C.R.S. § 7-80-1207: Ownership of equity.

(1) Subject to the requirements set forth in section 7-80-1203 (1)(c), an artist company has the same options with respect to equity ownership provided to limited liability companies generally under this article 80.

(2) The incorporators of an artist company may elect in the articles of organization one of the following structures for equity ownership:

(a) Ownership based on the sale of units, including fractional units;

(b) Pro rata ownership based on the number of members;

(c) Pro rata ownership based on capital contributions, including in-kind contributions of cash, property, artistic work, royalty sharing, revenue participation rights, or other intangible assets; or

(d) Fixed ownership percentages by individual member.

(3) Unless otherwise specified in an operating agreement, allocations and distributions must be made based on ownership percentages; except that the operating agreement may establish alternative allocation or distribution mechanisms, including allocations or distributions based on revenue participation, royalty sharing, recoupment waterfalls, or other criteria independent of ownership percentages.