Effective January 1, 2010, Illinois will begin allowing the organization of low-profit limited liability companies or L3Cs. An L3C is a hybrid business structure that offers an alternative to for-profit and nonprofit companies by combining the pass-through tax advantages of a traditional limited liability company with the social advantages of a nonprofit. Michigan, Vermont, Wyoming, Utah and North Dakota have also adopted statutes allowing the organization of L3Cs.
The L3C structure also provides a vehicle for attracting investment in companies founded by social entrepreneurs who may be more interested in promoting social, cultural or environmental changes than making a profit. Moreover, the L3C structure is intended to facilitate program-related investments (PRIs) by private foundations in for profit companies.