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How to Organize a Cooperative

How to Organize a Cooperative

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Published by: sweet02 on Jan 18, 2010
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How To Organize A Cooperative
Organizing a cooperative can both be complex and simple. It requires, first of all anunderstanding of the basic needs of the perspectives cooperative members. It demandspatience from the co-organizer who must take the cooperative goal and objectives, its visionsand long term goals a real part of the members lives.But it can be also easy because the Cooperative Code of the Philippines (RA 6938) hasdevised very clean cut steps for the coop-organizer and members. This question and answerform should make organizing cooperatives a little more understandable to the cooperativeorganizer.
What Is A Cooperative?
 A cooperative is a duly registered association of persons with a common bond of interest, whohave voluntarily joined together to achieve a lawful common social or economic end, makingequitable to contribution to the capital required and accepting a fair share of the risks andbenefits of the undertaking in accordance with universally accepted cooperative principle.By forming a cooperative you pool money, human resources and talent to build capital andwork together to produce more goods and raise incomes. Through cooperatives, you can lookfor the other sources of loans at low interest rates of borrowing form informal lenders orusers. The cooperative can also be a mechanism for marketing your produce.
What are the Principles of Cooperativism?
  The cooperative principles were reformulated by the International Cooperative Alliance inVienna in 1966 during its 23 Congress. The first principle is anchored on voluntarism. This means that each member of a cooperativebecomes a member voluntarily and is not restricted by social , political or religiousdiscrimination . In fact anyone who meets the qualifications set by a cooperative's bylaws canbe a member if he willingly shoulders their responsibility. The second principle is democracy. Coops are democratic organizations with officers andmanagers elected or appointed in a manner agreed on by members. Each member, no matterthe amount of his share, is entitled to one vote. The third principle is the limitation of share capital interest. In the context of cooperativism,interest on a member share capital is limited so that no person- especially those with money-can have an overwhelming equity in the coop. This prevents the domination of the coop'saffairs by wealthy members at the expense of poorer members and the organization as whole. The fourth principle, essentially a manifestation of the third principle, revolves on the sharingall location of cooperatives surplus or savings. At bottom, it mandates distribution of surplusequitably so that no member, gains at the expense of another. Surplus are, by decision of themember, used for developing the coop's business interests, providing common services tomembers in proportion to their transactions with the cooperatives. The fifth principle, makes provision for the education and training of cooperatives members,officers and employees, and of the general public in the principles and techniques of cooperation. The sixth principle harps on the promotion of cooperation between cooperatives at local,national and international levels. The seventh principle is the concern for community by working for its sustainabledevelopment through policies approved by the cooperative members.
What Are The Kinds Of Cooperative?
Credit Cooperative
- promotes thrift and savings among its members and createsfunds in order to grant loans for productivity
Consumer Cooperative
- the primary purpose is to procure and distributecommodities to member and non-members;
Producers Cooperative
- undertakes joint production whether agricultural orindustrial;
Service Cooperative
- engages in medical, and dental care, hospitalization,transportation, insurance, housing , labor, electric light and power, communication andother services; and
Multi- Purpose Cooperative
- combines two (2) or more of the business activities of these different types of cooperatives;According to membership and territory, the following are the categories of cooperatives:In terms of membership:I .Primary -The members of which are natural persons of legal age;II .Secondary- The members of which are primaries;III. Tertiary - The member of which are secondaries upward to one or more apexorganizations. Cooperatives whose members are cooperatives are called federations orunions.In terms of territory, cooperatives are categorized according to areas of operation which maynot be coincide with the political subdivisions of the country.
What are the General Steps in Forming a Cooperative?
Basically, there six steps in setting up a cooperative.
, get organized. You must have at least 15 members to do that. At once determine thecommon problems you would want solved and the basic needs you would want provided forthrough a cooperative. You may want to include increasing of your production, marketing of your produce, credit assistance, power generation, banking or insurance and other similarneeds.Determining your problems and needs will also help you classify the kind of a cooperative youwill be organizing.Even before coop is set up, a dedicated core group of people will do all the organizational andpaper works is a must. From this core group, working commodities may be formed to setthings moving. These committees may include membership, finance, executives, secretariatto name a few.
, prepare a general statement called an economic survey. This statement will help youmeasure your cooperatives chances of success.
, draft the cooperatives by-laws. The by-laws contain the rules and regulation governingthe operation of the cooperative.
, draft the articles of cooperation. Here you indicate the name of the cooperative, itsmembers, terms of existence and other pertinent description about your cooperative.
, secure bond of your accountable officers, normally the treasurer, or the treasurer andthe manager. The amount of the bond is to be decided upon by the Board of Directors, based
on the initial network of the cooperatives which includes the paid-up capital, membership feesand other assets of the cooperatives at time of registration.
, register your cooperative with the Cooperative Development Authority (CDA), you mustsubmit four copies each of the Economic Survey, By- Laws , and Articles of Cooperation andBond of Accountable Officer(s).In every step, you may consult the CDA. The CDA emphasizes education as a key to thesuccess of cooperatives.
Who May Become Members of a Primary Cooperative?
If you are a Filipino of legal age, you can be a coop member if you meet the qualificationsprescribed by the coop's by laws. The board of directors act on application for membership.A member may exercise his rights only after having paid the fees for membership andacquired shares in the cooperative,
What are the Kinds of Membership in the Cooperative?
A cooperative has two kinds of members; regular members and associate members.A regular member is entitled to all the rights and privileged of membership as stated in theCooperative Code and the coops by- laws.An associate member has no right to vote and to be voted upon and is entitled to such rightsand privileged provided by the cooperatives by laws.
What is the Minimum Number of Members in a Cooperative?
 Fifteen (15) natural persons of legal age who are citizens of the Philippines.
Can Government Officers and Employees Join a Cooperative?
  Yes, provided that:
Any officer of the government of the CDA shall be disqualified to be elected orappointed to any position in a cooperative;
Elected officials of the government, except barangay officials, shall be ineligible tobecome officers and directors of cooperatives; and
Any government employee may, in the discharge of his duties as member in thecooperative, use official time provided that the operations of the office where he worksare not adversely affected.
What is an Economic Survey?
An economic survey is a general statement describing the structure, purpose, economicfeasibility of the proposed cooperative, area of operation, size of membership and otherpertinent data. It, in fact a project feasibility study. The structure describes the kind of cooperative being set, up whether it is primary, secondary or tertiary and whether it is acredit, consumer transport or any other type of coop. The purpose defines the primary, secondary and other objectives of the cooperative. The areaof operation merely indicates the general merely indicates the geographical or sectoral of thecoop. For example, a cooperative may operate in, say Caloocan City; or it may operate in acertain sector like farmers. Size of membership is important so as to set limits to the coop'sscope of operation. This is closely related to cooperative structure.

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