This story was produced as part of the Colorado Capitol News Alliance. It first appeared at cpr.org.
Colorado is set to become the first state to create a new kind of corporation option just for artists.
An Artist Corporation, or A-Corp, is a type of limited liability company (LLC). It started as just an idea that Kickstarter co-founder Yancey Strickler presented in a TED Talk last year but is soon to become reality. The bill passed the state legislature but still needs Gov. Polis’ signature before becoming official.
The biggest point of confusion during the bill’s hearings in both the House and Senate was how the A-Corp structure meaningfully differs from already existing LLC options.
“[This bill] creates a simple optional business structure that allows artists to come together, share ownership of their work, and set clear rules on how that work is used and how income from it is shared,” bill co-sponsor Rep. Matthew Martinez answered during a committee hearing on the bill. “It gives them a way to build something that reflects how they actually operate while still keeping in control in the hands of the artists.”
The law specifies that under an A-Corp, artists will always maintain at least 51% ownership over the work they produce — a majority controlling share.
“A-Corp has different protections for intellectual property, which I think are a main asset that this has,” Cortney Stell, the executive director of the Englewood-based nomadic art museum Black Cube, told CPR News. “Being in a smaller city in a space that still really has a lot of open nature and open minds. I think that's how you see the Artist Corporation model being able to get a foot in the door here before it does anywhere else in the nation.”
Either an individual or group of artists can create an A-Corp. The structure would allow artists in a collective, like a band, to determine what happens to their assets in the event of dissolution, which advocates of the bill say is not readily laid out in already existing LLC structures.
“Nobody ever wants to assume something's going to go sour, but it does from time to time and it’s best to get it all down on paper,” said bill co-sponsor Rep. Rick Taggart during a committee hearing. “If [royalties] are going to continue, if they're not going to continue. Those kinds of things you can figure out in this document.”
Strickler said he chose Colorado to try this structure because he was advised to by arts advocates like the Sundance Institute’s Eugene Hernandez.
“With the move of the Sundance Film Festival to Boulder, it's just a state in an area that I think is poised to grow even more,” he told CPR News.
Some artists say they’re not only excited about the legal structure an A-Corp provides, but also the broader implications of art being respected as an occupation.
“It creates a framework that adds credibility and merit for the artistic sector,” Boulder poet and performing artist Maggie Saunders told CPR News. “The language of an Artist Corporation will create a larger echo in our state that being an artist is a real job with merit and it's worth pursuing.”
Advocates of the law hope that the legitimization of the A-Corp structure will also make it easier for artists to get access to health insurance, but that’s still yet to be seen.
Colorado allows individuals outside the state -- and even country -- to create companies here, so the law could have far-reaching effects.
