Did Slash and Duff return to Gn’R as “employees”?

[Draguns]

5 hours ago, default_ said:

Not quite actually, Ive heard an article where some musician (I believe it was someone from the Alman Brothers, dont really remember) where he said he got a $1500 royalties check from one of his most popular songs, I believe it was streaming related and the song has over 50mi streams. So I dont think these guys are making much. 

I dated a woman who had a single on KTU here in NYC. It was a hit in the early part of this decade. She had a tragic accident which derailed her career. She had mentioned  that even though her single still got played to this very day, she hasn't made much in royalties. 

[Draguns]

7 hours ago, nycgunner said:

Alternative could be that Axl, Slash, and Duff are shareholders in a LLC or limited partnership.  Presumably, they’d do an LLC, which would be more common and a better decision legally.  

My guess is they created a new legal entity (an LLC), Axl contributed the rights to GNR (since he controlled or owned it) in exchange for partnership interest units in a newly formed LLC. Revenue generated by concerts, merch, music are revenue at the LLC and net earnings (post all expenses, including employee costs for Dizzy, Melissa, Richard and Frank, and mgmt fees by Beta and team) are distributed to the three unit holders (aka shareholders)

But this is pure speculation!

 

I had checked the California State registry. Nothing came up regarding a  LLC in their database. You can't check for partnerships in their database. From my experiences, I think a new legal entity formed where they are now considered a partnership rather than a corporation. 

[Draguns]

16 hours ago, Gnrcane said:

They can and 100% must be shareholders and employees at the same time.  It is part of the tax code.  Since they are performing in concert, they must be paid "wages" for that out of the business at some reasonable rate.  If they just paid everybody else and split the profit, they'd be evading social security and medicare taxes.  In order to avoid trouble with the IRS, the three of them must take a salary for performances that is at least somewhat more than the other musicians.  If they ever record an album, the same would apply for the time spent in the studio.

Not necessarily. The employees can also be considered contractors. This is how Uber, Lyft, and WWE have gotten away with things like paying social security and taxes. These are things we don't know and probably will never know. GNR is considered a private company. Private companies are very tough to research  as I know from work.   

[Len Cnut]

4 hours ago, Draguns said:

The people who grew up listening to GNR are in their 40s or on their  mid 30s. It's part of being an adult to be interested in these things now compared to listening to music ands just being interested in  only art when you are a teen or early 20s. Grow up. You'll learn a lot from it. 

Yessuh bawss  

[Blackstar]

8 minutes ago, Creed said:

if they wouldnt be employees, matt, Steven, gilby and izzy would be in. its just that simple.

No, it isn't.

[AXL_N_DIZZY]

Could be wrong but my understanding is that they are both: (1) Partners along with Axl in the Guns N‘ Roses Partnership that controls the band’s IP, music, classic (& NITL?) merch, etc., and (2) very highly compensated (b/c of enhanced notoriety & drawing power with their participation) independent contractors in the vehicle Axl created to tour, and perform Guns N‘ Roses material back in the 90s (+ create new material?). I don’t think it would be all that different if you peaked under the hood of many major acts. It just becomes a “thing” when they’re not participating in (2), and yet the “show goes on”...

[Gnrcane]

9 hours ago, Draguns said:

Not necessarily. The employees can also be considered contractors. This is how Uber, Lyft, and WWE have gotten away with things like paying social security and taxes. These are things we don't know and probably will never know. GNR is considered a private company. Private companies are very tough to research  as I know from work.   

Uber and Lyft send 1099 forms to their contractors.  The drivers must then pay self employment tax on the income.  Assuming GNR is organized as an S-corp, LLC, LP or some other "pass through" entity, I don't think the owners can also be contractors, although I'm not 100% positive.

[hitmanhart408]

19 hours ago, Blackstar said:

Black Frog Entities was likely the entity through which Axl did NuGnR business.

 

Pretty common knowledge that Black Frog was the entity that Axl ran all things nuGNR through 

[SoulMonster]

On ‎23‎.‎05‎.‎2019 at 10:00 AM, Blackstar said:

The way I understand it, a partnership is one of the ways a business entity can operate (see post by @Draguns above) and it means that there are shares and shareholders/partners. Also in the partnership agreement there is provision about "partnership assets," which means the assets of the entities owned by the partners. And the documents of the GnR corporations I posted above state that Axl, Slash and Duff comprised the board of directors (shareholders) in those business entities.

