§ 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 that intends to qualify as a low-profit limited liability
company pursuant to the provisions of this section 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 this section 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 this section 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 section, all provisions of the Rhode Island Limited
Liability Act, chapter 16 of this title, applicable to domestic limited liability
companies are applicable to low-profit limited liability companies.