Lesson 6 - Comparison of Cooperative and Corporation

Introduction to Cooperative

Differences:

Cooperative
1. Legal Basis RA 9520 - Philippine Cooperative Code
2. Purpose help to improve the quality of life of its members.
3. Definition Cooperative - 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 capital required, patronizing their products and
services, and accepting a fair share of the risks and
benefits of the undertaking, following universally
accepted principles.
Corporation
RA 11232 - Revised Corporation Code (NEW)
Batas Pambansa Blg. 68 - Corporation Code of the
Philippines (OLD)
maximize stockholders value.
Corporation – an artificial being, created by operation
law having the right of succession and the power,
attributes and properties expressly authorized by law or
incident to its existence.

4. Formation
a. When it is Cooperative is born the day CDA issues its Certificate Corporation is born the day SEC issues its Certificate of
formed? of Registration Incorporation
b. Structure Based on 7 principles of cooperative and cooperative Shareholders must act in accordance with their charter more
values structured, less flexible and easy transfer of ownership

c. Incorporators 1. 5-15 incorporators 1. 2-15 incorporators

2. natural or juridical person 2. natural or juridical person
3. must be capacitated to enter in to contracts 3. must be capacitated to enter in to contracts
4. owns atleast 1000 shares, subject to 10% total 4. owns atleast 1 share of stock
capital max investment 5. majority must be residents of PH
5. must all be Filipino citizens with:
- same community
- same working environment
- bounded by common interest
6. must undergo PMES
5. Operation
a. Number of atleast 5 Public Company: Minimum is 7, No maximum
Member Private Corporation: Minimum of 2, Maximum of 50
b. Member one place or town only residents of which may reside in different areas
Locality
c. Liability of Based on the structure of cooperative with regional Stockholders are not liable if the corporation goes default
Members cooperative law (members are not liable if cooperative
goes default)

c. Voting Rights 1 member is to 1 vote 1 share is to 1 vote, a member can buy many share
d. Profits Earn money through member investments Make profits by selling financial instruments (stocks and
bonds) and through investments
e. Share non transferrable, but can be withdrawn Shares are transferable, with capital cannot be withdrawn
Transfer
f. Closure of closed when share capital is issued to the member Shares remains open and is not closed at any time
Share List
6. Dissolution Discuss in Lesson 9

Definition of term:
Shareholder/Stockholder -the owner of one or more shares of stock in a corporation
}Incorporator -are those stockholders or members mentioned in the Articles of Incorporation as originally forming and
composing the corporation, and who are signatories thereof.

5 Legal Doctine
1. Artificial being theory / Doctrine of Corporate Fiction
2.Doctrine of Piercing the Veil of Corporate Entity
3. Perpetual Life Doctrine / Succession Rule
4. 5 year non-commencent rule
5. 2 year non-activity rule