REGULATORY HURDLES IN LISTING OF SHARES OF NON-PROFIT COMPANIES

Companies Act, 2013 provides for incorporation of non-profit companies (NPCs) under section 8of the said Act.The Working Committee appointed by Securities and Exchange Board of India (SEBI) for makingrecommendations on social stock exchanges has in its report submitted to SEBI observed that thereare no regulatory hurdles for the NPCs in listing their equity shares on recognised stock exchanges.This paper names and discusses the legal and regulatory hurdles in the non-profit companies inlisting their shares on a recognised stock exchange in the context of the existing provisions underCompanies Act, 2013 (CA), Securities Contracts (Regulation) Act, 1956 (SCRA), SecuritiesContracts (Regulation) Rules, 1957 (SCRR), and relevant SEBI Regulations. The papers alsoattempt to identify the market constraints that may come in the way of creation of liquidity in theshares of such companies.