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Question for the Money Doctors

Question submitted on Jul 31, 2013.

Question

I am interested in establishing an Environmental Watershed Management Company that educates, trains, consults as well as performs waste management functions. What is l3c and how can I set up such an organization? I want to be able to obtain Fed,state,local private/public grants in Baltimore, Md.

Answer

An L3C is a low-profit limited liability company which exists in some states to bridge traditional business entities like Limited Liability Companies (LLCs) and non-profit entities. Some states also define such hybrid entities as Benefit Corporations. These entities are relatively new and involve legal organizational requirements and ongoing maintenance. So, you would need a business attorney to determine the requirements for Maryland and form the entity. A choice of entity is a business decision that includes business plan, tax and legal considerations. So, from a business point of view, you need to determine if it is the best choice for the activity and expected grants. From a personal financial planning point of view, the business plan needs to fit your personal plan, both short-term (e.g. organizational, start-up costs) and long-term (e.g. future income).


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