Registration under FCRA
FCRA (Foreign Contribution (Regulation) Act) is the act which regulated receipt of Foreign Contribution by both political and non-political parties. This is the most important legislation for those receiving foreign donation. Many of the area remain un clear by this Act and many areas are still open to internal decision of the Ministry of Home Affairs. In the current socio-political situation, the act assumes special significance.
Foreign Contribution (Regulation) Act, (FCRA), was enacted in the year 1976. Its aims are to regularize the acceptance and utilisation of Foreign Contribution or hospitality by certain persons or association. This was necessary so that people and organisation working in important area of national life may function in a manner consistent with the value of a sovereign democratic republic. Ministry of Home Affairs has since issued a citizen charter on the Act.
It can seen from the above, that the important aspects of FCRA are:-
- Regulation of Foreign Contribution or Foreign Hospitality.
- Utilisation of such contribution.
- Ensure consistent functioning of NGOs etc. with broad national policy.
REGULATION OF FOREIGN CONTRIBUTION
Chapter- II of the FCRA deals with regulation of Foreign Contribution and Foreign Hospitality.
The act regulates receipt of all sorts of donation made by foreign sources whether in Indian Currency or Foreign Currency. For the purpose of this note, the discussion is restricted to FCRA as applicable to non-political NGOs.
WHY REGISTRATION IS REQUIRED
According to FCRA, all association receiving Foreign Donation are required to obtain prior permission of Government of India, Ministry of Home Affairs for receipt and utilisation of such contribution. A system of permanent registration is also available whereby an association need not to take prior permission for the donation received by them. In this note, we shall restrict ourselves to discussion on this aspect of FCRA (permanent registration under FCRA). In a subsequent issue, we shall deal with the matter of prior permission.
HOW TO REGISTER
Before you start registration process, which is lengthy and time consuming, you should ensure that :-
1. Your organisation is at least three years old.
2. It does not have a parent Society which is already registered under FCRA.
3. Majority of the members of the board should not be on the board of another Society, which is already registered under FCRA.
4. The parent society of the applicant, if any, should not be based abroad.
5. No foreigner is on the board of the society.
Registration process without complying to the above is likely to be useless. There is no legal requirements regarding the above condition. Internally Ministry of Home Affairs does not grant a registration without ensuring the above major issues.
Tips: It is worthwhile to mention that Societies which are separately registered under Societies Registration Act have independent legal status.
Besides, you should open a separate bank account in the name of your society, which will be used for the purpose of receiving and utilising of receiving and utilisation FCRA Funds. You need to quote this number in your application.
DOCUMENTS REQUIRED FOR REGISTRATION
The following documents are required for registration purpose.
1. Form no. FC. 8.
2. Copy of Memorandum and Rules & Regulation of your society.
3. Copy of audited accounts for the last three years.
4. List of office bearers.
5. A note on activity of the association during the past three years.
6. Name and address of the bank along with account number in which you intent to receive foreign donation.
7. Copy of registration certificate.
FILING OF FORM NO. FC. 8
This is a very important aspect and minor technical mistake in filing the form no. FC. 8 can lead to rejection of your application. This is further complicated by the fact that Ministry of Home Affairs does not give any reason ing for the rejection of application. hence, it is absolutely necessary that Form No. FC. 8 is filled-up with abundant care and keeping in view the matters discussed in HOW TO REGISTER above. Duly filled-up FC. 8 along with the enclosures should be sent to Ministry of Home affairs by Regd. Post with A/D.
On receipt of your application normally an acknowledgment or defect letter is sent by the Ministry. In case, you receive a defect letter, you should immediately comply to it. All correspondence must contain the reference number indicated by the Ministry and should be sent to the Ministry by Regd. post with A/D only. Normally , they should not be sent by courrier.
Subsequently, the matter is referred to IB/CBI and an officer from that office will visit you for making his report. You should be prepared for extensive questioning by the officer. Such questioning can take four hours or more depending upon location and the officer conducting the inspection. After this inspection , the report will be sent to Ministry of Home Affairs by the officer directly.
Unfortunately, such enquiry take place, although you are otherwise, not eligible for FCRA Registration. This makes the matter worst. In case of rejection as you do not know whether your application is rejected because of un-favourable CBI report or a major mistake in your application or a simple minor omission in your application.
The address of Ministry of Home Affairs is as follows:
The Secretary, Govt. of India,
Ministry of Home Affairs (Internal Security wing FCRA)
9th Floor, Lok Nayak Bhavan,
Near Khan Market,
New Delhi – 110003
IMPORTANT CLAUSES IN FORM NO. FC.8 .
. Nature of association – indicate depending upon the major activity of the association.
. Details of earlier application for registration.
. Details of your bank account.
WHAT TO DO IN CASE OF REJECTION
Unfortunately, there is very little you can do in case of rejection. The Act provides – for appeal to High Court but this is a complicated and lengthy affair. In such situation, you should apply for prior permission to receive foreign contribution on a case to case (Project to Project basis). Please note that in case, your application is rejected you should not try to receive foreign contribution and will ultimately lead both of you in trouble.
After lapse of certain period, you should critically evaluate your last application for tracing out reason of rejection and then submit a fresh application. If required you should meet the officials yourself directly.