What are the Types of Registration Under FCRA 2010?
There two ways in which an applicant can obtain registration as per FCRA 2010, those are as follows:-
Normal Registration
The applicant must be registered under:-
- The Societies Registration Act, 1860 or
- The Indian Trusts Act, 1882 or
- Incorporated under Section 8 Company as per the Companies Act, 2013 or any such Act as may be prescribed.
An applicant must have made appropriate contributions by endeavoring activities in its chosen field for the benefit of society.
Must have spent a minimum of Rs. 15 lakhs in the last 3 years towards achieving its objectives.
Submission of the financial statements of the last 3 years that are duly audited by qualified Chartered Accountants.
If an entity that is newly registered,likely to receive the foreign contributions, then approval can be made to the Ministry of Home Affairs via the Prior Permission (PP) method.
Prior Permission Registration
The Prior Permission Registration is preferably suited for those institutions that are newly registered and are likely to receive foreign contributions. Prior Permission is granted for receiving the specific amount from a specific donor for carrying out specific projects. The Non-profit organization must be registered:-
- Under the Societies Registration Act, 1860 or,
- The Indian Trusts Act, 1882 or,
- Incorporated as Section 8 Company as per the Companies Act, 2013 or any such Act as may be required.
Submit a particular commitment letter from the contributor to the Ministry of Home Affairs which indicates (1) Amount of contribution given, and (2) Aim for which it is proposed to be given.
If in case, the Indian recipient organization and foreign donor organization have common members, the following conditions need to be met:-
- The Chief Functionary of the Indian entity cannot be part of the contributor entity.
- At least 51% of the members/office-bearers of the governing body of the Indian recipient entity should not be employees/members of the foreign contributor entity.
- Where the foreign contributor is an individual:-
I- That individual cannot be the Chief Functionary of the Indian organization.
II- At least 51% of office bearers/members of the governing body of the recipient entity should not be the family members and close relatives of the donor.
Non-Eligible Entities for Applying FCRA Registration
Following entities are not allowed to be granted FCRA registration:-
- The applicant is fictitious or Benami.
- Applicant against whom prosecution is conducted for indulging in any unfair activity
- An applicant who has been convicted or prosecuted for any communal tension made in any area of specified district or any part of the country
- Entity has engaged in any violent activities
- Has utilized foreign contribution for its personal use
- Any entity de-bared for accepting any foreign receipt or foreign grant under any provision of law.
- Any such acceptance of foreign grant that affects prejudicially:=
a. The sovereignty of India
b. Public Interest
c. Relationship with any state.
Brief on Renewal of FCRA License
FCRA registration remains valid for five years, which can be renewed by applying for the renewal. An entity shall apply for renewal within the following timelines:
- At least six months before the date when the license is getting lapsed.
- At least 12 months before the date when registration lapses, in cases the entity is operating on a multi-year project.
Cancellation/Suspension of FCRA Registration
In case authorities are of the view that registered entity is not operating as per the provisions of law and its license needs to be cancelled, such authority can do so by giving the notice to the concerned entity. Following are the few reasons that can be considered while cancelling the license:
- NGO fails to comply with the provisions of the Foreign Contribution (Regulation) Act.
- If the entity fails to submit an annual return within the due date
- In case any inquiry is made for any allegation imposed against such organization for any wrongdoing in operations, and such allegation proved to be true
- Contribution received is not utilized for the attainment of the main object of entity neither for achieving the purpose stated during FCRA registration application
Revised Conditions under FCRA Amendment Rules 2020
The Home Ministry has notified the Foreign Contribution (Regulation) (Amendment) Rules, 2020. The amendment has made many changes to the the Foreign Contribution (Regulation) Rules, 2011. Recently, the Ministry had amended The Foreign Contribution (Regulation) Act, 2010 by notifying the Foreign Contribution (Regulation) Amendment Act, 2020 and had notified the procedure for opening & operating the designated FCRA Account
- One of the significant amendment is revised conditions for FCRA registration. As per new condition for FCRA Registration, the institution seeking FCRA registration should be in existence for three years and must have spent a minimum amount of rupees fifteen lakh on its core activities for the benefit of society during the last three financial years.
- Also, criteria have been prescribed for a person seeking prior permission for receipt of specific amount from a specific donor for carrying out specific activities or projects.
- It has been provided that if application for renewal of FCRA registration is not received or not accompanied by requisite fee before the expiry of the validity of the certificate of registration, the validity of the certificate of registration shall be deemed to have ceased from the date of completion of the period of five years from the date of the grant of certificate of registration. In such cases the amount of foreign contribution lying unutilized in the FCRA Account shall vest with the prescribed authority.
- Ministry of Home Affairs has extended the date of validity of the registration certificates issued under the Foreign Contribution (Regulation) Act (FCRA), 2010 expiring between September 29, 2020 and May 31, 2021, till May 31 this year.
- MHA in its latest notification said that it is mandated to administer the FCRA and the Section 12(6) of the Act provides that the certificate granted shall be valid for a period of five years from the date of its issue.”
- FCRA registration of NGO is compulsory if the organization getting funding from foreign source. Strict punishment including cancellation can be done if NGOs found guilty of violating norms.