The low-profit limited liability company (L3C), is a business structure under Vermont law that allows for the creation of an entity that would be a hybrid of a nonprofit and for-profit entity. In particular, the L3C is a type of limited liability company (LLC) designed to attract private investments and philanthropic capital in ventures designed to provide a social benefit.
Unlike a standard LLC, the L3C has an explicit charitable intent as its primary mission; but unlike a charity, the L3C is free to distribute the profits, after taxes, to owners or investors. As such, it has become a vehicle of choice for social entrepreneurs. The basic purpose of the L3C is to signal to foundations and donor directed funds that entities formed under this provision intend to conduct their activities in a way that would qualify as program related investment (PRI), for the purposes of the IRS.
Foreign (Non-Vermont) L3Cs Doing Business in Vermont
If you are an existing out-of-state L3C and wish to do business in Vermont, you need to obtain a Certificate of Authority from the Office of the Secretary of State. For more information about registering as a foreign L3C, please see “Foreign Business Registration.”
Business Name of Low-Profit LLCs
The business name of a low-profit limited liability company must end with the abbreviation "L3C."
L3C business names may NOT contain the word "cooperative," nor the abbreviation "coop."
Low-Profit LLC Law
Please see “Fees & Filings” for the costs of registration.
Duration of Registration
Once registered, you must renew your L3C registration each year. For renewal information, please see “Annual/Biennial Reports.”
STOP: Before you get started, we recommend that you consult with an attorney, accountant, or business advisor about which business structure is best for you.
L3C Filings: Online or by Mail
Please see "Limited Liablity Company" for registration instructions.