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CS Professional · CSR and Social Governance · Social Stock Exchange

Kisan Mitra Pvt Ltd, a for-profit company, wishes to be recognised as a social enterprise on the SSE. It says it earns profits from selling farm inputs to small farmers. Which analysis is correct under the SEBI framework?

A for-profit company can be a social enterprise on the SSE only if it shows primacy of social intent through eligible activities and meets prescribed criteria, such as a threshold of target beneficiaries or revenue, plus impact reporting. Merely serving farmers is insufficient, and conversion into a trust is not required.

  1. AIt qualifies automatically because every company serving farmers is a social enterprise
  2. BIt is ineligible because only trusts and Section 8 companies can ever access the SSE
  3. CIt qualifies if the company's registration is cancelled and converted to a trust
  4. DA for-profit enterprise can be eligible only if it demonstrates that it primarily pursues eligible social objectives, and shows that a prescribed share of its activities, revenue or customers relates to the target population, and it must meet the framework's impact disclosure normsCorrect

Explanation

For-profit social enterprises are eligible only if they establish primacy of social intent and meet prescribed criteria, such as an eligible activity and a threshold of beneficiaries or revenue linked to underserved segments, and also meet impact reporting. Serving farmers alone is not sufficient, and conversion to a trust is not required.

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