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Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 26-0130.01 Sarah Lozano x3858 SENATE BILL 26-133
Senate Committees House Committees
Business, Labor, & Technology
A BILL FOR AN ACT
CONCERNING THE AUTHORIZATION TO ESTABLISH AN ARTIST COMPANY101
IN THE STATE, AND, IN CONNECTION THEREWITH, ENACTING THE102
"COLORADO ARTIST COMPANY ACT".103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov.)
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.
SENATE SPONSORSHIP
Bridges and Catlin,
HOUSE SPONSORSHIP
Martinez and Taggart,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
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
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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.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add part 12 to article2
80 of title 7 as follows:3
PART 124
COLORADO ARTIST COMPANY ACT5
7-80-1201. Short title.6
THE SHORT TITLE OF THIS PART 12 IS THE "COLORADO ARTIST7
COMPANY ACT".8
7-80-1202. Definitions.9
AS USED IN THIS PART 12, UNLESS THE CONTEXT OTHERWISE10
REQUIRES:11
(1) "A RTICLES OF ORGANIZATION " INCLUDES LONG -FORM12
ARTICLES.13
(2) "ARTIST" MEANS AN INDIVIDUAL WHO CREATES ANY WORK OF14
AUTHORSHIP OR ARTISTIC EXPRESSION COMPRISING WRITTEN , ORAL ,15
VISUAL, GRAPHIC , LITERARY , MUSICAL , AUDIOVISUAL , DIGITAL , OR16
PERFORMING ART IN ANY MEDIUM , INCLUDING PAINTING , PRINTING ,17
DRAWING, SCULPTURE , CRAFT , PHOTOGRAPHY , MUSIC , WRITING , FILM ,18
PERFORMANCE, INTERACTIVE MEDIA, OR DIGITAL CONTENT.19
(3) "A RTIST COMPANY" MEANS A LIMITED LIABILITY COMPANY20
ORGANIZED UNDER THIS PART 12 THAT MEETS THE REQUIREMENTS OF21
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SECTION 7-80-1203 (1).1
(4) "ARTISTIC MISSION" MEANS A SPECIFIC CREATIVE OR ARTISTIC2
OR EDUCATIONAL PURPOSE , INCLUDING THE CREATION , DEVELOPMENT,3
PRODUCTION, DISTRIBUTION, EXHIBITION, OR PERFORMANCE OF CREATIVE4
OR ARTISTIC WORKS , OR OPERATIONS CONDUCTED IN FURTHERANCE OF5
THE ARTS AND CULTURAL CONTRIBUTIONS.6
(5) "A RTISTIC WORK " MEANS CREATIVE OR ARTISTIC WORKS ,7
PROJECTS, OR ACTIVITIES CREATED, DEVELOPED, PRODUCED, DISTRIBUTED,8
EXHIBITED, OR PERFORMED PURSUANT TO , OR IN FURTHERANCE OF , AN9
ARTISTIC MISSION.10
(6) "G OVERNING BODY " MEANS THE MEMBERS , MANAGER , OR11
BOARD OF MANAGERS RESPONSIBLE FOR THE MANAGEMENT AND12
GOVERNANCE OF AN ARTIST COMPANY , AS SPECIFIED IN THE ARTIST13
COMPANY'S ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT.14
(7) "LONG-FORM ARTICLES" MEANS THE LONG FORM OF ARTICLES15
OF ORGANIZATION PRESCRIBED BY THE SECRETARY OF STATE PURSUANT16
TO SECTION 7-80-1206 (3).17
(8) "PUBLIC BENEFIT" MEANS A POSITIVE EFFECT OR REDUCTION OF18
NEGATIVE EFFECTS ON ONE OR MORE CATEGORIES OF PERSONS ,19
COMMUNITIES, OR INTERESTS OTHER THAN MEMBERS IN THEIR CAPACITIES20
AS MEMBERS , INCLUDING EFFECTS OF AN ARTISTIC , CHARITABLE ,21
CULTURAL, EDUCATIONAL, LITERARY, OR TECHNOLOGICAL NATURE.22
(9) "P UBLIC BENEFIT ARTIST COMPANY " MEANS AN ARTIST23
COMPANY THAT HAS ELECTED TO BE SUBJECT TO SECTIONS 7-80-1215 TO24
7-80-1217.25
7-80-1203. Artist company - requirements.26
(1) AN ARTIST COMPANY IS A LIMITED LIABILITY COMPANY THAT:27
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(a) IS ORGANIZED UNDER THIS PART 12;1
(b) HAS A STATED ARTISTIC MISSION SET FORTH IN ITS ARTICLES OF2
ORGANIZATION OR OPERATING AGREEMENT; AND3
(c) IS FORMED AND OWNED BY ONE OR MORE ARTISTS WHO, AT THE4
TIME OF THE ARTIST COMPANY'S FORMATION OR CONVERSION, OWN NOT5
LESS THAN FIFTY-ONE PERCENT OF ALL VOTING SECURITIES OF THE ARTIST6
COMPANY. ARTISTS MUST AT ALL TIMES MAINTAIN AN OWNERSHIP7
PERCENTAGE OF NOT LESS THAN FIFTY -ONE PERCENT OF ALL VOTING8
SECURITIES OF THE ARTIST COMPANY.9
(2) AN ARTIST COMPANY MAY BE OR GANIZED FOR ANY LAWFUL10
PURPOSE PERMITTED FOR LIMITED LIABILITY COMPANIES UNDER THIS11
ARTICLE 80 IF THE PURPOSE INCLUDES OR MATERIALLY FURTHERS THE12
ARTISTIC MISSION.13
(3) A N ARTIST COMPANY MAY SPECIFY IN ITS ARTICLES OF14
ORGANIZATION OR OPERATING AGREEMENT:15
(a) THAT THE ARTISTIC MISSION HAS PRIMACY OVER FINANCIAL16
OBJECTIVES;17
(b) THAT THE ARTISTIC MISSION AND FINANCIAL OBJECTIVES ARE18
OF EQUAL PRIORITY; OR19
(c) ANY OTHER PRIORITY OR BALANCING BETWEEN THE ARTISTIC20
MISSION AND FINANCIAL OBJECTIVES.21
7-80-1204. Conversion to artist company.22
(1) A LIMITED LIABILITY COMPANY THAT IS NOT AN ARTIST23
COMPANY MAY CONVERT TO AN ARTIST COMPANY BY COMPLYING WITH24
THIS SECTION. TO CONVERT TO AN ARTIST COMPANY, A LIMITED LIABILITY25
COMPANY SHALL:26
(a) AMEND ITS ARTICLES OF ORGANIZATION TO:27
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(I) S TATE THE ARTISTIC MISSION OF THE LIMITED LIABILITY1
COMPANY;2
(II) STATE THAT THE LIMITED LIABILITY COMPANY ELECTS TO BE3
GOVERNED BY THIS PART 12 AS AN ARTIST COMPANY; AND4
(III) I NCLUDE ANY OTHER PROVISIONS REQUIRED BY SECTIONS5
7-80-1203, 7-80-1206 (1), 7-80-1206 (3) IF LONG -FORM ARTICLES ARE6
USED, AND 7-80-1206 (5) IF THE ARTIST COMPANY WILL BE A PUBLIC7
BENEFIT ARTIST COMPANY;8
(b) E NSURE THAT, AT THE TIME OF CONVERSION , ONE OR MORE9
ARTISTS OWN NOT LESS THAN FIFTY -ONE PERCENT OF THE VOTING10
SECURITIES OF THE ENTITY;11
(c) O BTAIN APPROVAL FOR THE CONVERSION BY THE VOTE OR12
