FCRA REGISTRATION Procedure
FCRA stands for Foreign Contribution Regulation Act under which funds are granted for the specified purposes such as educational, cultural, religious, economics and social enhancement. Such funds are offered by foreign company to any other organization situated in different country however such organization is registered under the central government and carrying FCRA certification.
In case organization is not registered and want a favor from FCRA then organization can apply for permission certificate from central government however permission will be for specific purpose from specific source.
In case individual or organization seems to violate FCRA act then their certificate will be cancelled with this current unutilized amount of foreign contribution will be sealed by government. Hence one need to be careful while exercising foreign contribution.
FCRA Registration Eligibility
Through “prior permission” route organizations seeking foreign contributions may obtain FCRA registration or receive foreign contribution for definite cultural, social, economic, educational or religious programmers.
For an FCRA applicant it is always preferable to be a Trust or Society or a Section 8 Company. There is a requirement that not-for-profit entity must have been in existence for a minimum period of three years while making the FCRA application. With this it should not have received any foreign contribution prior to that without the Government’s approval.
Over the last three years, entity seeking registration should have spent at least Rs.10,00,000/- on its aims and objects, excluding administrative expenditure.
Submission of Statements of Income & Expenditure, duly audited by Chartered Accountant, for the period of last three years to substantiate that it meets the financial parameter.
If newly registered entity wants to receive foreign contributions, then approval for a specific activity from a specific source can be made to the Ministry of Home Affairs through the Prior Permission method.
Conditions for FCRA Registration
After the FCRA application is applied in the prescribed format, following criteria is verified before providing registration.
(a) In case the ‘person’ or ‘entity’ making an application for registration or grant of prior permission
Is not fictitious or benami;
Has not been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another;
Has not been prosecuted or convicted for creating communal tension or disharmony in any specified district or any other part of the country;
Has not been found guilty of diversion or mis-utilisation of its funds;
Is not engaged or likely to engage in propagation of sedition or advocate violent methods to achieve its ends;
Is not likely to use the foreign contribution for personal gains or divert it for undesirable purposes;
Has not contravened any of the provisions of this Act;
Has not been prohibited from accepting foreign contribution;
(b) The person making an application for registration has undertaken reasonable activity in its chosen field for the benefit of the society for which the foreign contribution is proposed to be utilized;
(c) The person making an application for giving prior permission under has prepared a reasonable project for the benefit of the society for which the foreign contribution is proposed to be utilized;
(d) The person being an individual, such individual has neither been convicted under any law for the time being in force nor any prosecution for any offence is pending against him.
(e) The person being other than an individual, any of its directors or office bearers has neither been convicted under any law for the time being in force nor any prosecution for any offence is pending against him.
(f) the acceptance of foreign contribution by the entity / person is not likely to affect prejudicial
The sovereignty and integrity of India;
The security, strategic, scientific or economic interest of the State;
The public interest;
Freedom or fairness of election to any Legislature;
Friendly relation with any foreign State;
Harmony between religious, racial, social, linguistic, regional groups, castes or communities.
(g) the acceptance of foreign contribution
Shall not lead to incitement of an offence;
Shall not endanger the life or physical safety of any person.
Conditions for the Certification from Central Government
Person or group of Persons who are eligible to participate in foreign contribution and who can receive foreign contribution.
Field in respect of which foreign contribution can be received.
Purposes for which foreign contribution shall be utilized.
Defines the source from where the person can accept foreign contribution under the FERA.
What are the Required Documents for FCRA Registration?
In India no one can participate in foreign contribution for specified purposes without FCRA registration. In India it is mandatory to get company registered for obtaining FCRA benefits under the FCRA Act. Each country has its own set of rules and regulations for administrating the FCRA department.
Following below mentioned documents are required for FCRA registration in India:
Application in form FC-3
submit the copies of audited statement of accounts for the past three years.
Registration Certificate in case association is registered as society or trust.
Article of Association & Memorandum of Association.
Purposes for which foreign contribution is being utilized.
Copy of resolution authorizing registration under FCRA.
Copy of documents issued by the Income Tax Department u/s 80G and 12A.
After obtaining FCRA registration, it will be valid for a period of five years. Six months prior to the date of expiry, an application for FCRA registration renewal can be made to keep the registration valid.