§ 7-16-76 Low-profit limited liability company. (a) A low-profit limited liability company shall at all times significantly further the accomplishment of one or more charitable or educational purposes within the meaning of § 170(c)(2)(B) of the Internal Revenue Code of 1986, 26 U.S.C. § 170(c)(2)(B), or its successor, and would not have been formed but for the entity's relationship to the accomplishment of charitable or educational purposes.
(b) A limited liability company which intends to qualify as a low-profit limited liability company pursuant to the provisions of § 7-16-76 shall so indicate in its articles of organization, shall organize under the provisions of § 7-16-6, and shall further state that:
(1) No significant purpose of the entity is the production of income or the appreciation of property; provided, however, that the fact that an 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.
(2) No purpose of the entity is to accomplish one or more political or legislative purposes within the meaning of § 170(c)(2)(D) of the Internal Revenue Code of 1986, 26 U.S.C. § 170(c)(2)(D), or its successor.
(c) If an entity that met the requirements of § 7-16-76 at its formation at any time ceases to satisfy any one of the requirements, it shall immediately cease to be a low-profit limited liability company, but by continuing to meet all the other requirements of this chapter, will continue to exist as a limited liability company. The name of the entity must be changed to be in conformance with § 7-16-9.
(d) Nothing in § 7-16-76 shall prevent a limited liability company that is not organized under it from electing a charitable or educational purpose in whole or in part for doing business under this chapter.
(e) Except as otherwise provided in this subsection, all
provisions of the Rhode Island Limited Liability Act, Chapter 7-16 of this
title, applicable to domestic limited liability companies are applicable to
low-profit limited liability companies.
(P.L. 2011, ch. 67, § 2; P.L. 2011, ch. 79, § 2.)