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

Vanya Foundation, a Section 8 company, and Gram Vikas Mandal, an unregistered village association, both work on rural sanitation. Under the concept of non-corporate entities in social governance, which statement is correct?

Vanya Foundation is a corporate entity because it is incorporated as a Section 8 company, even though it is non-profit. Gram Vikas Mandal is a non-corporate entity. Classification depends on legal form, not on profit motive or social purpose.

  1. ABoth are non-corporate entities because both are non-profit
  2. BVanya Foundation is a corporate entity despite being non-profit, while Gram Vikas Mandal is a non-corporate entityCorrect
  3. CNeither can contribute to social governance because one is a company and the other is unregistered
  4. DGram Vikas Mandal is a corporate entity because it has a social purpose

Explanation

Classification depends on legal form, not on profit motive. A Section 8 company is incorporated under the Companies Act and so is corporate. The village association is not a company, so it is non-corporate. Both can contribute to social governance, so the other options fail.

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