FCRA Registration: Overview

It's a known fact that Non-Governmental Organisations do have the primary function to support social, political, religious, and similar objectives. Their source of income is the funds received from them through donations and charities. However, when they intend to receive funds from any foreign source, they need to obtain formal permission from the Foreign Ministry of India in the form of a license, as provided under section 6(1) of the Foreign Contribution Regulation Act 2010, which is commonly known as, FCRA registration.

The Primary Purpose Behind FCRA Registration Includes-

• Prohibition to certain entities against acceptance of foreign contribution in any manner;
• The restriction against acceptance of foreign hospitality to certain entities;
• Governance of any acceptance of any foreign contribution made by any person in India.

Primarily, a Non-profit Organisation (or a Section 8 Company), Trust, or a society functioning as a Non-Governmental Organisation are eligible to apply for FCRA registration subject to fulfillment of the following conditions-However, partnership firms, and public/private companies may also obtain FCRA registration voluntarily, if they intend to undertake charitable objectives in future.

Types of FCRA Registration

As per the FCRA Act 2010 and Rules 2011, there are two categories of FCRA registration, namely-

• FCRA Prior Permission
• FCRA Registration 

Eligibility Criteria for FCRA Registration

A Non-Profit organisation or an NGO must have any social, cultural, economic or political objective on which it is functioning through specific projects or services shall obtain foreign contribution from any foreign source only after seeking and obtaining a certificate of registration regarding such acceptance of a foreign grant from the Ministry of Home Affairs. However, to make an application, such an organisation should not be expressly restricted from obtaining such registration as provided under Section 3 of the FCRA Act 2010.

Grant of FCRA Registration

To make an application for FCRA Registration, the applicant organization must fulfil the following conditions-

• Such organization must have obtained registration under the provisions of any of the below-mentioned acts-

1. Societies Registration Act, 1860 or
2. The Indian Trusts Act 1882
3. Section 8 of the Companies Act 2013(or registered under Companies Act 1956)

• Such organizations must exist for at least three years and has undertaken significant activities under its chosen objectives for which the foreign contribution is proposed to be expended.
• Such organization has incurred at least Rs. Rs. 15.00 lac in the last three years of time-period excluding the administrative expenses provided under Rule 5 of the FCRR Rules 2011.
• Where the Chief responsible officer of the organization (i.e. Chief functionary in case of a trust) wishes to include capital investment in the expenditure (minimum Rs. 15 lakh) in three years, then such chief officer shall be required to provide an undertaking to the fact that such capital assets (Land, Building, vehicles, equipment, etc.) shall be used solely in the fulfillment of the objectives of the organization and not for any other purposes.
• Such organizations or individuals already hold FCRA prior permission duly approved and allowed by the Central Government.

Grant of FCRA Prior Permission

It is important to note that an individual or organization does not become eligible to hold FCRA Registration in their formative stage and can only obtain FCRA registration after they are granted FCRA prior permission for a while. 

The FCRA prior permission registration allows an organization/association/individual to receive funds from donors for carrying out specific projects or activities as per the organization's objectives.

However, to make an application for FCRA Prior Permission, the applicant individual/organization must fulfil the following conditions-

• Such organization must have obtained registration under the provisions of any of the below-mentioned acts-

1. Societies Registration Act, 1860 or
2. The Indian Trusts Act 1882
3. Section 8 of the Companies Act 2013(or registered under Companies Act 1956)

• Such organisation/association must submit a copy of the letter from the donor providing the amount of total contribution received and the aim/objective for which such donation is to be incurred.
• Such association or organisation should have-

1. Such organisation must exist for at least three years and has undertaken significant activities under its chosen objectives for which the foreign contribution is proposed to be expended.
2. Such organization has incurred at least Rs. 15.00 lac in the last three years of time-period excluding the administrative expenses provided under Rule 5 of the FCRR Rules 2011.
3. Where the Chief responsible officer of the organization (i.e. Chief functionary in case of a trust) wishes to include capital investment in the expenditure (minimum Rs. 15 lakh) in three years, then such chief officer shall be required to provide an undertaking to the fact that such capital assets (Land, Building, vehicles, equipment etc.) shall be used solely in the fulfillment of the objectives of the organisation and not for any other purposes.