Yes, but the partnership formed as the result of the partnership agreement from 1992 (and likely amended or replaced by revised agreements later on) isn't by nature of the partnership agreement a business entity. Signing such an agreement doesn't found a business. There must have been a separate business entity. This is also implied in "Guns N' Roses Inc." For some reason, the guys decided that the statues of the business wasn't sufficient, or too narrow in limitations, so they seems to have decided to enter an over-arcing partnership that regulated some of the core aspects of their music endeavours, including how to split profits and what would happen to the band name of "Guns N' Roses" if the partnership was to dissolve.

Does it surprise anyone that even the legal dealings of the band is incomprehensibly convoluted 

 

[SoulMonster]

19 hours ago, Blackstar said:

So shareholders have to "employ" and pay themselves a salary in order to comply with the tax laws - in the case of the band, all three partners. 

I don't think that is entirely right. You can have shareholders taking out profits from companies without having to be formally registered as employees, just like Board members can get gratuity without being employees. So I suppose this could be true for Axl, Slash, and Duff, too, through being owners of a company handling the business of GN'R. Then they could have people employed who are on salaries.

[Blackstar]

12 hours ago, SoulMonster said:

Yes, but the partnership formed as the result of the partnership agreement from 1992 (and likely amended or replaced by revised agreements later on) isn't by nature of the partnership agreement a business entity. Signing such an agreement doesn't found a business. There must have been a separate business entity. This is also implied in "Guns N' Roses Inc." For some reason, the guys decided that the statues of the business wasn't sufficient, or too narrow in limitations, so they seems to have decided to enter an over-arcing partnership that regulated some of the core aspects of their music endeavours, including how to split profits and what would happen to the band name of "Guns N' Roses" if the partnership was to dissolve.

Does it surprise anyone that even the legal dealings of the band is incomprehensibly convoluted 

Yes, there was a separate business entity - and not only one, there were at least three corporations in which Axl, Slash and Duff were shareholders and directors or officers. They had separate entities for booking the tours (MOGOBO, Inc. and Missouri Storm, Inc.) and probably others for the merchandise etc. So the revenues and the expenses for various band activities (recording, touring etc.) went through those entities.

This clause in the partnership agreement stated that all the other business entities were owned by the partnership:

Any Terminated Partner shall sell to the other Partners equally any and all shares of stock held by the Terminated Partner in any and all corporations maintained by the Partners at the price of such shares of stock as shall have originally been paid by the Terminated Partner, and such Terminated Partner shall be deemed, as of the Termination Date or the Expulsion Date, as applicable, to have resigned from any positions held by such Terminated Partner as an officer of any such corporation or as a member of the board of directors of any such corporation.

And yes, the partnership agreement regulated how the money run through all the business entities would be divided and also how the overall band business would be managed, as well as additional issues like rights and obligations in the case of lawsuits against the band, or that if a partner left the band he couldn't remain a shareholder in the band's entities. Probably they were advised by the accountants/lawyers to opt for corporation type entities for liability or tax reasons, but the partnership agreement was necessary too for various reasons; for example, from what I read in the California state registry site, corporations exist separately from their owners and they continue existing even if all owners die.

Maybe the partnership agreement didn't found a business, but it established a legal entity. But we don't really know if it was also a business entity or not, do we? We don't have enough information. The California state registry site allows only to search for corporations and LLC's, not partnerships. And the trademarks are registered by the Guns N' Roses partnership, not by Guns N' Roses Inc. or another corporation or other type of business entity. I don't know, doesn't this mean that it's a business? @Draguns?

Also a general partnership, which the partnership agreement was about, is a type of business structure:

https://www.investopedia.com/terms/g/generalpartner.asp

https://business-law.freeadvice.com/business-law/partnerships/partnership-agreement.htm

EDIT: Actually, the partnership agreement didn't found the business, because the business (the Guns N' Roses general partnership, not Guns N' Roses, Inc. or the other corporations) already existed with or without a written partnership agreement:

Prior to March 28, 1990, the Partners, together with Stradlin and Adler, were members of a California general partnership.

So the partnership was a business irrespective of the trademarks, which are also registered to the partnership.

---------

I think what Axl said here about the band's management is pretty much in accordance to the provisions of the partnership agreement about the decision making process:

DEL: Is [Gilby] a "member" of Guns N' Roses?