CONSENT REQUIRED TO AMEND THE ARTICLES OF ORGANIZATION13
PURSUANT TO THE LIMITED LIABILITY COMPANY'S OPERATING AGREEMENT14
OR, IF THE OPERATING AGREEMENT DOES NOT SPECIFY THE VOTE OR15
CONSENT REQUIRED, BY THE UNANIMOUS CONSENT OF ALL MEMBERS; AND16
(d) F ILE THE AMENDED ARTICLES OF ORGANIZATION WITH THE17
SECRETARY OF STATE IN ACCORDANCE WITH SECTION 7-90-301.18
(2) UPON THE FILING OF AMENDED ARTICLES OF ORGANIZATION19
PURSUANT TO SUBSECTION (1)(d) OF THIS SECTION:20
(a) THE LIMITED LIABILITY COMPANY CONTINUES TO BE THE SAME21
ENTITY THAT EXISTED BEFORE THE CONVERSION;22
(b) ALL RIGHTS, TITLE, AND INTERESTS TO ALL REAL PROPERTY23
AND OTHER PROPERTY OWNED BY THE LIMITED LIABILITY COMPANY24
REMAIN VESTED IN THE ARTIST COMPANY;25
(c) ALL LIABILITIES AND OBLIGATIONS OF THE LIMITED LIABILITY26
COMPANY REMAIN LIABILITIES AND OBLIGATIONS OF THE ARTIST27
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COMPANY;1
(d) ALL RIGHTS OF CREDITORS AND ALL LIENS UPON ANY PROPERTY2
OF THE LIMITED LIABILITY COMPANY ARE PRESERVED UNIMPAIRED;3
(e) ANY ACTION OR PROCEEDING PENDING AGAINST THE LIMITED4
LIABILITY COMPANY MAY BE CONTINUED AGAINST THE ARTIST COMPANY5
AS IF THE CONVERSION HAD NOT OCCURRED; AND6
(f) THE ARTIST COMPANY IS SUBJECT TO THIS PART 12.7
(3) A CONVERSION CONDUCTED PURSUANT TO THIS SECTION DOES8
NOT CONSTITUTE A DISSOLUTION, TERMINATION, OR TRANSFER OF ASSETS9
OF THE LIMITED LIABILITY COMPANY.10
(4) (a) THE CONVERSION OF A LIMITED LIABILITY COMPANY TO AN11
ARTIST COMPANY PURSUANT TO THIS SECTION DOES NOT AFFECT A12
MEMBER'S LIABILITY FOR OBLIGATIONS OF THE LIMITED LIABILITY13
COMPANY INCURRED PRIOR TO THE CONVERSION BECOMING EFFECTIVE.14
(b) U NLESS OTHERWISE AGREED TO BY THE MEMBERS ,15
CONVERSION TO AN ARTIST COMP ANY DOES NOT AFFECT A MEMBER 'S16
EXISTING RIGHTS UNDER THE OPERATING AGREEMENT OF THE LIMITED17
LIABILITY COMPANY, EXCEPT TO THE EXTENT THE RIGHTS ARE UNDER AN18
OPERATING AGREEMENT ENTERED INTO ON OR AFTER THE EFFECTIVE DATE19
OF THIS PART 12 AND ARE INCONSISTENT WITH THE REQUIREMENTS OF THIS20
PART 12.21
7-80-1205. Application of article 80.22
(1) E XCEPT AS OTHERWISE PROVIDED IN THIS PART 12, THE23
PROVISIONS OF THIS ARTICLE 80 THAT ARE APPLICABLE TO LIMITED24
LIABILITY COMPANIES APPLY TO ARTIST COMPANIES.25
(2) I N THE EVENT OF A CONFLICT BETWEEN THIS PART 12 AND26
OTHER PROVISIONS OF THIS ARTICLE 80, THIS PART 12 CONTROLS.27
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(3) NOTWITHSTANDING SECTION 7-80-108 OR ANOTHER PROVISION1
OF THIS ARTICLE 80, THE REQUIREMENTS IMPOSED BY SECTIONS 7-80-12032
(1)(c) AND 7-80-1214 (2) SHALL NOT BE ALTERED IN AN OPERATING3
AGREEMENT. ALL OTHER PROVISIONS OF THIS PART 12 MAY BE MODIFIED4
BY THE OPERATING AGREEMENT TO THE EXTENT PERMITTED BY SECTION5
7-80-108 AND THIS PART 12.6
7-80-1206. Formation of artist company - long-form articles7
- public benefit artist company requirements.8
(1) A PERSON MAY FORM AN ARTIST COMPANY BY FILING ARTICLES9
OF ORGANIZATION OR LONG -FORM ARTICLES WITH THE SECRETARY OF10
STATE PURSUANT TO SECTION 7-90-301 THAT MEET THE REQUIREMENTS11
SET FORTH IN SECTIONS 7-80-204 AND 7-80-1203, SUBSECTION (3) OF THIS12
SECTION IF LONG-FORM ARTICLES ARE USED, AND SUBSECTION (5) OF THIS13
SECTION IF THE ARTIST COMPANY WILL BE A PUBLIC BENEFIT ARTIST14
COMPANY.15
(2) I F LONG -FORM ARTICLES ARE FILED AND AN OPERATING16
AGREEMENT IS NOT ADOPTED, THE ELECTIONS MADE IN THE LONG -FORM17
ARTICLES GOVERN THE ARTIST COMPANY.18
(3) ON OR BEFORE JULY 1, 2027, THE SECRETARY OF STATE SHALL19
PRESCRIBE AND MAKE PUBLICLY AVAILABLE A FORM OF LONG -FORM20
ARTICLES OF ORGANIZATION FOR AN ARTIST COMPANY THAT INCLUDES, IN21
ADDITION TO THE INFORMATION REQUIRED BY SECTION 7-80-204:22
(a) A STATEMENT OF THE ARTISTIC MISSION OF THE ARTIST23
COMPANY;24
(b) A STATEMENT REGARDING THE PRIORITY OF THE ARTISTIC25
MISSION AND FINANCIAL OBJECTIVES AS PROVIDED IN SECTION 7-80-120326
(3);27
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(c) A STATEMENT AS TO WHETHER THE ARTIST COMPANY ELECTS1
TO BE A PUBLIC BENEFIT ARTIST COMPANY SUBJECT TO SECTIONS2
7-80-1215 TO 7-80-1217 AND, IF SUCH ELECTION IS MADE, ONE OR MORE3
SPECIFIC PUBLIC BENEFITS TO BE PROMOTED BY THE ARTIST COMPANY;4
(d) CHECK-BOX OR FILL-IN-THE-BLANK PROVISIONS ALLOWING THE5
INCORPORATORS TO ELECT:6
(I) T HE STRUCTURE OF EQUITY OWNERSHIP FROM THE OPTIONS7
PROVIDED IN SECTION 7-80-1207;8
(II) THE STRUCTURE OF THE GOVERNING BODY FROM THE OPTIONS9
PROVIDED IN SECTION 7-80-1208;10
(III) WHETHER FIDUCIARY DUTIES APPLY AS PROVIDED IN SECTION11
7-80-1211;12
(IV) WHICH EXISTING ARTISTIC WORK SHOULD BE ASSIGNED OR13
EXCLUSIVELY LICENSED TO THE ARTIST COMPANY AS PROVIDED IN14
SECTION 7-80-1212;15
(V) W HETHER ARTISTIC WORK CREATED BY MEMBERS DURING16
THEIR MEMBERSHIP IS ASSIGNED OR EXCLUSIVELY LICENSED TO THE17
ARTIST COMPANY AS PROVIDED IN SECTION 7-80-1213 (1);18
(VI) THE TAX TREATMENT OF THE ARTIST COMPANY AS PROVIDED19
IN SECTION 7-80-1219;20
(VII) WHETHER DISTRIBUTIONS ARE MADE BASED ON OWNERSHIP21
PERCENTAGES OR ALTERNATIVE MECHANISMS, WITH SPACE TO DESCRIBE22
SUCH ALTERNATIVE MECHANISMS;23
(VIII) B ASIC PROVISIONS REGARDING TERMINATION OF A24
MEMBER'S MEMBERSHIP INTEREST UPON WITHDRAWAL FROM THE ARTIST25
COMPANY, ADMISSION OF NEW MEMBERS, AND RIGHTS TO ARTISTIC WORK26
