About FCRA Registration
The Foreign Contribution Regulation Act (FCRA) is an Indian legislation enacted to regulate the acceptance and use of foreign contributions or donations by individuals, associations, and NGOs. Its primary aim is to ensure that foreign funds do not compromise national security, public interest, or internal matters of the country. Organizations must register under FCRA and follow strict guidelines for the receipt, use, and reporting of such contributions. The law seeks to promote transparency, accountability, and proper utilization of foreign funds for legitimate purposes, while preventing misuse or diversion for activities detrimental to India’s sovereignty and integrity.
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Benefits of FCRA Registration
1. Overseas Investment
- The ongoing investment and support from foreign entities is a benefit of FCRA registration. Assistance may come from another foreign organization or from a foreign head office that is registered.
2. Adherence
- Organizations that have registered under the FCRA requirement will abide by all applicable laws.
3. Contributions
- Foreign donations are accepted by FCRA-registered organizations.
4. State Assistance
- An organization's ability to lawfully accept donations from abroad or government support is aided by its FCRA registration. Thus, through this registration process, the applicant is eligible to receive full-state assistance.
5. Acknowledgment
- This type of registration is typically completed by businesses and non-governmental organizations. Organizations that depend on foreign funding must register in accordance with FCRA regulations. An entity would be well-liked by the public and qualified to register with the FCRA. Charitable work or social service with no profit-making objective such as in the fields of health, education, the arts, culture, entertainment, etc., must be the organization’s main focus.
The other requirements consist of:
1. Minimum Duration
- Prior to requesting registration, the applicant must have been a registered business owner for a minimum of three years.
2. Financial Statements
- An authorized accountant must sign the financial statements for the previous three fiscal years, and both the revenue and expense statements and the financial statements must be submitted.
3. Cheap Costs
- After deducting administrative expenses, the NGO's main objective was to get at least Rs. 10 lakhs.
An NGO’s Registration
- The aforementioned Acts such as the Companies Registration Act of 1860, the Trusts Act of 1882, and Section 8 of the Companies Act, which mandates that NGOs register under the Companies Act of 2013, must all be followed by the applicant.
FCRA Registration Papers
- The following are the documents needed for FCRA registration.
- A certified copy of the trust or incorporation certificate.
- Information about PAN and the non-profit.
- A copy of the articles of association and founding agreement.
- Issued in compliance with Income Tax Act Section 12AB.
- The chief functionary's impression.
- The resolution of the governing body in certified true copies.
- A thorough report on the preceding three years’ activities.
- Financial statements that have been audited.
FCRA Registration Steps
Steps to Apply for FCRA Registration:
- The following are the documents needed for FCRA registration.
- Choose between Application for FCRA Prior Permission-Form FC-3B and Application for FCRA Registration Form FC-3A depending on the type of registration.
- Subsequently, choose Apply Online and Sign Up to generate your login credentials. Following a successful registration, the applicant will see a screen message verifying the creation of the account.
- Enter the password and username you previously created to get into your account. Choose FCRA Registration from the available options before proceeding.
- Click FC-3 in the title bar of the screen that appears to begin a new registration process.
- Make sure you enter the organization’s name and contact information in the form. Fill it out completely.
- Fill out the Executive Committee form by choosing Executive Committee from the menu bar.
- Enter the necessary data in the Add Key Feature Details box to add, remove, or modify key feature details.
- Transfer the required PDF files to the website. To finish the registration process, select one of the available payment methods.
FCRA License Validity
- After approval, an FCRA registration is good for five years. A renewal application must be submitted at least 12 months before the registration expires if the registered entity is actively involved in its operations. The other party must be notified by the registered entity at least six months in advance of the term's expiration.
FCRA Non-Compliance Consequences
- Last thoughts. Organizations involved in social and charitable endeavours can reap numerous advantages from registration under the Law on the Regulation of Foreign Contributions. These benefits include the ability to legally accept foreign contributions, the expansion of funding sources, the enhancement of credibility, and the ability to collaborate with international partners and donors.
What Does a Deed of Trust Consist Of?
The following details are included in the trust deed:
- The total number of trustees.
- The trust’s registered address.
- Suggested name for the trust.
- It is like a Commitment to adhere to all laws and regulations.
- Registration details including the settlor and two witnesses.
Registration Process for a Trust in India
1. Making the Right Name Choice:
- The name that is proposed should not be included in the restricted list of names as per the Emblems and Names Act of 1950.
2. Select the Trustees and Authors:
- No explicit provision on the number of settlers or authors.
- Typically, has only one author.
- Minimum of two trustees required.
- Author generally cannot serve as a trustee and must reside in India.
3. Construct a Trust Deed and Memorandum of Association:
- Trust Deed is accepted as official documentation attesting to the trust’s existence.
- MOA generally specifies the trust's main goals and relationship with trustees.
FAQ's
To lawfully accept donations from overseas sources non-governmental organisations in India must register with the FCRA.
Foreign donations and grants must be registered with the FCRA in order for nonprofits and NGOs to receive them.
The FCRA registration needs to be renewed at least 12 months prior to its expiration and it is valid for five years.
The trust deed or incorporation certificate PAN information audited financial statements and a report on activities for the previous three years are important documents.
The NGO must adhere to pertinent legal guidelines just like the Companies Registration Act and the Trusts Act, and it needs to have been in operation for no less than three years and contributed not less than Rs. 10 lakhs.