Philippine Cooperative Code

No. 125 Brgy.
San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com
Regulatory Framework for Business Transactions

Philippine Cooperative Code of 2008
I. Cooperatives (Republic Act No. 9520 a.k.a. Philippine Cooperative Code of 2008)
a. Definition of Cooperative – 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 capital required, patronizing their products and services
and accepting a fair share of the risks and benefits of the undertaking in accordance with
universally accepted cooperative principles.
b. Cooperative Principles - Every cooperative shall conduct its affairs in accordance with
Filipino culture, good values and experience and the universally accepted principles of
cooperation which include, but are not limited to, the following:
i. Voluntary and Open Membership - Cooperatives are voluntary

organizations, open to all persons able to use their services and willing to
accept the responsibilities of membership, without gender, social, racial,
cultural, political or religious discrimination.
ii. Democrative Member Control - Cooperatives are democratic organizations
that are controlled by their members who actively participate in setting their
policies and making decisions. Men and women serving as elected
representatives, directors or officers are accountable to the membership. In
primary cooperatives, members have equal voting rights of one-member, one-
vote. Cooperatives at other levels are organized in the same democratic
manner.
iii. Member Economic Participation - Members contribute equitably to, and
democratically control, the capital of their cooperatives. At least part of that
capital is the common property of the cooperative. They shall receive limited
compensation or limited interest, if any, on capital subscribed and paid as a
condition of membership. Members allocate surpluses for any or all of the
following purposes: developing the cooperative by setting up reserves, part of
which should at least be indivisible; benefitting members in proportion to their
patronage of the cooperative's business; and, supporting other activities
approved by the membership.
iv. Autonomy and Independence - Cooperatives are autonomous, self-help
organizations controlled by their members. If they enter into agreements with
other organizations, including government, or raise capital from external
sources, they shall do so on terms that ensure democratic control of their
members and maintain their cooperative autonomy.
v. Education, Training and Information - Cooperatives shall provide
education and training for their members, elected and appointed
representatives, managers, and employees, so that they can contribute
effectively and efficiently to the development of their cooperatives.
vi. Cooperation Among Cooperatives - Cooperatives serve their members
most effectively and strengthen the cooperative movement by working
together through local, national, regional and international structures.
vii. Concern for Community - Cooperatives work for the sustainable
development of their communities through policies approved by their
members.
a. Definition of Terms.
1|P a g e RLACO/DSALES/NVALDERRAMA
No. 125 Brgy. San Sebastian
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Telephone : (043) 723 8412
i. Member includes a person either natural or juridical who adhering to the

