The Foreign Contribution Regulation Act is extremely helpful if you're a nonprofit or a non-governmental organisation operating in India. The FCRA of 2010 is a vital legislation structure helping organisations regulate the acceptance and utilise foreign contributions in India.
Under this Act, you need to apply for registration to receive foreign contributions. This may raise many questions about the strict and comprehensive registration process.
You may be wondering what makes your organisation eligible for registration. This article will discuss how to go about the application process.
All you need to ensure is that you strictly comply with the provisions of the FCRA and follow the steps in this blog. You will need certain documents and avoid certain common pitfalls organisations face. This blog will ensure you know everything about the FCRA registration and application procedure.
Eligibility For FCRA Registration
The first step to FCRA registration – eligibility, and application procedure is to check whether your organisation qualifies for it. Nonprofits are of many kinds, and whether to focus of your nonprofit is culture, economics, education, religion, or society, you can accept foreign contributions.
All you need to do is follow a few simple steps to register your organisation and get your nonprofit a certificate of registration from the Central government.
To check your FCRA registration eligibility, ensure your organisation follows the following minimum requirements.
- Make sure your nonprofit is registered under the Societies Registration Act (1860), the Indian Trusts Act (1882), section 8 of the Companies Act (2013), and so on. Your organisation essentially needs to be registered as an organisation.
- You need to have an FCRA bank account. This article will explore the details of having an FCRA account, but you need to have a bank account with the State Bank of India at its main branch in New Delhi.
- The nonprofit you own or are working under must have existed for at least 3 years. Your association also needs to have undertaken reasonable activities in your chosen field of social work, whether it's education or human rights and so on. Society must have benefitted in some way from your organisation for the use of Foreign Contributions to be authorised.
- Your organisation must have spent a minimum of Rs. 15,00,000/- over the past 3 years on its workings and core activities. The goal of these activities must have been the benefit of society, and they must have been carried out over the past 3 financial years.
- In some special cases with further requests or pleas, or if the registration is made by someone under the Central Government or State Government, the condition of Rs. 15 lakhs being spent for activities may be waivered.
- The FCRA registration and application procedure can include capital investments such as buildings, vehicles, bank deposits, and so on. This needs to be included in the eligibility calculation when it comes to a minimum spending of Rs. 15 lakhs.
- An undertaking stating that the assets are vested with the nonprofit till the validity of the certificate is required.
- The assets, such as buildings and vehicles, need to be used for the sole purpose of activities listed under the Act.
- The rules thereunder need to be followed and cannot be diverted for any cause until the certificate of registration is valid.
- A nonprofit registering under this Act needs to have a 12A registration certificate to present.
An important factor to note is that every FCRA registration - eligibility and application procedure under clause (a) of sub-rule(1), which states that the application must be made in electronic form made before the commencement of the rules, will not be disposed of, but considered after the formation and furnishing of the FCRA account.
How to Set Up an FCRA Bank Account
As written above, nonprofit organisations under the FCRA need to have a bank account with the State Bank of India's main branch in New Delhi.
This bank account can be used solely for foreign contributions. You can also open another bank account for foreign contributions and a utilisation account in any PFMS-compliant scheduled bank of your choice.
1. To set up a bank account at the main branch of SBI in New Delhi, you'll need to obtain an Account Opening Form (AOF) either from an SBI branch or download it online.
2. Fill in the form carefully and submit it with the documents required in the form for KYC procedures and verification.
Make sure the mandatory KYC documents involve the required signatory's documents and the documents of the Beneficial Owner of your organisation.
3. The next step is to mail a hard copy of the form to a branch of SBI and send a scanned copy through email.
4. Try to make Xeroxes of the form so that you have your copy too. The applicant will receive a notification acknowledging the receipt of the form by the branch.
5. After 3 working days, the application will receive notice of whether the application and KYC documents are sufficient.
6. The accepting branch of SBI will then courier the documents and application to the main branch of SBI, and a day after the main branch receives the document, you will receive a notification about the same.
7. Lastly, the main branch will go through the documents and set up the bank account, which can be used for the utilisation of other purposes. They will send you a notification via email and SMS once your nonprofit's FCRA bank account is set up. The next step is to apply for FCRA registration.
How to Apply for FCRA Registration
Luckily, applying for an FCRA certificate is extremely convenient and can be done from your home. The steps given below are crucial and must be followed in order.
- The first step is to go to the Ministry of Home Affairs website.
- The website is fcraonline.nic.in
- Make a login ID
- Find the form which needs to be filled out, and it is called FC-3A
- The next step is to fill in the form and upload the required documents.
- Pay a nominal fee of Rs. 10,000 and print your application; make sure to make multiple copies for further use.
Documents to Keep at Hand for FCRA Registration and Application
Before you apply for FCRA registration, it's helpful to keep the documents ready for an easy application process. This makes sure half your work is done before you sit down to apply for a registration certificate.
Here are the documents you need and the sizes required. You can use free scanning apps available on the app store to scan and resize your documents.
- Registration Certificate of Association, this needs to be in PDF form of 1 MB
- Memorandum of Association/Trust deed, in PDF form as well of 5MB
- Activity Report for the past three financial years, PDF format, 3 MB
- Audited Statement of accounts for the past 3 financial years, 5MB, PDF format
- Affidavit of each key functionary, of 1 MB in PDF format
- Signature of Chief Functionary, a width of 140 pixels and a height of 60 pixels in 50KB
- Seal of Association of 100 KB, a width of 140 pixels, and a height of 60 pixels
To conclude, it's extremely important to be registered under FCRA to get funding through foreign contributions.
It can help you work better as an organisation and help you make a meaningful impact on society. All you need to do for a successful FCRA application is follow a few important steps.
Having your non-profit organisation be registered, having used at least Rs. 15 lakhs for activities, having a bank account at the main branch of SBI in New Delhi, and having all the necessary documents can ensure your successful application.
We hope this article helped solve all your queries. If you have further questions or need more help, contact us at Especia, and we're more than happy to help!