FCRA Registration

What is FCRA Registration?

FCRA Department comes under the Ministry of Home Affairs. FCRA Registration is optional for NGO / Trust / Section 8 Company..

In order to regulate the foreign contribution or foreign hospitality received by any individual, association or company the Government has consolidated all the laws and regulations relating to such transactions. For this purpose Foreign Contribution (Regulation) Act, 2010 was enacted. This was done to create a transparent mechanism for individuals and organizations through E-governance of FCRA related activities. This transparent system was created to discourage any detrimental activities which can be against national interest.

FCRA Registration – Eligibility & Application Procedure

Charitable Trusts, Societies, Section 8 Company that receive foreign contribution or donation from foreign sources are required to obtain registration under Section 6(1) of Foreign Contribution Regulation Act, 2010. Such a registration under the Foreign Contribution Regulation Act, 2010 is called a FCRA registration. In this article, we look at the procedure for obtaining FCRA registration in India.

Applying for FCRA Registration

Application for FCRA registration can be made using Form FC-3. Along with the application, the following documents must be submitted:

  • Self-certified copy of registration certificate/Trust deed etc., of the association
  • Self-certified copy of relevant pages of Memorandum of Association/ Article of Association showing aim and objects of the association.
  • Activity Report indicating details of activities during the last three years;
  • Copies of relevant audited statement of accounts for the past three years (Assets and Liabilities, Receipt and Payment, Income and Expenditure) clearly reflecting expenditure incurred on aims and objects of the association and on administrative expenditure;

Once FCRA registration is granted, it is valid for a period of five years. An application for renewal of FCRA registration can be made 6 months prior to the date of expiry, to keep the registration valid.

Document Requirement for FCRA Registration

  1. Self-certified copy of registration certificate/Trust deed etc., of the applicant association.
  2. Copy of PAN of the NGO.
  3. Self-certified copy of relevant pages of MOA/AOA/Deed reflecting the main objects of the association.
  4. Jpg file of signature of the chief functionary.
  5. Activity Report of last three years.
  6. Copies of audited Assets and Liabilities, Receipt and Payment, Income and Expenditure statement etc. of last 3 years reflecting the expenditures.
  7. Detail about the current and past management of the trust.
  8. Annual report of the NGO and details of work done in past 3 years.
  9. A true copy of the resolution passed by the Governing Body of the NGO.
  10. A Copy of certificate issued by the Income Tax Authority under 80G & 12A of the Income Tax Act.

Whenever any NGO either in the form of Trust, Society or Section 8 company is willing to receive any kind of foreign contribution or donation, they are required to obtain FCRA Registration under Section 6 (1) of Foreign Contribution (Regulation) Act, 2010. Irrespective of the nature of the contribution i.e. either cash or kind, the registration is mandatory. Enterslice is well known FCRA Consultants in India. We help organization willing to register under FCRA.

Yes, it is possible. But, there are certain pre-conditions to be satisfied. They are:

1. The Chief Functionary of the recipient organization shall not be the Foreign contributor (if contributor is individual) or a part of Foreign contributor organization.
2. Majority (51%)of members of the governing body of the recipient organization are not related in any way either as family or as members/employees of the foreign contributor.

There is a basic difference between prohibited and disqualified person. The prohibited person does not qualify for FCRA registration just because of its inherent nature. However, on the other hand in case of disqualification the person could have been able to apply for registration if it was restricted because of any act done by them. Such 'act' disqualifies them from filing an application.

As we have discussed there are two separate ways to receive foreign contribution, i.e. registration and prior permission. Following are the point of difference is the eligibility criteria.

For registration: It is required that the applicant
1. Is in existence for a minimum period of 3 years.
2. Has done reasonable work in the area to public interest.
3. Has spent at least Rs.10,00,000/- over the span of last 3 years for the furtherance of their main objects.

For Prior Permission: The applicant is not required to be registered for any minimum period as they are in the initial state. No work experience is required. However, the registration is situation specific in nature. This means that the prior permission is for:

1. Receipt of a specific amount of foreign contribution.
2. From a specific contributor.
3. For any specific project/ activity.

The applicant is required to submit a copy of approval letter from the foreign contributor for the stated amount of contribution.

