Colorado creates special LLC for artist businesses

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(The Center Square) - Artists in Colorado will soon have greater control over their work with a new type of LLC - the artist business. 

Gov. Jared Polis signed onto legislation this week that creates the artist corporation or A Corp. as a limited liability company. The law was passed during the recently concluded legislative session at the last minute with backing from artist groups.

“Things in Colorado are still trailblazing. We're not afraid to try something new,” said Meredith Badler, deputy director of Colorado Business Committee for the Arts.

“We're not entrenched, and we're really a space for innovation, particularly for small businesses and for artists," Badler told The Center Square during an interview.

The CBCA helped efforts to pass the bill, which the House voted for near-unanimously on the last day of the session.

The Colorado Artists Company law, Senate Bill 26-133, creates an LLC for people in the arts. Applications will need to have a stated artistic or creative mission and will require the artist hold a minimum of 51% ownership in the business.

The majority ownership requirement means artists would maintain creative and business control over their work. The ability for other investors to own a portion of the business means they could have access to revenue generated by the business without threatening its creative direction.

Badler said the idea was first proposed by Yancey Strickler, the cofounder of crowdfunding platform Kickstarter.

“[It’s] really for the purpose of understanding how creative work is different,” said Badler. “There hasn't been a model that really addresses how artists collaborate, how they want to work together and share ownership in their work. Artists were often forced to either go the nonprofit route, which has a lot of limitations, or in a more traditional LLC, which is built for just different types of businesses.”

The business structure of the artist business is available through typical LLCs, but the artist business is designed to make the development process easier for artists.

With SB26-133 now the law, the Colorado secretary of state is required to begin reviewing applications by July 2027 at the latest. Starting the rollout of the law cost the state $93,878.

“Expanding opportunities for Colorado artists to grow a business and unlocking more resources for artists across our state is good for our economy and the next generation of artists,” Polis said at the law’s signing. “Art plays an important role in our culture, history, and way of life, and this law will help artists thrive in Colorado.”

A Colorado Office of Economic Development and International Trade report found that the arts account for $18 billion in Colorado’s economy or 3.7% of the state’s total economy. The office also found the industry provides over 100,000 jobs.

Beyond the economy, Badler said there was a case for the artist business’ wider value to Colorado society.

“I think there's also a social case of valuing and not taking for granted the art, theater, music, dance, media, design that is integral to our everyday lives."