What is an L3C?

 The L3C is a hybrid of a “for profit” and nonprofit organization, and has characteristics of each. As with a nonprofit, an L3C must be formed  for a charitable or educational purpose or mission. However, as with a for profit entity, an L3C may have equity owners who have the right to receive profits and appreciation in the value of the business.

Funding

While the entity functions similar to a traditional limited liability company, an L3C is a business that has a charitable purpose, but is allowed to generate limited profits from its business. 


L3Cs can take advantage of both traditional funding through debt and equity financing as well as generating funding from private charitable foundations.