Callison Comments on Low Profit LLCs in New York Times

A number of states have adopted a statute permitting the incorporation of so-called low profit limited liability companies that are part social benefit and part low-profit entities. Unlike regular nonprofits, these businesses can tap into conventional capital markets as well as philanthropy. And unlike for-profit corporations, they allow investors to emphasize the social mission over making money and can be supported by money from foundations.

Opponents of the new structure, The New York Times reports, argue that it holds an inherent conflict of interest and that it will lower standards of fiduciary duty. William Callison, who helped defeat efforts to pass the hybrid incorporation law in Colorado, questions the need for this new business category, given that foundations can make investments in standard forms of business, and more and more companies are reconciling socially beneficial activities with the primary goal of making profits.

"There's a marketing job that's being done that somehow these are special," Callison told the Times. "I think they're anything but special." Read more.