FCRA Registration in India

FCRA manages the inflow of Foreign contributions or help to India. The law is upheld by the Ministry of Home Affairs. The FCRA pertains to the regulation of the acceptance and usage of foreign contributions by individuals and organizations in India. It was introduced in order to ensure that such contributions are not used to affect India’s political or economic situation adversely. The act stipulates that any individual or organization receiving foreign contributions must be registered under it. It also outlines the criteria and procedure to be followed for registration. The act mandates that all foreign contributions are to be received only through authorized banks and used for the stated purposes. Non-compliance with the provisions of the act can result in severe penalties and legal action.

The FCRA is a law in the Indian Constitution that aims to regulate the receipt and utilization of foreign funds and hospitality by specific individuals, organizations, or companies. Its main objective is to limit the acceptance and use of such funds for activities that could be detrimental to the public interest or related issues.

In essence, India’s acceptance of foreign aid or support is governed by FCRA. This legislation is enforced by the Ministry of Home Affairs.

The objective of this measure is to prevent foreign entities from exerting their influence, directly or indirectly, on social, political, economic, and religious discussions in India. Some examples of this influence include religious groups carrying out conversion programs in India, or companies providing funding for Indian activists protesting against large dams or nuclear plants.

Under the FCRA, it is not permitted for certain individuals and organizations, such as political parties, government employees, and print or visual news sources, to accept any donations from foreign sources. However, companies that have obtained registration are allowed to receive foreign funds.

THE OBJECTIVE OF FCRA ‐

The purpose behind the enactment of the Foreign Contribution Regulation Act, 2010 was to: –

Control the approval and utilization of funds or entertainment given by foreign entities to particular individuals, organizations, or businesses.
Reject the utilization or acknowledgement of Foreign hospitality or Foreign donation for any activities that are not in line with the national interest or related issues.

BENEFITS OF FCRA REGISTRATION:

Provides support to organizations that work towards improving the well-being of individuals in society through their involvement in social work activities.
If the organizations are registered with the FCRA, it provides legal assistance in receiving foreign contributions or government assistance.
Foreign entities are able to provide donations to an organization that has been registered under FCRA.

ELIGIBILITY FOR FCRA REGISTRATION

Companies that are registered under the Companies Act are classified as Section-8 corporations.
The Indian Trust Act is the legal framework for the registration of trusts in India.
The Indian Society Registration Act permits societies to legally register.
The FCRA should not prohibit the entity in any way.
The acceptance of foreign contributions by the trust will not pose a threat to anyone’s safety or security, nor will it lead to any wrongdoing.
In order to register as a non-profit organization, it is important to have charitable objectives that aim to benefit society through the promotion of various aspects such as health, education, economic growth, artistic development, cultural activities, religion, sports, and more.
The entities that are considered as substances are not allowed to have FCRA registration in India. The list of such entities is stated below.

Individuals who do not meet the eligibility criteria are not qualified to register for FCRA (Foreign Contribution Regulation Act) registration.

The applicant is fictitious
An individual who has been found guilty of engaging in unethical or unjust actions during legal proceedings.
A potential candidate who has been charged or convicted for inciting communal tensions in a specific district or any other region of the nation.
The organization has been involved in some aggressive actions.
The organizations have made use of some donations from abroad for their own purposes.
Under any stipulation of the law, an entity is prohibited from receiving any Foreign payment or Foreign donation.
If the acceptance of a grant from a foreign source results in preferential treatment of the entity, then it is considered problematic.
The sovereignty of India;
Because of a valid worry for the safety of individuals in public;
Any state in India has a relationship.

A requirement that must be met before someone can register for FCRA (Fair Credit Reporting Act) online.

The registration of the Organization is required in order for it to utilize its funds for charitable endeavors.
For an NPO to be considered eligible, it is necessary for it to have existed for the past three years.
The Organization is required to obtain registration under the Darpan Registration for Non-Profit Organizations.
The Organization should agree to receive contributions from foreign sources through a solitary bank account.

The documents that are mandatory to obtain registration under the FCRA (Foreign Contribution Regulation Act) in India are as follows: a copy of the certificate of registration as issued by the charity commissioner or registrar of societies, a copy of the latest audited financial statement as published by the organization, a copy of the trust deed or memorandum and articles of association, and a letter of confirmation from the bank with which the account of the organization is maintained.

The list of documents required for registering under the FCRA in India is as stated below: –

A self-provided copy of the certificate of incorporation, trust deed, or any other certificate that is pertinent to the entity.
PAN of the NGO;
A second copy of the Memorandum of Association (MoA) and Articles of Association (AoA) of a company.
The primary legal authority in the JPG structure is symbolized by Mark.
A comprehensive and thorough account of all the actions taken during the past three years.
Over the last three years, a financial statement, details of income and expenditures, a profit and loss account, and a cash flow statement have been scrutinized and approved.
An authenticated and legitimate document of the decision adopted by the authorized administrative group of the non-governmental organization.
Under the Income Tax Act of India, NGOs are entitled to certain exemptions as outlined in Section 80G and 12A, for which they receive certificates.

