In the present scenario, the world is more focused towards social and environmental causes. Businesses themselves, apart from their regular objective of profit-making, are actively involved in activities that promote social, economic, cultural and environmental growth and prosperity.
The world today is so well connected and so well linked that accessibility to any part of the world is easy. Transactions between people, places and countries take place on a day to day basis. As a result, the flow of foreign currency into and out of each country is now completely natural and an absolute commonality.
The volume at which these transactions are carried on is at a pretty high level, and as a result, it is almost not possible to keep track of the inflow and outflow of foreign currency in a regular manner. This brought about the need for the Foreign Contribution Regulation Act, 2010.
The Objective of FCRA 2010
The Foreign Contribution Regulation Act, 2010 was enacted with a view to:-
- Regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain individual associations or companies.
- Prohibit the acceptance and utilization of foreign hospitality or foreign contribution for any activities unfavourable to national interest and for matters related to therewith or incidental thereto.
In order to be eligible for the normal registration, there are a few prerequisites:-
- The applicant must be registered under the Societies Registration
or the Indian Trusts Act, 1882 or registered as Section 8 Company as per
the Companies Act, 2013 or any such Act as may be required.
- Must have made reasonable contributions by undertaking activities in its chosen field for the benefit of society.
- Must have spent a minimum of Rs. 10,00,000 in the last 3 years
towards achieving its objectives (Excludes administrative expenditure).
- Must submit the copies of the financial statements of the last 3 years that are duly audited by qualified Chartered Accountants.
- If a newly registered entity likes to get foreign contributions,
then an approval for a specific purpose, specific activity, and from a
specific source can be made to the Ministry of Home Affairs via the
Prior Permission (PP) method.
Prior Permission Registration
The Prior Permission route is ideally suited for those organizations which are newly registered and would like to receive foreign contributions. This is granted for receipt of a specific amount from a specific donor for carrying out specific activities/projects. The association must:-
- Be registered under the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or registered as Section 8 Company as per the Companies Act, 2013 or any such Act as may be required.
- Submit a specific commitment letter from the donor to the Ministry of Home Affairs which indicates:-
- Amount of contribution given
- Purpose for which it is proposed to be given
- Where the Indian recipient organization and foreign donor organization have common members, the following conditions need to be met:
- The Chief Functionary of the Indian organization can’t be part of the donor organization.
- At least 51% of the members/office-bearers of the governing body of the Indian recipient organization should not be employees/members of the foreign donor organization.
- Where the foreign donor is an individual:
- He cannot be the Chief Functionary of the Indian organization.
- At least 51% office bearers/members of the governing body of the recipient organization should not be the family members and close relatives of the donor.
In order to apply for registration under FCRA, the steps are as follows:-
- The first step is the one where the online portal of FCRA needs to be accessed.
- Form FC – 3A (Application for FCRA Registration) or Form FC – 3B (Application for FCRA Prior Permission) is to be clicked on, as the case may be.
- The webpage will next present the user with an option to apply online.
- Once the “Apply Online” option is selected, the next step is to create a username and password by clicking on “Sign Up”.
- Once a username and a password have been created, and the message regarding the same is displayed on the screen, the applicant may log in to the account.
- Once logged in, the “I am applying for” will have a dropdown list from which FCRA Registration has to be chosen. “Apply Online” is to be selected next, following which “Proceed Registration” has to be selected.
- Next, in the title bar, the FC-3 menu is to be clicked on to start the new registration procedure.
- This gives way to the association form where the relevant details have to be entered by the applicant along with the attachments containing the following documents:- – Darpan ID (not mandatory) – Association Address – Registration Number – Registration Date – Nature of the Association – Main object of the Association Once these details are filled in along with the attachments, the submit button is selected.
- The Executive Committee option has to be selected next from the menu bar. The details will be filled in the Executive Committee form.
- The option “Add details of Key Functionary” enables the applicant to add/delete/edit the details entered in the Executive Committee.
- Once all the Executive Committee details are entered in, the “Save” button must be clicked on.
- Further, bank details will have to be provided, including bank name, account number, IFSC code and address of the bank.
- Once the bank details are entered in, all the required documents are to be uploaded in PDF format.
- The place and date need to be entered in next after which the final submission button may be selected.
- The final step is to make the online payment by clicking on that particular button. Once the payment is made and the form is submitted, no changes can be made to the said form.
Once the FCRA registration is granted, the validity is for a five
year period. Nevertheless, it is to be noted that an application for the
renewal of the FCRA registration has to be made 6 months prior to the
date of expiry.
Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.
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