CRITICAL ANALYSIS OF SOCIAL STOCK EXCHANGES AND NON-PROFIT SOCIAL ENTERPRISES

Abstract

This paper discusses the relevance and significance of social stock exchanges and non-profit social enterprises in the Indian context, particularly regarding Indian laws. Social enterprises are required as an additional factor to improve the social conditions of the underprivileged over and above the government initiatives in that direction. Social enterprises may be for-profit organisations or non-profit organisations. Social enterprises face challenges in raising capital as there will be no returns or muted returns on the contributions made by the investors. The government of India and the Securities and Exchange Board of India took the initiative for the establishment of social stock exchanges to act as a platform for social enterprises to raise capital.
The paper examines the evolution of social stock exchanges and the relevant provisions under the securities laws concerning non-profit social enterprises and their listing on SSEs.
This paper argues that in the context of securities laws and tax laws, it may be relevant to have a separate mechanism for the dissemination of information to the contributors of such non-profit social enterprises instead of making the social stock exchange as a platform to achieve that objective in the absence of a secondary market for the instruments issued by them.