Once your band starts getting a good amount of shows you may start thinking about opening a bank account, buying a van or trailer, selling merch online, or protecting yourselves from legal issues. If not, you should really consider all of the above. Once you start earning money you have to file taxes for the income you receive. Most bands don’t actually make more money than they spend for quite some time, so you can avoid a lot of taxes if you start documenting your every step.
There are advantages and disadvantages for each type of business entity. For young bands I really think an LLC is the way to go, but you should consult someone more intelligent before you proceed. The “limited liability” part of the LLC is the attractive part. All the venues you play in should have business insurance & you should be named as additionally insured. However, at the level most of us are at that seems to be rare. If someone comes to your show & gets hurt they are going to sue everyone they can think of to try to recoup some money. If you are registered as an LLC they can go after the business entity, but not you personally.
I suggest checking out this site: http://www.nolo.com/legal-encyclopedia/form-llc-how-to-organize-llc-30287.html before you begin. You will need to pick one person in your band to be in charge of holding on to all your important papers. You are required to keep certain documents at a predetermined business address. Keep in mind that most local municipalities have restrictions on home-based businesses & may require you to register your business with the city or county.
Once you have decided which person in your band will be the most responsible you need to file your Articles Of Organization. In Ohio your forms can be found here http://www.sos.state.oh.us/SOS/businessServices.aspx and in Kentucky your forms can be found here https://secure.kentucky.gov/sos/ftbr/Welcome.aspx. The filing fee will range from $40 - $150. The form is pretty self-explanatory, but both states have local offices that can help you fill out the forms if you have any questions.
Once your articles of organization are filed I strongly suggest creating an operating agreement. You can find templates online, but it is basically a document that outlines the rights and responsibilities of each member of the LLC.
You can get an employer identification number from the IRS for free if you plan on opening a bank account. To review your responsibilities for taxes you can check out the IRS’s website: http://www.irs.gov/businesses/small/article/0,,id=99198,00.html.
I can’t stress enough that you should read a complete book on the subject before you file your articles of organization. The main purpose of this article is to show you how simple the whole process really is. There is a myth that it costs a ton of money to start a business, but that’s just not the case. Spend a little time doing some research & you will be able to take care of it all on your own. Good luck!