Any trust, organization, or Section 8 charity that accepts a foreign contribution or donation must register under Section 6(1) of the Foreign Contribution Regulation Act, 2010. This kind of registration is called an FCRA registration because it is mandated by the Foreign Contribution Regulation Act of 2010.
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 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.
The Eligibility Requirements
- Standard Procedure for Registration
- Regular registration necessitates that applicants fulfill certain conditions.
- An application must be eligible under the law, which may necessitate registration as a Section 8 business under the Companies Act of 2013 or as a society under the Society Registration Act of 1860 or the Indian Trusts Act of 1882.
- Must have significantly impacted the world by accomplishing novel things within its field.
- Must have put in at least Rs—10,00,000 over the past three years to succeed (Excluding administrative expenditure).
- Please include copies of audited financial accounts prepared by qualified Chartered Accountants for the prior three years to apply.
- A newly constituted corporation can get approval from the Ministry of Home Affairs to accept foreign donations for a specific purpose, activity, and source through a process called Prior Permission (PP).
- The Requirement for Preceding Authorization and Documentation
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.
Criteria for grant of FCRA Registration
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;
- 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.
- 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.
The acceptance of foreign contribution by the entity / person is not likely to affect prejudicially –
- 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.
The acceptance of foreign contribution-
- Shall not lead to incitement of an offence;
- Shall not endanger the life or physical safety of any person.
How to Apply for FCRA Registration
- 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.
FAQs
What Are the Penalties for Violation of FCRA?
The penalties for violating the FCRA depend on the nature of the offence committed, and the damages suffered by the victim. Here are some of the penalties for FCRA violations in India:
Compounding of offences: The FCRA Department has specified the list of offences that are compoundable in nature. Such compounding can be proceeded by the respective authorities mentioned in the Gazette.
Actual damages: This refers to the amount of money that the victim lost as a result of the FCRA violation. There is no set limit or minimum for actual damages.
Statutory damages: These are damages that don’t require proof of actual damages, but the compensation is limited to Rs. 1,00,000/- or 5% of the foreign contribution received during the period of non-submission, whichever is higher.
Punitive damages: These are awarded to punish an agency, business, or individual and deter them from violating the FCRA again. There is no limit on how much can be awarded.
Fines: NGOs that do not comply with or violate the act can be fined by the Ministry of Home Affairs.
Prohibition on accepting foreign contributions: NGOs convicted twice can be prohibited from accepting foreign contributions for three years.
Seizure and confiscation: In case of contravention, the Central Government has the power to seize and confiscate currency and articles under FCRA.
Non-Eligible Entities for Applying FCRA Registration ?
Certain entities are not eligible for FCRA registration, including:
Political Parties: Political parties and their affiliates are not eligible for FCRA registration.
Government-owned Organizations: Entities wholly or partially funded by the Indian government are generally not eligible.
Entities Engaged in Profitable Activities: Organizations primarily engaged in profit-making activities are ineligible.