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CS Professional · CSR and Social Governance · Contribution of Non-Corporate Entities in Social Governance

Greenleaf Society, a registered society, runs a skills programme and also earns fees from a paid training wing. Its governing body asks how this affects its character as a social organisation. Which view is sound?

Greenleaf Society may earn fees from its training wing so long as the surplus is applied to its objects and not distributed among members as profit. Earning income neither turns it into a company nor voids its social purpose.

  1. AEarning fees automatically converts it to a company
  2. BEarnings are acceptable if applied towards its objects and not distributed among members as profitCorrect
  3. CAny fee income makes its social purpose void
  4. DFee income must be paid out to members every year

Explanation

A non-profit society may earn income from activities, provided the surplus is applied to its objects and not distributed among members. Fee income does not change its legal form or void its purpose, and distribution to members would be inconsistent with non-profit status.

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