S Corporations have the following advantages:

• Separate legal entity providing for limited liability of shareholders for the debts of the corporation;
• Perpetual existence with easily transferable ownership interests;
• Generally regarded as the most suitable legal structure for raising capital (debt or equity);
• Relatively simple to provide equity compensation for employees;
• Can rely on business judgment rule to promote social and/or environmental mission that is in the long- or short-term best interests of the corporation;

BUT:

• The formation process is complicated with prescribed procedures;
• Formalities in formation and management must be adhered to;
• Competitive market pressures and concerns regarding duties to maximize shareholder value may discourage corporations from pursuing social or charitable purposes;
• Pass-through taxation can be problematic for certain investors;
• Corporations might be prohibited or restricted in certain instances from prioritizing social or environmental purposes that negatively impact shareholder value;
• Constituency statutes designed to allow for additional considerations outside of shareholder value lack accountability and disclosure and often conflict with other provisions governing corporations.

Download guidance about setting up a S Corporation