principles set forth in this Code and in the Articles of Cooperative, has been
admitted by the cooperative as member;
ii. General Assembly shall mean the full membership of the cooperative duly
assembled for the purpose of exercising all the rights and performing all the
obligations pertaining to cooperatives, as provided by this Code, its articles of
cooperation and bylaws: Provided, That for cooperatives with numerous and
dispersed membership, the general assembly may be composed of delegates
elected by each sector, chapter or district of the cooperative in accordance with
the rules and regulations of the Cooperative Development Authority;
iii. Board of Directors shall mean that body entrusted with the management of
the affairs of the cooperative under its articles of cooperation and bylaws;
iv. Committee shall refer to any body entrusted with specific functions and
responsibilities under the bylaws or resolution of the general assembly or the
board of directors;
v. Articles of Cooperation means the articles of cooperation registered under this
Code and includes a registered amendment thereof;
vi. Bylaws means the bylaws registered under this Code and includes any
registered amendment thereof;
vii. Registration means the operative act granting juridical personality to a
proposed cooperative and is evidenced by a certificate of registration;
viii. Cooperative Development Authority as such hereinafter referred to s the
Authority;
ix. Universally Accepted Principles means that body of cooperative principles
adhered to worldwide by cooperatives;
x. Representative Assembly means the full membership of a body of
representatives elected by each of the sectors, chapter or district o the
cooperative duly assembled for the purpose of exercising such powers lawfully
delegated unto them by the general assembly in accordance with its bylaws;
xi. Officers of the Cooperative shall include the members of the board of
directors, members of the different committee created by the general assembly,
general manager or chief executive officer, secretary, treasurer and members
holding other positions as may be provided for in their bylaws;
xii. Social Audit is a procedure wherein the cooperative assesses its social impact
and ethical performance vis-à-vis its stated mission, vision, goals and code of
social responsibility for cooperatives to be established by the Authority in
consultation with the cooperative sector. It enables the cooperative to develop a
process whereby it can account for its social performance and evaluate its impact
in the community and be accountable for its decisions and actions to its regular
members;
xiii. Performance Audit shall refer to an audit on the efficiency and effectiveness of
the cooperative as a whole; its management and officers; and its various
responsibility centers as basis for improving individual team or overall
performance and for objectively informing the general membership on such
performance;
xiv. Single-Line or Single-Purpose Cooperative shall include cooperative
undertaking activities which are related to its main line of business or purpose;
xv. Service Cooperatives are those which provide any type of service to its
members, including but not limited to, transport, information and
communication, insurance, housing, electric, health services, education, banking,
and savings and credit;
xvi. Subsidiary Cooperative refers to three or more primary cooperatives, doing
the same line of business, organized at the municipal, provincial, city, special
metropolitan political subdivision, or economic zones created by law, registered
with the Authority to undertake business activities in support of its member-
cooperatives.
b. Purposes of Cooperatives
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i. To encourage thrift and savings mobilization among the members;

ii. To generate funds and extend credit to the members for productive and
provident purposes;
iii. To encourage among members systematic production and marketing;
iv. To provide goods and services and other requirements to the members;
v. To develop expertise and skills among its members;
vi. To acquire lands and provide housing benefits for the members;
vii. To insure against losses of the members;
viii. To promote and advance the economic, social and educational status of the
members;
ix. To establish, own, lease or operate cooperative banks, cooperative wholesale
and retail complexes, insurance and agricultural/industrial processing enterprises,
and public markets;
x. To coordinate and facilitate the activities of cooperatives;
xi. To advocate for the cause of the cooperative movements;
xii. To ensure the viability of cooperatives through the utilization of new
technologies;
xiii. To encourage and promote self-help or self-employment as an engine for
economic growth and poverty alleviation; and
xiv. To undertake any and all other activities for the effective and efficient
implementation of the provisions of this Code.
c. Objectives and Goals of a Cooperative.
i. Provide goods and services to its members to enable them to attain increased
income, savings, investments, productivity, and purchasing power, and promote
among themselves equitable distribution of net surplus through maximum
utilization of economies of scale, cost-sharing and risk-sharing;
ii. Provide optimum social and economic benefits to its members;
iii. Teach them efficient ways of doing things in a cooperative manner;
iv. Propagate cooperative practices and new ideas in business and management;
v. Allow the lower income and less privileged groups to increase their ownership in
the wealth of the nation; and
vi. Cooperate with the government, other cooperatives and people-oriented
organizations to further the attainment of any of the foregoing objectives.
d. Powers and Capacities of Cooperative
i. To the exclusive use of its registered name, to sue and be sued;

ii. Of succession
iii. To amend its articles of cooperation in accordance with the provisions of this
Code
iv. To adopt bylaws not contrary to law, morals or public policy, and to amend and
repeal the same in accordance with Cooperative Code;
v. To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage,
and otherwise deal with such real and personal property as the transaction of the
lawful affairs of the cooperative may reasonably and necessarily require, subject
to the limitations prescribed by law and the Constitution;
vi. To enter into division, merger or consolidation, as provided in Cooperative Code;
vii. To form subsidiary cooperatives and join federations or unions, as provided in
Cooperative Code;
viii. To avail of loans, be entitled to credit and to accept and receive grants,
donations and assistance from foreign and domestic sources, subject to the
conditions of said loans, credits, grants, donations or assistance that will not
undermine the autonomy of the cooperative. The Authority, upon written
request, shall provide necessary assistance in the documentary requirements for
the loans, credit, grants, donations and other financial support;
ix. To avail of preferential rights granted to cooperatives under Republic Act No.
7160, otherwise known as the Local Government Code, and other laws,
particularly those in the grant of franchises to establish, construct, operate and
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maintain ferries, wharves, markets or slaughterhouses and to lease public

