Do you need an Artist Corporation (A-Corp)?

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Colorado just created a new corporate form built specifically for artists and creators: the Artist Corporation (A-Corp). 

Most visual artists probably don’t need an A-Corp. An LLC or a sole proprietorship is likely still the best format for the average studio. Larger galleries or studios may even have an Inc. and an S-Corp.

As mentioned by Paddy Johnson’s Hyperallergic article, at a minimum, LLCs and now A-Corps creates a legal separation between you and the business, which means if someone decides to sue, they’d go after the company, not your personal assets. If you’re making any kind of public art, you’d want this protection.  

The biggest potential beneficiaries of an A-Corp are musicians, filmmakers, NFT artists, creative collectives like Meow Wolf, and other artist-led ventures with recurring revenue and multiple collaborators.

What stands out:

• Artists must retain majority control of the company (51%)

• Creative IP (intellectual property) is protected and reverts to creators if the entity dissolves.

• Artistic labor and intellectual property can count as capital contributions.

• Ownership can be shared with collaborators while preserving artistic control. 

You do not need to live in Colorado to take advantage of the A-Corp however whether A-Corps become widely adopted remains to be seen. But it’s an interesting attempt to create ownership and governance structures that reflect how creative value is actually created.

More info here https://www.artistcorporations.com/