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Mar 3, 2020 · An L3C (low-profit limited liability company) is a for-profit LLC that satisfies three requirements: It significantly furthers the accomplishment of one or more charitable or educational purposes within the meaning of Sec. 170(c)(2)(b) of the Internal Revenue Code and would not have been formed but for the company's relationship to the ...
It is also known as a low-profit, limited liability company. What sets it apart from regular LLCs and other for-profit entities (i.e. corporations, partnership, etc.) is its ability to pursue charitable, educational or socially beneficial objectives as its primary motive.
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Pros and Cons. Examples of L3Cs. See also. References. Low-profit limited liability company. A low-profit limited liability company ( L3C) is a legal form of business entity in the United States. [1] . Commonly referred to as a hybrid structure, it has characteristics of both for-profit and non-profit entities. [1] .
Jun 1, 2017 · Among the benefits, starting an L3C is a very simple filing process—almost identical to that of an LLC. Similarly, it allows for individuals and businesses to own, control and profit from the organization. Because of this, they are also shielded from taking personal responsibility for liabilities like debt.
Sep 10, 2023 · L3C Business Form Basics. The L3C is a variation on the Limited Liability Company designed to take advantage of both non-profit and for-profit sources of capital. As the term "Low-Profit" suggests, an L3C typically engages in socially-beneficial activities which may not be lucrative enough to attract sufficient commercial investment.
Mar 16, 2020 · A low-profit limited liability company (L3C) is an enterprise with a profit goal that is subordinate to its charitable mission. An L3C is often described as a hybrid straddling the line between a nonprofit and for-profit venture: like a nonprofit, its primary purpose is charitable or educational, but like an LLC , it can make a profit.
Mar 21, 2017 · Even with their seemingly obvious advantages there are also many disadvantages to choosing a L3C. One of the most prominent disadvantages is that only 8 states recognize the L3C as a business organization under their applicable state law; these states being Vermont, Michigan, Wyoming, Utah, Illinois, Louisiana, Maine, and Rhode Island. [9] .