utilities, including access to extension and on-site research services and facilities
related to agriculture and fishery activities;
x. To organize and operate schools in accordance with Republic Act No. 9155,
Governance of Basic Education Act of 2001 and other pertinent laws; and
xi. To exercise such other powers granted by Cooperative Code or necessary to
carry out its purpose or purposes as stated in its Articles of cooperation.
e. Types and Categories of Cooperatives
i. Single-Line or Single-Purpose Cooperative shall include cooperative

undertaking activities which are related to its main line of business or purpose;
ii. Service Cooperatives are those which provide any type of service to its
members, including but not limited to, transport, information and
communication, insurance, housing, electric, health services, education, banking,
and savings and credit;
iii. Credit Cooperative is one that promotes and undertakes savings and lending
services among its members. It generates a common pool of funds in order to
provide financial assistance to its members for productive and provident
purposes;
1. Objectives of Credit Cooperative
a. To encourage savings among its members;
b. To create a pool of such savings for which loans for productive
or provident purpose may be granted to its members; and
c. To provide related services to enable its members to maximize
the benefit from such loans.
iv. Consumers Cooperative is one of the primary purpose of which is to procure
and distribute commodities to members and non-members;
v. Producers Cooperative is one that undertakes joint production whether
agricultural or industrial. It is formed and operated by its members to undertake
the production and processing of raw materials or goods produced by its
members into finished or processed products for sale by the cooperative to its
members and non-members. Any end product or its derivative arising from the
raw materials produced by its members, sold in the name and for the account of
the cooperative, shall be deemed a product of the cooperative and its members;
vi. Marketing Cooperative is one which engages in the supply of production
inputs to members and markets their products;
vii. Multipurpose Cooperative is one which combines two (2) or more of the
business activities of these different types of cooperatives;
viii. Advocacy Cooperative is a primary cooperative which promotes and advocates
cooperativism among its members and the public through socially-oriented
projects, education and training, research and communication, and other similar
activities to reach out to its intended beneficiaries;
ix. Agrarian Reform Cooperative is one organized by marginal farmers majority
of which are agrarian reform beneficiaries for the purpose of developing an
appropriate system of land tenure, land development, land consolidation or land
management in areas covered by agrarian reform;
x. Cooperative Bank is one organized for the primary purpose of providing a wide
range of financial services to cooperatives and their members;
xi. Dairy Cooperative is one whose members are engaged in the production of
fresh milk which may be processed and/or marketed as dairy products;
xii. Education Cooperative is one organized for the primary purpose of owning
and operating licensed educational institutions notwithstanding the provisions of
Republic Act No. 9155, otherwise known as the Governance of Basic Education
Act of 2001;
xiii. Electric Cooperative is one organized for the primary purposed of undertaking
power generations, utilizing renewable energy sources, including hybrid systems,
acquisition and operation of subtransmission or distribution to its household
members;
xiv. Financial Service Cooperative is one organized for the primary purpose of
engaging in savings and credit services and other financial services;
1. Services of Financial Service Cooperative
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a. The functions of credit cooperatives and other cooperatives,

