IACA – International Association of Commercial Administrators



Topic: L3C or low-profit limited liability companies

Question by: Kristyne Tanaka

Jurisdiction: Hawaii

Date: February 1, 2016

|Jurisdiction |Question(s) |

| |Does your jurisdiction register L3Cs or do you have pending legislation on L3Cs? |

|Manitoba | |

|Corporations Canada | |

|Alabama | |

|Alaska | |

|Arizona |Arizona had legislation a couple of years ago, but it died. As far as I’m aware, there is no pending legislation this session so far that addresses this entity type. |

|Arkansas | |

|California | |

|Colorado | |

|Connecticut |Connecticut does not presently recognize L3C’s. We adopted Benefit Corporations two sessions ago that became effective last year. Now the proponents of that bill wish to |

| |expand the social entrepreneurship circle to include Benefit LLC’s. That is the closest we have come to adopting something akin to the L3C to date. It remains to be seen |

| |if the proponents will introduce a bill in the upcoming Short Session beginning on Wednesday, February 3. In an informal tally among business lawyers conducted within the|

| |Executive Committee of the Business Law Section of the CT Bar Association, the Benefit LLC concept met a lukewarm reception, for whatever that is worth. |

| | |

| |Connecticut has similar “any legal purpose” language. In that sense, one could argue that the purpose of the L3C/Benefit LLC can be achieved through the use of the |

| |standard LLC form. However, one would have to utilize the LLC form designation, and could not use the designation LLLC or L3C (or BLLC or Benefit LLC, for that matter) |

| |because those forms are not recognized/specifically authorized under CT law. Therefore, the entity form is not authorized in CT even though a standard LLC entity form |

| |could be utilized to accomplish the same purpose as that intended by the advent of the LLLC/L3C/BLLC entity form. |

| | |

| |I raise the nuanced response set forth above not to be cheeky, but rather because the proponents of the Benefit LLC in CT have espoused as a specific advantage the notion|

| |that the new entity form designation (“Benefit LLC” or “BLLC”) holds marketing (and market) advantages for those entities adopting the proposed new form(s). So “You can |

| |already technically accomplish that using a standard LLC” is not a satisfactory response for the BLLC/LLLC proponents. |

|Delaware |We do not have L3Cs in Delaware and there is no pending legislation that I am aware of. |

|District of Columbia |In DC we do not have L3Cs. |

|Florida |Florida does not register L3Cs and we have no pending legislation. |

|Georgia | |

|Hawaii | |

|Idaho | |

|Illinois | |

|Indiana |No L3Cs in IN. No pending legislation. |

|Iowa | |

|Kansas |Kansas does not have L3C companies. |

|Kentucky | |

|Louisiana | |

|Maine | |

|Maryland |No L3Cs in Maryland and no pending legislation that I am aware of. |

|Massachusetts |Massachusetts does not have L3Cs nor do I know of any pending legislation at this time. |

|Michigan |Michigan has allowed the formation of low-profit limited liability companies (L3Cs) since January 16, 2009. The provisions in the Michigan Limited Liability Company Act |

| |pertaining to L3Cs are: MCL 450.4102(2)(m), MCL 450.4204(2), and MCL 450.4803(1)(d). |

|Minnesota | |

|Mississippi | |

|Missouri |Missouri does not register L3C's and currently does not have any pending legislation this year. However, the L3C's was introduced 2 years ago but did not go anywhere. |

|Montana |Montana does not have statutes authorizing an L3C and there is no pending legislation that I’m aware of. |

| |However, the Crow Indian Nation of Montana has authorized the formation of L3Cs (Crow Law and Order Code 18-5-102 ). |

|Nebraska | |

|Nevada | Nevada does not have L3Cs in statute nor do we have pending legislation that we are aware of. |

|New Hampshire | |

|New Jersey | |

|New Mexico | |

|New York | |

|North Carolina |North Carolina did have legislation for L3Cs, but two years ago the LLC Act was revised and they removed this portion of the Act. |

|North Dakota | |

|Ohio |Ohio does not register L3Cs, and we also do not have any pending legislation for this entity type. |

|Oklahoma | |

|Oregon | |

|Pennsylvania | |

|Rhode Island |Rhode Island registers L3C’s. Our statute: |

|South Carolina | |

|South Dakota | |

|Tennessee | |

|Texas |Texas does not have L3Cs. We also don’t have any pending legislation. |

|Utah |Utah registers L3Cs...Our statute can be found at: |

| | |

|Vermont | |

|Virginia |We do not have L3Cs, per se. Our LLC Act authorizes a Virginia LLC to be formed to engage in any business , purpose or activity, “whether or not such business , purpose |

| |or activity is carried on for profit.” So, in a sense, they are already authorized. |

|Washington |Washington State does not have L3C’s nor do we have any known legislation in the works. |

|West Virginia | |

|Wisconsin | |

|Wyoming | |

Additional comments:

Nova Scotia – has no such legislation

Full text of email:

Hi All,

Does your jurisdiction register L3Cs or do you have pending legislation on L3Cs?

Thank you in advance for your time and assistance.

Aloha,

Kristyne Tanaka

Documents Registration Supervisor

Dept. of Commerce and Consumer Affairs

Business Registration Division

335 Merchant Street

Honolulu HI 96813

ph. (808) 586-2727

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