AXL: This "member" thing is quite interesting, I read in an interview where Matt [Sorum, drummer] said that if he didn't get made a member, he wasn't going to be in Guns N' Roses. The truth of the matter is, Matt's a member of GN'R, but it doesn't really mean anything. It's kind of like a clubhouse/gang thing. We're all members of this gang. What it boils down to is, whose yard is the tree house in? Matt's a member of GN'R, and his opinions are taken into consideration. As far as that's concerned, Gilby is a member too, Dizzy is a member of the band. With all the background singers, horn players, keyboardists - we look at it like we're all Guns N' Roses. But the bottom line is, the business is basically run by Slash and myself. Then we run whatever it is we're discussing by Duff and see if he's cool with it. Guns N' Roses is basically Slash, Duff, Doug Goldstein and myself, but there's a lot of other people involved that are a part of our lives and a part of our family.

http://www.a-4-d.com/t545-1992-09-10-11-dd-rip-i-axl

Edited May 25, 2019 by Blackstar

[soon]

15 hours ago, Draguns said:

I dated a woman who had a single on KTU here in NYC. It was a hit in the early part of this decade. She had a tragic accident which derailed her career. She had mentioned  that even though her single still got played to this very day, she hasn't made much in royalties. 

One quarter, recently, a buddy of mine was paid out to the tune of $0.25. Mostly for radio play. Insult to injury, it was a check so he had to take the time to deposit/cash it.

I know of another guy who wrote one album track on a Cline Dion album and it made life comfortable for his family. He still has to work, but there wasnt financial stress thereafter.

Maybe 10 years elapsed between these two realities. Boggles the mind.

(PS, sorry to hear of that accident)

Edited May 24, 2019 by soon

[Blackstar]

1 hour ago, SoulMonster said:

I don't think that is entirely right. You can have shareholders taking out profits from companies without having to be formally registered as employees, just like Board members can get gratuity without being employees. So I suppose this could be true for Axl, Slash, and Duff, too, through being owners of a company handling the business of GN'R. Then they could have people employed who are on salaries.

That's what I assumed initially, but @Gnrcane said it's obligatory by the US tax code that the shareholders pay themselves a salary. So I just paraphrased what he said in reply to me. I don't have knowledge of the US business laws and tax code, but @Gnrcane seems to have.

[Modano09]

Did Slash and Duff sign contracts? I don't think of them as strictly "employees", I think Axl/Slash/Duff are all making the decisions, but legally it's probably still set up so it's still Axl's show if things don't work out.

[kiwiguns]

I suggest for those who haven't, check out Joe Rogan and his conversation with Billy Corgan on his podcast. 

Very informative re music industry and royalties. 

I found it very fascinating on a side note on how Billy Corgan sees things in hinsight older and wiser now than at the time in his 20s.

The pumpkins situation is very similar to Guns in relation to Billy and James (relationship repaired) with Darcy on the outside. 

 

Edited May 24, 2019 by kiwiguns

[YourMother'sDruthers]

This whole thread is ridiculous... not in the sense of the actual idea or conception of the thread, just in the sense that this is all there is to talk about.

[lame ass security]

2 hours ago, kiwiguns said:

I suggest for those who haven't, check out Joe Rogan and his conversation with Billy Corgan on his podcast. 

Very informative re music industry and royalties. 

I found it very fascinating on a side note on how Billy Corgan sees things in hinsight older and wiser now than at the time in his 20s.

The pumpkins situation is very similar to Guns in relation to Billy and James (relationship repaired) with Darcy on the outside. 

 

I kind of follow the Smashing Punpkin's situation mainly because I thought D'Arcy was hot.😄  I guess she and Corgan's relationship is still the same as the last few years?

Edited May 24, 2019 by lame ass security

[jacdaniel]

Axl has clearly been in charge since 96. Hasn’t really done/achieved much since then. At least in terms of releasing material. Was practically forced against his will to release the stuff he has. 

Weird situation. I’d love to understand the actual reasons why but maybe we never will. 

[Draguns]

7 hours ago, Blackstar said:

Yes, there was a separate business entity - and not only one, there were at least three corporations in which Axl, Slash and Duff were shareholders and directors. They had separate entities for booking the tours (MOGOBO, Inc. and Missouri Storm, Inc.) and probably others for the merchandise etc. So the revenues and the expenses for various band activities (recording, touring etc.) went through those entities.

And yes, the partnership agreement regulated how the money run through all the business entities would be divided and also how the overall band business would be managed, as well as additional issues like rights and obligations in the case of lawsuits against the band, or that if a partner left the band he couldn't remain a shareholder in the band's entities. Probably they were advised by the accountants/lawyers to opt for corporation type entities for liability or tax reasons, but the partnership agreement was necessary too for various reasons; for example, from what I read in the California state registry site, corporations exist separately from their owners and they continue existing even if all owners die.

