Social Purpose Corporations: What, Why, How

Consumers and investors are increasingly interested in the social profile of the businesses they choose to invest in and buy from. In Washington State, you can create a for-profit corporation that is set up to pursue profits and public good. This form of corporation is called a Social Purpose Corporation (“SPC”). SPCs are governed, together with for-profit corporations, under the Washington Business Corporation Act, RCW 23.B.5 (the “Corporation Act”).

At Summit Law Group, we are proud to be part of the broader shift toward corporate responsibility as a foundational tenet of good business practice. We have helped businesses in the private and nonprofit-adjacent sectors convert to SPCs.

An SPC is a hybrid of a traditional for-profit corporation and a non-profit corporation. The fundamental difference between a traditional corporation and an SPC is that corporate directors can prioritize the social purpose of the corporation in fulfilling their duties without the risk of legal liability, even if their decisions reduce shareholder value. Washington statutes permit the stated social purpose of the corporation to guide director decision making in conjunction with, and with equal importance to, maximizing shareholder returns.  

SPCs must have a General Social Purpose (RCW 23B.03.010) and may have one or more Specific Social Purposes (RCW 23B.25.030). A General Social Purpose is intended to promote positive short-term or long-term effects, or minimize adverse short-term or long-term effects, of the corporation’s activities upon any or all of (i) the corporation’s employees, suppliers, or customers; (ii) the local, state, national, or world community; or (iii) the environment. SPCs are free to adopt any Specific Social Purpose they deem appropriate, as set forth in the SPC’s articles of incorporation.

We believe that SPCs, as a concept, represent a modern, progressive, future-oriented approach to business. If you would like to know more about the specific mechanics of becoming an SPC or need help in ensuring proper governance of an existing SPC, reach out to our Summit Law Group corporate law partners, Ada Danelo ( or Jessica Mitchell (


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