Social Purpose Corporation
A social purpose corporation (an “SPC”) is a Washington corporation that has organized itself to pursue one or more social purposes.
How do you do this? You set forth in your Articles of Incorporation:
- A corporate name that contains the words “social purpose corporation” or “SPC”;
- A statement that the corporation is organized as a social purpose corporation governed by the Social Purpose Corporation Chapter of Title 23B RCW;
- A statement setting forth the general social purpose or purposes for which the corporation is organized pursuant to Section 3 of the Act (Section 3 says that “[e]very corporation governed by this chapter must be organized to carry out its business purpose under RCW 23B.03.010 in a manner intended to promote positive short-term or long-term effects of, or minimize adverse short-term or long-term effects of, the corporation’s activities upon any or all of:
- the corporation’s employees, suppliers, or customers;
- the local, state, national, or world community; or
- the environment.”)
Note: The shareholders of each SPC are required to choose the SPC’s social purposes and to define those purposes within the broad parameters outlined in RCW 23B.03.010 described above. For example, a corporation could choose as its social purpose to promote the welfare of its workers, thereby allowing company executives to make decisions based on the impact that any changes to the business might have on workers in addition to how they impact shareholder returns. Or, a corporation could choose as one of its social purposes to support farmers who practice environmentally sound practices by only buying goods produced by such farmers.
- A provision stating the following: “The mission of this social purpose corporation is not necessarily compatible with and may be contrary to maximizing profits and earnings for shareholders, or maximizing shareholder value in any sale, merger, acquisition, or other similar actions of the corporation.”