As a Social Purpose Corporation, the directors of the organization can weigh and consider the designated social purpose before making decisions, even if it results in a lower financial return to shareholders. Directors are legally protected in instances where they decide to choose environmental or social impact over economic gain.
On the plus side, this form of corporation makes it clear to your customers what you stand for. It is relatively easy to form, even if you’re currently an S or C Corp that wants to convert to a Social Purpose Corporation structure. As an SPC, it’s easier to attract investors who are liked minded, and the formed business is built with the long term in mind. It’s difficult for shareholders to mount a lawsuit since the purpose takes precedence over profits. Still, shareholders do have a say in determining the corporation’s mission, so there is a substantial amount of buy-in to the direction of the company from the get-go.
On the downside, you’re still on the hook for all sales and use taxes, just as a corporation is. If there are dissenting shareholders who want out, you’ll need to cash them out, so you’ll need to make sure your financial projections factor this in.