16-20-1102. Requirements.
(1) To be a low-profit limited liability company, a limited liability company shall: contain in its name the abbreviation "L3C" or "l3c"; state in its certificate of organization that it is a low-profit limited liability company; organize under this chapter; and be organized for a business purpose that satisfies, and at all times operates to satisfy each of the requirements under Subsection. (2)
(2) A low-profit limited liability company: shall significantly further the accomplishment of one or more charitable or educational purposes within the meaning of Section 170(c)(2)(B), Internal Revenue Code; shall demonstrate that it would not be formed but for the limited liability company's relationship to the accomplishment of a charitable or educational purpose; subject to Subsection, may not have as a significant purpose the production of income or the appreciation of property; and (3) may not have as a purpose to accomplish one or more political or legislative purposes within the meaning of Section 170(c)(2)(D), Internal Revenue Code.
(3) Notwithstanding Subsection, if a low-profit limited liability company produces significant income or capital appreciation, in the absence of other factors, the fact that the low-profit limited liability company produces significant income or capital appreciation is not conclusive evidence of a significant purpose involving the production of income or the appreciation of property. (2)