Legislation establishing a new form for "do good" businesses – the Benefit Limited Liability Company – has passed the Maryland General Assembly and is en route to the governor to be signed into law. In December we covered the Maryland Benefit Corporation Act, the first law of its kind in the United States.
The Benefit LLC is much like the Benefit Corporation: it allows LLC managers to strive for a profit and, at the same time, seek to advance social and environmental goals. Traditionally, LLC managers could be subject to liability if they put other interests ahead of making a profit for the members. The legislation would permit managers in businesses electing to be Benefit LLCs to consider factors such as advancement of the arts, environment, and community when making business decisions without exposing themselves to liability.
The Benefit LLC legislation would give businesses looking to make a profit while promoting social good another option for organization. Such businesses might be inclined to consider an LLC over a corporation to take advantage of traditional LLC benefits, like "pass-through" taxation and simplified record keeping.