UPON MEMBER WITHDRAWAL AND TERMINATION OF MEMBERSHIP27
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INTEREST; AND1
(IX) W HETHER CERTAIN DECISIONS REQUIRE ARTIST2
SUPERMAJORITY OR UNANIMOUS APPROVAL;3
(e) IF THE ELECTION IS MADE UNDER SUBSECTION (3)(d)(V) OF THIS4
SECTION, A NARRATIVE DESCRIPTION OF THE ARTISTIC WORK TO BE5
CREATED BY THE ARTIST COMPANY TO SET FORTH THE SCOPE OF ARTISTIC6
WORK SUBJECT TO THE ASSIGNMENT OR EXCLUSIVE LICENSE;7
(f) A PROVISION ALLOWING THE INCORPORATORS TO ELECT8
WHETHER SELECTED TERMS IN THE LONG -FORM ARTICLES MAY BE9
SUPERSEDED BY A SUBSEQUENTLY ADOPTED OPERATING AGREEMENT:10
(I) WITHOUT AMENDMENT TO THE LONG-FORM ARTICLES; OR11
(II) O NLY WITH CONCURRENT AMENDMENT TO THE LONG -FORM12
ARTICLES; AND13
(g) O THER PROVISIONS CONSISTENT WITH LAW AS THE14
INCORPORATORS ELECT TO INCLUDE.15
(4) T HE LONG-FORM ARTICLES MAY BE AMENDED IN THE SAME16
MANNER AS ARTICLES OF ORGANIZATION UNDER SECTION 7-80-209.17
(5) IF AN ARTIST COMPANY ELECTS TO BECOME A PUBLIC BENEFIT18
ARTIST COMPANY PURSUANT TO SECTION 7-80-1215, THE ARTIST19
COMPANY SHALL STATE IN THE HEADING OF ITS ARTICLES OF20
ORGANIZATION THAT IT IS A "PUBLIC BENEFIT ARTIST COMPANY ". A21
CERTIFICATE OF MEMBERSHIP INTEREST OR OTHER SECURITY ISSUED BY A22
PUBLIC BENEFIT ARTIST COMPANY MUST NOTE CONSPICUOUSLY THAT THE23
PUBLIC BENEFIT ARTIST COMPANY IS A PUBLIC BENEFIT ARTIST COMPANY24
FORMED PURSUANT TO THIS PART 12.25
(6) A N ARTIST COMPANY 'S NAME MAY CONTAIN THE WORDS26
"ARTIST COMPANY" OR THE ABBREVIATIONS "ALLC", "A CORP", "AC", OR27
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"A.C." IN LIEU OF OR IN ADDITION TO ANY TERM OR ABBREVIATION1
OTHERWISE PERMITTED BY SECTION 7-90-601 (3)(c).2
7-80-1207. Ownership of equity.3
(1) S UBJECT TO THE REQUIREMENTS SET FORTH IN SECTION4
7-80-1203 (1)(c), AN ARTIST COMPANY HAS THE SAME OPTIONS WITH5
RESPECT TO EQUITY OWNERSHIP PROVIDED TO LIMITED LIABILITY6
COMPANIES GENERALLY UNDER THIS ARTICLE 80.7
(2) THE INCORPORATORS OF AN ARTIST COMPANY MAY ELECT IN8
THE ARTICLES OF ORGANIZATION OR LONG -FORM ARTICLES ONE OF THE9
FOLLOWING STRUCTURES FOR EQUITY OWNERSHIP:10
(a) O WNERSHIP BASED ON THE SALE OF UNITS , INCLUDING11
FRACTIONAL UNITS;12
(b) PRO RATA OWNERSHIP BASED ON THE NUMBER OF MEMBERS;13
(c) P RO RATA OWNERSHIP BASED ON CAPITAL CONTRIBUTIONS ,14
INCLUDING IN-KIND CONTRIBUTIONS OF CASH, PROPERTY, ARTISTIC WORK,15
ROYALTY SHARING , REVENUE PARTICIPATION RIGHTS , OR OTHER16
INTANGIBLE ASSETS; OR17
(d) FIXED OWNERSHIP PERCENTAGES BY INDIVIDUAL MEMBER AS18
SPECIFIED IN THE LONG-FORM ARTICLES.19
(3) UNLESS OTHERWISE SPECIFIED IN AN OPERATING AGREEMENT,20
ALLOCATIONS AND DISTRIBUTIONS MUST BE MADE BASED ON OWNERSHIP21
PERCENTAGES; EXCEPT THAT THE OPERATING AGREEMENT MAY ESTABLISH22
ALTERNATIVE ALLOCATION OR DISTRIBUTION MECHANISMS , INCLUDING23
ALLOCATIONS OR DISTRIBUTIONS BASED ON REVENUE PARTICIPATION ,24
ROYALTY SHARING , RECOUPMENT WATERFALLS , OR OTHER CRITERIA25
INDEPENDENT OF OWNERSHIP PERCENTAGES.26
7-80-1208. Governing body.27
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(1) A N ARTIST COMPANY HAS THE SAME GOVERNANCE OPTIONS1
PROVIDED TO LIMITED LIABILITY COMPANIES GENERALLY UNDER THIS2
ARTICLE 80.3
(2) THE INCORPORATORS OF AN ARTIST COMPANY MAY ELECT IN4
THE ARTICLES OF ORGANIZATION OR LONG -FORM ARTICLES ONE OF THE5
FOLLOWING GOVERNANCE STRUCTURES:6
(a) G OVERNANCE BY MEMBERS , WITH VOTING BASED ON7
OWNERSHIP PERCENTAGES;8
(b) G OVERNANCE BY A SINGLE MANAGER , WITH THE MANAGER9
ELECTED BY MEMBERS; OR10
(c) GOVERNANCE BY A BOARD OF MANAGERS , WITH MANAGERS11
ELECTED BY MEMBERS.12
(3) M ORE COMPLEX GOVERNANCE STRUCTURES , INCLUDING13
SEPARATE VOTING FOR ARTISTIC DECISIONS VERSUS BUSINESS DECISIONS,14
MAY BE SPECIFIED IN AN OPERATING AGREEMENT.15
7-80-1209. Governance principles.16
(1) U NLESS OTHERWISE PROVIDED IN THE ARTICLES OF17
ORGANIZATION OR OPERATING AGREEMENT OF AN ARTIST COMPANY:18
(a) A QUORUM FOR A MEETING OF MEMBERS OR MANAGERS19
CONSISTS OF A MAJORITY OF THE VOTING INTERESTS OR MANAGERS , AS20
APPLICABLE, ENTITLED TO VOTE AT THE MEETING;21
(b) EXCEPT AS PROVIDED IN SUBSECTION (1)(c) OF THIS SECTION,22
AN ACT OF THE MEMBERS OR MANAGERS REQUIRES APPROVAL BY A23
MAJORITY OF THOSE PRESENT AT A MEETING AT WHICH A QUORUM IS24
PRESENT; EXCEPT THAT THE FOLLOWING ACTIONS REQUIRE APPROVAL BY25
A MAJORITY OF ALL VOTING INTERESTS OF THE MEMBERS:26
(I) AMENDMENT OF THE ARTICLES OF ORGANIZATION;27
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(II) ADOPTION OR AMENDMENT OF AN OPERATING AGREEMENT;1
(III) M ERGER, CONSOLIDATION , CONVERSION , CHANGE OF2
CONTROL, OR OTHER BUSINESS COMBINATION TRANSACTION;3
(IV) DISSOLUTION OF THE ARTIST COMPANY;4
(V) E LECTION TO BECOME OR CEASE TO BE A PUBLIC BENEFIT5
ARTIST COMPANY;6
(VI) A N ACTION THAT WOULD REDUCE ARTIST -MEMBER7
OWNERSHIP BELOW THE REQUIRED PERCENTAGE SET FORTH IN SECTION8
7-80-1203 (1)(c); AND9
(VII) OTHER MATTERS AS MAY BE SPECIFIED IN THE ARTICLES OF10
ORGANIZATION OR OPERATING AGREEMENT; AND11
(c) THE FOLLOWING ACTIONS REQUIRE APPROVAL BY A MAJORITY12
OF ALL VOTING INTERESTS OF ARTIST -MEMBERS, EVEN IF THE ACTION IS13
EFFECTUATED BY AN AMENDMENT TO THE ARTICLES OF ORGANIZATION OR14
OPERATING AGREEMENT:15
(I) A N ACTION MATERIALLY AFFECTING THE OWNERSHIP ,16
LICENSING, TRANSFER, OR REVERSIONARY RIGHTS OF ARTISTIC WORK OF17
