The Beatles & Co. is formed

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The Beatles’ financial advisors, appointed by NEMS Enterprises, were exploring options to reduce the impact of taxes to be paid to the UK Inland Revenue and advised the Beatles to create a new legal entity to consolidate their various business interests.

On this day, The Beatles & Co. Ltd was created.

The Beatles became employees of this company and, apart from songwriting royalties, which would be paid directly to the authors of the individual songs, all the money earned by the group would be channeled into The Beatles & Co. So instead of being four individuals sharing their income in The Beatles Ltd (formed in June 1963) and having to pay income taxes, their earnings would now be subject to corporate taxes. From Medium:

Clive Epstein, Brian’s brother, worked in the financial administration side of the New End Music Stores (NEMS), Epstein’s management company, and set to work. On April 19, 1967 the Beatles became a legal partnership sharing all of their income, whether from group, live or solo work (except songwriting). The Beatles and Co. Ltd was created to bind them together legally for ten years on a goodwill share issue of £1 million. The first anyone in the public would have known of it was on May 19, 1967, with the launch of Sgt Pepper’s Lonely Hearts Club Band, which had a discreet green apple on the back sleeve.

When Apple was formed, which was before Brian died, it wasn’t called Apple, but the structure of the buyout was there. The reason the Beatles sold 80% of themselves to this entity, which would become Apple, and to change Beatles Ltd. to Beatles and Co. was to save taxes. The reason that the 80% sale was triggered was because of the accumulated royalties at EMI that they were due to receive and the fact that if the royalties had been paid to them as individuals, it would have been taxed at 85% or something like that. This structure was set up by Clive Epstein as a tax structure. At one point it was suggested that this be a real estate company; that was the original idea for lack of anything else. They couldn’t figure out what to do with all this capital. All of this was set up while Brian was alive. After Brian died, my recollection is that they then decided to take this entity and create what they did, which was Apple.

Peter Brown, Brian Epstein’s personal assistant – From “Those Were The Days 2.0” by Stefan Granados

Brian Epstein didn’t want to know about Apple. The Beatles had vast bank accounts and were advised to reduce the tax burden. We had to submit plans of how to invest this money so we could save three of four shillings in the pound – which of course with their money was a substantial amount. So we set up what was laughingly called ‘the executive board’ to plan how to invest this money. I was on the board along with Neil Aspinall and Pete Shotton, and we just kicked around plans and ideas. The first real idea was to open a chain of greetings card shops. They are now on every street corner, but they were unheard of in those days. So we finally thought this was a good idea and we put it to the Beatles. They just sat there for a moment, and then John said, ‘What a f****g boring idea. We had been weeks on this so one of us asked them to come up with something better. So that’s how ‘Apple’ as it became, evolved from that meeting. Really the whole thing was crazy, but it was their money.

Alistair Taylor – From Alistair Taylor – The Beatles ‘Mr Fixit’ – Beatles in London, November 28, 2016

As far as income tax was concerned, on the first £100,000 you paid, probably, something like £87,500 in tax. On the next £100,000, you paid about 98 per cent in tax. So that, being an individual or a partnership, if you were generating a lot of income, you were facing a terrific taxation liability. Brian Epstein once told me that they had been offered a contract by Coca-Cola for something like $3 million, but they were refusing to accept it, because they felt that it would all go in tax.

Harry Pinsker, The Beatles’ personal accountant – From “The Beatles: Off the Record” by Keith Badman, 2008

This is how the shares for The Beatles & Co. Ltd were split:

John Lennon	5%
Paul McCartney	5%
George Harrison	5%
Ringo Starr	5%
The Beatles Ltd	80%

On November 17, 1967, The Beatles Ltd would change its name to Apple Music Ltd.

Last updated on March 3, 2023