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FCRA REGISTRATION
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Enquiry for FCRA Registration
FCRA REGISTRATION
FCRA Registration stands for the Foreign Contribution Regulation Act Registration, and it's all about getting the green light from the Indian government to accept foreign donations or contributions. It's mainly for nonprofits, charities, and organizations that want to tap into international funds for their work. Those funds could be used for various things like community development, education, health services, and whatnot. The whole idea is to make sure that foreign donations are used appropriately and not funneled into sketchy activities. If an organization is planning to receive funds from abroad, they've got to apply for this registration, show their financial records, and give a good reason why they need the funds, basically proving they're legit and have nothing but good intentions. Once approved, they'll stay compliant with the rules around how the money can be used. It's a process, but it's essential for transparency and accountability. So, if you know any NGOs or social enterprises looking to go international with their funding, they should check this out!
Objectives of FCRA Registration
• Preventing the use of foreign funding for purposes that might harm national integrity, sovereignty, or interest is known as "ensuring national security."
• Ensuring that contributions from abroad are put to beneficial use for cultural, social, educational, religious, and economic goals.
• Keeping an eye on how foreign funds are being used to stop financial fraud, money laundering, and poor management.
• Limiting foreign funding to political parties and organizations in order to prevent excessive foreign influence on Indian politics is known as "political influence prevention."
• Enabling non-profits and NGOs to lawfully accept donations from overseas for development and humanitarian causes.
Benefits of FCRA Registration
1. Legally Accept Foreign Funds:
Makes it possible for societies, trusts, and NGOs to accept foreign donations from overseas donors in a legal manner.
2. Enhanced Credibility & Trust:
Enhances the organization's standing among stakeholders, government officials, and international funders.
3. Access to International Funding Opportunities:
Provides avenues for grants, contributions, and collaborations with international organizations, agencies, and charitable foundations.
4. Long-term financial stability and sustainability:
Ensured by helping NGOs diversify their funding sources.
5. Extension of Social and Developmental Initiatives:
Enables institutions to carry out extensive initiatives in disaster assistance, healthcare, education, and rural development.
6. Benefits for the Organization in Terms of Taxation:
Non-profits that are registered with the FCRA are also eligible for 12A and 80G tax exemptions, which lessen their financial burden.
7. Government Regulation Compliance:
Guarantees respect to Indian regulatory frameworks, preventing fines and legal problems associated with foreign money.
8. International Cooperation & Recognition:
For projects with a worldwide impact, organizations can work with foreign governments, institutions, and non-governmental organizations.
9. Greater Accountability & Transparency:
In order to increase accountability and transparency in the use of funds, registered entities are required to keep accurate financial records.
10. Long-Term Development and Operational Growth:
Offers NGOs a solid platform to expand their initiatives and accomplish more significant social objectives.
Eligibility Criteria for FCRA Registration
1. Normal Registration
i. The application must be registered as a Section 8 Company under the Companies Act of 2013 or any other Act that may be necessary, or under the Societies Registration Act of 1860 or the Indian Trusts Act of 1882.
ii. It must have undertaken activities in its chosen field for the benefit of society and made reasonable contributions.
iii. It must have invested at least Rs. 10,00,000 in the past three years to accomplish its goals (excluding administrative costs).
iv. Copies of the most recent three years' worth of financial statements that have been properly audited by certified chartered accountants must be submitted.
v. A newly registered entity may use the Prior Permission (PP) approach to request clearance from the Ministry of Home Affairs for a specific activity, purpose, and source if it would like to receive foreign donations.
2. Prior Permission Registration
i. Be registered as a Section 8 Company under the Companies Act of 2013 or any other Act that may be necessary, or under the Societies Registration Act of 1860 or the Indian Trusts Act of 1882.
ii. Send the Ministry of Home Affairs a particular commitment letter from the donor that states:-
• The amount of money donated.
• The reason it is suggested to be given.
iii. The following requirements must be fulfilled in cases where the foreign donor organization and the Indian receiving organization share members:-
• It is not possible for the Chief Functionary of the Indian organization to be affiliated with the donor organization.
• Employees or members of the foreign donor organization should not make up at least 51% of the members or office-bearers of the Indian recipient organization's governing body.
• If the foreign contributor is an individual:-
1. Single person, he is not permitted to serve as the Indian organization's chief functional officer.
2. The receiving organization's governing body members and office bearers should not be at least 51% of the donor's family members.
Non-Eligibility Criteria for FCRA Registration
1. The applicant is either Benami or a fake.
2. The applicant is being prosecuted for engaging in any unfair behavior.
3. An applicant who has been found guilty or charged with causing communal conflict in a designated district or anywhere in the nation.
4. The entity has participated in any violent actions.
5. Has made advantage of foreign contributions for its own purposes.
Any organization prohibited by law from accepting any foreign grant or receipt.
6. Any such foreign grant acceptance that has a negative impact:
• India's sovereignty.