Maybe the partnership agreement didn't found a business entity, but it established a legal entity. But we don't really know if it was also a business entity or not, do we? We don't have enough information. The California state registry site allows only to search for corporations and LLC's, not partnerships. And the trademarks are registered by the Guns N' Roses partnership, not by Guns N' Roses Inc. or another corporation or other type of business entity. I don't know, doesn't this mean that it's a business? @Draguns?

It is a business. I can tell you that a lot of Private Equity and Venture Capital firms are set up as General Partnerships. 

You can tell a lot about the company based on the legal tail in its name. The important thing is what is said in the lawsuit against the brewery and the U.S. Trademark filings. These are legal documents, which are sent to a U.S. government agency. We don't know how the partnership is structured, but we do know that the three are partners in the business entity of GNR.   

[Blackstar]

8 minutes ago, Draguns said:

It is a business. I can tell you that a lot of Private Equity and Venture Capital firms are set up as General Partnerships. 

You can tell a lot about the company based on the legal tail in its name. The important thing is what is said in the lawsuit against the brewery and the U.S. Trademark filings. These are legal documents, which are sent to a U.S. government agency. We don't know how the partnership is structured, but we do know that the three are partners in the business entity of GNR.   

Thanks. Did this 1992 partnership agreement that we have the document of say how the business set up as partnership was structured?

http://www.a-4-d.com/t3745-1992-10-dd-guns-n-roses-partnership-contract-memorandum-of-agreement

[nycgunner]

17 hours ago, hitmanhart408 said:

Pretty common knowledge that Black Frog was the entity that Axl ran all things nuGNR through 

Is that Black Frog the same as all of the NILT merch? All of the shirts I have say Black Frog on the interior printed tag 

[Draguns]

8 hours ago, Blackstar said:

Thanks. Did this 1992 partnership agreement that we have the document of say how the business set up as partnership was structured?

http://www.a-4-d.com/t3745-1992-10-dd-guns-n-roses-partnership-contract-memorandum-of-agreement

Sure! It does state the structure. They may have used this as a foundation to create a new contract. Remember there was that rumor about Axl getting 50%, while Slash and Duff  getting 25% each.  

[lost un the jungle]

Slash and Duff were part of GNR company after they left. Remember when Live Era disc was released, they had to do some arrangement between them. Then, Axl had the right to continue "operating" under GNR name, so this is why he could hire new poeple to continue with the band. During the 90's and after that, the former members get paid royalties for credits in the songs (this is why I think Izzy i.e. never went crazy looking for a job...). So now, in my opinion, Axl continues having a major participation in terms of deciding hiring/not hiring members (Frank remained, Fortus remained, no Matt, etc) but somehow the original 3 get some sort of 3 split cut. In terms of Izzy, he wanted the same sattus, but obviously was not offered, since the original 3 are "owners" of GNR band and he does not.

[Tom2112]

Didn't Slash basically say that he doesn't even now where he stands with gnr in terms of the business. 

What's most likely is Duff and Slash joined the most recent version of GNR and get a larger cut of the overall money, much more than the other members and a little less than Axl.

Who cares though😄 it really doesn't matter. If they can get on stage and play or get in a studio and make music that's what I care about.

[Modano09]

1 hour ago, lost un the jungle said:

Slash and Duff were part of GNR company after they left. Remember when Live Era disc was released, they had to do some arrangement between them. Then, Axl had the right to continue "operating" under GNR name, so this is why he could hire new poeple to continue with the band. During the 90's and after that, the former members get paid royalties for credits in the songs (this is why I think Izzy i.e. never went crazy looking for a job...). So now, in my opinion, Axl continues having a major participation in terms of deciding hiring/not hiring members (Frank remained, Fortus remained, no Matt, etc) but somehow the original 3 get some sort of 3 split cut. In terms of Izzy, he wanted the same sattus, but obviously was not offered, since the original 3 are "owners" of GNR band and he does not.

When Izzy wanted out of the band, he sold his share of the band back to Axl/Slash/Duff. When Slash/Duff left, they just left the band, but maintained their interest in the partnership. Axl could continue on calling his band "Guns N'Roses" but Slash/Duff had some say/control over how material they wrote/performed in the band could be used. They all received royalties for anything they wrote/recorded while they were in the band.

I think that's probably the basis of the Izzy disagreement - they feel they were the ones who managed the brand for 20-some years and they already paid him for his claim to GNR, he felt he was an original member like them so he should get what they get.