COOPERATIVE

approve date: February 17, 2009

Enacted: March 10,1990

Revised: 2009

state policy- Policies of the government and encourages the private sector to
undertake actual formation and organization.

Cooperative- autonomous or has freedom to govern

 can exist on their own

 have a law-making body which is the board of directors
 an association of person with a common interest

purpose of cooperatives- to achieve their social economic and cultural needs by

making an equitable position.

- patronizing their products and goods.

Cooperative principles:

1.Voluntary and open- they participate by their desire to be part of it.

2. Democratic member control- controlled by their members who actively participate

3. Members economic participation- self-governing power

4. autonomy and independence- independent from the agency of the government.

5. education, training, and information- all members need to attend training about
coop for extra knowledge.

6. cooperation among cooperatives - works together from local, regional, and

national.

7. concern for community- sustainable development for the community.

Representative assembly- full members of a body of representatives from

cooperation.
  this is composed of all members of cooperatives and the purpose is to
exercise such powers lawfully.

Additional definitions:

Social audit- requires assistance and has a social responsibility to the community.

Performance audit- audit the efficiency and effectiveness of the cooperative as to

performance in their operation.

Officers- Members of the board of director and has different committees created by
the GA or members as provided in their bylaws.

Subsidiary- Companies that are partially owned by the cooperative. It performs the
task that would fall under the central cooperative's office. An example of this is a
sister company like CNN and HBO.

Federation- Makes an association among cooperatives and has 3 or more

cooperatives, doing the same business.

Purpose of Cooperatives-

1.  encourage thrift and savings mobilization- they are prudent in saving so that
they will not be extravagant because they can accept savings from
cooperatives.
2. Generate funds and extend credit- they accept loans
3. encourage systematic production and marketing - Products that they can sell
or produce.
4. Provide goods and services and other requirements- As to goods, they are
trading while in services it is a profession or labor. It is also about giving
incentives to the members of cooperatives
5. Develop expertise and skills among members- it is about developing their
buildings or provides seminars for educational purposes.
6. acquire land and provide housing- they are providing incentives to the
members of cooperatives like a house and lot. It has a juridical entity also
that's why it can acquire land from the members of cooperatives.

Power and Capacities:

1. exclusive use of registered names, to sue and be sued.

2. succession
3. to amend its articles of cooperation
4. to adopt its bylaws not contrary to law
5. deal with real and personal property
6. enter into division merger or consolidation
7. form subsidiary cooperatives and federations
8. avail loans, donation, and foreign sources
9. avail of preferential rights 
10. organize and operate schools

Requirement for operation:

 1. Pre-membership education seminar
2. the newly organized primary may be registered as MPC.
3. an economic survey including staffing pattern
4. articles of cooperation where it must have at least 15 members and a
minimum capital of 15,000 and will be reviewed 5 years.
5. bylaws
6. bonds of accountable offers

Amendments - Needs a vote of 2/3 of the members with voting rights

 merger, consolidation, and division of cooperative where it requires 3/4 of all

members with voting rights and constituting a quorum or a number of
attendance.

Types of cooperative:

1. credit- promotes saving and lending services.

2. consumers- sold to members and outsider
3. producers- undertakes joint production like agriculture.
4. marketing- supply of production input
5. service- engages in medical and dental care can also be jeepney drivers.
6. multi-purpose- combines 2 or more business activities.

Additional types of cooperatives:

1. agrarian reform 
2. cooperative bank
3. dairy
4. education
5. electric
6. financial service
7. fishermen
8. health service
9. housing
10. insurance
11. water services
12. workers

Federation- refers to a 3 or more primary cooperative where it Coordinate and

facilitates the activities of the other registered societies and it is a registered society.

Membership:

1. must be in a legal age

2. capable and willing to perform the responsibility
3. allows associate members but needs to qualify
4. all effective officials are ineligible to be officers except party-list
representatives.
General assembly:

1. 3/4 vote of the members required to delegate some powers to Representative

assembly

2. Quorum is at least 25% of all members entitled to vote.

3. voting in a primary cooperative, strictly for 1 member,1 vote, and no proxy allowed

Board of directors- Responsible for strategic planning, direction, setting, and policy. It
disqualifies a person engaged in a business similar to the cooperative.

Committees and officers - There will be additional members like mediation and
conciliation and ethics. all officers and committee members will be required to
undergo training conducted by the CDA. No comprehension except for per diems but
if cooperative reports a net loss, officers will be entitled to removal of officers and can
be done with majority votes.

Responsibilities of cooperatives:

1. accountant or bookkeeper must be responsible for maintenance and

safekeeping of books
2. audit committee is responsible for continuous and periodic review of books of
accountants.
3. audited financial statements are required to be posted in the principal's office.

Annual reports:

 must be filled in within 120 days from the close calendar year
 regular activities undertaking
 must show their progress and achievements
 liability for non-submission and other penalties imposable until the
cooperative has complied.

Tax privileges:

-Cooperatives are not subjected to any taxes and fees which are imposed and other
tax laws for cooperatives transacting business with members only. Transactions with
members are not subjected to taxes and fees including final tax.

Tax exemptions:
Non-members will pay VAT and cooperatives will collect and remit it to BIR. among
25% of the net surplus is returned to members as to interest and patronage refund.

Additional privileges:

The faculty members have the right to refuse in management of the canteen and
other services. Housing agencies and financial institutions shall create a window for
financing housing projects.

capital- the subsidies, donations, legacies, and aids shall not be divided into
individual share capital holdings. There is a limitation on the share capital where it
held 1 member to reduced from 20% to 10%. The reasonable and realistic member
builds up a program.

Audit- They review the balance sheet, cash flows, and the income statement of a
cooperative. social and performance audits may be conducted by an independent
social auditor.

Federation union must submit:

-list of contributing cooperative

- business consultancy assistance with nature and cost

- training activities specifying nature participants and cost.

Distribution of net surplus

Other provisions:

special provisions

1. transportation cooperatives 
2. electric cooperative
3. cooperative banks
4. credit cooperative
5. financial service cooperatives
6. housing cooperative

-conciliation and mediation committee

-additional penal provisions

- CDA allowed formulating rules on cooperative code o certain provisions.

-congressional overnight committee to review and approve the implementing rules

and regulations

Re-registration of all cooperatives to confirm their status must submit

 certificate of registration 
 articles of cooperation
 bylaws
 latest audited financial statement