Pre-requisite of FCRA Registration:

Ordinary Registration

The person who is applying ought to have obtained registration under either the Societies Registration Act, 1860, or the Indian Trusts Act, 1882, or must have registered as Section 8 Company as per the Companies Act, 2013, or any other relevant act as may be necessary.

It is likely that they have provided meaningful help to society through their efforts in their chosen area of expertise.

It is likely that they have spent a minimum of 10 lakh rupees in the past three years to achieve their objectives, not including any spending related to regulations.

You need to provide certified copies of the budget reports from the last three years, which have been audited by qualified Chartered Accountants.

If a newly registered organization wishes to receive foreign contributions, they must request specific permission from the Ministry of Home Affairs through the Prior Permission (PP) method, which requires a clear purpose and source for the funds.

Prior Permission Registration

The Prior Permission training appears to be a fitting option for newly registered organizations seeking to receive foreign contributions. It allows them to receive a specific amount of money from a particular donor for specific activities or projects. To qualify, the organization must: –

In order to comply with relevant laws, an organization must be officially recognized and documented under the Societies Registration Act of 1860, the Indian Trusts Act of 1882, registered as a Section 8 Company under the Companies Act of 2013, or any similar legislation that is applicable.
that the donor is fully committed to providing the necessary funding for the project. This commitment letter should clearly outline the donor’s financial obligation, the purpose of the funding, and the timeline for the disbursement of funds. It should also include contact information for the donor’s representative in case of any further inquiries. This letter is a necessary requirement for the Ministry to process the application for the project.
Amount of contribution given

Reason for which being given is proposed

If Indian organizations that receive donations and foreign organizations that provide donations have members in common, specific conditions must be fulfilled.
The head person in charge of Indian groups may not necessarily be crucial to the funding organizations.
At least 51% of the people in charge of governing Indian charitable groups must not be affiliated with or employed by foreign donor organizations.
If the donor is an individual who is not a citizen of the country receiving the donation.
It is not possible for him to hold the position of the top official in Indian organizations.
It is recommended that no more than 51% of the staff members from the management team of the receiving organizations should be related to or directly affiliated with the donor.

APPLICATION PROCEDURE

To register under FCRA, the process includes the following steps: –

The first step is to access the online portal of FCRA.

Usually, the forms FC-3A and FC-3B, which are used to apply for FCRA registration and prior permission respectively, are selected.

Afterwards, the webpage will offer the option for the customer to apply online.

After selecting “Apply Online”, the subsequent step is to create a username and password by clicking on the “Sign Up” button.

After creating a username and password, and receiving a message confirming it, the applicant is now able to access their Account by logging in.

After successfully logging in, select “FCRA Registration” from the options available in the dropdown menu labeled “I’m applying for”. Then, click on “Apply Online” and proceed to choose “Continue Registration”.

Next, to initiate the newly registered method, the FC-3 menu should be clicked on located in the title bar.

The next step is to fill out the Association Form with important information and relevant documents provided by the candidate. These details include the Darpan ID (which is optional), Organization Address, Registration Number, Registration Date, Nature of the Organizations, and Main Object of the Organizations. Once these details have been completed and the relevant documents attached, the candidate can select the submit button.

The next step is to select the Executive Committee option from the menu bar, and then complete the details in the Executive Committee Form.

The option “Add details of Key Officer” allows the candidate to include, remove, or modify the information entered in the Executive Committee.

Once all the intricacies of the Executive Committee are added, the button labeled “Save” should be clicked.

Additionally, it is important to provide details pertaining to the bank such as its name, account number, IFSC code and location/address.

Once the bank details are provided, it is necessary to upload all the required documents in PDF format.

After selecting the location and date, the final hospitality button can be selected.

To complete the process, click on the designated button to make the online payment. Once the payment is complete and the Form is submitted, it cannot be altered.

If the FCRA registration is approved, it will be valid for a long period of time. However, it should be noted that an application for renewing the FCRA registration must be submitted six months prior to the expiry date.

The annulment or temporary halt of FCRA registration:

In case experts determine that a recognized entity is not adhering to regulatory provisions and its license needs to be revoked, they have the authority to do so by notifying the entity. There are several factors that may be taken into account when revoking a license.

The NGO does not comply with the regulations outlined in the Foreign Contribution (Regulation) Act.
If the organization does not provide an annual report by the required deadline.
If there is an investigation into an accusation against an organization regarding improper actions during their operations, and if that accusation is found to be accurate.
The received contribution is not being put towards the entity’s primary objective, nor is it being used to fulfill the purpose stated in the FCRA registration application.

What are the consequences if someone breaks FCRA rules?

Breaking FCRA rules can lead to different types of consequences such as the following: –

The capturing and taking away of money received from abroad as contributions.
A penalty of an amount up to five times the value of the foreign contribution utilized may be imposed.
The examination and confiscation of financial documents and data.