What is FCRA Registration?

FCRA stands for Foreign Contribution Regulation Act that governs and regulated foreign contributions occurring within India. FCRA Registration Certificate issued by the government authority is a mandatory obligation to acquire or receive any foreign contribution or external grants by any registered trust, society, institution, association, and NGOs.

The primary objective of FCRA registration is to legalize the receipt of any foreign contribution by domestic entities and for ensuring the proper utilization of such funds for the specified purpose.

What do you mean by Foreign Contribution?

According to Section 2 (1) (h) of FCRA Act 2010, "Foreign Contribution" means the donations, delivery or transfer made by any foreign source;

·   Under this clause, a donation, delivery, any currency received by any person who has received any grant, which is from any foreign resource, either directly or through one or more person;

·  According to sub-section (1) of section 17, the interest accumulated on the foreign contribution deposited in any bank or any income derived from foreign participation shall also be counted as foreign contribution.

Who can apply for FCRA Registration?

For applying FCRA applicant should be registered under as;

•      Society Registration Act,1860;
•       Indian Trust Act, 1882;
•       Section 8 of Companies Act,2013

What is the minimum requirement for FCRA Registration?

Following is the critical requirement for applying FCRA Registration depending upon the type of registration such as:

Obligations for Proper FCRA Registration:

• The applicant shall be a registered entity and must be operating for a minimum of 5 years.
• Applicant entity must have spent at least INR 10 Lakhs in the previous three years for the attainment of its main objects for which the entity was registered, excluding administrative expenses made.
• The last three years' financial statement audited by a qualified chartered accountant shall be submitted by an applicant.

The Obligation for Prior Permission FCRA Registration:

• If the newly registered entity is willing to receive a foreign contribution or foreign grants shall apply for prior permission
• During applying for the same, it shall give the details relating to a foreign owner who is contributing the fund
• The fund received shall be utilized only for the specified purpose

What is Eligibility for applying for FCRA Registration?

Following are the eligible entities for applying for FCRA registration:

•  Trust registered under the Indian Trust Act
•  Societies registered under Indian Society Registration Act
• Section-8 companies incorporated under the Companies Act
• The applicant must be registered as NPO set up with charitable objectives for serving the society by promoting health, education, economic development, promotion of art, culture, religion, sports, etc
• The entity must not be prohibited in any form by the provision of the Foreign Contribution (Regulation) Act.
• Foreign contribution accepted shall not endanger the life or safety of any individual or shall not lead to any offense.

What are the Non-Eligible entities for applying for 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
• Is 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:

Ø  The sovereignty of India

Ø  Public Interest

Ø  Relationship with any state.

What is the FCRA Registration Process?

Following is the step by step online process of applying for FCRA license:

• Apply online through filling online form FC-3 available on the official website of FCRA https://fcraonline.nic.in
• Click option "FCRA Online Forms" for registration under FCRA.
• The applicant will be redirected to the next page for several options, such as application for seeking the permission of the central Government, foreign receipt intimation, application for FCRA registration, etc.
• Select "Apply Online" option under Application for FCRA Registration (FC-3)
• New user needs to sign up for completing the application form
• Fill the form and complete all the mandatory details
• Once the form is completed, click the save button, after which "User id" will be generated automatically.
• Then applicant needs to sign up using the login credential generated automatically on the above procedure.
• Continue to start step by step registration.
• Once the entire form is completed, the applicant needs to scan and attach the documents in PDF Format.
• Complete the online registration by making online payment through online payment gateways.

What are the Documents required for FCRA Registration?

Following documents shall be annexed with the online application:

• Self-certified copy of incorporation certificate, trust deed, or any other certificate hold by such entity
• PAN of NGO
• Copy of MOA & AOA of associations and institutions
• Signature of the chief judiciary in JPG format
• A detailed report on activities of the preceding three years.
• Audited copy of financial statement, P&L account, Income-Expenditure details, and cash flow statement of the preceding three years.
• CTC of the resolution passed by a governing body authorized by NGO
• Certificate obtained under section 80G and 12A of Income Tax. Section 80G and 12A provide tax exemption to NGOs under the Income-tax Act.

What is the process for Renewal of FCRA Registration?

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.

What is the process for the Cancellation of FCRA Registration?

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

Conclusion

Ministry of Home, Affairs regulates the department of FCRA Registration. To control foreign contribution or foreign grants received by any individual, organization, or corporation, the Government has incorporated laws and guidelines to identify such contributions. In case of any query, contact Corpbiz.