including multipurpose cooperatives, that provide savings and
credit to their members, and"
b. Other financial services subject to regulation by the BSP.
xv. Fishermen Cooperative is one organized by marginalized fishermen in
localities whose products are marketed either as fresh or processed products;
xvi. Health Services Cooperative is one organized for the primary purpose of
providing medical, dental and other health services;
xvii. Housing Cooperative is one organized to assist or provide access to housing
for the benefit of its regular members who actively participate in the savings
program for housing. It is co-owned and controlled by its members;
xviii. Insurance Cooperative is one engaged in the business of insuring life and
poverty of cooperatives and their members;
xix. Transport Cooperative is one which includes land and sea transportation,
limited to small vessels, as defined or classified under the Philippine maritime
laws, organized under the provisions of this Code;
xx. Water Service Cooperative is one organized to own, operate and manage
waters systems for the provision and distribution of potable water for its
members and their households;
xxi. Workers Cooperative is one organized by workers, including the self-
employed, who are at same time the members and owners of the enterprise. Its
principal purpose is to provide employment and business opportunities to its
members and manage it in accordance with cooperative principles
xxii. Laboratory Cooperative - shall refer to a cooperative duly recognized by the
Authority, formed and managed principally by minors and is affiliated with
another registered cooperative which is called the guardian cooperative. Fifteen
(15) or more minors who are Filipino citizens, actually residing in the community
or enrolled in an educational institution within or near the area of operation of
the Guardian Cooperative or out of school minor actually residing in the
community, may organize a Laboratory Cooperative composed of minors, which
shall be seven (7) years old but below eighteen (18) years of age. Purposes of
Laboratory Cooperatives. A Laboratory Cooperative shall be organized
for any or all of the following purposes:
1. To serve as a training ground for its members to prepare them for
membership in regular cooperatives;
2. To teach the value of thrift and saving mobilization among its members;
3. To instil cooperative values, principles, financial discipline and leadership
skills among its members;
4. To promote and advance Filipino social and cultural values, ecological
awareness and sustainable development.
xxiii. Guardian Cooperative - shall refer to duly registered cooperative to which a
laboratory cooperative is affiliated with.
xxiv. Primary Cooperative – The members of which are natural persons.
xxv. Secondary Cooperative – The members of which are primary cooperatives.
xxvi. Tertiary Cooperative – The members of which are secondary cooperatives.
f. Functions of a Federation of Cooperatives (Organization of Cooperatives) – A

federation of cooperatives shall undertake the following functions:
i. To carry on any cooperative enterprise authorized under Article 6 of Cooperative
Code that complements augments, or supplements but does not conflict,
compete with, nor supplant the business or economic activities of its member
cooperatives;
ii. To carry on, encourage, and assist educational and advisory work relating to its
member cooperatives;
iii. To render services designed to encourage simplicity, efficiency, and economy in
the conduct of the business of its member cooperatives and to facilitate the
implementation of their bookkeeping, accounting, and other systems and
procedures;
iv. To print, publish, and circulate any newspaper or other publication in the interest
of its member cooperatives and enterprises;
v. To coordinate and facilitate the activities of its member cooperatives;
vi. To enter into joint ventures with national or international cooperatives of other
countries in the manufacture and sale of products and/or services in the
Philippines and abroad; and
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vii. To perform such other functions as may be necessary to attain its objectives.
1. A federation of cooperatives may be registered by carrying out the
formalities for registration of a cooperative.
2. Registered cooperatives may organize a federation according to the type
of business activity engaged in by the cooperatives.
g. Purposes of Cooperative Unions (Organization of cooperatives and federations

