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In many instances, organizations are not able to cater to the social responsibilities because of the huge pressure in corporate sector by the shareholders (Mickels, 2009). By registering as a Benefit corporation, an organization can project them as a business which also has the aim of developing a better society, such as the Good Capital LLC mentioned in the case, where investment is also carried out to provide solutions to some of the challenging problems faced by the society. Therefore, the biggest advantage is that both the society as well as the organization benefits. It also provides encouragement to a generation of entrepreneur who can share benefits with the society, without having to fear about the lawsuits or lack of support from the shareholders (Reiser, 2012).
However, there are certain disadvantages also. where by Benefit corporates can get sued by if it fails to take the steps for the benefit of the society as per the state laws (Reiser, 2012). If the status of Benefit corporations is given to organizations, it is mandated that they take solid steps towards the social cause they are committed to (Reiser, 2012). Additionally, it also has a high risk of abuse as powerful leaders may use it to mask their follies (Katz and Page, 2010). Hence, it is appropriate only for those businesses that are fully committed to both social causes as well as to their shareholders.
The issue of abuse also leads to the question of ethics in Benefit corporations. As the potential of misusing is high, because the losses can be easily masked out as investment for fulfilling the social causes, it is necessary to have rigorous testing standards so that organizations cannot take undue advantage in the pretext of being a Benefit organization (Reiser, 2012). In addition, an organization should give equal priority to its organizational mission as well as the social cause undertaken, so that it can commit fully to