How to Start an Independent Record Label in the UK

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.

Do you need a licence to start a record label?

There is no specific licence required to operate a record label in the UK. You do not need approval from any regulatory body to release music. However, there are registrations that are essential if you want to collect the money your releases generate: PPL membership (for neighbouring rights on recordings), PRS for Music membership (if you also publish compositions), and an ISRC registrant code (for identifying your recordings globally). These are not licences in the regulatory sense, but without them you will release music that generates royalties you cannot collect.

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 as the minimum standard.

What it costs to start a record label in the UK

The setup costs for a UK record label are lower than most people expect. The essential outlay breaks down as follows:

• Companies House incorporation: £12 (online filing)
• Business bank account: free with most UK banks (Starling, Tide, and Monzo all offer free business accounts)
• PPL membership: free
• PRS for Music membership: £100 one-time fee (if operating a publishing arm)
• ISRC registrant code: free through PPL
• Music industry solicitor for recording contracts: £500 to £1,500 for template agreements
• First release costs (mastering, artwork, distribution fees): £200 to £1,000 depending on scope

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.

Common mistakes new UK labels make

Most new labels lose money not through bad music decisions but through operational oversights that compound over time:

• Not registering with PPL as a record company. Without this, neighbouring rights royalties on your recordings go uncollected.
• Using a personal bank account for label income. This creates accounting problems and makes it harder to demonstrate the label is a genuine business entity to distributors and partners.
• No reversion clause in recording contracts. If the label stops trading, the artist should have a clear path to reclaim their masters. Without this, masters can end up in legal limbo.
• Ignoring metadata. ISRC assignment errors, missing songwriter credits, and incorrect distributor metadata cause royalties to be misallocated. These errors are easy to prevent and expensive to fix after the fact.
• Skipping publishing administration. The label collects recording royalties but nobody is collecting the composition royalties on the same releases.

Timeline: from idea to first release

A realistic timeline for getting a UK record label operational and releasing its first track:

• Week 1: Incorporate at Companies House. Open a business bank account. Apply for PPL membership as a record company.
• Week 2: Apply for an ISRC registrant code through PPL. Set up a distribution account (DistroKid, TuneCore, or a label-tier partner).
• Week 3 to 4: Commission recording contract templates from a music industry solicitor. Begin metadata infrastructure (even a spreadsheet is a start).
• Week 4 to 6: Sign your first artist or prepare your own release. Register the works with PRS if you are also handling publishing.
• Week 6 to 8: Submit your first release to your distributor. Most distributors require 7 to 14 days lead time before release date.
• Week 8 onwards: First release is live. Ongoing work begins - royalty accounting, metadata maintenance, next release planning.

Label services vs starting your own label

Starting a label gives you full control, but it also means building and maintaining every piece of infrastructure yourself - distribution, publishing administration, metadata management, royalty accounting, and collection society relationships. For artists and managers who want label infrastructure without the operational overhead, label services providers offer an alternative. A label services engagement gives you access to distribution, publishing administration, and metadata management while you retain 100 percent ownership of your masters and compositions. You get the operational infrastructure of a label without incorporating one. This is particularly relevant if you have an existing catalog that needs professional administration but you do not want to build a label around it.

If you are setting up a label or considering whether label services might be a more practical path for your catalog, our free Catalog Assessment is a practical starting point. It covers both recording and publishing royalties on your releases and identifies what is currently being collected and what is being missed.

Frequently Asked Questions