Rhode Island is latest state to enact L3C Legislation
Rhode Island Governor Chaffee signed L3C Legislation into law on June 13, 2011 with the legislation to be effective July 1, 2012. HB 5279 was sponsored by Rep. Christopher Blazejewski.
In April, Blazejewski stated that “With many students graduating from our colleges and universities with a focus on entrepreneurship and community service, Rhode Island is well-positioned to become the Silicon Valley of the social venture movement,” said Representative Blazejewski (D-Dist. 2, Providence, East Providence). “As a tool for economic development, it is critical that we aid investment and foster growth in these socially responsible businesses.”
According to the Americans for Community Development, the L3C embodies the operating efficiencies of a for-profit company along with a reduced regulatory structure. As an LLC, it can bring together foundations, trusts, endowment funds, pension funds, individuals, corporations, other for-profits and government entities into an organization designed to achieve social objectives while also operating according to for-profit metrics.
“The L3C structure lays the groundwork for a new way of doing business in Rhode Island,” said Representative Blazejewski. “It would aid investment in social ventures by opening up the possibility of combining foundation funding as well as private investment dollars to finance socially responsible businesses, attract even more investment in this sector, and position Rhode Island as a national social venture hub.”