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FCRA Registration

The FCRA, or Foreign Contribution Regulation Act, oversees foreign donations in India, aiming to ensure transparent fund usage and legalize foreign contributions received by local entities.

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FCRA Registration - Overview

The FCRA (Foreign Contribution Regulation Act) is a legislative framework established by the Indian government to oversee and regulate the acceptance of aid or donations from foreign sources. FCRA registration is obligatory for entities like Charitable Trusts, Societies, or Section 8 Companies that receive foreign contributions or donations.

FCRA, or Foreign Contribution Regulation Act, governs and manages foreign contributions occurring within the territory of India. The issuance of an FCRA Registration certificate is carried out by government authorities, and it is mandatory for registered trusts, institutions, societies, associations, and certified NGOs to acquire this certification before accepting any foreign grants, contributions, or funds.

The primary objective of the FCRA registration process is to legitimize the receipt of funds or contributions from foreign countries by domestic entities and to ensure the proper and designated utilization of such funds or contributions for the intended objectives.

Outlined below are the minimum prerequisites for completing the FCRA Registration:

A) Requirements for Successful FCRA Registration:

1. The applicant should possess a registered company with a track record of operating for more than 5 years.
2. The entity seeking registration must have expended a minimum of Rs. 10 Lakhs in the past three years towards achieving its primary objectives for which the company was originally registered. This expenditure should exclude administrative expenses.
3. The financial statements of the preceding three years must be submitted by the applicant. It's crucial that these financial statements are audited by a qualified chartered accountant.

B) Obligations for Prior License FCRA Registration:

1. If an entity intends to receive contributions, funds, or grants from foreign countries, it must apply for prior permission.
2. When applying for prior permission, comprehensive details about the foreign contributors, investors, or donors who are providing funds to the entity must be submitted.
3. The received funds should be strictly utilized for the designated purposes as specified in the application.

Checklist for applying for FCRA Registration

  • The following categories of companies are eligible to apply for FCRA online registration:

    1. Trusts registered under the Indian Trust Act.
    2. Societies registered under the Indian Society Registration Act.
    3. Section-8 companies incorporated under the Companies Act.

    For FCRA online registration, the applicant entity must possess a registered certificate as a Non-Profit Organization (NPO) with charitable objectives aimed at benefiting the society and local community. These objectives may include the advancement of health, economic development, education, promotion of art, religion, culture, sports, and more within the community.

    In addition, the applicant must fulfill the following criteria:

    1. Not be prohibited in any manner under the provisions of the Foreign Contribution (Regulation) Act.
    2. Ensure that foreign contributions or funds received do not pose a threat to public safety, life, or lead to any illegal activities or offenses.

    Entities that do not meet the criteria mentioned above are not eligible for FCRA registration. These non-eligible entities include:

    1. Sham or Benami entities.
    2. Applicants that have faced prosecution or allegations related to communal issues in specific districts or areas.
    3. Entities facing prosecution for engaging in unfair or illegal activities.
    4. Entities involved in violent activities.
    5. Entities that use foreign contributions or funds for personal purposes.
    6. Companies debarred from receiving foreign grants or foreign receipts as per legal provisions.
    7. Adoption of foreign grants that have a detrimental effect on public interest, India's sovereignty, or relationships with other states.

Following are the documents needed for FCRA registration process

  • Required Documents for FCRA Registration:

    • Self-attested copy of the incorporation certificate or Certificate of Incorporation (COI) of the entity, trust deed, or any other registered license or certificate owned by the entity.
    • PAN (Permanent Account Number) of the NGO.
    • Copy of the Memorandum of Association (MOA) and Articles of Association (AOA) of the entity or association.
    • Signature of the chief justice in the specified format.
    • Detailed records or reports on activities conducted over the past three years.
    • Copies of financial statements audited by a well-skilled and authorized Chartered Accountant (CA), including Profit and Loss (P&L) account, Income-Expenditure details, and cash flow statements for the preceding three years.
    • A resolution passed by the governing body empowered by the NGO.
    • Certificate received as per sections 80G and 12A of the Income Tax Act, which grant tax exemption to registered NGOs.

    Registration Process of FCRA License:

    1. Apply online by entering all the necessary information in the prescribed online form FC-3 available on the FCRA official website https://fcraonline.nic.in.
    2. Click on the "FCRA Online Forms" tab to initiate the FCRA registration process.
    3. Select the "Apply Online" option under the Application for FCRA Registration (FC-3).
    4. If you're a new user, sign up to access the application form.
    5. Fill the application form with all required information.
    6. After submitting the form, a "User ID" will be generated for you. Use this to log in to the portal.
    7. Complete the form, attach the necessary documents in the prescribed format (usually PDF), and make the required online payment.

    Renewal of FCRA License:

    • Renewal should be applied for at least six months prior to the expiration date.
    • If the organization is working on a multi-year project, renewal can be applied for at least 12 months before the expiration date.

    Cancellation or Suspension of FCRA Registration:

    • Authorities can cancel the FCRA license if the organization fails to adhere to the provisions of the Foreign Contribution (Regulation) Act.
    • Failure to submit annual returns before the due date can also lead to cancellation.
    • If allegations against the organization are substantiated, leading to proven illegal activities.
    • Utilization of foreign contributions contrary to the purposes stated during the FCRA registration process can also result in cancellation.
FAQ

Frequently Asked Questions

FCRA Registration once issued, it is valid for about five years and can be renewed by applying for the same between six months before the expiry date..
FC-4 is the annual compliance is filed within 9 months from the end of the financial year, that is it can be filed before the 31st of December per year.

FCRA registration is classified into two types:

  • Proper Permission for FCRA registration
  • Proper FCRA registration
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