Skip to content

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

Three friends form Greenleaf Associates, a partnership firm, to run an organic farming training centre for tribal youth, sharing profits. A student asks whether it can be regarded as contributing to social governance. Which statement is correct?

A partnership firm is a non-corporate entity, so it can contribute to social governance through its activities. It has no legal personality separate from its partners. Neither being outside the society or trust categories nor conversion into a company is required.

  1. ANo, because only societies and trusts are non-corporate entities
  2. BNo, because any entity that shares profits is excluded from social governance
  3. CYes, but only if it converts into a company
  4. DYes, a partnership firm is a non-corporate entity, and its social contribution depends on its activities and conduct, though it has no separate legal personalityCorrect

Explanation

Partnership firms are non-corporate entities and may undertake social activities. A firm is not a legal person distinct from its partners. Conversion into a company is not required, and the profit-sharing does not remove it from the category of non-corporate entities.

Did you get it right without looking?

One question tells you little. A timed set on Contribution of Non-Corporate Entities in Social Governance shows your real accuracy, how long you take and where you lose marks.

Practise Contribution of Non-Corporate Entities in Social GovernanceFree diagnostic mock

More Contribution of Non-Corporate Entities in Social Governance questions