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16
June 2025Q. 4A(ii)5 marksSyllabus 2022OR, alternative to Q. 4
(ii)Under what circumstances can the Central Government cancel the certificate granted under Section l2 for receiving foreign contribution under the Foreign Contribution (Regulation)
Act, 2010 ?
Section 14 of the Foreign Contribution (Regulation) Act, 2010 provides that the Central Government may, if it is satisfied after making such inquiry as it may deem fit, by an order, cancel the certificate if.-
(1)the holder of the certificate has made a statement in, or in relation to, the application for the grant of registration or renewal thereof, which is incorrect or false; or
(i)the holder of the certificate has violated any of the terms and conditions of the certificate or renewal thereof; or
(ii)in the opinion of the Central Government, it is’ necessary in the public interest to cancel the certificate; or
(iii)the holder of certificate has violated any of the provisions of this Act or rules or order made there under; or
(iv)if the holder of the certificate has not been engaged in any reasonable activity in its chosen field for the benefit of the society for two consecutive years or has become defunct.
(5 Marks)
Source: ICSI Guideline Answers, June 2025, Q. 4A(ii) (Syllabus 2022).
June 2024Q. 3(c)5 marksSyllabus 2022
(c)Gama is resident in India and citizen of India. He is going to receive the foreign contribution from US. Explain the foreign contribution and conditions under which he can receive such foreign contribution under Foreign Contribution (Regulation) Act, 2010 ?
According to Section 2(1)(h) the Foreign Contribution (Regulation) Act, 2010, Foreign Contribution means the donation, delivery or transfer made by any foreign source-
(a)Of any article, not being an article given to a person as a gift for his personal use, if market value, in India, of such article, on the date of such gift, is not more than such sum as may be specified from time to time, by the Central Government by the rules made by it in this behalf.
(b)Of any currency, whether Indian or Foreign currency.
(c)Of any security as defined u/s 2 (h) of the Securities Contracts (Regulations) Act, 1956 and includes any foreign security as defined u/s 2(o) of FEMA, 1999.
Conditions to receive Foreign Contribution:
Any person can receive foreign contribution subject to the following conditions:
•It must have a definite cultural, economic, educational, religious or social programme
•It must obtain the FCRA registration/prior permission from the Central Government.
•It must not be prohibited under section 3 of FCRA, 2010.
It may be noted that “Person” includes-
i)An individual:
ii)A Hindu undivided family:
iii)An association;
iv)A company registered under section 25/8 of the companies Act [Section 2(1)(m)]
Source: ICSI Guideline Answers, June 2024, Q. 3(c) (Syllabus 2022).
December 2024Q. 4A(iii)5 marksSyllabus 2022OR, alternative to Q. 4
(iii)What is a ‘Foreign Company’ and what are the conditions for receiving Foreign Contribution by a Person Resident in India as per provisions of the Foreign Contribution (Regulation) Act, 2010.
According to Section 2(g) of the Foreign Contribution (Regulation) Act, 2010 “Foreign Company”
means any company or association or body of individuals incorporated outside India and includes— i. A foreign company within the meaning of the Companies Act, 1956/2013; ii. A company which is a subsidiary of a foreign company; iii. 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); iv. A multi-national corporation.
It may be noted that 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; Any “Person” can receive foreign contribution subject to the following conditions:
It must have a definite cultural, economic, educational, religious or social programme.
It must obtain the FCRA registration/prior permission from the Central Government It must not be prohibited under Section 3 of FCRA, 2010.
It may be noted that “Person” includes (i) (i) (iii) (iv) an individual; a Hindu undivided family; an association; a company registered under section 25/8 of the Companies Act, 1956/2013 respectively.
PART–II
Source: ICSI Guideline Answers, December 2024, Q. 4A(iii) (Syllabus 2022).
December 2023Q. 4(a)5 marksSyllabus 2022
(a)Explain the provisions of section 5 of the Foreign Contribution (Regulation)
Act, 2010 relating to procedure to notify on Organization of a political nature.
According to section 5(1) of the Foreign Contribution (Regulation) Act, 2010, the Central Government may, having regard to the activities of the organisation or the ideology propagated by the organisation or the programme of the organisation or the association of the organizations with the activities of any political party, by an order published in the Official Gazette, specify such organisation as an organisation of a political nature not being a political party, referred to in clause (f) of sub section (1) of section 3. The Central Government may, by rules made by it, frame the guidelines specifying the ground or grounds on which an organisation shall be specified as an organisation of a political nature.
As per Section 5(2) of the Act, before making an order under sub- section (1), the Central Government shall give the organisation in respect of whom the order is proposed to be made, a notice in writing informing it of the ground or grounds, on which it is proposed to be specified as an organisation of political nature under that sub-section.
Section 5(3) states that the organisation to whom a notice has been served under sub-section (2), may, within a period of thirty days from the date of the notice, make a representation to the Central Government giving reasons for not specifying such organisation as an organisation under sub-section (1). The Central Government may entertain the representation after the expiry of the said period of thirty days, if it is satisfied that the organisation was prevented by sufficient cause from making the representation within thirty days.
Section 5(4) provides that the Central Government may, if it considers it appropriate, forward the representation referred to the sub-section (3) to any authority to report on such representation.
The Central Government may, after considering the representation and the report of the authority referred to in sub- section (4), specify such organisation as an organisation of a political nature not being a political party and make an order under sub-section (1) accordingly.
