Social purpose corporation

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A social purpose corporation (SPC) is a type of for-profit entity in some U.S. states that enables corporations to consider social or environmental issues in decision making instead of relying only on profit-maximizing goals. The social purpose corporation structure permits consideration of these issues but does not require it. Social purpose corporations are similar to benefit corporations (B Corporations) and flexible purpose corporations (FPCs).


In California, "[t]he amendment, S.B. 1301, changes existing law (found under Corporations Code Sections 2500-3503)[1] to emphasize the social-purpose nature of the flexible purpose corporations, most notably by changing its name to the "Social Purpose Corporation." S.B. 1301 takes effect on January 1, 2015. On that date, existing FPCs will automatically continue their existence as SPCs.[2]


Florida created both social purpose corporations and benefit corporations in 2014.[3] The main difference between the two is that B corporations must pursue a "general public benefit", which applies to all of the company's activities, while SPCs may pursue a public benefit in limited areas.[4] The following example from the Florida Bar Journal gives a good illustration of this difference between SPCs and benefit corporations:

Suppose that a for-profit corporation plans to manufacture and sell an anti-malarial drug and, as part of its business plan, will distribute that drug at low or no cost in African countries. If distribution in Africa is the corporation's sole benefit purpose, the corporation could appropriately be a SP corporation. However, if the corporation is a B corporation, directors and officers would be mandated to consider as well employee programs, environmental concerns, community issues, and similar societal factors, and cannot concentrate on a single benefit program to the detriment of other general benefit concerns.[4]

Shareholders, directors, and persons owning more than 5% equity in a Florida SPC may bring lawsuits against a Florida SPC for failure to pursue or create a public benefit,[5] but the corporations, their directors, and their management are shielded from monetary damages in such lawsuits for failing to create a public benefit. Florida SPCs must prepare an annual report on the company's achievements towards its public benefit goals, but unlike Florida B Corporations, these reports do not need to be assessed by a third-party standard.[4]


Washington State passed the law for social purpose corporations in 2012.[6] Florida became the second state to adopt social purpose corporations in 2014.[7] Although there are no official requirements for social purpose corporations to have a positive social or environmental impact, most of the companies which have registered as social purpose corporations in Washington State, the pioneering state for SPCs, have a focus on social or environmental impacts.[8]

See also[edit]


  1. ^ "Bill Text - SB-1301 Corporate Flexibility Act of 2011: Social Purpose Corporations Act". 
  2. ^ Interactive, NK (2014-10-06). "Goodbye Flexible Purpose Corporation, Hello Social Purpose Corporation: Governor Brown Signs S.B. 1301 – Adler & Colvin". Adler & Colvin. Retrieved 2018-07-31. 
  3. ^ Walker, Matt (December 5, 2014). "Professor Cohn writes Florida benefit corporations law". UF Law. University of Florida College of Law. Retrieved 10 August 2016. 
  4. ^ a b c Cohn, Stuart; Ames, Stuart (November 2014). "Now It's Easier Being Green: Florida's New Benefit and Social Purpose Corporations". Florida Bar Journal. 88 (9): 38. Retrieved 10 August 2016. 
  5. ^ "Statutes & Constitution Online Sunshine". 
  6. ^ "Social Purpose Corporation - Corporations - WA Secretary of State". 
  7. ^ Ant, Fire (9 May 2014). "New Florida Law Allows for "Social Purpose Corporations"". 
  8. ^ "Archived copy". Archived from the original on 2014-11-14. Retrieved 2014-11-14.