FCRA Registration – Eligibility & Required documents

Section 6(1) of the Foreign Contribution Regulation Act, 2010 requires charitable trusts, societies, and Section 8 companies that receive foreign contributions or donations to register. A FCRA registration is one that is made under the Foreign Contribution Regulation Act of 2010. The procedure for obtaining FCRA registration in India is discussed in this article.

Eligibility for obtaining FCRA Registration

Organizations seeking foreign donations for specific cultural, social, economic, educational, or religious programmes can apply for FCRA registration or apply for “prior permission” to receive foreign contributions. A Trust, Society, or Section 8 Company is preferable to an FCRA applicant. The not-for-profit organisation must have been in operation for at least three years before to filing the FCRA application, and it must not have accepted any foreign contributions without prior approval from the government. In addition, the business seeking registration must have spent at least Rs.10 lakh on its goals and objectives in the previous three years, excluding administrative costs. Statements of Income and Expenditure for the last three years, thoroughly audited by a Chartered Accountant, must be submitted to verify that it fulfils the financial parameters. If a newly registered entity wishes to receive foreign donations, the Ministry of Home Affairs can grant approval for a specific activity, specific purpose, and from a specific source using the Prior Permission (PP) approach.

Applying for FCRA Registration

Form FC-3 can be used to apply for FCRA registration. The following documents must be presented with the application:

• A self-certified copy of the association’s registration certificate/trust deed, etc.
• A self-certified copy of the necessary portions of the Memorandum of Association/Article of Association, indicating the association’s purpose and objectives.
• Copies of applicable audited statement of accounts for the past three years (Assets and Liabilities, Receipt and Payment, Income and Expenditure) clearly illustrating expenditure incurred on the association’s goals and objectives as well as administrative expenditure;

The FCRA registration is valid for five years after it is approved. A renewal application for FCRA registration can be submitted six months in advance.

If you are facing any such issues while doing FCRA registration, renewal, amendment etc. you can contact us at @ 70152-77705 or write to us at csmanishamittal@gmail.com

What are the Penalties for Violation of FCRA?

Violations of the FCRA can result in the following penalties:

• Seizure and confiscation of foreign donation proceeds.
• A penalty of up to five times the amount of the foreign donation.
• Accounts and records are inspected and seized.

What are the Types of Registration Under FCRA 2010?

According to the FCRA 2010, there are two options for an application to gain registration:

Normal Registration–

The applicant must be registered under one of the following statutes:

• The Societies Registration Act, 1860;
• The Indian Trusts Act, 1882; or
• Incorporated under Section 8 of the Companies Act, 2013, or any other statute that may be specified.

An applicant must have made appropriate contributions to society by engaging in activities in their chosen field.

It must have spent at least Rs. 15 lakhs in the last three years to achieve its goals.

Financial statements for the previous three years, duly audited by certified Chartered Accountants.

If an entity that is newly registered, likely to receive the foreign contributions, then approval can be made to the Ministry of Home Affairs via the Prior Permission (PP) method.

Prior Permission Registration

The Prior Permission Registration is preferably suited for those institutions that are newly registered and are likely to receive foreign contributions. Prior Permission is granted for receiving the specific amount from a specific donor for carrying out specific projects. The Non-profit organization must be registered:-

• Under the Societies Registration Act, 1860 or,
• The Indian Trusts Act, 1882 or,
• Incorporated as Section 8 Company as per the Companies Act, 2013 or any such Act as may be required.

Submit a particular commitment letter from the contributor to the Ministry of Home Affairs which indicates (1) Amount of contribution given, and (2) Aim for which it is proposed to be given.

If in case, the Indian recipient organization and foreign donor organization have common members, the following conditions need to be met:-

• The Chief Functionary of the Indian entity cannot be part of the contributor entity.
• At least 51% of the members/office-bearers of the governing body of the Indian recipient entity should not be employees/members of the foreign contributor entity.
• Where the foreign contributor is an individual:-

I- That individual cannot be the Chief Functionary of the Indian organization.

II- At least 51% of office bearers/members of the governing body of the recipient entity should not be the family members and close relatives of the donor.

Non-Eligible Entities for Applying FCRA Registration

Following entities are not allowed to be granted FCRA registration:-

• The applicant is fictitious or Benami.
• Applicant against whom prosecution is conducted for indulging in any unfair activity
• An applicant who has been convicted or prosecuted for any communal tension made in any area of specified district or any part of the country
• Entity has engaged in any violent activities
• Has utilized foreign contribution for its personal use
• Any entity de-bared for accepting any foreign receipt or foreign grant under any provision of law.
• Any such acceptance of foreign grant that affects prejudicially:=

1. The sovereignty of India

2. Public Interest

3. Relationship with any state.

Renewal of FCRA License

FCRA registration remains valid for five years, which can be renewed by applying for the renewal. An entity shall apply for renewal within the following timelines:

• At least six months before the date when the license is getting lapsed.
• At least 12 months before the date when registration lapses, in cases the entity is operating on a multi-year project.

Cancellation/Suspension of FCRA Registration

In case authorities are of the view that registered entity is not operating as per the provisions of law and its license needs to be cancelled, such authority can do so by giving the notice to the concerned entity. Following are the few reasons that can be considered while cancelling the license:

• NGO fails to comply with the provisions of the Foreign Contribution (Regulation) Act.
• If the entity fails to submit an annual return within the due date
• In case any inquiry is made for any allegation imposed against such organization for any wrongdoing in operations, and such allegation proved to be true
• Contribution received is not utilized for the attainment of the main object of entity neither for achieving the purpose stated during FCRA registration application

Disclaimer: This article does not provide legal advice. We are not liable for any inaccuracies, damages, or losses. Legal advice should be sought in case of any concerns.

If you are facing any such issues while doing FCRA registration, renewal, amendment etc. you can contact us at @ 70152-77705 or write to us at csmanishamittal@gmail.com. I have done my best to provide all the specifics, but please accept my apologies if any of the information supplied is incorrect. Please feel free to comment, interact, and propose topics for future posts.