1. Industry
Send to a Friend via Email

Your suggestion is on its way!

An email with a link to:


was emailed to:

Thanks for sharing About.com with others!

You can opt-out at any time. Please refer to our privacy policy for contact information.

Nonprofit/For-Profit Hybrid: Low-Profit Limited Liability Company (L3C)

A Hybrid Organization for Social Good


L3C organizations are a new way to fulfill a social mission. A hybrid of a nonprofit and for-profit corporation, the L3C is run in a similar way to a for-profit company, but is like a nonprofit in that its mission is to do something for the social good.

An L3C generates a profit but it isn't the sole priority. It is not tax-exempt, but it can seek investors and investments that are program related for funding. The IRS does restrict how much profit an L3C can make and property it can own. Also, this hybird organization cannot engage in political work or lobbying. The organization must make clear that fulfilling a charitable goal is the primary reason it exists.

This new type of nonprofit organization is recognized by the states of Vermont, Michigan, Illinois, Wyoming, and Utah; while North Carolina and Maine are in the process of finalizing legislation recognizing it; and many other states are considering it.

For more information on this form of organization and other types of social enterprises, visit the Social Enterprise Alliance, Social Returns, and the Roberts Enterprise Development Fund. The Foundation Center also has great information on social enterprise.


  1. About.com
  2. Industry
  3. Nonprofit Charitable Orgs
  4. Starting a Nonprofit
  5. Low-Profit Limited Liability Company (L3C): Definition

©2014 About.com. All rights reserved.