Low-Profit Limited Liability Company (L3C)

An L3C is a hybrid business model that combines features of a limited liability company, or LLC, with a 501(c)(3) nonprofit entity. This hybrid model allows L3Cs to pursue a social mission, with profit as a secondary business goal, and it gives them access to a wider variety of investment options since the designation allows foundations and other donor-directed funding sources to consider their contributions as program-related investments (PRIs). Vermont was the first state to enact legislation legalizing this business model and it currently exists in seven states and two Native American territories.