Splitting royalties between co-authors on Amazon
July 7, 2016 1:23 PM Subscribe
A friend of mine and I would like to self-publish a book together on Amazon. How do we split the royalties when Amazon only allows one payee and how do we deal with the tax implications? Added complication: one of us is the U.S., the other is in Canada.
A friend and I plan to compile and edit a collection of stories that we will self-publish on Amazon. Only one of us can be the recipient of any royalties, which would of course be split with the other. We're in two different countries. How do we deal with this so each of us can declare our half of the royalties?
(FYI: the writers of the stories will be paid a one-time fee and we'll have contracts for them. Friend and I will have a contract between ourselves detailing that we will split the costs, work, and any profits equally. For all intents and purposes, consider us the co-authors. YANMAccountant, and I will be talking to one, I promise.)
Friend is the American and it probably makes the most sense for her to be the payee since Canadian sellers have to go through American Amazon/Kindle anyway. My understanding is that I (the Canadian) would give her a W-8BEN and she could pay me as a contractor. Can she do that if she's just acting as an individual? She does have an LLC for an unrelated business and has suggested creating a branch under that LLC and give it a DBA for our "company" (i.e. this collection). But I don't expect that we're going to be creating a publishing empire here or anything, especially in a small niche genre -- this project is not going to generate big bucks, though it will probably make some money. So would the DBA step be worth it or would it be much more complicated than it needs to be?
Basically, I would like to know:
- if anyone here has ever co-authored a book published on Amazon and how you and your co-author split royalties (even if you were in the same country);
- if we are needlessly complicating things here with a DBA, etc.;
- if we're not complicating things enough and this is going to be way harder than anticipated.
Thanks!
A friend and I plan to compile and edit a collection of stories that we will self-publish on Amazon. Only one of us can be the recipient of any royalties, which would of course be split with the other. We're in two different countries. How do we deal with this so each of us can declare our half of the royalties?
(FYI: the writers of the stories will be paid a one-time fee and we'll have contracts for them. Friend and I will have a contract between ourselves detailing that we will split the costs, work, and any profits equally. For all intents and purposes, consider us the co-authors. YANMAccountant, and I will be talking to one, I promise.)
Friend is the American and it probably makes the most sense for her to be the payee since Canadian sellers have to go through American Amazon/Kindle anyway. My understanding is that I (the Canadian) would give her a W-8BEN and she could pay me as a contractor. Can she do that if she's just acting as an individual? She does have an LLC for an unrelated business and has suggested creating a branch under that LLC and give it a DBA for our "company" (i.e. this collection). But I don't expect that we're going to be creating a publishing empire here or anything, especially in a small niche genre -- this project is not going to generate big bucks, though it will probably make some money. So would the DBA step be worth it or would it be much more complicated than it needs to be?
Basically, I would like to know:
- if anyone here has ever co-authored a book published on Amazon and how you and your co-author split royalties (even if you were in the same country);
- if we are needlessly complicating things here with a DBA, etc.;
- if we're not complicating things enough and this is going to be way harder than anticipated.
Thanks!
(FYI: the writers of the stories will be paid a one-time fee and we'll have contracts for them. Friend and I will have a contract between ourselves detailing that we will split the costs, work, and any profits equally. For all intents and purposes, consider us the co-authors.
You're not the co-authors. The writers of the stories are the authors. You and your friend have a small publishing company. You two appear to be your company's in-house editors and/or officers. There is no need for any "splitting of royalties" on the facts you've given.
To decide whether your company should be a formalized partnership, an LLC, or something else, and how you will deal with taxes, you'll need to consult your company's lawyer and/or accountant.
posted by JimN2TAW at 2:20 PM on July 7, 2016 [1 favorite]
You're not the co-authors. The writers of the stories are the authors. You and your friend have a small publishing company. You two appear to be your company's in-house editors and/or officers. There is no need for any "splitting of royalties" on the facts you've given.
