Centre for Youth Ltd. (CYL) is a section 8 company and operating since last 20 years. Its prime area of activities is to promote education and employability amongst unserved population. Currently the major donations come

CS Executive · Capital Market and Securities Laws · PYQS · June 2024
Centre for Youth Ltd. (CYL) is a section 8 company and operating since last 20 years. Its prime area of activities is to promote education and employability amongst unserved population. Currently the major donations come through advertisement in social media. As the company started providing education towards financial literacy, it needs more funds to cater the growing demand. The management is of the view that as CYL is a not-for-profit entity, it can't raise funds through open market for fulfilling its objects. You being a SEBI law consultant, advise the management on the below aspects for raising of funds through Social Stock Exchange (SSE) (with reasons): If CYL was debarred by Ministry of Home Affairs for carrying out its activities, can it still raise funds through SSE?

Answer & Explanation:

A Social Enterprise shall not be eligible to register or raise fund, if the Social Enterprise or any of its promoters or directors or trustees has been debarred from carrying out its activities or raising funds by the Ministry of Home Affairs. In the given case, CYL was debarred by Ministry of Home Affairs, thus, it cannot register or raise fund through SSE. [Regulation 292H(e)]

Topics: Social Stock Exchange

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