COOPERATIVE RA 9520 Cooperative Principles

- Juridical Entity run by the members for the members a. Voluntary and open membership

CDA – Governed by its own BOD b. Democrative member control

- DILG, DTI, and other members c. Member economic participation

- Has ADMINISTRATOR – executive d. Autonomy and independence

*CDA and Administrator are appointed by the President of the PH e. Education, training and information

In order to assist the Administrator, there’s deputy administrator – appointed by f. Cooperation among cooperatives
BOD
g. Concern for community
CDA – gov’t agency in charge of registration and regulation of coop
Right to Examine
COOPERATIVE – ran by General Assembly *members with full voting rights
1. Legal Docs
- Composed of at least 15 members – original;
2. Books
- Must be a Filipino and of legal age, has common bond of interest; and
3. Records
- Residing or working in the intended area of operation
4. Reports
Common Bond of Interest – residential, institutional, associational, or
Types of Audit
organizational
1. Financial – Financial Audit Report will be given to BOD and Committee
*A single-purpose coop may transform into a multipurpose or may create
subsidiaries only after at least two (2) years of operations 2. Performance – Effectiveness and Efficiency of the operation of the cooperative
Primary objective – to help improve the quality of life of its members 3. Social – community involvement of the cooperative
1. Provide goods and services to its members to enable them to attain increased Dissolution
income, purchasing power, and promote among themselves equitable
distribution of net surplus through maximum utilization of economies of scale, 1. Voluntary Dissolution
cost-sharing and risk-sharing. I. No creditors affected – resolution
2. Provide optimum social and economic benefits to its members; II. With creditors affected – petition for dissolution
3. Teach them efficient ways of doing things in a cooperative manner; 2. Involuntary Dissolution
4. Propagate cooperative practices and new ideas in business and management; I. Court – Insolvency is a ground
5. Allow the lower income and less privileged groups to increase their ownership II. CDA
in the wealth of the nation; and
3. Failure to Organize and Operate – 2 years inoperative from the issuance of
6. Cooperate with the gov’t, other cooperatives and people-oriented organization certificate of registration or become inoperative for 2 consecutive years without
to further the attainment of any of the foregoing objectives. just cause [deemed dissolve]
Article of Cooperation Powers

- Name 1. Amend the article or by-laws – 2/3 votes of all members with voting rights,
present and constituting a quorum (General Assembly)
- Purpose
2. Merger, Consolidation, and Division – 3/4 votes of all members with voting
- Scope of business – limit
rights, present and constituting a quorum (General Assembly)
- Term – 50 years, renewable
3. Dissolution (division) – 3/4 votes of all members with voting rights, present
*no extension can be made earlier than 5 yrs. prior to the original or subsequent and constituting a quorum (General Assembly)
expiry date/s unless there are justifiable reasons for an earlier extension
4. Removal
- Amount of Share Capital
5. Assignment
- Sworn Statement of Treasurer
6. Relating to Membership
- The amount is true and there is really subscription and payment of 25%
*I. Removal – has grounds specified in the by-laws
Primary Cooperatives – compose of natural person
*II. Assignment – needs approval of BOD
Secondary Cooperatives – compose of primary cooperatives
GR: No member shall transfer his shares or interest in the coop or any part
Tertiary Cooperatives – compose of secondary cooperatives thereof

*In terms of territory, coop shall be categorized according to areas of operations EX:
which may or may not coincide with the political subdivisions of the country.
a. He has held such share capital contrib or interest for 1 yr. or more;
General Statement – description of the business
b. The assignment is made to the coop or to a member or to a person who fails
Economic Survey [ES] – viability of the cooperative to operate within the field of the membership of the coop; and

- Must be submitted together with AOC c. The BOD has approved such assignement

All coop applying for registration shall file with the CDA the AOC which shall be 7. General Assembly – can delegate powers to the BOD – 3/4 votes of gen.
signed by each of the organizers and acknowledged by them if natural persons assembly
(primary), and by the chairpersons or secretaries, if juridical person (secondary or
8. Allocation of interest on capital
tertiary), before a notary public.
- Allocation
By-Laws
- Deferral of issuance – creation of revolving fund for specific use
How to change the by-laws? Dispute Resolution Mechanism
Articles of Cooperation
o Intra Cooperative disputes
I. Membership
- Through mediation, arbitration, and other ways to resolve intra coop
a. Name
disputes
b. Number
- Others – Lawful and does not violate the code
c. Permanent Address of registrant How meeting is conducted

d. Common Bond of membership – limit as to what kind of people to recruit Powers and Duties of the General Assembly

