A new law in the US state of Colorado has created a new kind of limited company specifically designed to suit and support artists and creatives. It’s based on a concept called A Corps - or Artist Corporations - proposed by Kickstarter co-founder Yancey Strickler, who says at least six other US states are now considering something similar.
Most artists and songwriters are basically self-employed and so need some kind of structure to manage their projects, revenues and intellectual property, either operating as a sole trader or sole proprietor, or setting up some kind of limited company. The A Corp aims to provide a formal structure with limited liabilities that also protects the creator’s interests.
Writing about the idea last year, Strickler said the A Corp would be “a new business entity that turns artists and creators from gig workers to owners”, and which would let individual or groups of creators “keep full control of their IP and creative output while pooling income, sharing equity, and qualifying for both donations and investment under one flexible, legally recognised structure”.
The A Corp has now become a reality, in one US state at least, thanks to the Colorado Artist Company Act, which was signed into law by the state’s governor Jared Polis earlier this week.
Key features off an A Corp, under the act, include that artists must control the business by having at least 51% of any voting shares issued; the company must have a stated artistic mission; and any IP assigned or licensed to the company can never be transferred to non-artist investors or third parties, and will revert to the artists if the company is ever dissolved.
A website set up to promote the new company type admits that “most of what the A-Corp offers is technically possible today, if you hire the right lawyers and draft the right agreements”. However, it adds, this new category of company “makes it a standard form, accessible and affordable to anyone”.
Speaking to The Colorado Sun, one of the politicians behind the Colorado Artist Company Act, Matthew Martinez, says “we can really set the tone for the nation on how we take care of our artists, our musicians, our painters, our poets”, adding, “this just really makes sense, this is a red tape-cutting bill”.
Meanwhile Meredith Badler, Deputy Director at the Colorado Business Committee For The Arts, which backed the act, adds, “We’re so often forging our own path in the creative sector, and it’s exciting to see the Colorado state government really codify something that’s for artists. It really recognises their unique needs and their unique benefits”.