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Sunrise Realty Ltd, a for-profit company, builds luxury villas and also runs a small mid-day meal programme that supports its brand image. It applies for identification as a for-profit social enterprise (FPE) for the SSE. Which approach reflects the SEBI framework?

A for-profit company must prove primacy of social intent, such as most of its revenue, customers or expenditure relating to eligible activities serving underserved beneficiaries. A small side programme alongside luxury villa business does not make it a social enterprise, and conversion to a trust is not needed.

  1. AIt qualifies automatically because it carries out a charitable activity alongside business
  2. BIt qualifies if it earns most of its revenue from luxury villas and shares the profits with beneficiaries
  3. CIt must establish primacy of social intent, for example by showing that a majority of its revenue or customer base or expenditure relates to eligible activities and target beneficiaries, and not merely a side projectCorrect
  4. DIt qualifies only if it converts to a trust

Explanation

A for-profit enterprise must demonstrate that social impact is its primary objective, typically through eligible activities and underserved target populations accounting for the predominant share of revenue, customers or spending. A minor CSR-style programme does not meet this. Conversion to a trust is not required.

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