HOUSE DOCKET, NO. 2994        FILED ON: 1/21/2011

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1868

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

Linda Dorcena Forry

_________________

To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to creating low profit limited liability companies.

_______________

PETITION OF:

HOUSE DOCKET, NO. 2994        FILED ON: 1/21/2011

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1868

[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE HOUSE, NO. 4589 OF 2009-2010.]

The Commonwealth of Massachusetts

_______________

In the Year Two Thousand Eleven

_______________

An Act relative to creating low profit limited liability companies.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1.  Section 2 of chapter 156C of the General Laws, as appearing in the 2006 Official Edition is hereby amended by inserting, after paragraph 6, the following paragraph: (6a)   “Low-profit limited liability company” or “L3C”, a limited liability company, other than a foreign limited liability company, organized under or governed by this chapter, which has set forth in its articles of organization a business purpose that satisfies, and  at all times complies with, each of the following requirements:(i) The limited liability company (a) significantly furthers the accomplishment of one or more charitable or educational purposes within the meaning of section 170(c)(2)(B) of the Internal Revenue Code of 1986, as amended, and (b) would not have been formed but for the entity’s relationship to the accomplishment of charitable or educational purposes; (ii)No significant purpose of the limited liability company is the production of income or the appreciation of property; provided, however, that the fact that the entity produces significant income or capital appreciation shall not, in the absence of other factors, be conclusive evidence of a significant purpose involving the production of income or the appreciation of property; and (iii) No purpose of the limited liability company is to accomplish one or more political or legislative purposes within the meaning of section 170(c)(2)(D) of the Internal Revenue Code of 1986, as amended.

SECTION 2.  The first paragraph of section 3 of said chapter 156C, as so appearing, is further  amended by inserting in line 4, after the abbreviation “LC”, the following:- “, provided, however, that if the limited liability company is a low-profit limited liability company, as defined in section 2, its name shall contain the words “Low-profit Limited Liability Company,” or the abbreviation ‘L3C’ or ‘l3c’”.

SECTION 3.  Subsection (a) of section 12 of said chapter 156C, as so appearing, is hereby amended by inserting, after paragraph (7) the following paragraph:- (7)(a) if the limited liability company is a low-profit limited liability company ;

SECTION 4.  Section 13 of chapter 156C , as so appearing, is further amended by inserting , after paragraph (d) the following paragraph:- (d)(1) If a low-profit limited liability company has ceased to meet any of the requirements in paragraph (6)(a) of section 2 of this chapter, it shall file a certificate of amendment with the state secretary within thirty (30) days after ceasing to meet those requirements, to amend its name to conform with the requirements  in paragraph (1) of section (3) of this chapter governing limited liability company names.

SECTION 5.  Paragraph (5) of section 45 of said chapter 156C, as so appearing, is hereby amended by striking out, in line 15, the words “forty-four.” And inserting in their place the words “forty-four; or”

SECTION 6. Said section 45 of said chapter 156C, as so appearing, is further amended by adding the following paragraph:- (6) with respect to a low-profit limited liability company that has ceased to meet any of the requirements in paragraph (6)(1) of section 2, the failure for sixty (60) days after ceasing to meet those requirements to file articles of amendment with the state secretary, amending its name to conform with the requirements of paragraph(1) of section 3.