THE ARTIST COMPANY OR ARTIST-MEMBERS;18
(II) C HANGING THE DEFINITION OR SCOPE OF "PUBLIC BENEFIT"19
UNDER THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF A20
PUBLIC BENEFIT ARTIST COMPANY;21
(III) ELECTING TO BECOME OR CEASING TO BE A PUBLIC BENEFIT22
ARTIST COMPANY;23
(IV) CONVERTING THE ARTIST COMPANY INTO AN ENTITY OTHER24
THAN AN ARTIST COMPANY;25
(V) M ODIFYING THE GOVERNING CONTROL OF THE ARTIST26
COMPANY, INCLUDING WITH RESPECT TO MANAGEMENT STRUCTURE ,27
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VOTING RIGHTS, OR DECISION-MAKING AUTHORITY; AND1
(VI) APPROVING THE ANNUAL OPERATING BUDGET OF THE ARTIST2
COMPANY.3
(2) THE FOLLOWING IS NOT INDIVIDUALLY AN INDICATION OF LACK4
OF GOOD GOVERNANCE, GROUNDS FOR PIERCING THE LIMITED LIABILITY5
VEIL, OR EVIDENCE OF IMPROPER CORPORATE FORMALITIES:6
(a) FAILURE TO PREPARE WRITTEN MINUTES OF MEETINGS OF THE7
GOVERNING BODY IF THERE IS ADEQUATE WRITTEN EVIDENCE OF FORMAL8
APPROVALS TAKEN BY THE GOVERNING BODY;9
(b) F AILURE TO HOLD ANNUAL MEETINGS OF MEMBERS OF AN10
ARTIST COMPANY; OR11
(c) F AILURE OF AN ARTIST COMPANY TO OBSERVE OTHER12
FORMALITIES CUSTOMARILY ASSOCIATED WITH COLORADO LIMITED13
LIABILITY COMPANIES OR OTHER ENTITY FORMS.14
7-80-1210. Acceptance of capital.15
(1) A N ARTIST COMPANY MAY ACCEPT CAPITAL IN ANY FORM ,16
INCLUDING:17
(a) GRANTS;18
(b) REFUNDABLE GRANTS;19
(c) FIRST LOSS CAPITAL;20
(d) PROGRAM-RELATED INVESTMENTS;21
(e) MISSION-RELATED INVESTMENTS;22
(f) A FINANCIAL AGREEMENT FOR IMPACT RETURNS INVESTMENTS;23
(g) DEBT INSTRUMENTS;24
(h) EQUITY INVESTMENTS;25
(i) CONVERTIBLE INVESTMENT INSTRUMENTS;26
(j) FINANCIAL INSTRUMENTS, INCLUDING REVENUE, CASH FLOW,27
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AND PROFIT PARTICIPATION RIGHTS;1
(k) ROYALTY SHARING RIGHTS; AND2
(l) IN-KIND CONTRIBUTIONS, INCLUDING INTELLECTUAL PROPERTY3
SUCH AS ARTISTIC WORK.4
(2) I F AND TO THE EXTENT THAT A DONOR , WITH RESPECT TO5
GRANTS OR REFUNDABLE GRANTS, IS REQUIRED TO EXERCISE EXPENDITURE6
RESPONSIBILITY, THE DONOR IS ENTITLED TO THE STATEMENTS PREPARED7
FOR MEMBERS AS SET FORTH IN SECTION 7-80-1217.8
(3) I F AND TO THE EXTENT THAT A DONOR REQUESTS THAT9
DONATIONS BE TAX DEDUCTIBLE , UNLESS AND UNTIL THE FEDERAL10
INTERNAL REVENUE SERVICE PROVIDES THAT ARTIST COMPANIES ARE11
ENTITLED TO STATUS AS TAX EXEMPT ORGANIZATIONS, DONATIONS TO AN12
ARTIST COMPANY MAY BE MADE THROUGH A SEPARATE TAX EXEMPT13
ORGANIZATION.14
7-80-1211. Fiduciary duties.15
(1) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE DUTIES16
OF MEMBERS AND MANAGERS OF AN ARTIST COMPANY ARE GOVERNED BY17
SECTION 7-80-404.18
(2) IN ADDITION TO THE DUTIES SPECIFIED IN SECTION 7-80-404,19
THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF AN ARTIST20
COMPANY MAY SPECIFY DUTIES OF MEMBERS OR MANAGERS WITH RESPECT21
TO THE ARTISTIC MISSION OF THE ARTIST COMPANY, INCLUDING DUTIES TO:22
(a) PRESERVE AND PROMOTE THE ARTISTIC MISSION OF THE ARTIST23
COMPANY;24
(b) B ALANCE THE ARTISTIC MISSION WITH THE FINANCIAL25
INTERESTS OF THE ARTIST COMPANY AND THE PECUNIARY INTERESTS OF26
THE MEMBERS; OR27
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(c) CONSULT WITH OR OBTAIN APPROVAL FROM ARTIST-MEMBERS1
ON DECISIONS MATERIALLY AFFECTING THE ARTISTIC DIRECTION OR2
CREATIVE OUTPUT OF THE ARTIST COMPANY.3
(3) T HE DUTIES SPECIFIED IN SUBSECTIONS (1) AND (2) OF THIS4
SECTION MAY BE MODIFIED BY THE ARTICLES OF ORGANIZATION OR5
OPERATING AGREEMENT OF AN ARTIST COMPANY TO THE EXTENT6
PERMITTED BY SECTIONS 7-80-108 AND 7-80-204.7
(4) F OR PUBLIC BENEFIT ARTIST COMPANIES , THE DUTIES OF8
MEMBERS AND MANAGERS ARE FURTHER SPECIFIED IN SECTION 7-80-1216.9
(5) T HE LONG -FORM ARTICLES MUST INCLUDE CHECK -BOX10
ELECTIONS ALLOWING INCORPORATORS TO ACCEPT THE DEFAULT DUTIES11
DESCRIBED UNDER THIS SECTION OR TO MODIFY SPECIFIC DUTIES AS12
PERMITTED BY SUBSECTION (3) OF THIS SECTION.13
7-80-1212. Intellectual property as a capital contribution -14
assignment or exclusive licensing to artist company.15
(1) A MEMBER OF AN ARTIST COMPANY MAY ASSIGN OR16
EXCLUSIVELY LICENSE TO THE ARTIST COMPANY INTELLECTUAL17
PROPERTY, INCLUDING ARTISTIC WORK OR ANY RIGHT OR RIGHTS RELATED18
TO THE ARTISTIC WORK, AS IN-KIND CAPITAL CONTRIBUTIONS, INCLUDING19
AS THE INITIAL CAPITAL CONTRIBUTION OF THE MEMBER TO BECOME A20
MEMBER OF THE ARTIST COMPANY.21
(2) THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT22
OF AN ARTIST COMPANY MAY PROVIDE FOR THE VALUATION OF ARTISTIC23
WORK, OR ANY RIGHT OR RIGHTS RELATED TO THE ARTISTIC WORK ,24
ASSIGNED OR EXCLUSIVELY LICENSED TO THE ARTIST COMPANY PURSUANT25
TO THIS SECTION. IF, PRIOR TO THE TIME OF ASSIGNMENT OR EXCLUSIVE26
LICENSING, THE GOVERNING BODY OF THE ARTIST COMPANY AND THE27
SB26-133-16-
ASSIGNING OR EXCLUSIVE LICENSING MEMBER FAIL TO AGREE ON A1
VALUATION, THE MEMBER MAY ELECT TO EITHER:2
(a) DECLINE TO ASSIGN OR EXCLUSIVELY LICENSE THE ARTISTIC3
WORK, OR ANY RIGHT OR RIGHTS RELATED TO THE ARTISTIC WORK, TO THE4
ARTIST COMPANY; OR5
(b) HAVE AN INDEPENDENT PROFESSIONAL VALUATOR MUTUALLY6
AGREED TO BY THE PARTIES DETERMINE THE VALUATION OF THE ARTISTIC7
WORK AT THE ARTIST COMPANY'S COST, WHICH DETERMINATION IS FINAL8
AND BINDING.9
(3) ANY ASSIGNMENT OR EXCLUSIVE LICENSING OF ARTISTIC WORK10
