BUSINESS LA

AWS AND REGULATIONS

BACHEELOR OF SCIENCE IN ACCOUNTANCY

G
Governning
g LLaw C
Coomm mennceemeentt o of JJurrid
iddiicall Peerso
ona
alityy
o Registration by CDA
-issuance of Certificate of
• R.A. No. 6938
1990- Note: Cooperative may be dissolved if it has not
2007 • Cooperative Code of thee
Philippines carried on business for 2 connsecutive years.

• R.A. No. 9520 V

VoottinnggRRe
equ ir ementtss
2008-
present • Philippine Cooperative Amendment of
Code of 2008 Articles of ଶ
 ଷ vote of the members
Cooperation (AOC)
BBOD has no powers here
Amendment of By-
SSiixx IIm porttanntt Pr inci ples Laws
Autonomy The government will not Power to Delegate  Cannot
C be delegated to
interfere in the manaagement and Amendment t Board
the
operations of cooper atives Merger and ଷ
Duly Registered Cooperative Developpment  At
A least of the members
Consolidation ସ
Association Authority (CDA) –govverning body Termination of  Majority
M vote of the BOD
Common Bond This is what makes a cooperative membership
of Interest distinct from a corpooration
Social, Economic, Cultural
and Aspirations (SECA)
RReg
giisstra
atiion of Coo
oppeera
atiivess
Voluntary Obtain by makin g equitable
Membership contributions.
A written approval or reccommendation from the
Patronizing Members will buy from concerned government aagency must be filed with
their own cooperative and pattronize their CDA (if applicable)
products own products/servicees.
Accepting a fair Same set up principlees with a
share of risk and corporation.
benefits C
Catteg oriies
Primary Members are natural persons.
BBassicc R equuireem Secondary Members are primaries
mentss Tertiary Members are secondary cooperatives. It
Original  15 or more persons can be a federaation which comprises of
Members  Filipino citizens three or moree cooperatives doing the
 Of legal age same line of buusiness.
 Have common bond off interest
 Residents in area of opeeration
 Completed Pre-Membeership M
Meem
mber shiip
Education Seminar (PM MES) Transfer of Requiress approval of the
Liability  Limited to the extent of ccontribution Shares applicatiion for member ship filed
Term by the BOD
B and shall exercise
 50 years subject to exttension
rights after payment of the shares
 No extension earlier thaan 5 years
prior expiration Nature of  Personnal Right
Ownership  Death or insanity of a member
Capital  25% of ASC is subscribedd
 25% of subscription is paaid will terrminate his membership
 15,000 minimum paid-up capital
(100k for multi-purpose ccoop .) KINDS OF MEMBERS
Name  Includes the word “Coooperative” 1. Regular members
Submission  Economic Survey -Entitled to all the rights
r and privileges of
 Articles of Cooperationn membership.
 By-Laws (w/ names of thee directors)
1
 BUSINESS LAWS AND REGULATIONS
BACHELOR OF SCIENCE IN ACCOUNTANCY

2. Associate Members  Share Agreement –shall be issued by the

-Entitled only to such rights conferred by the by- Cooperative at the end of every calendar year
laws. No right to vote and be voted. based on the number of shares fully paid for
-May be regular members if he is: the said period.
 Member for 2 continuous years
 Patronizing cooperative as a member PPro
ohhiib itiioonns
 Signifies his intention to be a regular  Cannot issue multiple types of common
member
shares with different par value share.
Note: BOD can terminate membership
 Par Value cannot be increased or decreased by
GROUNDS FOR TERMINATION
way of amending it AOC and By-Laws.
1. Failure to comply with his obligation
(Continuous)
LIMITATIONS ON SHARE CAPITAL HOLDINGS
2. Violation of the by-laws/rules of coop.
 No member of a primary cooperative other
3. Act or omission injurious or prejudicial to the
than the cooperative itself shall own or hold
interest of the welfare of the cooperative
more than 10% of the share capital of the
4. Not patronizing the services of the
cooperative.
cooperative for unreasonable period of time.
DISQUALIFICATIONS OF GOV. EMPLOYEES
RRep
pr eseenttat ivve
e A
Assseembly  An officer of the CDA is disqualified to be
 Apply to cooperatives with numerous and appointed to any position in the cooperative.
dispersed members.  An elective government official is disqualified
 The required number of the members shall be to become officers and directors except to a
at least 1,000. partylist representative.

Q
Qu orruum
m BBoard
d oof D
Dir eccttoorrss
General Rule: of the members entitled  5-15 persons
to vote in each sector, chapter or district.
 Term of 2 years
Exceptions:
 Cooperative Banks
 ½ + 1 of all members entitled to vote TTypeess a
annd
d C
Ca teegoorriiees
 ¾ of all the members entitled to vote in case 1. Credit Cooperative –promotes and undertakes
of amendment of AOC and By-laws. savings and lending services among its members.
 Electric Cooperative 2. Consumers Cooperative –the primary purpose
 5% of the members entitled to vote. is to procure and distribute commodities.
3. Producers Cooperative –undertakes joint
C
Ca piitalliizaatioonn production whether agricultural or industrial.
 Issuance of Preferred Share Capital 4. Marketing Cooperative –engages in the supply
 Shall be prescribed in the By-Laws of production inputs to members and markets
 Shall not exceed 25% of the total their products.
authorized capital. 5. Service Cooperatives –engages in medical,
 Subscription Agreement –additional dental care, insurance and other services.
subscription is allowed only when initial 6. Advocacy Cooperative –promotes and
subscription is fully paid. advocates cooperativism among its members and
public through education and training etc. (NGO)
2
 BUSINESS LAWS AND REGULATIONS
BACHELOR OF SCIENCE IN ACCOUNTANCY