Section 3(1) of FCRA, 2010 specifies a list of person who is prohibited from receiving any foreign contribution:

1. Anyone contesting election.
2. Editor, owner, printer, publisher, columnist, cartoonist or correspondent of any registered newspaper.
3. Judge of court of law, government servant or any employee of a Corporation either owned or controlled by the Government.
4. Member of any legislature.
5. Any political party or its office bearer.
6. Any other organization of political nature specified under sub-section (1) of Section 5 by the Central Government.
7. Any company or association engaged in the production or broadcast of news or current affairs programmers through any electronic mode of mass communication, or any other electronic form as defined in clause (r) of sub-section (i) of Section 2 of the Information Technology Act, 2000 or otherwise.
8. Editor, owner, correspondent, cartoonist or columnist, of any organization referred to in point 7.
9. Anyone else who have been prohibited from receiving foreign contribution.

Section 2(1) (j) of FCRA, 2010 has provided clear definition of Foreign source who can provide foreign contribution. This list includes the followin:-

1. Any foreign Government including any agency of such Government.
2. Any international agency, this will not include any agency specifically excluded by the Central Government by notification ( like United Nations or any of its specialized agencies, the World Bank, International Monetary Fund etc.).
3. Foreign company incorporated outside India.
4. Any foreign corporation.
5. Any multi-national corporation referred to in Section 2(g) sub-clause (iv) of FCRA, 2010.
6. Company registered under Companies Act, 1956, whose minimum 51% of share capital is held, either singly or in the aggregate, by:
a. Foreign Government.
b. Foreign citizens.
c. corporations incorporated in a foreign country or territory d. trusts, societies or other associations of individuals (whether incorporated or not), formed or registered in a foreign country or territory e. Foreign company.
7. Foreign trade union either registered or not.
8. Foreign trust or a foreign foundation financed majorly by a foreign country or territory.
9. Any society, club or other association or individuals formed or registered outside India.

In order to apply for registration, first it is necessary to understand what actually constitutes as foreign contribution. The definition of 'foreign contribution' is stated under Section 2 of the Foreign Contribution (Regulation) Act, 2010. It states that "foreign contribution" will include any donation, delivery or transfer made by any foreign source,

1.Of any currency, whether Indian or foreign.
2.Of any article. However, if such article is a gift and its market value at the time of transfer does not exceed Rs. 25,000/-.
3.Of any security as defined in clause (h) of section 2 of the securities Contracts (Regulation) Act, 1956 and includes any foreign security as defined in clause (o) of Section 2 of the Foreign Exchange Management Act, 1999

As it was above mentioned, for receiving any kind of foreign contribution FCRA registration is mandatory. There are two ways to receive such contribution under the Act, they are:

1. Proper Registration: They are already under business for a minimum period of 3 years.
2. Prior Permission: This route is for organizations in their initial formative stage.

In order to accept foreign contribution following conditions must be satisfied:

1. The receiver must have been involved in cultural, economic, educational, religious or social program me.
2. It must either have FCRA registration or prior permission under the Act.
3. The receiver is not included in the prohibited list under Section 3 of FCRA, 2010

Before making an application for registration we have to be clear that the applicant is not disqualified under the Act. Following are the conditions which disqualify a person:

1. It is fictitious or benami in nature.
2. Either the applicant being an individual or in case of any organization any of its directors/ office bearers has not been prosecuted or convicted for
a. Forcing religious conversions either directly or indirectly through their activities.
b. For creating communal tension.
3. Is involved in propagation of sedition or advocating violence of any nature.
4. Found guilty of wrongful utilization of its funds and is likely to use amount of contribution for its personal gains.
5. Has contravened any of the provisions of this Act.
6. Is prohibited from accepting foreign contribution.

One basic pre requisite for registration under FCRA is that the applicant must be a registered under an existing statute including.

1. Societies Registration Act, 1860 or
2. Indian Trusts Act, 1882 or
3. Section 8 of Companies Act, 2013) etc

Once the applicant is granted registration under FCRA, such registration shall remain valid for a period of 5 years.

However, in case of Prior Approval the validity expires once the forien contribution is fully utilized, for which the permission was/is granted. This period shall not exceed 5 years

Under Section 12 (4) (g) it is clearly stated that no registered person under FCRA can accept any amount of any foreign contribution which:

1. Can lead to incitement of an offence or
2. Can endanger the life or can cause physical harm to any person

Once FCRA registration is granted, it is valid for a period of five years. An application for renewal of FCRA registration can be made 6 months prior to the date of expiry, to keep the registration valid.

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