Dear Members,
A Society registered in Delhi under the Societies Registration Act 1860 likes to know whether it can have a person of Indian origin with USA citizenship on the Governing Board as an Institutional Representative.
The individual is Chief Functionary of an another Institution registered in India as a Trust that is also registered in the USA according to their own statutes The Individual lives in both the countries from time to time.
Thanks,
Vijay K. Sardana
Dear Mr Sardana,
I think I do not need to add anything, Mr D’Souza has already covered the issue quite well, and Soma has covered it from FCRA angle.
If I can summarise and also share practical situations.
Delhi Society Act does not prohibit foreigners becoming Board member. Although FCRA discourages organisations to have foreign citizens. Although during the current renewal exercise, we have come across several cases, where PIO / OIC card holders have been given FCRA renewal.
In a recent case, Tax authorities have also questioned a foreigner on Board of the organisation, however I believe (and secretly hope) that is an aberration and not a policy decision.
rgds
Dear Vijay,
From past experience, it seems clearly an issue not entirely dealt with by the State or Central Acts pertaining to Societies. I would only cite my experience.
It is no where stated in the Act that an expat cannot be a member of the Governing Body – this is surprisingly so glaringly unclear that some organisations have gone ahead with an expat on board.
Notwithstanding the above, we would not like to cross swords with the relevant authority/ies. Hence while this is so case of the Societies Act, when it comes to the FCRA, it would be advisable to refrain from having an expat on board. Some organisations have experienced enormous difficulty in obtaining the FCRA clearance or did not receive it when an expat is on board. Even after making changes to the Board, it becomes difficult to convince FCRA/MHA that you would conform to this.
It is also imperative that not-for-profits ensure they are on the right side of the Income Tax Dept, whose views on expats on board may also not be favorably disposed.
I hope this helps – no clear black and white writings.
regards
Joe D’Souza
Dear Mr. Vijay,
Foreigners on the board are allowed through prior permission only under the following circumstances:
1. The foreigner is married to an Indian citizen
2. The foreigner has been working in India for at least five years
3. The foreigner has specialized knowledge in the medical and health related fields
4. The foreigner is ex-officio in terms of the inter governmental agreement
5. The foreigner is an ex-officio from a multilateral body which is exempted from the definition of foreign source
These restrictions are for the organizations registered under FCRA. This is my understanding on the foreigners on Board.
Thanks and regards,
B V Soma Sastry