Should I structure my business as a L3C, LLC, cooperative, or...?
Grantspace recently held a live chat entitled: Nonprofit, For-Profit, L3C, B Corp...How to Choose? The transcript includes several links to resources that help answer this question: http://grantspace.org/Multimedia-Archive/Live-Chats/Nonprofit-For-Profit-L3C-B-Corp-How-to-Choose-2011-08-24
Marc J. Lane commented
The L3C offers substantial benefits. To learn the particulars, I invite you to join the L3C Connect group on LinkedIn.
A social entrepreneur or nonprofit in any state can set up an L3C by organizing it in one of the eight states that have enacted enabling legislation and then registering it as a "foreign" entity in the state of operation. That's how L3Cs are springing up all over the country.
Does anyone know of businesses structured as L3Cs that have realized benefits (program related investment from foundations, or something else) or experienced challenges (ie, banks wondering if they were credit-worthy) from having done so? I'd love to learn more about actual experiences!
David Marangio of Bay Ridge Food Coop (www.foodcoopbayridge.com) reminded me that the Community Food Enterprise report from the Wallace Center and the Business Alliance for Local Living Economies (BALLE) has this great section looking at different models of local ownership, including LLC, cooperatives, non-profit hybrids, etc: http://communityfoodenterprise.org/introduction/types-of-cfe-models
Gary Matteson commented
Careful, L3Cs are only available in certain states. Make sure the state in which you wish to form an L3C will charter such a creature. Also, a Non-profit can own and operate a for-profit enterprise as long as it is mission-related; you just have to be careful to assure the activities support the mission.