To decide whether your company should be a formalized partnership, an LLC, or something else, and how you will deal with taxes, you'll need to consult your company's lawyer and/or accountant.
posted by JimN2TAW at 2:20 PM on July 7, 2016 [1 favorite]
Best answer: (FYI: the writers of the stories will be paid a one-time fee and we'll have contracts for them. Friend and I will have a contract between ourselves detailing that we will split the costs, work, and any profits equally. For all intents and purposes, consider us the co-authors. YANMAccountant, and I will be talking to one, I promise.)
Somehow I read right past this the first time--you will essentially be functioning as a partnership anyway.
By the way, you need to consider the problems of multiple authors and copyright. You're going to want the authors of the individual works to assign their copyright to some individual or entity (or otherwise to draft the contract so that it's a work made for hire, which again requires an entity to be the employer). A partnership could serve as that entity. Otherwise, it's going to be one or the other of you, which potentially leaves the non-holder exposed if problems develop between you.
posted by praemunire at 2:21 PM on July 7, 2016 [1 favorite]
Somehow I read right past this the first time--you will essentially be functioning as a partnership anyway.
By the way, you need to consider the problems of multiple authors and copyright. You're going to want the authors of the individual works to assign their copyright to some individual or entity (or otherwise to draft the contract so that it's a work made for hire, which again requires an entity to be the employer). A partnership could serve as that entity. Otherwise, it's going to be one or the other of you, which potentially leaves the non-holder exposed if problems develop between you.
posted by praemunire at 2:21 PM on July 7, 2016 [1 favorite]
There is no need for any "splitting of royalties" on the facts you've given.
It sounds as if he is intending either to have the authors assign him the copyright in their individual pieces for a flat fee or else structure the contract so that the pieces are works for hire. I don't know if that's a great deal for the authors, but it's certainly possible under U.S. copyright law, at least. If so, the royalties would not go to the individual authors.
posted by praemunire at 2:27 PM on July 7, 2016
It sounds as if he is intending either to have the authors assign him the copyright in their individual pieces for a flat fee or else structure the contract so that the pieces are works for hire. I don't know if that's a great deal for the authors, but it's certainly possible under U.S. copyright law, at least. If so, the royalties would not go to the individual authors.
posted by praemunire at 2:27 PM on July 7, 2016
Response by poster: I apologize for the confusion; I chose "co-authors" to simplify terminology and to basically say that Friend and I would be the ones splitting the royalties. And yes, essentially it would be writers assigning copyright to one of us or the partnership, however we decide to go. This is not without precedent in this particular genre and it would be a fair price.
praemunire, I really don't believe the royalties would be much more than a few thousand dollars, if that, and then split in half. So really not a ton, and I don't know that it's worth creating a whole formal partnership for it. But the copyright issues and international aspect are definitely making things way more difficult than we initially anticipated.
posted by pised at 9:31 PM on July 7, 2016
praemunire, I really don't believe the royalties would be much more than a few thousand dollars, if that, and then split in half. So really not a ton, and I don't know that it's worth creating a whole formal partnership for it. But the copyright issues and international aspect are definitely making things way more difficult than we initially anticipated.
posted by pised at 9:31 PM on July 7, 2016
Best answer: Sounds like lawyer time, to me. Especially due to the international aspect of this. This looks like one of those situations where even if an appropriate expert were to show up here, there aren't nearly enough specifics in the question for them to be able to give you solid advice. Likely, you don't even know what all the necessary information is (I mean, I'm sure I don't know all the pertinent questions a lawyer would ask in this situation) so you probably ought to consult with a lawyer just to figure out what all the "unknown unknowns" are in your situation.
This sounds like the kind of well-intentioned thing that could easily turn into a big ol' acrimonious mess if you don't get a specialist to help you set it all out plain and square with all the details sorted and accounted for. Lawyer time.
posted by Anticipation Of A New Lover's Arrival, The at 2:46 PM on July 8, 2016
This sounds like the kind of well-intentioned thing that could easily turn into a big ol' acrimonious mess if you don't get a specialist to help you set it all out plain and square with all the details sorted and accounted for. Lawyer time.
posted by Anticipation Of A New Lover's Arrival, The at 2:46 PM on July 8, 2016
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posted by praemunire at 2:04 PM on July 7, 2016 [2 favorites]