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The FCRA Amendment Bill 2026: Part II – Compliance and Other Changes

Summary: The Foreign Contribution (Regulation) Amendment Bill 2026 proposes significant amendments to the Foreign Contribution (Regulation) Act, 2010, tightening the regulatory framework for foreign contributions in India. It limits timelines for receipt and utilisation of foreign contribution under the prior permission route, codifying the restrictions that began with government circulars issued in 2025. The Bill also defines the term “key functionaries,” to cover all leadership positions irrespective of organisational structure, exposes key functionaries to personal liability for organisational offences, and imposes on them a statutory duty to report an organisation’s cessation or defunct status. The evolving FCRA landscape requires organisations to review governance structures, identify key functionaries, ensure timely renewals, and maintain complete records to ensure continuing compliance.

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The FCRA Amendment Bill 2026: Part I - Asset Vesting

Summary: The Foreign Contribution (Regulation) Amendment Bill 2026 proposes significant changes to the Foreign Contribution (Regulation) Act, 2010, most notably replacing Section 15 with a new Chapter IIIA. This establishes a Designated Authority in which all foreign contribution and assets of an organisation vest upon cancellation, surrender or cessation of its FCRA registration. During provisional vesting, the Designated Authority has the power to take possession of assets and manage the organisation’s activities, including using its foreign contribution. If the organisation fails to obtain fresh registration or renewal within the prescribed time, its assets permanently vest in the Designated Authority and may be disposed of through prescribed modes. The Designated Authority enjoys extensive powers under the 2026 Bill, and judicial intervention is largely restricted. The amendments carry serious implications for FCRA-registered organisations, demanding rigorous compliance, meticulous accounting and proactive governance.

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Regulator’s Gaze over Unutilised Foreign Contributions of NGOs

Summary: As per the recent reports, the Ministry of Home Affairs has issued show cause notices to several NGOs registered under the Foreign Contribution (Regulation) Act, 2010, asking why their registrations should not be cancelled in cases where foreign contributions have neither been received nor utilised for three consecutive financial years. While prolonged non-utilisation may, in the regulator’s view, raise questions on an organisation’s bona fide intent, the development has sparked debate on whether non-utilisation of foreign funds alone can justify cancellation, particularly where NGOs continue to pursue their objectives through other lawful means.

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Section 8 Company Limited by Guarantee: An Alternative to Traditional Section 8 for FEMA & FCRA Issues Faced by Foreign Owned and Controlled Entities

Summary: The blog discusses the progressive shift in the implementation of CSR activities by foreign-owned and controlled entities, and how a Section 8 company limited by guarantee can serve as an alternative to the challenges faced by traditional Section 8 companies under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, and the Foreign Contribution (Regulation) Act, 2010.

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Promoter Incentives: Two Steps Closer, and Many Steps To Go

Summary: The blog analyses the amendments made to the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 in relation to (i) the regulatory developments around allowing the top brass of India Inc’s new age technology companies to retain their ESOPs upon being classified as ‘promoters’ during the IPO process and (ii) the amendments undertaken to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 earlier this year.

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