There are lots of things wrong with the current definitions of a corporation, a fact which was highlighted recently by the Supreme Court's ruling that companies have unlimited right to 'free speech'. Unfortunately, the only thing to do about it is to create a new form, and doing that is an incredibly complex and messy process.
The Low-profit LLC (or L3C) is a good start, inserting socially-beneficial purposes in front of profit in its charter in a way that lets it qualify for some foundation funding that would otherwise be restricted to non-profits. Besides the B-Corp, there's not much precedent in this area, and it still feels like we're a long way from having new corporate forms guide some of the world's largest behemoth's toward the public good. But innovation in the area continues, and in the meantime, I've incorporated my new venture as an L3C. I'll let you know how it goes.
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David Anderson (davidryal)
Feb 13, 2010
Aug 2, 2011 10:46 PM UTC
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A low-profit limited liability company (L3C) is a legal form of business entity in the United States that was created to bridge the gap between non-profit and for-profit investing by providing a structure that facilitates investments in socially beneficial, for-profit ventures while simplifying compliance with Internal Revenue Service rules for "Program Related Investments". Background The L3C is a low-profit limited liability company (LLC), that functions via a business modality that is a hybrid legal structure combining the financial advantages of the limited liability company, an LLC, with the social advantages of a non-profit entity. An L3C runs like a regular business and is profitable. However, unlike a for-profit business, the primary focus of the L3C is not to make money, but to achieve socially beneficial aims, with profit making as a secondary goal. The L3C thus occupies a niche between the for-profit and charitable sectors. As of September, 2009, an L3C can only be formed in the states of Michigan, Vermont, Wyoming, Utah, the Crow Indian Nation and the Oglala Sioux Tribe. On August 4, 2009, Gov. Pat Quinn signed Illinois' L3C Bill SBO239 and the law will take effect on January 1, 2010.
Robert M. Lang, the creator of the L3C, CEO of The Mary Elizabeth & Gordon B. Mannweiler Foundation Inc. and CEO of L3C Advisors, L3C the nations very first L3C recommends that you visit the web page for Americans for Community Development for frequent ...