TO AN ARTIST COMPANY PURSUANT TO THIS SECTION MAY BE LIMITED IN11
SCOPE TO INCLUDE ONLY THE ARTISTIC WORK, OR ANY RIGHT OR RIGHTS12
RELATED TO THE ARTISTIC WORK, REQUIRED FOR THE ARTISTIC MISSION OF13
THE ARTIST COMPANY.14
(4) U NLESS OTHERWISE SPECIFIED IN THE ARTICLES OF15
ORGANIZATION OR OPERATING AGREEMENT OF AN ARTIST COMPANY ,16
ARTISTIC WORK ASSIGNED OR EXCLUSIVELY LICENSED TO THE ARTIST17
COMPANY PURSUANT TO THIS SECTION IS ASSIGNED OR EXCLUSIVELY18
LICENSED SUBJECT TO THE REVERSIONARY RIGHTS SET FORTH IN SECTION19
7-80-1222 (2)(a)(I), WHICH REVERSIONARY RIGHTS CONSTITUTE A20
RETAINED INTEREST THAT DOES NOT TRANSFER TO THE ARTIST COMPANY21
AND IS NOT AVAILABLE TO CREDITORS OF THE ARTIST COMPANY .22
INTELLECTUAL PROPERTY CONTRIBUTED TO THE ARTIST COMPANY THAT23
DOES NOT CONSTITUTE ARTISTIC WORK IS NOT SUBJECT TO THE24
REVERSIONARY RIGHTS AND IS AN ASSET OF THE ARTIST COMPANY.25
7-80-1213. Artistic work created during membership -26
restriction on transfer.27
SB26-133-17-
(1) THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT1
OF AN ARTIST COMPANY MAY REQUIRE ARTIST -MEMBERS TO ASSIGN OR2
EXCLUSIVELY LICENSE TO THE ARTIST COMPANY ARTISTIC WORK CREATED3
BY THE ARTIST -MEMBERS DURING MEMBERSHIP THAT RELATES TO THE4
ARTISTIC MISSION OF THE ARTIST COMPANY. ARTISTIC WORK ASSIGNED OR5
EXCLUSIVELY LICENSED PURSUANT TO THIS SUBSECTION (1) IS SUBJECT TO6
THE REVERSIONARY RIGHTS SET FORTH IN SECTION 7-80-1222 (2)(a)(I),7
WHICH REVERSIONARY RIGHTS CONSTITUTE A RETAINED INTEREST THAT8
DOES NOT TRANSFER TO THE ARTIST COMPANY AND IS NOT AVAILABLE TO9
CREDITORS OF THE ARTIST COMPANY. INTELLECTUAL PROPERTY CREATED10
ON BEHALF OF THE ARTIST COMPANY THAT DOES NOT CONSTITUTE11
ARTISTIC WORK IS NOT SUBJECT TO THE REVERSIONARY RIGHTS AND IS AN12
ASSET OF THE ARTIST COMPANY.13
(2) I F THE ASSIGNMENT OR EXCLUSIVE LICENSING TERMS14
DESCRIBED IN SUBSECTION (1) OF THIS SECTION ARE INCLUDED IN AN15
ARTIST COMPANY 'S ARTICLES OF ORGANIZATION OR OPERATING16
AGREEMENT, THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT17
OF THE ARTIST COMPANY MUST ALSO INCLUDE A NARRATIVE DESCRIPTION18
OF THE ARTISTIC WORK TO BE CREATED BY THE ARTIST COMPANY TO19
DELINEATE THE SCOPE OF ARTISTIC WORK SUBJECT TO ASSIGNMENT OR20
EXCLUSIVE LICENSING.21
(3) AN ARTIST-MEMBER MAY RETAIN SPECIFIED ARTISTIC WORK22
CREATED BY THE ARTIST -MEMBER DURING THE ARTIST -MEMBER'S23
MEMBERSHIP BY PROVIDING WRITTEN NOTICE TO THE ARTIST COMPANY24
DESCRIBING THE ARTISTIC WORK TO BE RETAINED BY THE ARTIST-MEMBER.25
THE WRITTEN NOTICE MAY BE PROVIDED AT THE TIME THE26
ARTIST-MEMBER JOINS THE ARTIST COMPANY OR WITHIN THIRTY DAYS27
SB26-133-18-
AFTER THE GENERATION OF THE ARTISTIC WORK. IF A WRITTEN NOTICE IS1
PROVIDED, THE ARTIST -MEMBER SHALL GRANT THE ARTIST COMPANY A2
NONEXCLUSIVE, PERPETUAL , IRREVOCABLE LICENSE TO THE ARTISTIC3
WORK TO THE EXTENT THAT THE ARTIST -MEMBER USES THE ARTISTIC4
WORK IN THE ARTIST-MEMBER'S WORK FOR THE ARTIST COMPANY.5
(4) ALL ARTISTIC WORK ASSIGNED OR EXCLUSIVELY LICENSED TO6
OR CREATED BY ARTIST -MEMBERS ON BEHALF OF THE ARTIST COMPANY7
MUST BE OWNED BY EITHER THE ARTIST -MEMBERS OR THE ARTIST8
COMPANY AND IS SUBJECT TO THE REVERSIONARY RIGHTS DESCRIBED IN9
SECTION 7-80-1222 (2)(a)(I). T HE ARTISTIC WORK SHALL NOT BE10
TRANSFERRED TO, OWNED BY, ASSIGNED TO, OR EXCLUSIVELY LICENSED11
TO NONARTIST MEMBERS OR INVESTORS OR OTHER NONARTIST THIRD12
PARTIES EXCEPT THROUGH LICENSES OR OTHER CONTRACTUAL13
AGREEMENTS ENTERED INTO WITH UNAFFILIATED THIRD PARTIES IN THE14
ORDINARY COURSE OF BUSINESS FOR BONA FIDE COMMERCIAL PURPOSES.15
LICENSES AND CONTRACTUAL AGREEMENTS DESCRIBED IN THIS16
SUBSECTION (4) ARE SUBJECT TO THE REVERSIONARY RIGHTS DESCRIBED17
IN SECTION 7-80-1222 (2)(a)(I). T HE ARTICLES OF ORGANIZATION OR18
OPERATING AGREEMENT MAY ADDRESS:19
(a) T REATMENT OF ARTISTIC WORK UPON AN ARTIST -MEMBER'S20
DEPARTURE FROM THE ARTIST COMPANY , INCLUDING WHETHER THE21
ARTISTIC WORK REMAINS WITH THE ARTIST COMPANY OR REVERTS TO THE22
DEPARTED ARTIST-MEMBER IN SPECIFIED DEPARTURE SCENARIOS;23
(b) R IGHTS OF DEPARTED ARTIST -MEMBERS TO CONTINUE24
RECEIVING ROYALTIES OR REVENUES FROM ARTISTIC WORK CREATED25
DURING THEIR MEMBERSHIP;26
(c) RIGHTS OF REMAINING ARTIST-MEMBERS TO CONTINUE USING27
SB26-133-19-
OR EXPLOITING ARTISTIC WORK CREATED JOINTLY WITH DEPARTED1
ARTIST-MEMBERS;2
(d) PROCEDURES AND CONSENT REQUIREMENTS FOR ANY SALE OR3
ASSIGNMENT OF ARTISTIC WORK TO NONARTIST THIRD PARTIES , WHICH4
MUST INCLUDE THE CONSENT OF THE ARTIST-MEMBER WHO CREATED THE5
ARTISTIC WORK AND PROVIDE FOR CONSIDERATION TO BE PAID TO THE6
ARTIST-MEMBER FOR RELINQUISHMENT OF THE ARTIST -MEMBER'S7
REVERSIONARY RIGHTS IF THE REVERSIONARY RIGHTS ARE TO BE8
INCLUDED IN THE SALE OR ASSIGNMENT; AND9
(e) UPON DISSOLUTION OF THE ARTIST COMPANY, REVERSIONARY10
RIGHTS AS DESCRIBED IN SECTION 7-80-1222 (2)(a)(I).11
7-80-1214. Separation of economic rights from governance12
and control.13
(1) THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT14
OF AN ARTIST COMPANY MAY PROVIDE FOR THE SEPARATION OF ECONOMIC15
RIGHTS FROM GOVERNANCE AND CONTROL RIGHTS.16
(2) ANY GOVERNANCE AND CONTROL RIGHTS MUST AT ALL TIMES17
REMAIN WITH ARTIST-MEMBERS IN ACCORDANCE WITH SECTION 7-80-120318
(1)(c). NONARTIST INVESTORS MAY HOLD ECONOMIC RIGHTS, INCLUDING19
