D.C. Tax Attorney Elizabeth Minnigh Quoted on L3Cs in Entrepreneur.com Article

Elizabeth Carrott Minnigh, an associate in the Tax Section of Buchanan Ingersoll & Rooney's Washington, D.C., office, was quoted in a March 16, 2010, article posted on the website, Entrepreneur.com and picked up by TheStreet.com and Yahoo!SmallBusiness. The article titled, "The New Double Bottom Line," discussed L3Cs, which is described as "a hybrid model that allows owners to do well by doing good. The bonus? L3Cs can get funding from sources that have traditionally been hard to tap — such as foundations."

The article goes on to note that "[t]he L3C, just like the LLC, is a for-profit business structure. …  Ranging from an organic milk company in Maine to consulting firms in Colorado, the L3C's main goal is to provide social benefit. Despite this do-good aspect, the business owner must pay taxes."

Minnigh pointed out that currently there are no L3C specialists because the format is relatively new. "However, it will probably be most cost-effective to use someone with some familiarity with the L3C structure," she said, adding that resources — including sample operating agreements that can advise an attorney how to proceed — are available online at the Americans for Community Development website.

The article went on to discuss possible pitfalls and plusses of the L3C. "While L3Cs' social missions purpose provides a unique branding opportunity, it also imposes a duty on its owners 'to manage the L3C in accordance with this purpose,' according to Minnigh."

The article concluded saying, "The L3C represents a brave new world of social entrepreneurship that Minnigh says depends on the objectives of the people forming the entity and the potential pool of investors."