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Sampark Club, a political party affiliate, and Rudra Trust, a religious body, both apply to be identified as social enterprises on the Social Stock Exchange. Which statement is correct?

Both applicants are ineligible. The SEBI framework specifically excludes political or religious organisations or activities, along with corporate foundations, trade associations and professional bodies, from being identified as social enterprises, regardless of registration or the type of instrument they plan to use.

  1. APolitical or religious organisations, trade associations and professional or business bodies are ineligible to be identified as social enterprisesCorrect
  2. BBoth are eligible if they have a registered trust deed
  3. COnly the political affiliate is excluded; religious bodies are always eligible
  4. DBoth are eligible if they raise funds only through zero coupon zero principal instruments

Explanation

The SEBI framework excludes corporate foundations, political or religious organisations or activities, professional or trade bodies, infrastructure and housing companies (except affordable housing), and certain others. Hence both applicants are ineligible irrespective of the instrument they plan to use or their trust deed.

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