RIGHTS TO DISTRIBUTIONS , ROYALTIES , REVENUE PARTICIPATION , OR20
OTHER FINANCIAL RETURNS, WITHOUT CORRESPONDING GOVERNANCE OR21
CONTROL RIGHTS.22
(3) A N OPERATING AGREEMENT MAY SPECIFY THE EXTENT AND23
NATURE OF ECONOMIC RIGHTS HELD BY NONARTIST INVESTORS, INCLUDING24
PRIORITY OF DISTRIBUTIONS, REVENUE PARTICIPATION ARRANGEMENTS,25
RECOUPMENT PROVISIONS, AND OTHER FINANCIAL TERMS.26
7-80-1215. Public benefit artist company - election.27
SB26-133-20-
(1) AN ARTIST COMPANY MAY ELECT AT FORMATION OR AT THE1
TIME OF CONVERSION TO BE A PUBLIC BENEFIT ARTIST COMPANY BY:2
(a) STATING IN THE HEADING OF ITS ARTICLES OF ORGANIZATION3
THAT IT IS A "PUBLIC BENEFIT ARTIST COMPANY";4
(b) SETTING FORTH IN ITS ARTICLES OF ORGANIZATION AND IN ITS5
OPERATING AGREEMENT, IF ANY, ONE OR MORE SPECIFIC PUBLIC BENEFITS6
TO BE PROMOTED BY THE ARTIST COMPANY; AND7
(c) STATING IN ITS OPERATING AGREEMENT, IF ANY, THAT IT IS A8
PUBLIC BENEFIT ARTIST COMPANY.9
(2) A N ARTIST COMPANY THAT IS NOT FORMED AS A PUBLIC10
BENEFIT ARTIST COMPANY MAY BECOME A PUBLIC BENEFIT ARTIST11
COMPANY BY:12
(a) AMENDING ITS ARTICLES OF ORGANIZATION AND OPERATING13
AGREEMENT TO COMPLY WITH THE REQUIREMENTS OF SUBSECTION (1) OF14
THIS SECTION; AND15
(b) OBTAINING APPROVAL OF THE ELECTION BY A MAJORITY OF ALL16
VOTING INTERESTS OF THE MEMBERS AS REQUIRED BY SECTION 7-80-120917
(1)(b)(V) AND THE MAJORITY OF ALL VOTING INTERESTS OF18
ARTIST-MEMBERS AS REQUIRED BY SECTION 7-80-1209 (1)(c)(III).19
(3) A PUBLIC BENEFIT ARTIST COMPANY MAY CEASE TO BE A20
PUBLIC BENEFIT ARTIST COMPANY BY:21
(a) AMENDING ITS ARTICLES OF ORGANIZATION TO REMOVE THE22
DESIGNATION AS A PUBLIC BENEFIT ARTIST COMPANY AND THE SPECIFIC23
PUBLIC BENEFITS; AND24
(b) OBTAINING APPROVAL OF THE AMENDMENT BY A MAJORITY OF25
ALL VOTING INTERESTS OF THE MEMBERS AS REQUIRED BY SECTION26
7-80-1209 (1)(b)(V) AND THE MAJORITY OF ALL VOTING INTERESTS OF27
SB26-133-21-
ARTIST-MEMBERS AS REQUIRED BY SECTION 7-80-1209 (1)(c)(III).1
(4) A PUBLIC BENEFIT ARTIST COMPANY THAT ELECTS TO CEASE2
BEING A PUBLIC BENEFIT ARTIST COMPANY REMAINS SUBJECT TO THIS PART3
12 AS AN ARTIST COMPANY.4
(5) IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE PUBLIC5
BENEFITS TO BE PROMOTED BY A PUBLIC BENEFIT ARTIST COMPANY AS SET6
FORTH IN ITS OPERATING AGREEMENT AND IN ITS ARTICLES OF7
ORGANIZATION, THE OPERATING AGREEMENT CONTROLS AMONG THE8
MEMBERS, THE MANAGERS, AND OTHER PERSONS THAT ARE PARTY TO OR9
OTHERWISE BOUND BY THE OPERATING AGREEMENT.10
(6) A MANAGER OF A PUBLIC BENEFIT ARTIST COMPANY , OR, IF11
THERE IS NO MANAGER , ANY MEMBER OF A PUBLIC BENEFIT ARTIST12
COMPANY, THAT BECOMES AWARE THAT THE SPECIFIC PUBLIC BENEFITS TO13
BE PROMOTED BY THE PUBLIC BENEFIT ARTIST COMPANY SET FORTH IN ITS14
OPERATING AGREEMENT ARE INACCURATELY SET FORTH IN ITS ARTICLES15
OF ORGANIZATION SHALL PROMPTLY AMEND THE ARTICLES OF16
ORGANIZATION IN ACCORDANCE WITH SECTION 7-80-1209 (1)(c)(II).17
(7) THE ELECTION TO ADOPT A PUBLIC BENEFITS PROVISION MAY18
FACILITATE CERTIFICATION OF AN ARTIST COMPANY UNDER THIRD-PARTY19
STANDARDS APPLICABLE TO PUBLIC BENEFIT ARTIST COMPANIES.20
7-80-1216. Public benefit artist company - duties of members21
and managers.22
(1) T HE MEMBERS OR MANAGERS OR OTHER PERSONS WITH23
AUTHORITY TO MANAGE OR DIRECT THE BUSINESS AND AFFAIRS OF A24
PUBLIC BENEFIT ARTIST COMPANY SHALL MANAGE OR DIRECT THE25
BUSINESS AND AFFAIRS OF THE PUBLIC BENEFIT ARTIST COMPANY IN A26
MANNER THAT BALANCES:27
SB26-133-22-
(a) THE PECUNIARY INTERESTS OF THE MEMBERS;1
(b) THE BEST INTERESTS OF THOSE MATERIALLY AFFECTED BY ITS2
CONDUCT;3
(c) THE SPECIFIC PUBLIC BENEFITS SET FORTH IN ITS ARTICLES OF4
ORGANIZATION AND OPERATING AGREEMENT, IF ANY; AND5
(d) ITS ARTISTIC MISSION.6
(2) UNLESS OTHERWISE PROVIDED IN AN OPERATING AGREEMENT,7
A MEMBER, A MANAGER, OR OTHER PERSON WITH AUTHORITY TO MANAGE8
OR DIRECT THE BUSINESS AND AFFAIRS OF A PUBLIC BENEFIT ARTIST9
COMPANY DOES NOT HAVE ANY LIABILITY FOR MONETARY DAMAGES FOR10
THE FAILURE TO MANAGE OR DIRECT THE BUSINESS AND AFFAIRS OF THE11
PUBLIC BENEFIT ARTIST COMPANY AS PROVIDED IN SUBSECTION (1) OF THIS12
SECTION.13
(3) A MEMBER OR MANAGER OF A PUBLIC BENEFIT ARTIST14
COMPANY OR ANOTHER PERSON WITH AUTHORITY TO MANAGE OR DIRECT15
THE BUSINESS AND AFFAIRS OF A PUBLIC BENEFIT ARTIST COMPANY SHALL16
NOT, BY VIRTUE OF THE PUBLIC BENEFITS PROVISIONS OF THIS PART 12 OR17
SUBSECTION (1) O F T H I S S E C T I O N, HAVE ANY DUTY TO A PERSON ON18
ACCOUNT OF ANY INTEREST OF THE PERSON IN THE PUBLIC BENEFITS SET19
FORTH IN ITS ARTICLES OF ORGANIZATION AND OPERATING AGREEMENT,20
IF ANY, OR ON ACCOUNT OF ANY INTEREST MATERIALLY AFFECTED BY THE21
PUBLIC BENEFIT ARTIST COMPANY'S CONDUCT.22
(4) W ITH RESPECT TO A DECISION IMPLICATING THE BALANCE23
REQUIREMENT SET FORTH IN SUBSECTION (1) OF THIS SECTION, A MEMBER,24
A MANAGER, OR OTHER PERSON WITH AUTHORITY TO MANAGE OR DIRECT25
THE BUSINESS AND AFFAIRS OF A PUBLIC BENEFIT ARTIST COMPANY IS26
DEEMED TO SATISFY THE PERSON'S FIDUCIARY DUTIES TO MEMBERS AND27
SB26-133-23-
THE PUBLIC BENEFIT ARTIST COMPANY IF THE PERSON'S DECISION IS BOTH1
INFORMED AND DISINTERESTED AND NOT A DECISION THAT A PERSON OF2
ORDINARY, SOUND JUDGMENT WOULD NOT APPROVE.3
7-80-1217. Public benefit artist company - annual statements.4
