Colorado Artist Companies

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.An artist company must state its artistic mission in its articles of organization or operating agreement and be formed and owned by one or more individuals that create works of authorship or artistic expression comprising written, oral, visual, graphic, literary, musical, audiovisual, digital, or performing art in any medium (artists). Artists must own not less than 51% of all voting securities of the artist company at all times (required ownership percentage).A limited liability company that is not an artist company but that meets the required ownership percentage may convert to an artist company by amending its articles of organization or its operating agreement to state its artistic mission and by complying with certain other requirements.A person may form an artist company by filing with the Colorado secretary of state articles of organization or long-form articles. The Colorado secretary of state is required to prescribe the form of the long-form articles and make the form publicly available on or before July 1, 2027. The long-form articles must include check-box or fill-in-the-blank provisions allowing the election of certain ownership, governance, artistic work distribution, tax treatment, and dissolution structures.An artist company may accept capital in any form and its members and managers have certain duties specified in the artist company's articles of organization or operating agreement along with the duties imposed by state law applicable to limited liability companies.Members of an artist company may assign or exclusively license intellectual property to an artist company as an in-kind capital contribution. An artist company's articles of organization or operating agreement may require artist-members to assign or exclusively license to the artist company artistic work created during membership that relates to the artistic mission of the artist company. An artist company's articles of organization or operating agreement may provide for certain procedures and terms regarding the admission and departure of members.An artist company may elect at formation, or at the time of conversion for a limited liability company, to be a public benefit artist company (public benefit artist company) by stating in its articles of organization and operating agreement, if any, that it is a public benefit artist company and setting forth in its articles of organization and operating agreement, if any, one or more specific public benefits to be promoted by the artist company. The members and managers of a public benefit artist company are subject to certain additional duties. A public benefit artist company must provide its members and donors with an annual statement specifying certain information as to the public benefits and artistic mission of the public benefit artist company.Upon the dissolution of an artist company or public benefit artist company, artistic work assigned or licensed by artist-members to the artist company or created by artist-members of the artist company reverts to the artist-member, except as specified in the articles of organization or operating agreement and subject to certain security interests, licenses, and obligations. After giving effect to artistic work reversionary rights, the assets of the artist company must be distributed in accordance with the articles of organization or operating agreement or, if not specified in the articles of organization or operating agreement, pro rata to members based on ownership percentages.(Note: This summary applies to this bill as introduced.)