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Copyright collecting societies have been developed so as to rectify the difficulty faced by individual copyright holders to negotiate and give license to multiple and dispersed users and vice versa. They serve as intermediary between users and copyright holders and create less costly supply of copyrighted works and less costly access to users of copyrighted works. following the promulgation of copyright proclamation in 2004, with the same rational, Ethiopian copyright holders and their professional associations have established a copyright collecting society known by the name Ethiopian copyright and neighboring rights collective management society (ECNRCMS), though not yet functional. Thus, the paper examines legal challenges , institutional problems and other challenges that hinder effective functioning of the collecting society; and recommends possible way outs.