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What is Foreign Source & Foreign Company as per Foreign Contribution Regulation Act 2010?

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What is Foreign Source & Foreign Company as per Foreign Contribution Regulation Act 2010?

 

What is a foreign source?

Foreign source, as defined in Section 2(1) (j) of FCRA, 2010 includes:-

(i) the Government of any foreign country or territory and any agency of such Government;

(ii any international agency, not being the United Nations or any of its specialized agencies, the World Bank, International Monetary Fund or such other agency as the Central Government may, by notification, specify in this behalf;

(iii) a foreign company;

(iv) a corporation, not being a foreign company, incorporated in a foreign country or territory;

 (v) a multi-national corporation referred to in sub-clause (iv) of clause (g) of section 2 of FCRA, 2010;

(vi) a company within the meaning of the Companies Act, 1956, and more than onehalf of the nominal value of its share capital is held, either singly or in the aggregate, by one or more of the following, namely:- a. the Government of a foreign country or territory; b. the citizens of a foreign country or territory; c. corporations incorporated in a foreign country or territory; d. trusts, societies or other associations of individuals (whether incorporated or not), formed or registered in a foreign country or territory; e. foreign company;

(vii) a trade union in any foreign country or territory, whether or not registered in such foreign country or territory;

(viii) a foreign trust or a foreign foundation, by whatever name called, or such trust or foundation mainly financed by a foreign country or territory;

(ix) a society, club or other association or individuals formed or registered outside India;

(x) a citizen of a foreign country;”

NOTE – A few bodies/ organisations of the United Nations, World Bank and some other International agencies/multilateral organisations are exempted from this definition, and are not treated as foreign source. Hence, the funds received from them are not considered as foreign contribution.

 

Whether an Individual of Indian Origin who has acquired foreign nationality is treated as foreign source?

Yes. The contribution received from all the non- Indian Passport Holders are treated “Foreign Source.”

 

What is a foreign company?

As per of FCRA, 2010, Section 2(1) (g) foreign company means any company or association or body of individuals incorporated outside India and includes-

  1. a) a foreign company within the meaning of Section 379 of the Companies Act, 2013
  2. b) a company which is a subsidiary of a foreign company
  3. c) the registered office or principal place of business of a foreign company referred to in sub-clause (i) or company referred to in sub-clause (ii);
  4. d) a multi-national corporation

 

What is a Multinational Corporation?

As per explanation given under clause (g) of sub-section 1 of Section 2 of FCRA, 2010 a corporation incorporated in a foreign country or territory shall be deemed to be a multi-national corporation if such corporation,-

(a)  has a subsidiary or a branch or a place of business in two or more countries or territories; or

(b) carries on business, or otherwise operates, in two or more countries or territories

 

Whether a Company incorporated in India under the Companies Act, 2013 having its operations in 2 or more countries is to be treated as a MNC under FCRA, 2010?

Ans. No

 

What is a candidate for election?

A candidate for election means a person who has been duly nominated as a candidate for election to any legislature.

 

What is a registered newspaper?

“registered newspaper” means a newspaper registered under the Press and Registration of Books Act, 1867.

 

What is a political party?

 “political party” means –

(i) an association or body of individual citizens of India -

A) to be registered with the Election Commission of India as a political party under section 29A of the Representation of the People Act, 1951; or

B) which has set up candidates for election to any Legislature, but is not so registered or deemed to be registered under the Election Symbols (Reservation and Allotment) Order, 1968;

(ii) a political party mentioned in column 2 of Table 1 and Table 2 to the notification of the Election Commission of India No. 56/J&K/02, dated the 8th August, 2002, as in force for the time being;

 

Also Read : Introduction to Foreign Contribution Regulation Act 2010, definitions and applicability with examples 

Eligibility Conditions for Grant of Registration and Prior Permission to accept Foreign Contribution as per FCRA

How to apply for registration or prior permission for FCRA Certificate and documents required

Restrictions on Acceptance and Utilization of Foreign Contribution (Administrative expenses) as per Foreign Contribution Regulation Act 2010

Transfer of Foreign Contribution to Registered or Unregistered person as per FCRA 2010

Filing of Annual Returns, Accounts and Audit as per Foreign Contribution Regulation Act 2010

Banks and Banking related issues as per Foreign Contribution Regulation Act 2010

Change in Name, Address, Objectives, FC Account details as per Foreign Contribution Regulation Act 2010

Process for Renewal of registration under Foreign Contribution Regulation Act 2010

Suspension and Cancellation of Registration, Offences, Penalties and Compounding of certain offences under Foreign Contribution Regulation Act 2010

Introduction to Foreign Contribution Regulation Act 2010, definitions and applicability with examples

 




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