of cooperatives) – Registered cooperatives and federations at the appropriate levels
may organize or join cooperative unions to represent the interest and welfare of all types
of cooperatives at the provincial, city, regional, and national levels. Cooperative unions
may have the following purposes:
i. To represent its member organizations;
ii. To acquire, analyze, and disseminate, economic, statistical, and other
information relating to its members and to all types of cooperatives within its
area of operation;
iii. To sponsor studies in the economic, legal, financial, social and other phases of
cooperation, and publish the results thereof;
iv. To promote the knowledge of cooperative principles and practices;
v. To develop the cooperative movement in their respective jurisdictions;
vi. To advise the appropriate authorities on all questions relating to cooperatives;
vii. To raise funds through membership fees, dues and contributions, donations, and
subsidies from local and foreign sources whether private or government; and
viii. To do and perform such other non-business activities as may be necessary to
attain the foregoing objectives.
1. Cooperative unions may assist the national and local governments in the
latter’s development activities in their respective jurisdictions.
h. Cooperatives Not in Restraint of Trade. – No cooperative or method or act thereof

which complies with this Code shall be deemed a conspiracy or combination in restraint
of trade or an illegal monopoly, or an attempt to lessen competition or fix prices
arbitrarily in violation of any laws of the Philippines.
i. Organization of Primary Cooperative

i. Ordinary Cooperative - Fifteen (15) or more natural persons who are Filipino
citizens, of legal age, having a common bond of interest and are actually residing
or working in the intended area of operation, may organize a primary
cooperative under this Code: Provided, That a prospective member of a primary
cooperative must have completed a Pre-Membership Education Seminar (PMES).
ii. Any newly organized primary cooperative may be registered as multipurpose
cooperative only after compliance with the minimum requirements for
multipurpose cooperatives to be set by the Authority. A single-purpose
cooperative may transform into a multipurpose or may create subsidiaries only
after at least two (2) years of operations.
iii. Voting Requirement for Registration of Electric Cooperative. – In
compliance with the referendum as a voting procedure, the required number of
votes for registration of electric cooperative with the CDA shall be twenty percent
(20%) of all members in good standing
j. Economic Survey before Formation of a Proposed Cooperative - Every group of

individuals or cooperatives intending to form a cooperative under Cooperative Code shall
submit to the Cooperative Development Authority a general statement describing, among
others the structure and purposes of the proposed cooperative: Provided, That the
structure and actual staffing pattern of the cooperative shall include a bookkeeper;
Provided, further, That they shall not be allowed to operate without the necessary
personnel and shall also submit an economic survey, indicating therein the area of
operation, the size of membership, and other pertinent data in a format provided by the
Cooperative Development Authority.
k. Liability of Cooperative duly registered under this Code - A cooperative duly

registered under this Code shall have limited liability.
l. Term of Cooperative - A cooperative shall exist for a period not exceeding fifty (50)
years from the date of registration unless sooner dissolve or unless said period is
extended. The cooperative term, as originally stated in the articles of cooperation, may
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be extended for periods not exceeding fifty (50) years in any single instance by an
amendment of the articles of cooperation, in accordance with this Code: Provided, That
no extension can be made earlier than five (5) years prior to the original or subsequent
expiry date/dates unless there are justifiable reasons for an earlier extension as may be
determined by the Authority.
m. Articles of Cooperation - All cooperatives applying for registration shall file with the
CDA the articles of cooperation which shall be signed by each of the organizers and
acknowledged by them if natural persons, and by the chairpersons or secretaries, if
juridical persons, before a notary public. Each cooperative to be registered under this
Code shall adopt bylaws not inconsistent with the provisions of this Code. The bylaws
shall be filed at the same time as the articles of cooperation.
i. Contents of Articles of Cooperation

1. The name of the cooperative which shall include the word cooperative;
2. The purpose or purposes and scope of business for which the
cooperative is to be registered;
3. The term of existence of the cooperative;
4. The area of operation and the postal addresses of its principal office;
5. The names, nationality, and the postal addresses of the registrants;
6. The common bond of membership;
7. The list of names of the directors who shall manage the cooperative; and
8. The amount of its share capital, the names and residences of its
contributors and a statement of whether the cooperative is primary,
secondary or tertiary in accordance with Article 23 hereof.
Note: The articles of cooperation may also contain any other provisions not
inconsistent with this Code or any related law.
ii. Contents of Cooperative By-Laws - Each cooperative to be registered under

