Foreign Contribution (Regulation) Act, 2010 – Eligibility & Application Procedure

Here is everything you need to know about FCRA Registration, eligibility and application procedure. Read the blog to know more.

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. FCRA complete form is The Foreign Contribution Regulation Act, and the procedures for registering in India are discussed here.

Significance of the Fair Credit Reporting Act of 2010

The 2010 Foreign Contribution Regulation Act was created to achieve the following objectives

• Organisations can no longer receive unrestricted foreign funding or accept hospitality from foreign governments.
• No foreign hospitality or gift may be accepted or used for actions harmful to the national interest, related to, or ancillary activities damaging the national interest.

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

The Prior Permission route is the best bet for a recently established organization looking to receive donations from abroad. This is given out when a certain amount of money has been raised from a specific person or organization to finish a particular project or series of connected actions. Individuals in the group ought to –

• Possess valid registration under the Companies Act of 2013, the Indian Trusts Act of 1882, the Societies Registration Act of 1860, or other similar legislation.
• Send a letter describing the donor’s particular promises to the Ministry of Home Affairs, including but not limited to
• Value of Donation
• The purpose of the proposed allocation
• Given this scenario, members of a foreign donor organization and an Indian recipient group can cross
• The organization’s most significant donor can’t concurrently employ the head of the Indian nonprofit.
• As per Indian law, if a foreign organization sponsors an Indian recipient, at least 51% of the Indian recipient’s governing body must not consist of employees or members of the foreign donor.
• When a foreign individual is a donor:
• If that’s what the Indians want from their leader, he’s not the man for the job.
• More than half of the organization’s board of directors can’t be the donor or the donor’s close family or business connections.

How to Apply for FCRA Registration

An individual may apply for FCRA registration by submitting Form FC-3. To complete your application, please include the following:

• Copies of the association’s governing documents, such as a company incorporation certificate or trust deed that have been certified by the association’s
• A copy of the Articles of Incorporation or Memorandum of Association has been attested to by the association’s officers, emphasizing the sections that state the association’s goals.
• Report on Recent Activities, detailing accomplishments from the past three years;
• Statements of Assets and Liabilities, Payments and Receipts, Income and Expenditures, where appropriate, for the most recent three years that have been audited and that clearly show money spent on the association’s stated goals and administrative costs;
• After receiving an FCRA registration number, businesses have five years to comply with the law. Up until six months before the expiration date, FCRA registration can be renewed.

Online FCRA Registration Forms

Learn the steps for registering with the FCRA online.

• Visit the FCRA website as the first step.
• Select the “FCRA Online Forms” option to complete your FCRA registration.

• Finish up your FCRA registration application by clicking the link on the next screen. Follow the link to go on to the next page.

• To submit your application for FC3, select the “Click to Apply Online” link 

• Lastly, a sample copy of the FCRA registration form for 501(c)(3) organizations is shown.
• Fill out the essential fields and click “Save.”
• If you’ve followed the steps correctly, at the end of the seventh one, you’ll receive a message that says, “User ID successfully created, and Your user ID is:”
• A User ID and Password must be entered to access the portal.

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.

Compulsory prior permission requirement: NGOs can be required to obtain prior permission even if they are registered under FCRA.

Inspection and seizure of accounts and records: The authorities can inspect and seize accounts and records of NGO that violate the FCRA.

FCRA full form = Foreign Contribution Regulation Act

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.

A fictitious or Benami applicant is not eligible for FCRA registration.

Login

• Select “FCRA registration” from the “I am applying for” menu. Click the link below to access our online application.
• Click the “Proceed to New Registration” button.
• Sign up for the event by going to the FC3 Menu in the main menu.

Association Details 

You will see the association information form. Please fill out the form below with the requested information.

• Darpan, I.D
• Mailing Address for Group
• The ID number for documentation
• Registration Place
• Term of Registration
• Nature of established bonds
• The Main Aim of the Association
• Press the “Submit” button to complete 

Executive Committee Form

• The Executive Committee Form can be accessed by selecting Executive Committee from the main menu.
• Changes to the Executive Committee’s profile can be made by selecting “Add details of Key Functionary.”
• Click the Add/View button after checking the boxes next to the records you want to edit.
• Fill in the following screen with details about the international traveler. Choose the appropriate option from the menu to make edits to or delete a record.
• You’ll have to fill in your EC details and other personal stuff. 
• Click the save button after finishing the EC form.

Financial Figures

• Enter your banking details (account number, IFSC code, and complete address).
• Lastly, choose “Other Details” from the drop-down menu and complete the form.
• You’ll need to upload your documents.

Final Submission

• Go to “final submission” in the menu. To complete the application process, you must first declare your intent, input the desired time and place, and submit the form.
• A confirmation window will appear; select OK to complete the submission.
• Please note that the information entered into an application cannot be altered after an application has been filed.
• Select “Make Online Payment” from the main menu to finish the transaction.
• Select the Continue for Payment option on the new screen. To make a payment, choose your preferred payment method and checkout.

FCRA Registration Renewal

After receiving an FCRA registration number, businesses have five years to comply with the law. Up until six months before the expiration date, FCRA registration can be renewed.

• To begin, access the Application for Renewal of FCRA Registration using the FCRA Online Forms page.
• Log in to the FCRA portal with your credentials.
• To complete the application, select “FCRA renewal” from the “I am applying for” drop-down menu. To keep your FCRA registration current, repeat the steps from above.

Conclusion:-

FAQs

 

How can a trust accept foreign donations without FCRA?

A trust can accept foreign donations without FCRA registration by seeking prior permission from the central government. This permission is granted for specific projects and under certain conditions.

What are the types of consequences of not renewal of FCRA registration?

Failure to renew FCRA registration on time can lead to the suspension of foreign funding, which can impact the trust's ongoing projects and activities.

Which ministry regulates FCRA?

The Ministry of Home Affairs, Government of India, regulates FCRA.

Is the FCRA Act implemented by the Ministry of Finance?

No, the FCRA Act is implemented by the Ministry of Home Affairs.

Which ministry regulates FCRA and FEMA?

The Ministry of Home Affairs regulates FCRA, while the Reserve Bank of India (RBI) administers FEMA (Foreign Exchange Management Act).

Who approves FCRA registration?

FCRA registration is approved by the Ministry of Home Affairs, subject to compliance with FCRA rules and regulations.