Your own publishing company and limited company 

In this model, you can also transfer your personal share of royalties to your limited company. The limited company can be the same company that also acts as your own publishing company or a different company. If the company is included in the tax prepayment register, royalties are paid without withholding tax. 

Your own publishing company and limited company at a glance:

• The publisher’s shares of your distributions will be paid to your own publishing company. 
• The personal shares of your distributions have been transferred to your own limited company. The distributions received by the company are its business income, which is taxed in accordance with the business tax regulations. 
• The operating model involves annual maintenance costs of the company’s operations (e.g. accounting). 

Prerequisites for the your own publishing company and limited company model:  

• A significant part of your income consists of royalties paid by Teosto. 
• Your company is a Teosto publisher member. 
• Your publishing company is a limited company. This allows you to transfer your personal shares of the distributions to the company. 
• Alternatively, in addition to your publishing company, you have another company in the form of a limited company to which you can transfer your personal shares. 
• If the limited company has other shareholders in addition to you, they must all be Teosto members, i.e. the limited company must be owned in its entirety by Teosto’s music creator members. 

Payment of publisher’s shares to your own publishing company 

You and your own company can sign a publishing agreement on your music, in which case the publisher’s share of your distributions will be paid to your own company. In addition to the copyright royalties accumulated for your own music, your company must also have other billable activities, such as musician fees. 

Prerequisites for setting up your own publishing company: 

• Your publishing company becomes a Teosto publisher member. 
• You take care of the music publisher’s duties, such as the marketing of your music, in the name of your publishing company. 
• You are aware that running your own publishing company is a business activity that requires, among other things, accounting and the prepayment of taxes. 

Increasing the publisher’s royalty share 

Teosto’s distribution rules define the publishing company’s shares of the royalties for published works. According to the distribution rules, the publisher’s share of the distribution for the work is usually 33.3%, but in special cases the share may be higher, but no more than 50%.  

If you want to enter into a publishing agreement with your own publishing company so that the publisher’s share paid to your company will be 50%, you must apply for an increased publisher’s share from Teosto’s Repertoire Committee. The special agreement concerning the increased publisher’s share may be for a maximum of five years at a time, but it is possible to renew the agreement. 

Payment of personal shares to a limited company 

The taxation model for limited companies – so-called company model – suits professional music creators for whom music royalties are the primary source of income. The personal royalties paid by Teosto to a company are taxed as the company’s business income. 

The arrangement does not apply to the payment of royalties administered by other copyright societies, i.e. royalties distributed to you by Gramex, Kopiosto or foreign copyright societies, if you are a direct member of these societies. The arrangement also does not apply to publishing rights or the publisher’s shares of distributions. 

The adoption of the taxation model for limited companies requires the temporary transfer of music copyrights from the music creator to their limited company. The matter is agreed upon in an agreement between the creator, the company and Teosto. The company may also have other owners, but they must all be Teosto’s music creator members. 

Read more: 

• The taxation model for limited companies (the company model)