this Code shall adopt bylaws not inconsistent with the provisions of Cooperative
Code. The bylaws shall be filed at the same time as the articles of cooperation.
1. The qualifications for admission to membership and the payment to be
made or interest to be acquired as a conditions for the exercise of the
right of membership;
2. The rights and liabilities of membership;
3. The circumstances under which membership is acquired, maintained and
lost;
4. The procedure to be followed in cases of termination of membership;
5. The conditions under which the transfer of a share or interest of the
members shall be permitted;
6. The rules and procedures on the agenda, time, place and manner of
calling, convening, conducting meetings, quorum requirements, voting
systems, and other matters relative to the business affairs of the general
assembly, board of directors, and committees;
7. The general conduct of the affairs of the cooperative, including the
powers and duties of the general assembly, the board of directors,
committees and the officers, and their qualifications and
disqualifications;
8. The manner in which the capital, may be raised and the purposes for
which it can be utilized;
9. The mode of custody and of investment of net surplus;
10. The accounting and auditing systems;
11. The manner of loaning and borrowing including the limitations thereof;
12. The method of distribution of net surplus;
13. The manner of adopting, amending, repealing, and abrogating bylaws;
14. A conciliation or mediation mechanism for the amicable settlement of
disputes among members, directors, officers and committee members of
the cooperative; and
15. Other matters incident to the purposes and activities of the cooperative.
iii. Requirement for Registration with CDA

1. No cooperative, other than a cooperative union as described under
Article 25 hereof, shall be registered unless the articles of cooperation is
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accompanied with the bonds of the accountable officers and a sworn

statements of the treasurer elected by the subscribers showing that at
least twenty-five per centum (25%) of the authorized share capital has
been subscribed and at least twenty-five per centum (25%) of the total
subscription has been paid: Provided, That in no case shall the paid-up
share capital be less than Fifteen thousand pesos (P15,000.00).
2. The Cooperative Development Authority shall periodically assess the
required paid-up share capital and may increase it every five (5) years
when necessary upon consultation with the cooperative sector and the
National Economic and Development Authority (NEDA).
n. Juridical Personality of Cooperative - A cooperative formed and organized under

Cooperative Code acquires juridical personality from the date the CDA issues a certificate
of registration under its official seal. All applications for registration shall be finally
disposed of by the CDA within a period of sixty (60) days from the filing thereof,
otherwise the application is deemed approved, unless the cause of the delay is
attributable to the applicant: Provided, That in case of a denial of the application for
registration, an appeal shall lie with the Office of the President within ninety (90) days
from receipt of notice of such denial: Provided, further, That failure of the Office of the
President to act on the appeal within ninety (90) days from the filing thereof shall mean
approval of said application.
o. Evidence of juridical personality of cooperative A certificate of registration issued

by the CDA under its official seal shall be conclusive evidence that the cooperative
therein mentioned is duly registered unless it is proved that the registration thereof has
been cancelled.
p. Amendment of Articles of Cooperation and By-laws - Unless otherwise prescribed

by this Code and for legitimate purposes, any provision or matter stated in the articles of
cooperation and by laws may be amended by two-thirds (2/3) vote of all the members
with voting rights, without prejudice to the right of the dissenting members to exercise
their right to withdraw their membership under Article 30. The amendments shall take
effect upon (1) its approval by the CDA or (2) within thirty (30) days from the date of
filing thereof if not acted upon by the Authority for a cause not attributable to the
cooperative
q. Types of Membership in cooperatives