• Interest of the Public.
• Connection to any state.
Documents Required for FCRA Registration
The following files must be uploaded in Form FC-3A in order to finish the registration process:
1. Registration Certificate.
2. Memorandum of Association/Trust Deed.
3. Activity Report for the Past Three Years.
4. Audited Statement of Revenue for the Past Three Years.
5. Affidavit of Every Essential Employee.
6. The Association's Chief Functionary Signature.
7. The Association's Seal.
FCRA Registration Online Process
The following files must be uploaded in Form FC-3A in order to finish the registration process:
1. Registration Certificate.
2. Memorandum of Association/Trust Deed.
3. Activity Report for the Past Three Years.
4. Audited Statement of Revenue for the Past Three Years.
5. Affidavit of Every Essential Employee.
6. The Association's Chief Functionary Signature.
7. The Association's Seal.
FCRA Bank Account Requirements
• Opening an FC designated bank account with SBI, Main Branch, New Delhi, is a prerequisite for any organization wishing to register for FCRA.
• Organizations may also open one "Utilization Account" and one "Another FCRA Account" at any scheduled bank that complies with the PFMS.
FCRA Approval Types
• FCRA Registration (For businesses that fit the requirements).
• FCRA Prior Permission (for new non-governmental organizations that require certain foreign funding).
Renewal of FCRA License
By submitting an application, an FCRA registration can be renewed for an additional five years. An entity must submit an application for renewal by the deadlines listed below:
• At least 6 months before the license's expiration date.
• At least 12 months prior to the registration expiration date, if the organization is working on a multi-year project.
FCRA Registration Cancellation or Suspension
Authorities may give notice to the relevant entity if they believe that a registered entity is not operating in accordance with the law and that its license needs to be revoked. The few factors listed below may be taken into account while terminating the license:
• The Foreign Contribution (Regulation) Act's provisions are not followed by the NGO.
• If an annual return is not filed by the entity by the deadline.
• If an investigation is conducted into a claim made against such an organization for operational misconduct and the claim turns out to be accurate.
• The received contribution is not used to accomplish the entity's primary goal.
Penalties for FCRA Non-Compliance
• Penalty for Accepting Foreign Contribution Without Registration: An organization faces a fine of ₹1,00,000 or 30% of the foreign contribution received, whichever is higher, if it accepts foreign contributions without first obtaining the necessary registration from the Central Government (per Section 11).
• Failure to Report Foreign Contribution Receipt on Time: The penalty for not reporting foreign contributions within the allotted time frame (as stated in Sections 3, 11, and 35 of the FCRA Rules, read in connection with Rule 6) is 5% of the total amount of foreign contributions received during a financial year.
• Failure to Provide Required Details on Time: Failure to provide required details (under Sections 37, 11, and 17, read with Rule 17A) carries a penalty of ₹10,000 for each instance of delayed reporting.
• Failure to Upload Information on the Website: if an organization fails to upload required information on its website (under Sections 37 and 19 of the Act, read with Rule 13), the penalty is ₹10,000 per instance.
• Failure to Report Opening of Account(s) on Time: In accordance with Sections 37, 17, and 19 of the Act, as well as Rules 9(1) and 9(2), an organization is subject to a penalty of ₹10,000 per utilization account for failing to notify within the allotted time if they fail to report the opening of a foreign contribution account.
- FAQ
1. What is the fee for FCRA Registration?
• For FCRA Registration – Rs. 10,000.
• For Prior Permission – Rs. 5,000.
2. What is Prior Permission under FCRA?
To acquire foreign funding for a particular project from a specific donor, organizations under three years old may apply for FCRA Prior Permission.
3. How long does it take to get FCRA Registration?
Depending on Ministry of Home Affairs (MHA) verification and review, the process typically takes three to six months.
4. What is the validity of FCRA Registration?
The five-year validity of an FCRA registration and must be renewed prior to its expiration.
5. Can an organization receive foreign funds without FCRA Registration?
No, it is against the law to accept foreign donations without FCRA authorization. Failure to do so may result in fines or registration cancellation.
6. Can FCRA Registration be canceled?
Yes, registration may be canceled by the authorities if:
• Money is misappropriated.
• There are no annual returns filed.
• The group does things that are not in the best interests of the country.
7. What happens if FCRA Registration expires?
Foreign funds cannot be granted to the NGO unless a renewal request is submitted at least six months prior to the expiration date.
8. Can an NGO have multiple FCRA Bank Accounts?
No, only the approved SBI FCRA account may receive foreign donations. Money can be moved to other project-specific accounts, too.
9. Where can I check the status of my FCRA Registration?
You can check the status of your application by going to the "Status Check" section at https://fcraonline.nic.in.
10. How can an organization apply for FCRA Registration?
The application must be completed online by filling Form FC-3A and paying the registration fee via the official website: https://fcraonline.nic.in.