1. When is FCRA Registration Required?
Whenever any NGO either in the form of Trust, Society or Section 8 company is willing to receive any kind of foreign contribution or donation, they are required to obtain FCRA Registration under Section 6 (1) of Foreign Contribution (Regulation) Act, 2010. Irrespective of the nature of the contribution i.e. either cash or kind, the registration is mandatory. Enterslice is well known FCRA Consultants in India. We help organization willing to register under FCRA.
2. In case of prior approval can Foreign contributor and Indian recipient organization have common members?
Yes, it is possible. But, there are certain pre-conditions to be satisfied. They are:
1. The Chief Functionary of the recipient organization shall not be the Foreign contributor (if contributor is individual) or a part of Foreign contributor organization.
2. Majority (51%)of members of the governing body of the recipient organization are not related in any way either as family or as members/employees of the foreign contributor.
3. What is the difference between prohibited and disqualified person?
There is a basic difference between prohibited and disqualified person. The prohibited person does not qualify for FCRA registration just because of its inherent nature. However, on the other hand in case of disqualification the person could have been able to apply for registration if it was restricted because of any act done by them. Such 'act' disqualifies them from filing an application.
4. What is the difference between Registration and Prior Permission under FCRA?
As we have discussed there are two separate ways to receive foreign contribution, i.e. registration and prior permission. Following are the point of difference is the eligibility criteria.
For registration: It is required that the applicant
1. Is in existence for a minimum period of 3 years.
2. Has done reasonable work in the area to public interest.
3. Has spent at least Rs.10,00,000/- over the span of last 3 years for the furtherance of their main objects.
For Prior Permission: The applicant is not required to be registered for any minimum period as they are in the initial state. No work experience is required. However, the registration is situation specific in nature. This means that the prior permission is for:
1. Receipt of a specific amount of foreign contribution.
2. From a specific contributor.
3. For any specific project/ activity.
The applicant is required to submit a copy of approval letter from the foreign contributor for the stated amount of contribution.
5. Who is prohibited to accept foreign contribution?
Section 3(1) of FCRA, 2010 specifies a list of person who is prohibited from receiving any foreign contribution:
1. Anyone contesting election.
2. Editor, owner, printer, publisher, columnist, cartoonist or correspondent of any registered newspaper.
3. Judge of court of law, government servant or any employee of a Corporation either owned or controlled by the Government.
4. Member of any legislature.
5. Any political party or its office bearer.
6. Any other organization of political nature specified under sub-section (1) of Section 5 by the Central Government.
7. Any company or association engaged in the production or broadcast of news or current affairs programmers through any electronic mode of mass communication, or any other electronic form as defined in clause (r) of sub-section (i) of Section 2 of the Information Technology Act, 2000 or otherwise.
8. Editor, owner, correspondent, cartoonist or columnist, of any organization referred to in point 7.
9. Anyone else who have been prohibited from receiving foreign contribution.
6. Who can be a foreign contributor?
Section 2(1) (j) of FCRA, 2010 has provided clear definition of Foreign source who can provide foreign contribution. This list includes the followin:-
1. Any foreign Government including any agency of such Government.
2. Any international agency, this will not include any agency specifically excluded by the Central Government by notification ( like United Nations or any of its specialized agencies, the World Bank, International Monetary Fund etc.).
3. Foreign company incorporated outside India.
4. Any foreign corporation.
5. Any multi-national corporation referred to in Section 2(g) sub-clause (iv) of FCRA, 2010.
6. Company registered under Companies Act, 1956, whose minimum 51% of share capital is held, either singly or in the aggregate, by:
a. Foreign Government.
b. Foreign citizens.
c. corporations incorporated in a foreign country or territory
d. trusts, societies or other associations of individuals (whether incorporated or not), formed or registered in a foreign country or territory
e. Foreign company.
7. Foreign trade union either registered or not.
8. Foreign trust or a foreign foundation financed majorly by a foreign country or territory.
9. Any society, club or other association or individuals formed or registered outside India.
7. Under FCRA what constitutes as foreign contribution?
In order to apply for registration, first it is necessary to understand what actually constitutes as foreign contribution. The definition of 'foreign contribution' is stated under Section 2 of the Foreign Contribution (Regulation) Act, 2010. It states that "foreign contribution" will include any donation, delivery or transfer made by any foreign source,
1.Of any currency, whether Indian or foreign.
2.Of any article. However, if such article is a gift and its market value at the time of transfer does not exceed Rs. 25,000/-.
3.Of any security as defined in clause (h) of section 2 of the securities Contracts (Regulation) Act, 1956 and includes any foreign security as defined in clause (o) of Section 2 of the Foreign Exchange Management Act, 1999.
8. How can a person accept foreign contribution Under FCRA?
As it was above mentioned, for receiving any kind of foreign contribution FCRA registration is mandatory. There are two ways to receive such contribution under the Act, they are:
1. Proper Registration: They are already under business for a minimum period of 3 years.
2. Prior Permission: This route is for organizations in their initial formative stage.
In order to accept foreign contribution following conditions must be satisfied:
1. The receiver must have been involved in cultural, economic, educational, religious or social program me.
2. It must either have FCRA registration or prior permission under the Act.
3. The receiver is not included in the prohibited list under Section 3 of FCRA, 2010
9. Who are disqualified to apply for FCRA registrations?
Before making an application for registration we have to be clear that the applicant is not disqualified under the Act. Following are the conditions which disqualify a person:
1. It is fictitious or benami in nature.
2. Either the applicant being an individual or in case of any organization any of its directors/ office bearers has not been prosecuted or convicted for
a. Forcing religious conversions either directly or indirectly through their activities.
b. For creating communal tension.
3. Is involved in propagation of sedition or advocating violence of any nature.
4. Found guilty of wrongful utilization of its funds and is likely to use amount of contribution for its personal gains.
5. Has contravened any of the provisions of this Act.
6. Is prohibited from accepting foreign contribution.
10. Who can be an applicant for FCRA?
One basic pre requisite for registration under FCRA is that the applicant must be a registered under an existing statute including.
1. Societies Registration Act, 1860 or
2. Indian Trusts Act, 1882 or
3. Section 8 of Companies Act, 2013) etc.
11. What is validity period of registration under FCRA?
Once the applicant is granted registration under FCRA, such registration shall remain valid for a period of 5 years.
However, in case of Prior Approval the validity expires once the forien contribution is fully utilized, for which the permission was/is granted. This period shall not exceed 5 years.
12. What are the restrictions relating to foreign contribution?
Under Section 12 (4) (g) it is clearly stated that no registered person under FCRA can accept any amount of any foreign contribution which:
1. Can lead to incitement of an offence or
2. Can endanger the life or can cause physical harm to any person
13. Whether any donation by an individual of Indian origin and having foreign nationality be counted as 'foreign contribution'?
Yes. Such donation will be treated as foreign contribution. However, 'Non-resident Indians', who still have Indian citizenship will not be counted in this category.