Mercury Ltd. decided to donate 2% of its sales to ‘ Child Right and You (CRY) for improving the condition of children in India. This initiative by the company was highly appreciated by the public and their sales increased by 10%. Identify the interest group towards which Mercury Ltd. is discharging its social responsibility?
Answers
Explanation:
Business has various social responsibilities towards different interested groups. identify the relevant interested groups in the following cases
1.entrepreneur should act according to well accepted values of the society.
2.Business should provide fair return on their in capital investment.
3. Business should avoid any type of pollution
4. Business enterprises must pay taxes regularly and honestly.
5. Business suit supply good quality products at reasonable price.
6. They should be proper and safe working condition
The interest group towards which Mercury Ltd. is discharging its social responsibility is the community.
Community interest business:
- A community interest company, often known as a CIC, is a unique type of non-charitable limited corporation that exists more for the good of the community or with the intention of pursuing a social goal than for the benefit of its shareholders.
- For those interested in starting a social enterprise, a community interest company is one option; other business structures include charities, trusts, standard companies, unincorporated associations, and charitable incorporated organisations (CIO).
Advantages of community interest business:
A firm dedication to social objectives
- While typical limited corporations' articles of association can specify social objectives, community interest company status bestows a definite dedication to a shared cause.
- Investors and the general public are reassured by the statutory basis of the asset lock, which guarantees that a CIC's funds will be used for the company's social aims rather than for individual shareholders.
- More generally, the fact that community interest companies are continually subject to regulation by the CIC Regulator promotes trust in a CIC's honesty.
Access to specific financial instruments
- Some donors exclusively give to charity or community interest organisations because they offer guarantees that the money will be used for the intended reasons.
- Access to funding, whether from donors, grants, or community development financing, may therefore encourage a social enterprise to function as a CIC rather than as a typical business.
Limited responsibility and defence
- As with other companies that operate as limited companies, limiting liability is the main benefit.
- For individuals who own and run the company, this offers a crucial component of security.
- In addition, it offers some security for any assets connected to the social enterprise that would not typically be possible for an unincorporated entity, as they are frequently kept in individual names.
Familiarity
- Those in charge of administering the organisation are probably familiar with the limited company structure, which includes directors and shareholders/members.
- It is also reasonably easy to run, especially when compared to a charity.
- Additionally, it will be easily recognised by the business community and others with whom the company interacts.
- For instance, having a formalised, well-known structure may be advantageous when dealing with the government or other organisations that award funding.
Consistency of intent
- A community interest business is a sort of limited corporation that has its own legal existence.
- As a result, it can continue to operate and assist the community until it is dissolved or turned into a charity.
- One unique aspect of the CIC model is that, even if it is dissolved, any remaining assets (after satisfying any creditors) must be transferred to another asset-locked entity, such as another CIC or a charity.
- This guarantees that financial contributions made to a CIC will support social or charitable goals even after the CIC has ceased operations.
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