L³Cs: The Next Big Wave in Socially Responsible Investing or Just Simply Too Good to Be True?
David J. Schwister
Washington University in Saint Louis - School of Law; Washington University in Saint Louis - John M. Olin Business School
March 11, 2009
Journal of Business, Entrepreneurship and the Law, Vol. 3, p. 1, Fall 2009
This article pertains to the growing popularity of Low-Profit, Limited Liability Companies (L3Cs). It includes a discussion of the potential pitfalls involved in the adoption of this organizational structure. Part I introduces a timely example that illustrates how L3Cs are gaining steam across the U.S. Part II provides a history of the L3C movement and offers a look at the current legal landscape of L3Cs on the federal and state level. Part III offers a glimpse into possible problems that L3Cs may run into including registration as well as disclosure requirements with the Securities and Exchange Commission ("S.E.C."). In addition, Part III examines what the fiduciary obligations will be in L3Cs and concludes by exploring the possibility of overlapping governmental policing that may occur as more of these entities sprout up.
Number of Pages in PDF File: 16
Keywords: Securities, L3Cs, Social Entrepreneurship
JEL Classification: K22, M13Accepted Paper Series
Date posted: July 3, 2009 ; Last revised: June 6, 2010
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