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fdi requirements for sec 25 companies


Posted By admin on December 25, 2013 No Comments
  • In today’s globalised world, business houses are planning to diversify and expand its operations across the territorial borders to increase its market share and have a international presence .For raising finance to meet the diversification plans, business houses are also looking for the foreign investments. And NGO’S are no exception to this.
  • But the NGOs cannot take foreign contribution directly. For this purpose they should be registered under the Foreign Contribution Regulation Act 1976, commonly known as the FCRA.
  • Foreign contribution can be received either one time or many times. For any one time contribution the NGOs can receive the amount by seeking prior permission of the FCRA Section of the Ministry of Home Affairs, Government of India; whereas for multiple and regular contributions of the foreign source it is advisable to seek permanent registration from the said Ministry.

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  • For this purpose an application is to be made by the NGO (working for at least three years after its due registration), in the prescribed Form FC-8 along with the desired enclosures
  • It is essential to receive foreign contribution only in one designated bank account.
    Registered organization are required to maintain separate account under the FC head and submit a return along with the audited statement of accounts of the previous year by 31 July every year.
  • The registered organization, should inform to the Ministry about any change in name of the organisation, its Registered Office and aims and objects within 30 days of the applicable change. .
  • The management should be well aware of various provisions of the FCRA and should strictly follow the same otherwise they may face a number of rigorous punishments under the Act.

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Advantages of a Section 25 company

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Differentiate among Section 25 company, society and trust

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