A BILL FOR AN ACT CONCERNING THE AUTHORIZATION TO ESTABLISH AN ARTIST COMPANY IN THE STATE, AND, IN CONNECTION THEREWITH, ENACTING THE "COLORADO ARTIST COMPANY ACT".
Bill Summary
The bill creates the "Colorado Artist Company Act", which authorizes a person in the state to create a limited liability company with a stated artistic mission (artist company), which artist company is subject to state law applicable to limited liability companies except where specified in the bill.
PART 12 — COLORADO ARTIST COMPANY ACT
§ 7-80-1202. Definitions.
(2) "Artist" means an individual who creates any work of authorship or artistic expression comprising written, oral, visual, graphic, literary, musical, audiovisual, digital, or performing art in any medium, including painting, printing, drawing, sculpture, craft, photography, music, writing, film, performance, interactive media, or digital content.
(3) "Artist Company" means a limited liability company organized under this Part 12 that meets the requirements of Section 7-80-1203(1).
(4) "Artistic Mission" means a specific creative or artistic or educational purpose, including the creation, development, production, distribution, exhibition, or performance of creative or artistic works, or operations conducted in furtherance of the arts and cultural contributions.
(5)–(9) Additional definitions include "Artistic Work" (creative works pursuant to the mission), "Governing Body" (members, manager, or board), "Long-Form Articles" (simplified formation documents), "Public Benefit" (positive effects on communities beyond members), and "Public Benefit Artist Company" (an artist company that elects public benefit status).
§ 7-80-1203. Artist company — requirements.
(1) An Artist Company is a limited liability company that:
(a) Is organized under this Part 12;
(b) Has a stated artistic mission set forth in its articles of organization or operating agreement; and
(c) Is formed and owned by one or more artists who, at the time of formation or conversion, own not less than fifty-one percent of all voting securities. Artists must at all times maintain an ownership percentage of not less than fifty-one percent of all voting securities.
(3) An Artist Company may specify in its articles of organization or operating agreement:
(a) That the artistic mission has primacy over financial objectives;
(b) That the artistic mission and financial objectives are of equal priority; or
(c) Any other priority or balancing between the artistic mission and financial objectives.
§ 7-80-1204. Conversion to artist company.
(1) A limited liability company that is not an Artist Company may convert to an Artist Company by:
(a) Amending its articles of organization to state the artistic mission and elect governance under this Part 12;
(b) Ensuring that one or more artists own not less than fifty-one percent of the voting securities;
(c) Obtaining approval by the vote or consent required to amend the articles of organization; and
(d) Filing the amended articles with the Secretary of State.
(2) Upon filing, the LLC continues as the same entity. All property, liabilities, liens, and pending actions carry over. The conversion does not constitute a dissolution or transfer of assets.
§ 7-80-1205. Application of article 80.
Except as otherwise provided, standard Colorado LLC law applies to Artist Companies. Where this Part 12 conflicts with other LLC provisions, this Part 12 controls. The 51% artist ownership requirement and the separation of economic rights from governance cannot be altered by an operating agreement.
§ 7-80-1206. Formation — long-form articles.
A person may form an Artist Company by filing articles of organization or long-form articles with the Secretary of State.
On or before July 1, 2027, the Secretary of State shall prescribe and make publicly available a form of long-form articles that includes check-box or fill-in-the-blank provisions allowing election of:
• Equity ownership structure
• Governing body structure
• Fiduciary duty elections
• IP assignment or licensing terms
• Tax treatment
• Distribution mechanisms
• Member admission and departure terms
• Supermajority or unanimous approval requirements
An Artist Company's name may contain "Artist Company" or the abbreviations "ALLC", "ACORP", "AC", or "A.C."
§ 7-80-1207. Ownership of equity.
(2) Incorporators may elect one of the following structures:
(a) Ownership based on the sale of units, including fractional units;
(b) Pro rata ownership based on the number of members;
(c) Pro rata ownership based on capital contributions, including in-kind contributions of cash, property, artistic work, royalty sharing, revenue participation rights, or other intangible assets; or
(d) Fixed ownership percentages by individual member.
(3) Distributions may be based on ownership percentages, or the operating agreement may establish alternative mechanisms including revenue participation, royalty sharing, recoupment waterfalls, or other criteria.
§ 7-80-1208. Governing body.
(2) Incorporators may elect one of the following governance structures:
(a) Governance by members, with voting based on ownership percentages;
(b) Governance by a single manager, elected by members; or
(c) Governance by a board of managers, elected by members.
(3) More complex governance structures, including separate voting for artistic decisions versus business decisions, may be specified in an operating agreement.
§ 7-80-1209. Governance principles.
Unless otherwise provided:
• A quorum is a majority of voting interests or managers.
• Most acts require majority approval of those present at quorum.
Certain major actions require a majority of all voting interests:
Amending articles, adopting an operating agreement, mergers, dissolution, and actions reducing artist ownership below 51%.
Certain actions require a majority of artist-members specifically:
Changes to IP rights, changing the public benefit scope, converting to a non-artist entity, modifying governance control, and approving the annual operating budget.
Relaxed formalities: Failure to prepare written minutes, hold annual meetings, or observe other corporate formalities is not individually grounds for piercing the LLC veil.
