Criteria for recognition an entity as Social Enterprise
A NPO or FPE can be classified as a Social Enterprise. To be classified as one, following criteria has to be fulfilled.
- Primacy of Social Intent needs to be established through engaging in certain social causes. These could be any of the activities covered under SDGs or even protection of national heritage, art and culture, promotion of rural/nationally recognised/para-Olympic/Olympic Sports, supporting non-profit ecosystems, and several other socio related activities.
- Entity should be focussed on serving under-served or less privileged population or backward regions, with minimum 2/3rd of its average revenues of last 3 years coming from serving such populations or 2/3rd of average expenditures of last 3 years focussed on target population.
- Corporate Foundations, political religious organisations, professional or trade associations, infrastructure or housing companies (exception low-housing activities) will not be eligible to be recognised as social enterprise.
Registration of NPO / Social Enterprise at SSE
Registration Requirements
A NPO can register itself on SSE as per S.292(F) of ICDR Regulations. To do the same it needs to fulfil following requirements.
- A NPO must have been registered for at least 3 years. Its registration as NPO (Society, Trust, S.8, etc.) must be valid for next 12 months at the time of seeking registration with SSE. PAN should confirm the legal status of the NPO.
- If entity owned by Govt, indicate the same, or state if it is a private entity.
- 12A/12AA/12AB registration, valid for at least 12 months.
- Should have a valid 80G registration to be able to give IT deduction to investors.
- NPO should have a minimum spending of around Rs 50 lakh during last FY and receipts at least around Rs 10 lakh.
- NPO should have at least 2/3rd of its spending on social projects, to be classified as a social enterprise.
Benefits of registration on SSE as a Social Enterprise
- Improved market access: By registering on SSE as a Social Enterprise, a NPO gets access to a common and structured meeting ground between Social Enterprises and investors/donors with inbuilt regulation for providing sanctity and accountability of finances.
- Synergy between investors and investee in social aims:In view of flexibility of investments and capital that would be available on an SSE, the canvas of choice would be much wider allowing investors and investees with similar missions and visions to connect seamlessly
- Performance based philanthropy: Performance of the enterprises listed on an SSE would be monitored thus it will instil a culture of performance driven philanthropy.
- Minimal registration cost: SSE saves cost for both issuer and investor/donor by charging minimal fees for registration and listing.
- Additional avenue for Social Enterprises: Central and State governments till date have the biggest onus of achieving sustainable development goals. SSE will provide an alternate avenue for raising funds thereby encouraging new and existing social enterprises.
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Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place,
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