Starting a record label in the UK is more accessible than it has ever been. Here is a practical overview of the legal, financial, and operational steps involved — without the mystification.
What starting a record label actually means
At its most basic, a record label is an entity that owns master recordings and exploits them commercially. Starting a label means creating the legal and operational structure to do this: incorporating a company, establishing a business bank account, setting up distribution, registering with collection societies, and — if you are signing artists — having the legal infrastructure to manage recording contracts. The formal process is simpler than many assume; the challenge is the ongoing operational work of running a music business.
Company formation
The standard structure for a UK record label is a private limited company (Ltd). Incorporation through Companies House costs £12 and can be completed online in a few hours. The company structure provides legal separation between the label's liabilities and your personal finances, and is the appropriate entity for holding intellectual property (master recordings), entering contracts, and operating a business. A sole trader structure is possible for very early-stage operations but creates personal liability and is less appropriate as the business grows.
Collection society memberships
A UK record label should register with the relevant collection societies:
- PPL — for neighbouring rights royalties on sound recordings. Labels register as record companies; performers register separately as performers. PPL membership is free.
- MCPS — for mechanical royalties on compositions (if the label also publishes). Accessed through PRS for Music.
- PRS for Music — if the label has a publishing division or wants to collect composition royalties on behalf of signed songwriters.
Setting up distribution
A record label needs a distribution partner to get releases onto streaming platforms. Options range from self-service distributors (DistroKid, TuneCore, CD Baby) — which are appropriate for small labels — to label-tier distribution services offered by larger aggregators (AWAL, The Orchard, Believe Distribution) that provide more infrastructure and editorial relationships. Label-tier services typically require a minimum catalog size or track record. Starting with a self-service distributor and graduating to a label deal as the catalog grows is a common path.
Recording contracts and rights
If you are signing artists to your label, you need recording contracts that clearly define: who owns the master recordings, the royalty rate payable to the artist, the recoupment terms, the territory and term of the agreement, and the reversion conditions. These documents should be drafted or reviewed by a music industry solicitor. A poorly drafted recording contract creates disputes that are expensive to resolve and can damage artist relationships. The cost of a solicitor at this stage is significantly less than the cost of litigation later.
ISRC codes and metadata infrastructure
As a record label, you will be responsible for assigning ISRC codes to the recordings you release. You can apply for a label registrant code through PPL, which allows you to generate your own ISRCs rather than relying on your distributor's assignment. Having your own registrant code gives you more control over your catalog's metadata and makes it easier to switch distributors without losing ISRC continuity. Establish a metadata management process early — tracking which ISRCs have been assigned to which recordings in a spreadsheet is the minimum standard.
Publishing administration for a label
If your label releases music by songwriters who are not already administered by a publishing entity, those songwriters are potentially missing their composition royalties. As a label, you can either ensure your artists have their own publishing arrangements in place, or establish a publishing arm to administer their compositions. Publishing administration is a separate business from a record label — it involves PRS membership, works registration, and ongoing royalty collection for compositions rather than recordings. Many small labels operate both without fully realising they are doing two separate things.
If you are setting up a label and want to understand how to ensure both the recording and publishing royalties on your releases are correctly collected, our free Catalog Assessment is a practical starting point.