§ 7-80-1210. Acceptance of capital.
An Artist Company may accept capital in any form, including:
Grants · Refundable grants · First loss capital · Program-related investments · Mission-related investments · Impact returns investments · Debt instruments · Equity investments · Convertible instruments · Revenue, cash flow, and profit participation rights · Royalty sharing rights · In-kind contributions including intellectual property.
Donors exercising expenditure responsibility are entitled to member-level statements. Tax-deductible donations may be routed through a separate tax-exempt organization.
§ 7-80-1211. Fiduciary duties.
Standard LLC fiduciary duties apply. Additionally, the articles or operating agreement may specify duties to preserve and promote the artistic mission, balance the mission with financial interests, and consult with artist-members on decisions affecting creative direction. These duties may be modified as permitted by Colorado LLC law.
§ 7-80-1212. Intellectual property as a capital contribution.
A member may assign or exclusively license intellectual property — including artistic work — to the Artist Company as an in-kind capital contribution.
The articles or operating agreement may provide for valuation. If the governing body and the contributing member cannot agree on valuation, the member may decline to contribute or have an independent valuator determine the value at the company's cost (binding).
Any assignment or license may be limited in scope to what's required for the artistic mission.
Unless otherwise specified, artistic work contributed is subject to reversionary rights — it comes back to the artist if the company dissolves. These reversionary rights are retained interests not available to creditors.
§ 7-80-1213. Artistic work created during membership.
The articles or operating agreement may require artist-members to assign or exclusively license artistic work created during membership that relates to the artistic mission. Such work is subject to reversionary rights.
If this provision is included, the scope of artistic work must be clearly defined in a narrative description.
An artist-member may retain specific artistic work by providing written notice within 30 days of creating it. If retained, the artist-member grants the company a nonexclusive, perpetual, irrevocable license for any use of that work in company activities.
All artistic work must be owned by either artist-members or the Artist Company. It shall not be transferred to, owned by, or licensed to non-artist members, investors, or other non-artist third parties except through licenses or contracts entered into with unaffiliated third parties in the ordinary course of business for bona fide commercial purposes. All such licenses are subject to reversionary rights.
§ 7-80-1214. Separation of economic rights from governance and control.
The articles or operating agreement may provide for the separation of economic rights from governance and control rights.
Governance and control rights must at all times remain with artist-members in accordance with the 51% requirement. Non-artist investors may hold economic rights — including distributions, royalties, revenue participation, or other financial returns — without corresponding governance or control rights.
§ 7-80-1215–1217. Public benefit artist company.
An Artist Company may elect to become a Public Benefit Artist Company at formation or by later amendment (requiring majority approval of all members and of artist-members).
Requirements: State "Public Benefit Artist Company" in the articles heading, and set forth one or more specific public benefits.
Members and managers must balance: pecuniary interests of members, interests of those affected by the company's conduct, the specific public benefits, and the artistic mission.
No personal liability for monetary damages for failure to balance these interests (unless the operating agreement provides otherwise).
A Public Benefit Artist Company must annually provide members and donors a statement specifying: promotion of public benefits, fulfillment of the artistic mission, and the best interests of those materially affected. The statement must include objectives, standards for measuring progress, factual information on success, and an assessment.
§ 7-80-1218. Member transition.
The articles or operating agreement may address: procedures for admission and departure of members; rights to artistic work, royalties, and revenue upon departure; whether departing members retain collective names or trademarks; continuing economic rights; valuation and buyout provisions; and dispute resolution.
Defaults (if not specified): Departing member's ownership interest follows standard LLC rules. Assigned artistic work remains with the company subject to reversionary rights. Work created during membership follows the assignment terms in the agreement, or federal IP law. No continuing distributions or royalties unless required by other sections.
§ 7-80-1219–1220. Tax treatment and reporting.
The long-form articles may include an election to be taxed as a corporation or to confirm pass-through tax treatment, subject to federal tax law.
An Artist Company must file the same periodic reports required of all Colorado LLCs.
§ 7-80-1221. Limitation on liability — no private right of action.
No person has a private right of action against an Artist Company, its governing body, managers, or members based on: failure to pursue a public benefit, failure to fulfill the artistic mission, or breach of public benefit duties. This does not limit other rights or remedies available under law.
§ 7-80-1222. Dissolution — artistic work reversionary rights.
Upon dissolution:
All artistic work assigned, licensed, or created by artist-members reverts to those artists automatically. Assignments and exclusive licenses terminate.
For joint works, rights revert as specified in the agreement, by mutual agreement, or as jointly owned under federal IP law.
Reversionary rights are retained interests — never fully transferred to the company and not available to creditors. They are subject to: perfected security interests granted with the artist's written consent, existing third-party licenses, and continuing royalty or revenue obligations.
After artistic work reverts and liabilities are paid, remaining assets are distributed per the agreement or pro rata by ownership percentage.
§ 7-80-1224. Jurisdiction — foreign artists.
A person from any jurisdiction may form or convert an LLC to an Artist Company under this Part 12. The Artist Company is a domestic Colorado LLC regardless of where its artist-members reside.
Section 2. Effective date.
This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 12, 2026, if adjournment sine die is on May 13, 2026); except that, if a referendum petition is filed, the act will not take effect unless approved at the November 2026 general election.