Every order under sub-section (1) shall be made within a period of one hundred and twenty days from the date of issue of Notice under sub-section (2). In case no order is made within the said period of one hundred and twenty days, the Central Government shall, after recording the reasons therefore make an order under sub-section (1) within the period of sixty days from expiry of the said period of one hundred and twenty days.
Source: ICSI Guideline Answers, December 2023, Q. 4(a) (Syllabus 2022).
June 2026Q. 3(c)5 marksSyllabus 2022
(c)Ananya Rao is a senior officer working in a Government-owned company. She was invited by a Canadian organisation to attend and speak at a conference in Canada.
The organisation offered to pay for her flight, hotel stay and other expenses. She accepted the offer without taking permission from the Central Government. She says the visit was in her personal capacity and not related to her official work. After returning to India, she did not inform the Government about the hospitality she received. In this situation answer the following with reason :
(i)Whether she was required to take prior permission under the Foreign Contribution (Regulation) Act, 2010.
(ii)Whether saying that the visit was in her personal capacity excuses her from the legal requirement.
(i)Section 6 of the Foreign Contribution (Regulation) Act, 2010 provides that no member of a Legislature or office-bearer of a political party or Judge or Government servant or employee of any corporation or any other body owned or controlled by the Government shall, while visiting any country or territory outside India, accept, except with the prior permission of the Central Government foreign hospitality. Foreign hospitality includes travel, accommodation, transport, boarding, lodging or any other hospitality provided by a foreign source.
In the present situation, Ms. Rao is a senior officer in a Public Sector Undertaking wholly owned by the Government. Therefore, she falls within the category of persons covered under Section 6. The airfare, hotel stay, and other expenses paid by the Canadian organisation constitute “foreign hospitality” under the Act. Hence, she was legally required to obtain prior permission from the Central Government before accepting such hospitality. Her failure to do so amounts to contravention of Section 6.
(ii)Section 6 does not distinguish between official and personal visits. The restriction applies based on the status of the person (e.g., Government servant or employee of a Government controlled body), not on the purpose of the visit.
In the given situation, Ms. Rao’s argument that the visit was in her personal capacity is not legally valid. The statutory requirement is triggered by her position as an employee of a Government owned corporation. Therefore, irrespective of whether the visit was personal or official, prior permission was mandatory.
Accordingly, her acceptance of foreign hospitality without permission violates Section 6 of the FCRA, 2010.
Source: ICSI Guideline Answers, June 2026, Q. 3(c) (Syllabus 2022).
December 2023Q. 3(b)5 marksSyllabus 2022
(b)Amit, a director of a Public Limited Company was on a business trip to USA.
Suddenly, he developed chest pain there and was provided medical treatment in a hospital, the funds for which were provided by one John, a US national who happened to be his friend. Did Amit violate the provisions of the Foreign Contribution Regulation Act, 2010 ? Give reason.
As per Section 6 of the Foreign Contribution Regulation Act, 2010 following person cannot receive foreign hospitality visiting any country without prior permission of the Central Government:
i.Members of a legislature ii. Office bearers of political parties.
iii.Judges iv. Government Servants, Public Servants v. Employees of any Corporation or any other body owned or controlled by the Government Since Directors of Public Company are not covered under Section 6 of the Foreign Contribution Regulation Act, 2010. Therefore, Amit can accept foreign hospitality and as such he or the company has not contravened the provisions of the Foreign Contribution Regulation Act, 2010.
Source: ICSI Guideline Answers, December 2023, Q. 3(b) (Syllabus 2022).
December 2025Q. 2(a)5 marksSyllabus 2022
(a)ABC Pvt. Ltd. who has been granted certificate to receive foreign contribution, receives foreign contribution for administrative purpose but it invests whole amount of contribution in the mutual funds. Discuss whether ABC Pvt. Ltd. can do so. Also, explain the provisions of Restriction to utilize Foreign Contribution for Administrative Purpose as per Section 8 of the Foreign Contribution (Regulation) Act, 2010.
According to Section 8 of the Foreign Contribution (Regulation) Act, 2010, every person, who is registered and granted a certificate or given prior permission under the Act and receives any foreign contribution,
(a)shall utilise such contribution for the purposes for which the contribution has been received:
Provided that any foreign contribution or any income arising out of it shall not be used for speculative business:
Provided further that the Central Government shall, by rules, specify the activities or business which shall be construed as speculative business for the purpose of this Section;
(b)shall not defray as far as possible such sum, not exceeding twenty percent of such contribution, received in a financial year, to meet administrative expenses.
Provided that administrative expenses exceeding twenty percent of such contribution may be defrayed with prior approval of the Central Government.
The Central Government may prescribe the elements which shall be included in the administrative expenses and the manner in which the administrative expenses shall be calculated.
Administrative Expenses as per Rule 5 of Foreign Contribution Regulation Rules, 2011includes salaries, rent, utilities, travel, legal and professional fees, etc. Investment in mutual funds is not considered an administrative expense and is not a permissible use of foreign contribution.
ABC Pvt. Ltd. received foreign contribution for administrative purposes but invested the entire amount in mutual funds, which does not qualify as administrative expenditure. Therefore, this is not permissible under Section 8 of the of the Foreign Contribution (Regulation) Act, 2010.
Source: ICSI Guideline Answers, December 2025, Q. 2(a) (Syllabus 2022).