The low-profit limited liability company (L3C) is a hybrid nonprofit/for-profit entity: like a nonprofit, its primary purpose is charitable or educational; but like an LLC, it can make a profit. An L3C, specifically, is a company that:
- significantly furthers the accomplishment of one or more charitable or educational purposes within the meaning of 26 U.S.C. § 170(c)(2)(B):
- would NOT have been formed except for the company's relationship to the accomplishment of its charitable or educational purposes;
- does NOT have a "significant purpose" of producing income or appreciating property (though both are allowed); and
- does NOT exist to accomplish one or more political or legislative purposes within the meaning of 26 U.S.C. § 170(c)(2)(D).
NOTE: L3Cs are not eligible for tax exemption under Internal Revenue Code § 501(c).
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
11 V.S.A. Ch. 25, SubCh. 11 (effective July 1, 2015)
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 Liability Company” for registration instructions.