If you are in a band, a solo performer, a songwriter or producer, one thing to consider forming is an entity in order to protect you personally in cases involving negligence or some other type of mishap. For example, if a fan is injured at one of your performances or concerts, a legal action may be brought against you (and the other band members, if appropriate) personally. You do not want this to happen, especially if you have personal assets and property that can be exposed to this liability.
One solution is to form an entity such as a limited liability company or a corporation. These types of entities can shield you (and the band) from personal liability for any potential claims that may be brought against you.
Many individuals and companies are forming limited liability companies (or LLC's) for this specific purpose. The LLC has less adminsitrative work than the corporation and is very flexible regarding how it would be taxed.
I would welcome any questions regarding the LLC, including it's formation and the documents involved.
Remember, music is a business investment just like many other businesses. It is important to keep your investment well protected!