7. Multipurpose Cooperative –combines 2 or C

Com
mmerrc
ciia
all V
Vss. C
Coo
oooperra
at ivve
e
more of the business activities of these different COMMERCIAL COOPERATIVE
types of cooperative. BANK BANK
Notes: Acceptance  Members  Members
 No cooperative shall be registered as a of Deposits  Non-Members
multipurpose cooperative unless it has been Governing  SEC  CDA
Agency  BSP (supervise)  BSP (supervise)
in operation for at least 2 years.
Minimum 2B - 5B 10M - 200M
 Cooperatives with a minimum paid-up Capital
capital of 100k or as required in the
feasibility study, whichever is higher may be 13. Credit Cooperative (Financial Service) –
allowed to transform into a MP Cooperative organized for the primary purpose of engaging in
except agriculture cooperatives and agrarian savings and credit services and other financial
reform cooperatives. services.
8. Agrarian Cooperatives –organized by marginal 14. Fishermen Cooperative -organized by
farmers majority of which are agrarian reform marginalized fishermen in localities whose
beneficiaries for the purpose of developing an products are marketed either as fresh or
appropriate system of land tenure, development, processed products.
consolidation or management in areas covered by 15. Health Services Cooperative -organized for the
agrarian reform. primary purpose of providing medical, dental and
9. Dairy Cooperative –its members are engaged in other health services.
the production of fresh milk which may be 16. Housing Cooperative -organized to assist or
processed and/or marketed as dairy products. provide access to housing for the benefit of its
10. Education Cooperative –Organized for the regular members who actively participate in the
primary purpose of owning and operating licensed savings program for housing. It is co-owned and
educational institutions notwithstanding the controlled by its members.
provisions of R.A. 9155(Governance of Basic 17. Insurance Cooperative. Engaged in the business
Education Act of 2001). of insuring life and property of cooperatives and
11. Cooperative Bank –organized for the primary their members.
purpose of providing a wide range of financial Failure to secure the Certificate of
services to cooperatives and their members. Authority from the Insurance Commission
12. Electric Cooperative –organized for undertaking within two (2) years from the date of its
of power generations, utilizing renewable energy registration with CDA shall be a ground for
sources, including hybrid systems, acquisition and the revocation/cancellation of the Certificate
operation of subtransmission or distribution to its of Registration.
household members. 18. Transport Cooperative. Includes land and sea
 Minimum paid up capital : P15,000 transportation, limited to small vessels, as
 Energy Regulation Commission (ERC) shall defined or classified under the Philippine
within 45 days from the close of each fiscal maritime laws, organized under the provisions of
year, issue a certificate to the electric coop. this Code.
concerned on the total amount collected for 19. Water Service Cooperative. Organized to own,
capital contributions. operate and manage waters systems for the
provision and distribution of potable water for
its members and their households.

3
 BUSINESS LAWS AND REGULATIONS
BACHELOR OF SCIENCE IN ACCOUNTANCY

20. Labor Service Cooperative -engaged in  Authority may cancel the cooperatives
providing a specific labor, job, or service to a Certificate of Registration if it is proven that
principal under a contracting or subcontracting the cooperative has no assets, or its
arrangement. whereabouts is unknown, despite diligent
 “Cabo” a prohibited activity where a efforts to ascertain it. These facts shall be stated
person /group of persons or a labor group, in the Order of Cancellation. No winding up
in the guise of cooperative, supplies shall be observed.
individual members or workers to an
employer, with or without any monetary or TTax Tre
eattmeenntt
other consideration, whether in the capacity Transactions with:
of an agent of the employer or as an MEMBERS Exempt
ostensible independent contractor. NON-MEMBERS Taxable
BOTH Pro rata
21. Workers Cooperative -organized by workers,
including the self-employed, who are at the same A
Auud
diit
time members and owners of the enterprise. The Shall be conducted by:
principal purpose is to provide employment and  External Auditor
business opportunities to its worker members and  Member(good standing) of the PICPA
manage it in accordance with the cooperative  Accredited by BOA and CDA
principles.
TWO KINDS OF AUDIT
M
Meerrg
gerr and
dCCoonnsoli da tiioonn 1. Social Audit -assessment of its social impact
PROCEDURES: and ethical performance vis-à-vis its stated
Board Resolution mission.
-by each constituent cooperatives. 2. Performance Audit -efficiency and
effectiveness of the cooperative as a whole
Memorandum of Understanding and its management and officer.
-stating the creation of a joint committee to
formulate the plan and proposal to merge/consol.

General/Representative Assembly's Approval

-of proposal plan and new AOC and By-Laws

D
Disssoolluuttionn
1. Expiration of Charter
2. Voluntary Dissolution
3. Judicial Proceedings
4. Dissolved by Order of the Authority

PROCEDURES:
 Board of Liquidators/Trustees shall submit its
Final Report.