Dancing is beautiful. Dancing takes us in a different world full of glamor, feelings, fashion, and a holiday. People go to learn dancing for various reasons and take different dance classes. While there are different types of dances, it is important to keep in mind that running a dance studio business is providing service where dance instructors give dance instruction to their students.
From legal point of view, similar to many businesses, a dance studio owner should think of protecting studio’s assets. Some of the most important assets are music and video equipment, a music collection, instruction materials, teachers and studio’s name. From my personal experience as a professional Ballroom and Latin dancer, the name and its reputation are probably one the most valuable assets. Generally, the name is earned through dancing community by competing, teaching, and judging and is very respected for years to come. If done right, they can be protected.
Some of the things to keep in mind when running a dance studio. First, to run a successful dance studio, the owner has to consider incorporating the studio as business to limit liability and bring structure for the business to run smoothly.
Each state has different rules and regulations governing incorporation process. For example, to form a Corporation, New York, under the Section 301 of the Business Corporation Law, requires a special taxation for shares that the corporation is authorized to issue which must be paid at the time of formation of the corporation. To form LLP, New York, under Section 121-201 of the New York State Revised Limited Partnership Act, requires the filing of the certificate of limited partnership, a limited partnership (LP) plus publication within 120 days. While Massachusetts doesn’t require the above requirements, the M.G.L. Chapter 156D controls all corporations in Massachusetts, which means that a corporation in Massachusetts is still required to submit its annual report with the appropriate fee. There are cheaper ways to incorporate in other states. Dance studio owner should consider the location prior incorporation where s/he wants to conduct the business prior incorporating.
Second, the provisions of the lease and its renewal are important to protect the studio from losing its location. From my personal experience, many real estate developers/landlords do not think of dancers as business savvy people. Dancers are considered to be artsy. Often, verbal promises are not included in integrated written agreements. This can make it difficult to run a profitable studio smoothly. Also, moving studio’s location a lot may not be beneficial and should be kept to the minimum.
Third, is insurance. Insurance is here to protect our property from many types of damage; environmental and/or human made. Also, insurance should cover clients’ possible injuries to minimize costly litigation. There are waivers available but they may not protect your studio 100%. In some places, waivers are not valid or partially valid. In New York, the waivers are valid for instructional purposes only and if drafted properly. That means that your studio may still be liable for injuries that occur on the premises. In Massachusetts, “the issue of waiver is for the fact finder. When the facts are undisputed, the waiver is a question of law.” See, Linda Coal & Supply Co. v. Tasa Coal Co., 416 Pa. 97, 101 (1964). Also, it is an affirmative defense. See, Sharon v. City of Newton, 437 Mass. 99 (2002). Under Mass. Gen. Laws, Ch. 93A protects from unfair and deceptive business practices. “A statutory right or remedy may be waived when the waiver would not frustrate the public policies of the statute and the court “ordinarily would not effectuate a consumer’s waiver of rights under c. 93A”. See, Canal Electric Co. v. Westinghouse Electric Corp. 406 Mass. 369 (1990).
Fourth, handling employees is just as crucial. There is an employee’s contract, immigration that may require sponsorship, human conflict, termination, and a non-compete agreement issues.
Fifth, sometimes there is an occasional encroaching on dance business by other dance studios that can bring a lot of frustration and litigation. A dance studio owner, can address these issues timely and avoid further losses down the road.
Sixth, as of late, Internet and media took a whole different spin on how the studio appears on-line. Domain name, hosting, visibility/ranking and copyright of videos along with music and its combination came to play an important role in dance business industry.
Written by Margarita Smirnova, Esq.
If you have a specific question relating to your business, please contact Margarita