• In cases where the members of a foreign organisation as well as in the Indian organisation are in common, the following conditions must be fulfilled to obtain Prior Permission -

1. The chief officer of such an organization/association should not be a member of the foreign donor organisation.
2. Not more than 25% of the office-bearer members of the Indian organization/association should be shared in both Indian and foreign donor organizations. 
3. Where the foreign donor organization comprises a single person/individual, then such a single person or organization should not be any office-bearer or chief officer in such an Indian organization. 
4. Where the foreign donor organization comprises a single person/individual In the case of a single foreign donor, then not more than 25% of the office-bearers of the Indian organisation should not be the family members or close relatives of the donor.

• Such person /association or organisation must open an FCRA Account in the State Bank of India, Sansad Marg, New Delhi, for receiving foreign contribution.
• Such organisation/association must obtain a 12A registration certificate and registration under the Darpan portal for NGOs.
• Such organization/association which intends to seek permission for receiving more than Rs. 50, 00,000/- (Fifty Lakh rupees) shall be required to attach a copy of audited statements of accounts and activity report immediately preceding three years along with the application.

FCRA Application Procedure

Provided below is the step-by-step process of making an application for FCRA registration and FCRA Prior Permission -

• Log on to the online FCRA web portal through the link http://fcraonline.nic.in and create a login id and password by providing the registered email id and phone number of the organization.
• Move to the main page and click "FCRA services". Choose appropriate e-form from the list, which shall be FC-3A (in case of FCRA Registration and FC-3B in point of FCRA Prior Permission.
• Fill in the requisite details and attached documents in pdf format.
• Verify details once more and go to the payment page and submit a sum of Rs. 5000/- in case of FCRA Prior Permission and Rs. 10000/- in FCRA Registration through the payment gateway and click submit.
• Once you apply, the application shall be verified by the Ministry of Home Affairs, and a reference number will be generated for application status tracking purposes.

Document’s required for Registration & Fees

Documents required for FCRA registration

Following is the list of the documents required to attach with the FC-3A application-

• Scanned photo and signature of the chief functionary of the organization/association in jpg format;
• Scanned copy of the registration certificate of the society or trust deed of the organization/association in pdf format having a size up to 1 MB.
• Scanned copy of the constitution documents of the organization (i.e. MOA & AOA in case of a section 8 company, trust deed in case of a trust, etc.) providing for the primary aims and objectives of the company in pdf form up to size 5MB.
• Scanned copy of the activity report providing for the activities undertaken by the organization during the immediately preceding three years in pdf format up to size 3MB.
• Scanned copy of audited financial statements of the immediately preceding three financial years, which shall include details of assets and liabilities, expenditures and incomes, etc. related to the primary objectives of the organization and expenses incurred on the administrative costs up to size 5MB.
• A sum of Rs. 10,000/- shall be required to be paid along with the application through the payment gateway. 

Documents Required for FCRA Prior Permission

• Scanned photo and signature of the chief functionary of the organization/association in jpg format;
• Scanned copy of the registration certificate of the society or trust deed of the organization/association in pdf format having a size up to 1 MB.
• Copy of the commitment letter signed by the donor in pdf format up to size 5MB.
• Copy of the specific project or activity for which the foreign contribution is intended to be received ;
• A sum of Rs. 5,000/- shall be required to be paid along with the application through the payment gateway;

Validity of the Registration & Renewal

Once granted, FCRA Registration(including Prior Permission) shall be valid for a total period of five years from the date of grant of registration, and renewal for the same shall be applied at least six months from the date of expiry of enrolment at a renewal fee of Rs. 5000/-

Benefits of FCRA Registration

• Ease in procuring Govt. Grants & Donations- Obtaining registration under FCRA Act makes an organization or association eligible to seek funds or grants from the Government authorities towards its primary objective apart from the permission to receive funds legally from any foreign source.
• Attracts Foreign Donations- Under the provisions of the FCRA Act 2010, a company registered under the provisions of section 8 of Companies Act 2013 shall be eligible to receive charity or donation from foreign entities or foreign charitable organizations such as Infinity Foundation, New Zealand High Commission, SWISSAID, AUSAID, European Commission, etc.
• Ease in Loans Procurement- As the FCRA registration is a registration recognized and granted by the Central Government of India, it becomes easier for the NGOs to avail loan facilities from banks and financial institutions.
• Higher Public Trust & Reliability- Since FCRA registration is a registration granted by the Central government, it enjoys a higher sense of trust and reliability for charity and donation purposes.

Penalties & Prosecution

Therefore, every organization/association must obtain registration before receiving charities/donations from foreign sources, and also follow other applicable compliances, as failure to undertake the same may lead to the following penalties-