Table.

Types of organizations and their respective characteristics

Organizational Cooperative1
Elements
“A cooperative is an autonomous
and duly registered association of
persons, with a common bond of
interest, who have voluntarily
joined together to achieve their
social, economic and cultural
needs and aspirations by making
equitable contributions to the
Definition and
capital required, patronizing
Purpose
their products and services and
accepting a fair share of the risks
and benefits of the undertaking in
accordance with universally
accepted cooperative principles.”
(Source: RA 9520)
 The board of directors shall
be responsible for the
strategic planning, direction-
setting and policy-
formulation activities of the
cooperatives.
 Composed of not less that
five (5) nor more than fifteen
Governance (15) members elected by the
general assembly for a term
of two (2) years and shall
hold office until their
successors are duly elected.
 Decision-making is done by
having majority vote. One
representative means one
vote.
Refers to the body given authority
to implement the policies
determined by the Board in
directing the curse of business of
the foundation. Management shall
be hired by the Board in
Management accordance to the organizational
policies and procedures.
Corporation2
“A corporation is an artificial
being created by operation of
law, having the right of
succession and the powers,
attributes and properties
expressly authorized by law or
incident to its existence.
Corporations have capital stock
divided into shares and area
authorized to distribute to the
holders of such shares dividends
or allotments of the surplus
profits on the basis of the shares
held are stock corporations. All
other corporations are non-
stock corporations”. (Source:
Philippine Corporate Code)
 Number of directors or
trustees, which shall not be
less than five (5) nor more
than fifteen (15), depending
on the agreed and approved
By-Laws.
 Decision-making is also
done through majority vote.
Votes are casted based on
the number of shares owned
by the stockholder.
Same applies to Corporation.
Foundation/Association3
A foundation is a non-stock, non-
profit corporation with funds
established to maintain or aid
charitable, religious, educational
athletic cultural, literary, scientific,
social welfare or similar activities
primarily through extending grants
or endowments. (Source: Corporate
Code)
 Number of directors or trustees,
which shall not be less than
five (5) nor more than fifteen
(15), depending on the agreed
and approved By-Laws.
 Decision-making is done by
having majority vote. One
representative means one vote
since there are no shares
involved.
Same applies to Foundation.

Job description will be tailored

based on the nature of the
business. Levels of Authority will
be defined by the Board as well.
Membership Base Members can either be regular
members and associate members.
For primaries, the minimum
number of members is 15
individuals.
For federation, the members are
primary cooperatives.
Corporators are those who
compose a corporation, whether
as stakeholders or members.
Corporators in a stock
corporation are called
stockholders or shareholders.
Corporators in a non-stock
Foundations can be composed of
members who can be individuals or
associations. Representatives can be
elected as Board of Directors during
elections.

1
Source: Republic Act 9520
2
Source: Philippine Corporate Code
3
Ibid
 Organizational Cooperative
Elements
Cooperatives registered under this
Code may derive their capital
from any or all of the following
sources:
 Member's share capital;
 Loans and barrowings
including deposits;
 Revolving capital which
Financial &
consists of the deferred
Resource
payment of patronage
Mobilization
refunds, or interest on share
capital; and
 Subsidies, donations,
legacies, grants, aids and
such other assistance from
any local or foreign
institution whether public or
private
 Approved and signed By-
Laws and Articles of
Cooperation
 Minimum number of
members
 Capitalization:
o Members subscribed
25% of Authorized
capital
o Paid 25% of the
subscribed capital
o Minimum paid-up
Registration
Requirements capital of PhP15,000
Privileges,  Business conducted for
Exemption on members shall not be subject
Taxes to any taxes and fees
imposed under the internal
revenue laws and other tax
laws.
 Cooperatives with
accumulated reserves and
undivided net savings of not
more than Ten million pesos
(P10,000,000.00)
 Exempted from customs
duties, advance sales or
compensating taxes on their
Corporation
corporations are called members.
Corporations are treated as
profit-oriented entities hence
free funds are quite limited.
Based on experience, available
funds are in the nature of equity
investment, term loans, credit
lines, soft loans.
 Approved and signed By-
Laws and Articles of
Incorporation
 Capitalization (for stock
corporation):
o Stockholders
subscribed 25% of
Authorized capital
o Paid 25% of the
subscribed capital
o Minimum paid-up
capital of PhP5,000
 At least 30% Income Tax
will be applied on income
or revenues from the
business, trade or
operations.
Foundation/Association
Foundations can mobilize resources
from grants and contributions from
individuals, partnerships,
corporations, associations,
trusts and organizations.
Foundations are required to prepare
Schedule of Contributions and
Donations to amount of not less than
PhP100,000.
 Approved and signed By-Laws
and Articles of Incorporation
 Capitalization - It should have a
minimum bank deposit of
PhP1M as endowment funds.
 Plan of Operations executed by
the President of the Foundation
defining the source of funds,
proposed disbursement plan and
the target beneficiaries of the
funds.
 Other requirements includes
o Complete name, address
and contact number of
project officer-in- charge;
and
o Complete address and
contact number of project
office.
o Certification from Mayor
or other relevant
government agencies on
the merit of existing or
planned foundation’s
activities.
 30% Income Tax Exemption
where funds generated from
donations, grants and
operations are geared towards
the fulfillment of its original
purpose.
 Contributions made to
foundations are not subject to
12% VAT except of revenues
were generated from business
or trading.
 The contribution made to any
accredited foundation is
deductible in full and is
 Organizational Cooperative Corporation Foundation/Association
Elements
importation of machineries, exempted from tax
equipment and spare parts
used by them and which are
not available locally a
certified by the department
of trade and industry (DTI)
 Exempted from: (1) Income
Tax on the amount allocated
for interest on capitals; (2)
Value-Added Tax on
transactions with non-
members. That at least
twenty-five per centum
(25%) of the net income of
the cooperatives is returned
to the members in the form
of interest and/or patronage
refunds;
 Donations to charitable,
research and educational
institutions and reinvestment
to socioeconomic projects 
 Real Property taxes intended
for the cooperative’s
operations.
Sources: RA 9520 and Corporate Code