HB 19 Summary

• Authorizes the creation of low-profit limited liability companies (L3Cs) in Hawaii under Chapter 428 of the Hawaii Revised Statutes as for-profit entities that significantly further charitable or educational purposes.

• Requires L3Cs to indicate their status in articles of organization and state that no significant purpose is income production or property appreciation, and that no purpose involves political or legislative activities.

• Mandates that L3Cs and their operators be subject to fiduciary duties under Chapter 556 (Uniform Fiduciaries Act).

• Requires L3C company names to contain "low-profit limited liability company" or the abbreviation "L3C" to distinguish them from standard limited liability companies.

• Specifies that operating agreements cannot eliminate or reduce the charitable or educational obligations and purposes undertaken by an L3C organized under this Act.