Dear Sir,
Recently whilst doing financial review of a foundation I came across the following:
Organisations legal documents such as 12 AA Registration, Society registration document, PAN, and all other documents were in the name of XYZ foundation. Organisation is filing IT and FC return in the name of XYZ foundation
However in the FC renewal registration document the following is mentioned :
The chief Functionary
ABC Hospital funded and managed by XYZ foundation . FC bank account is opened in the name of ABC Hospital and the account number mentioned in the FC bank account is same to what is mentioned in the FC renewal registration document.. Organisation is filing FC returns in the name of : ABC Hospital funded and managed by XYZ foundation
Would like to know
1) Can we go ahead and do partnership with the organisation
2) if answer to the above question is yes- then funds to be released in the name of ABC hospital as bank account is opened in that name whereas entity is registered in the name of XYZ foundation
Please suggest way forward
Thanks
Ratish
This is a very unique problem, where FCRA registration is in the name of a division / a project of the legal organisation. This used to happen quite often earlier. I am surprised it is still happening and even the FCRA has been renewed inthe name of the Project and not the legal organisation.
There seems to be failure of a number of Checks & Balances, PAN I presume is in the name of legal organisation, how did SBI opened bank account in the name of Project. Darpan Id is a must for all organidsations wanting to register on FCRA website. Then without PAN how Darpan Id was created for the Project.
I would advise caution, before signing any agreement with the Project and not the legal entity, as there will be little recourse for the organisation for any legal redress, in case of dispute. In any case, under S.7 no entity can transfer funds to another NGO, so not sure how your entity (I presume a India based FCRA registered entity) can transfer funds to another NGO. So please take proper advise before fund transfer.