(1) A PUBLIC BENEFIT ARTIST COMPANY SHALL AT LEAST5
ANNUALLY PROVIDE ITS MEMBERS AND DONORS WITH A STATEMENT6
SPECIFYING:7
(a) THE PUBLIC BENEFIT ARTIST COMPANY 'S PROMOTION OF THE8
PUBLIC BENEFITS SET FORTH IN ITS ARTICLES OF ORGANIZATION AND9
OPERATING AGREEMENT, IF ANY;10
(b) THE PUBLIC BENEFIT ARTIST COMPANY'S FULFILLMENT OF ITS11
ARTISTIC MISSION; AND12
(c) THE BEST INTERESTS OF THOSE MATERIALLY AFFECTED BY THE13
PUBLIC BENEFIT ARTIST COMPANY'S CONDUCT.14
(2) T HE STATEMENT REQUIRED BY SUBSECTION (1) OF THIS15
SECTION MUST INCLUDE:16
(a) THE OBJECTIVES THAT HAVE BEEN ESTABLISHED TO PROMOTE17
THE PUBLIC BENEFIT ARTIST COMPANY 'S PUBLIC BENEFITS , ARTISTIC18
MISSION, AND INTERESTS;19
(b) THE STANDARDS THAT HAVE BEEN ADOPTED TO MEASURE THE20
PUBLIC BENEFIT ARTIST COMPANY'S PROGRESS IN PROMOTING THE PUBLIC21
BENEFIT ARTIST COMPANY 'S PUBLIC BENEFITS , ARTISTIC MISSION , AND22
INTERESTS;23
(c) OBJECTIVE FACTUAL INFORMATION BASED ON THE STANDARDS24
DESCRIBED IN SUBSECTION (2)(b) OF THIS SECTION REGARDING THE PUBLIC25
BENEFIT ARTIST COMPANY 'S SUCCESS IN MEETING THE OBJECTIVES FOR26
PROMOTING THE PUBLIC BENEFITS, ARTISTIC MISSION, AND INTERESTS; AND27
SB26-133-24-
(d) AN ASSESSMENT OF THE PUBLIC BENEFIT ARTIST COMPANY 'S1
SUCCESS IN MEETING THE OBJECTIVES AND PROMOTING THE PUBLIC2
BENEFITS, ARTISTIC MISSION, AND INTERESTS.3
(3) THE STATEMENT REQUIRED BY THIS SECTION MAY BE INCLUDED4
IN OR PROVIDED CONCURRENTLY WITH ANY OTHER REPORT OR STATEMENT5
PROVIDED TO MEMBERS.6
7-80-1218. Member transition.7
(1) A N ARTIST COMPANY 'S ARTICLES OF ORGANIZATION OR8
OPERATING AGREEMENT MAY PROVIDE FOR:9
(a) P ROCEDURES FOR ADMISSION OF NEW MEMBERS AND10
DEPARTURE, WITHDRAWAL, EXPULSION , OR DISSOCIATION OF EXISTING11
MEMBERS, SO LONG AS ARTISTS RETAIN OWNERSHIP IN ACCORDANCE WITH12
THE REQUIREMENTS OF SECTION 7-80-1203 (1)(c);13
(b) RIGHTS TO ARTISTIC WORK, ROYALTY SHARING RIGHTS, AND14
REVENUE PARTICIPATION RIGHTS UPON A MEMBER 'S DEPARTURE ,15
INCLUDING:16
(I) W HETHER ARTISTIC WORK ASSIGNED OR EXCLUSIVELY17
LICENSED BY THE DEPARTING ARTIST-MEMBER REMAINS WITH THE ARTIST18
COMPANY OR REVERTS TO THE MEMBER, IN WHOLE OR IN PART;19
(II) WHETHER ARTISTIC WORK CREATED DURING THE MEMBER 'S20
MEMBERSHIP REMAINS WITH THE ARTIST COMPANY OR REVERTS TO THE21
ARTIST-MEMBER IN SPECIFIED DEPARTURE SCENARIOS , IN WHOLE OR IN22
PART;23
(III) W HETHER AND ON WHAT TERMS THE DEPARTING24
ARTIST-MEMBER RETAINS RIGHTS TO RECEIVE ROYALTIES OR REVENUES25
FROM ARTISTIC WORK CREATED DURING THEIR MEMBERSHIP IN SPECIFIED26
DEPARTURE SCENARIOS; AND27
SB26-133-25-
(IV) W HETHER AND ON WHAT TERMS THE DEPARTING1
ARTIST-MEMBER RETAINS RIGHTS TO USE COLLECTIVE NAMES ,2
TRADEMARKS, OR OTHER IDENTIFIERS ASSOCIATED WITH THE ARTIST3
COMPANY;4
(c) C ONTINUING ECONOMIC RIGHTS OF DEPARTED MEMBERS ,5
INCLUDING DISTRIBUTION RIGHTS , ROYALTY SHARING , AND REVENUE6
PARTICIPATION;7
(d) R IGHTS AND OBLIGATIONS OF REMAINING MEMBERS ,8
INCLUDING RIGHTS TO CONTINUE EXPLOITING ARTISTIC WORK JOINTLY9
CREATED WITH DEPARTED ARTIST-MEMBERS;10
(e) V ALUATION AND BUYOUT PROVISIONS FOR A DEPARTING11
MEMBER'S INTEREST; AND12
(f) DISPUTE RESOLUTION PROCEDURES.13
(2) I N THE ABSENCE OF PROVISIONS ADDRESSING MEMBER14
DEPARTURE IN THE ARTICLES OF ORGANIZATION OR OPERATING15
AGREEMENT OF AN ARTIST COMPANY:16
(a) A DEPARTING MEMBER'S OWNERSHIP INTEREST IS SUBJECT TO17
THE DEFAULT PROVISIONS OF THIS ARTICLE 80;18
(b) ARTISTIC WORK ASSIGNED OR EXCLUSIVELY LICENSED BY THE19
MEMBER, IF AN ARTIST-MEMBER, TO THE ARTIST COMPANY REMAINS THE20
PROPERTY OF THE ARTIST COMPANY , SUBJECT TO ANY REVERSIONARY21
RIGHTS PROVIDED IN SECTION 7-80-1222 (2)(a)(I);22
(c) A RTISTIC WORK CREATED BY THE MEMBER , IF AN23
ARTIST-MEMBER, DURING THEIR MEMBERSHIP SHALL BE TREATED IN24
ACCORDANCE WITH ANY ASSIGNMENT OR EXCLUSIVE LICENSING TERMS25
INCLUDED IN THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT26
PURSUANT TO SECTION 7-80-1213 (1) OR, IN THE ABSENCE OF SUCH TERMS,27
SB26-133-26-
IS GOVERNED BY FEDERAL INTELLECTUAL PROPERTY LAW; AND1
(d) T HE DEPARTING MEMBER HAS NO CONTINUING RIGHTS TO2
DISTRIBUTIONS, ROYALTIES, OR REVENUES EXCEPT AS MAY BE REQUIRED3
BY SECTION 7-80-1213 (4) OR 7-80-1222 (2)(a)(I).4
(3) T HE ADMISSION OF A NEW MEMBER MUST INCLUDE THE5
CONSENT SPECIFIED IN THE ARTICLES OF ORGANIZATION OR OPERATING6
AGREEMENT OF AN ARTIST COMPANY OR , IN THE ABSENCE OF SUCH7
SPECIFICATION, THE CONSENT REQUIRED BY SECTION 7-80-701.8
7-80-1219. Tax treatment.9
THE LONG -FORM ARTICLES MAY INCLUDE AN ELECTION TO BE10
TAXED AS A CORPORATION OR TO CONFIRM PASS -THROUGH TAX11
TREATMENT FOR FEDERAL INCOME TAX PURPOSES , SUBJECT TO12
APPLICABLE FEDERAL TAX LAW.13
7-80-1220. Reporting requirements.14
AN ARTIST COMPANY SHALL FILE THE PERIODIC REPORT REQUIRED15
OF LIMITED LIABILITY COMPANIES UNDER SECTION 7-90-501.16
7-80-1221. Limitation on liability - no private right of action.17
(1) A PERSON SHALL NOT HAVE A PRIVATE RIGHT OF ACTION18
AGAINST AN ARTIST COMPANY, ITS GOVERNING BODY, ITS MANAGER, OR19
ITS MEMBERS BASED ON:20
(a) T HE ARTIST COMPANY 'S FAILURE TO PURSUE OR CREATE A21
PUBLIC BENEFIT;22
(b) T HE ARTIST COMPANY 'S FAILURE TO FULFILL ITS ARTISTIC23
MISSION; OR24
(c) A NY ALLEGED BREACH OF DUTIES DESCRIBED IN SECTION25
7-80-1216.26
(2) THE LIMITATION ON PRIVATE RIGHTS OF ACTION SET FORTH IN27
