The L3C Illusion: Why Low-Profit Limited Liability Companies Will Not Stimulate Socially Optimal Private Foundation Investment in Entrepreneurial Ventures
23 Pages Posted: 4 Feb 2011 Last revised: 21 Oct 2011
Date Written: September 1, 2010
This paper considers low-profit limited liability companies (L3Cs). It determines that the L3C status provides no advantages regarding two of the stated reasons for the concept, namely enabling foundations to make program related investments and providing clearer fiduciary duty/governance rules, and concludes that the L3C form has little or no value and should be abandoned.
Keywords: limited liability company, low-profit limited liability company, program related investment, L3C
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