your template.

  4. Choose a distributor

    Check how many artists each plan allows, who collects the money, how splits work and what happens to your catalog if you stop paying or leave. DistroKid's Ultimate plans, for example, go up to 100 artists.

  5. Sort out your codes

    Every release needs a UPC and every track an ISRC. Your distributor can usually create them. A US label can also apply for its own ISRC prefix at usisrc.org.

  6. Sign up to collect royalties

    Register with SoundExchange as a recording owner, which is free. If you also publish the songs, join The MLC, which is free, and a performing rights organization.

  7. Claim your label on the stores

    On Spotify, submit a label team request with links to a few tracks or albums your company owns. Review is manual and can take a few days. If the team already exists, ask its Admin for an invite.

  8. Keep a catalog list

    For every release, record its title, artist, UPC, ISRCs, release date, distributor and agreement. You'll need this whenever something goes wrong.

Who collects which royalties

A label usually deals with several income streams, and they don't all arrive from one place.

MoneyWho collects itWhat you do
Streaming recording royaltiesYour distributorPay your artists under their agreements
Digital performance royalties from services like SiriusXM and PandoraSoundExchangeRegister as the recording owner
US digital mechanical royalties for songsThe MLCJoin if you publish the songs
Songwriter and publisher performance royaltiesASCAP, BMI or SESACJoin if you publish the songs

Do you need to own the masters?

No, but the agreement has to say who does. Some labels own the recordings, and others license them for a set time. This decides who can collect recording royalties, who can move the catalog to another distributor and who can register the copyright.

How to copyright a song in the US

Mistakes new labels make

These cost little to avoid at the start, and a lot to untangle later.

  • Releasing on a handshake, then disagreeing about splits once money arrives.
  • Uploading under an artist's personal distributor account, so the label can't manage or move the catalog.
  • Losing UPCs and ISRCs, which you need when you change distributors or restore a release.
  • Not checking the catalog after release. A label can't rely on each artist to notice a missing song.

How Traxure helps

Once you have a roster, checking every release by hand stops being practical. Traxure's Manager and Label plans put your artists in one place. It checks each Spotify profile every 12 hours and your full catalog every day, and it also checks Apple Music, Amazon Music, YouTube Music, Deezer, TIDAL, SoundCloud and Pandora. If a release stops showing, you get an email with a note to your distributor ready to send. Every plan starts with a seven-day free trial.

Fees and rules were checked on each organization's own pages on 2 November 2026.

Questions artists ask

How much does it cost to start a record label?

It can be modest at first. The US Small Business Administration says LLC registration usually costs under $300 in total. On top of that, budget for a lawyer's review, a distributor plan and whatever you spend on recording and marketing.

Do I need an LLC to start a record label?

No. A sole proprietorship forms automatically when you start doing business, but it offers no separation between you and the business. An LLC generally protects your personal assets. An accountant or lawyer can advise on your situation.

Can I start a label for my own music?

Yes. Many independent artists release through their own label name. Some distributors let you set a label name on certain plans, such as DistroKid's Musician Plus and above.

How do record labels make money?

Usually from their share of recording income under each artist's agreement, and sometimes from publishing, licensing or other rights the agreement covers.

Does a record label need its own ISRC code?

No. Most distributors can issue ISRCs. In the US, rights owners can apply for their own prefix through usisrc.org if they want to assign their own codes.

Sources

Traxure

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Traxure checks your releases on Spotify and other platforms around the clock, confirms a change before alerting you and tells you what to do next. Seven-day free trial.

Pricing

Plans from $12 a month.

7-day free trial on every plan. Cancel anytime.

  • Artist $12/mo
  • Manager $69/mo
  • Label $199/mo
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