SB26-133-27-
THIS SECTION DOES NOT LIMIT ANY OTHER RIGHTS OR REMEDIES1
AVAILABLE UNDER LAW.2
7-80-1222. Dissolution and winding up - artistic work3
reversionary rights - distribution of assets.4
(1) DISSOLUTION OF AN ARTIST COMPANY IS GOVERNED BY PART5
8 OF THIS ARTICLE 80, EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION.6
(2) (a) (I) UPON DISSOLUTION OF AN ARTIST COMPANY, ALL RIGHTS7
TO ARTISTIC WORK ASSIGNED OR EXCLUSIVELY LICENSED BY8
ARTIST-MEMBERS TO THE ARTIST COMPANY OR CREATED BY9
ARTIST-MEMBERS OF THE ARTIST COMPANY DURING THE ARTIST-MEMBER'S10
MEMBERSHIP REVERT TO THE ARTIST -MEMBERS THAT ASSIGNED ,11
EXCLUSIVELY LICENSED, OR CREATED SUCH ARTISTIC WORK AND ANY12
APPLICABLE ASSIGNMENT OR EXCLUSIVE LICENSE AUTOMATICALLY13
TERMINATES. FOR JOINTLY CREATED WORKS, ASSIGNED OR EXCLUSIVELY14
LICENSED RIGHTS REVERT TO THE APPLICABLE ARTISTS:15
(A) A S SPECIFIED IN THE ARTICLES OF ORGANIZATION OR16
OPERATING AGREEMENT OF THE ARTIST COMPANY;17
(B) I F NOT SPECIFIED IN THE ARTICLES OF ORGANIZATION OR18
OPERATING AGREEMENT OF THE ARTIST COMPANY, AS MUTUALLY AGREED19
UPON BY THE APPLICABLE ARTISTS; OR20
(C) I F MUTUAL AGREEMENT CANNOT BE REACHED BY THE21
APPLICABLE ARTISTS, AS JOINTLY OWNED ARTISTIC WORK IN ACCORDANCE22
FEDERAL INTELLECTUAL PROPERTY LAW.23
(II) I NTELLECTUAL PROPERTY THAT DOES NOT CONSTITUTE24
ARTISTIC WORK IS NOT SUBJECT TO THE REVERSIONARY RIGHTS DESCRIBED25
IN THIS SECTION AND SHALL BE DISTRIBUTED PURSUANT TO SUBSECTION26
(3) OF THIS SECTION.27
SB26-133-28-
(III) T HE REVERSIONARY RIGHTS DESCRIBED IN SUBSECTION1
(2)(a)(I) OF THIS SECTION CONSTITUTE RETAINED INTERESTS THAT WERE2
NEVER FULLY TRANSFERRED TO THE ARTIST COMPANY AND THEREFORE3
ARE NOT ASSETS OF THE ARTIST COMPANY AVAILABLE TO CREDITORS OR4
NONARTIST INVESTORS.5
(b) T HE REVERSIONARY RIGHTS DESCRIBED IN SUBSECTION6
(2)(a)(I) OF THIS SECTION ARE SUBJECT TO:7
(I) PERFECTED SECURITY INTERESTS OR LIENS GRANTED BY THE8
ARTIST COMPANY WITH THE EXPRESS WRITTEN CONSENT OF THE ARTIST OR9
ARTISTS HOLDING THE REVERSIONARY RIGHT;10
(II) EXISTING LICENSES TO THIRD PARTIES ENTERED INTO IN THE11
ORDINARY COURSE OF BUSINESS; AND12
(III) CONTINUING ROYALTY SHARING OR REVENUE PARTICIPATION13
OBLIGATIONS SPECIFIED IN THE ARTICLES OF ORGANIZATION OR OPERATING14
AGREEMENT OF THE ARTIST COMPANY.15
(c) THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT16
OF AN ARTIST COMPANY MAY SPECIFY THE TERMS OF A REVERSION ,17
INCLUDING:18
(I) PRIORITY AMONG ARTISTS IN CLAIMING REVERSIONARY RIGHTS;19
(II) ALLOCATION OF REVERSIONARY RIGHTS IN JOINT WORKS;20
(III) C ONTINUING OBLIGATIONS TO SHARE ROYALTIES OR21
REVENUES FROM REVERTED ARTISTIC WORK; AND22
(IV) RIGHTS TO USE COLLECTIVE NAMES, TRADEMARKS, OR OTHER23
IDENTIFIERS.24
(3) UPON DISSOLUTION, AFTER GIVING EFFECT TO ANY ARTISTIC25
WORK REVERSIONARY RIGHTS DESCRIBED IN SUBSECTION (2)(a)(I) OF THIS26
SECTION, AND AFTER PAYMENT OR PROVISION FOR LIABILITIES:27
SB26-133-29-
(a) ASSETS SHALL BE DISTRIBUTED IN ACCORDANCE WITH PRIORITY1
AND DISTRIBUTION PROVISIONS IN THE ARTICLES OF ORGANIZATION OR2
OPERATING AGREEMENT OF THE ARTIST COMPANY , INCLUDING3
PREFERENCES FOR HOLDERS OF REVENUE PARTICIPATION RIGHTS, ROYALTY4
SHARING RIGHTS, OR OTHER ECONOMIC INTERESTS; OR5
(b) IF NOT SPECIFIED, ASSETS SHALL BE DISTRIBUTED PRO RATA TO6
MEMBERS BASED ON OWNERSHIP PERCENTAGES.7
(4) THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT8
OF AN ARTIST COMPANY MAY SPECIFY:9
(a) P RIORITY OF DISTRIBUTIONS AMONG DIFFERENT CLASSES OF10
ECONOMIC INTERESTS;11
(b) TREATMENT OF UNVESTED OR CONTINGENT ECONOMIC RIGHTS;12
(c) ALLOCATION OF REMAINING INTELLECTUAL PROPERTY VALUE;13
OR14
(d) OTHER DISSOLUTION AND DISTRIBUTION TERMS.15
7-80-1223. Effect on other limited liability companies.16
THIS PART 12 DOES NOT AFFECT A STATUTE OR RULE OF LAW THAT17
IS APPLICABLE TO A LIMITED LIABILITY COMPANY THAT IS NOT AN ARTIST18
COMPANY.19
7-80-1224. Jurisdiction - foreign artists.20
(1) A PERSON FROM A JURISDICTION OTHER THAN COLORADO MAY21
FORM OR CONVERT A LIMITED LIABILITY COMPANY TO AN ARTIST22
COMPANY UNDER THIS PART 12, SUBJECT TO COMPLIANCE WITH THIS PART23
12.24
(2) THE FORMATION OF AN ARTIST COMPANY UNDER THIS PART 1225
IS GOVERNED BY THE LAWS OF THE STATE , AND AN ARTIST COMPANY26
FORMED UNDER THIS PART 12 IS A DOMESTIC LIMITED LIABILITY COMPANY27
SB26-133-30-
FOR ALL PURPOSES UNDER THIS ARTICLE 80, REGARDLESS OF THE1
RESIDENCE OR DOMICILE OF ITS ARTIST-MEMBERS.2
(3) NOTHING IN THIS SECTION AFFECTS THE REQUIREMENTS FOR3
FOREIGN LIMITED LIABILITY COMPANIES UNDER PART 9 OF THIS ARTICLE4
80.5
SECTION 2. Act subject to petition - effective date. This act6
takes effect at 12:01 a.m. on the day following the expiration of the7
ninety-day period after final adjournment of the general assembly (August8
12, 2026, if adjournment sine die is on May 13, 2026); except that, if a9
referendum petition is filed pursuant to section 1 (3) of article V of the10
state constitution against this act or an item, section, or part of this act11
within such period, then the act, item, section, or part will not take effect12
unless approved by the people at the general election to be held in13
November 2026 and, in such case, will take effect on the date of the14
official declaration of the vote thereon by the governor.15
SB26-133-31-