A. Subject to Removal Qualification and disqualification of the directors

B. Voluntary Termination of Membership Capital Purposes

a. 60 days’ notice Debt Limit

b. Once approved, you’ll be given refund [all interest and equity] How to distribute the net surplus and how to use

c. Coop assets > liabilities w/out your equity Accounting and Auditing Policy

II. Limited Liability A. General Assembly

III. Pre-membership Education Seminar – before become member must attend GR: May delegate power to BOD
seminar
EX:
- Numbers of Directors
1. Amend the AOC or By-laws
By-Laws
2. Election, Appointment, and Removal of BOD
I. Membership
3. Approval of Developmental Plans
a. Qualification of members
B. BOD *Optional
b. Disqualification
a. 5 to 15 members
c. Rights and Responsibilities – patronize the product of the cooperative
b. 2 years – term of office
[ground for removal the non-patronizing]
C. Committees – smaller bodies
d. How membership is Acquired, Maintained, or Lost
a. Must be in the by-laws
Cooperative Administration
b. By-laws must provide for 4 committees
- Directors must provide Bond [surety] – insurance in nature *once may
i. Audit Committee – GA appoint members
kalokohan na ginawa ang director, money will be directed to cooperative]
ii. Election Committee – GA appoints members
Meeting
iii. Mediation and Conciliation Committee – BOD appoint members
- Notice of the meeting
iv. Ethics Committee – BOD appoint members
- Quorum
v. Executive Committee – option
- Voting
vi. Grievance Committee – option
- Withdrawal right

- Documentation requirement
D. Officers 4. By a vote of majority of all the members of the BOD:

a. Chairperson – member of BOD a. When a member has not patronized any of the services of the coop for an
unreasonable period of time as may be previously determined by the BOD;
b. Vice-chairperson – member of BOD
b. When a member has continuously failed to comply with his obli;
c. Others even outside BOD
c. When a member has acted in violation of the bylaws and the rules of coop; and
Share Capital *25:25 Rule
d. For any act or omission injurious or prejudicial to the interest or the welfare of
No coop, other than a coop union, shall be registered unless the AOC is
the coop
accompanied with the bonds of the accountable officers and sworn statements of
the treasurers elected by the subscribers showing that at least: Effect of death of a member

- 25% of the authorized share capital should be subscribed and Where a member of coop dies, his heir shall be entitled to his shares of the
decedent provided that the total shareholding of the heir does not exceed 10% of
- 25% of the subscribed capital must be paid up or 15,000 – w/ever is higher,
the share capital of the coop and that the heir is qualified and is admitted as
except for multipurpose coop which should not be less than 100,000
members of the coop. If the heir fails to qualify as a member or where his total
*The CDA shall periodically assess the required paid-up share capital and may shareholding exceeds 10%, the share or shares excess will revert to the coop
increase it every 5 yrs. when necessary upon consultation with the coop sector upon payment to the heir of the value of such shares.
and the NEDA
Composition
*No member shall own more than 10% of the subscribed share capital of the
1. Share Capital
coop
2. Liabilities and Bonds
- Maximum Par – 1,000
3. Revolving Capital
- No individual member can own more than 10% of the share capital
4. Donated Capital – capital from persons other than members which is not
o Cooperative can hold in cases of buy-back of shares
liabilities
Termination of Membership
- Go to national government upon liquidation
a. A member of coop may, for any valid reasons, withdraw his membership from
Voting system
the coop by giving a 60-day notice to the BOD. Subject to the bylaws, the
withdrawing member shall be entitled to a refund of his share capital Primary coop – only 1 vote
contribution and all other interest. However, such fund shall not be made if upon
Sec/Ter coop – 1 basic vote and as many as incentive votes as provided in the
payment the value of assets of the coop would be less the aggregate amount of
bylaws but not to exceed 5 votes
its liabs exclusive of his share capital contribution
*The votes cast by the delegates shall be deemed votes cast by the members
2. Primary coop – death and insanity
thereof
3. Secondary or tertiary coop – Insolvency and dissolution
Voting by Proxy
*In case of death or insanity, the next-of-kin may assume the duties and
Bylaws of a coop other than primary, may provide for voting by proxy
responsibilities of the original member
 EX: Coop banks – ½ plus one of the number of voting shares of all the members
in good standing
Net Surplus *it shall not be construed as profit (benefits > expenses) – will go to
Electric coop – 5% of all the members entitled to vote unless otherwise provided
1. Reserve Fund – 10% [first 5 years of operation – 50%; absorb net losses]
in the bylaws
2. Training and Education Fund – 10%
6. Quorum [BOD] – Majority of the members of the board, unless the bylaws
3. Committee Development Fund – 3% provided otherwise *proxy cannot attend or vote at board meeting

4. Optional Fund – 7% 7. Dual membership is allowed unless otherwise there is a stipulation to the
contrary
5. Interest

6. Patronage Refund [excess upon buying of product/services] – based on average

Notes:

1. lapse of 60 days from registration to CDA – deemed approved *unless the

*In case of denial of the application for registration, an appeal shall lie with the
Office of the President within 90 days from receipt of notice of such denial – lapse
of 90 days deemed approved

2. lapse of 30 days from filing for amendment of AOC or by-laws – deemed

3. Gen. Assembly Regular Meeting – at least annually on a date fixed in the

Special meeting – may be called at any time by a majority vote of the BOD or as
provided in the bylaws. A notice in writing shall be sent 1 week prior to the
meeting to the all members who are entitled to vote

*In the case of a newly approved coop, a special GA shall be called, as far as
practicable within 90 days from such approval

4. BOD Regular Meeting – at least monthly

Special meeting – may be held at any time upon the call of the chairperson or a
majority of the members of the board. A written notice of the meeting specifying
the agenda of the special meeting shall be given to all members of the board at
least 1 week before the said meeting

5. Quorum [Gen. Assembly] – GR: at least 25% of all the members entitled to vote