i. A regular member is one who has complied with all the membership
requirements and entitled to all the rights and privileges of membership.
ii. An associate member is one who has no right to vote nor be voted upon and
shall be entitled only to such rights and privileges as the bylaws may
provide: Provided, That an associate who meets the minimum requirements of
regular membership, continues to patronize the cooperative for two (2) years,
and signifies his/her intention to remain a member shall be considered a regular
member.
r. Liability of Members - A member shall be liable for the debts of the cooperative to the
extent of his contribution to the share capital of the cooperative.
s. Termination of Membership
i. A member of a cooperative may, for any valid reason, withdraw his membership
from the cooperative by giving a sixty (60) day notice to the board of directors.
Subject to the bylaws of the cooperative, the withdrawing member shall be
entitled to a refund of his share capital contribution and all other interests in the
cooperative: Provided, That such fund shall not be made if upon such payment
the value of the assets of the cooperative would be less than the aggregate
amount of its debts and liabilities exclusive of his share capital contribution.
ii. The death or insanity of a member in a primary cooperative, and the insolvency
or dissolution of a member in a secondary or tertiary cooperative may be
considered valid grounds for termination of membership: Provided, That in case
of death or insanity of an agrarian reform beneficiary-member of a cooperative,
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the next-of-kin may assume the duties and responsibilities of the original
member
iii. Required Vote for Termination of Membership in a Cooperative -

Membership in the cooperative may be terminated by a vote of the majority of all
the members of the board of directors for causes provided by law.
iv. Grounds for Membership Termination in a Cooperative
1. When a member has not patronized any of the services of the

cooperative for an unreasonable period of time as may be previously
determined by the board of directors;
2. When a member has continuously failed to comply with his obligations;
3. When a member has acted in violation of the bylaws and the rules of the
cooperative; and
4. For any act or omission injurious or prejudicial to the interest or the
welfare of the cooperative.
v. Procedures for Termination of Membership in a Cooperative - Member

whose membership the board of directors may wish to terminate shall be
informed of such intended action in writing and shall be given an opportunity to
be heard before the said board makes its decision. The decision of the board
shall be in writing and shall be communicated in person or by registered mail to
said member and shall be appealable within thirty (30) days from receipt thereof
to the general assembly whose decision shall be final. The general assembly may
create an appeal and grievance committee whose members shall serve for a
period of one (1) year and shall decide appeals on membership termination. The
committee is given thirty (30) days from receipt thereof to decide on the appeal.
Failure to decide within the prescribed period, the appeal is deemed approved in
favor of the member. Pending a decision by the general assembly, the
membership remains in force.
t. Refund of Interests. – All sums computed in accordance with the bylaws to be due
from a cooperative to a former member shall be paid to him either by the cooperative or
by the approved transferee, as the case may be, in accordance with Cooperative Code.
u. Administration of Cooperative
i. Composition of the General Assembly – The general assembly shall be

composed of such members who are entitled to vote under the articles of
cooperation and bylaws of the cooperative.
ii. Power and Definition of the General Assembly – The general assembly
shall be the highest policy-making body of the cooperative and shall exercise
such powers as are stated in this Code, in the articles of cooperation and in the
bylaws of the cooperative.
iii. Nondelegable Powers of General Assembly

1. To determine and approve amendments to the articles of cooperation
and bylaws;
2. To elect or appoint the members of the board of directors, and to
remove them for cause. However, in the case of the electric cooperatives
registered under this Code, election of the members of the board shall
be held in accordance with its bylaws or election guideline of such
electric cooperative; and
3. To approve developmental plans of the cooperative.
iv. Procedure and Required Vote for Delegation of Powers of General

Assembly to Board of Directors or Smaller Body of the Cooperative -
Subject to such other provisions of this Code and only for purposes of prompt
and intelligent decision-making, the general assembly may by a three-fourths
(3/4) vote of all its members with voting rights, present and constituting a
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quorum, delegate some of its powers to a smaller body of the cooperative. These
powers shall be enumerated under the bylaws of the cooperative.
v. Cooperative Meetings. – A regular meeting shall be held annually by the

general assembly on a date fixed in the bylaws, or if not so fixed, on any dated
within ninety (90) days after the close of each fiscal year: Provided, That notice
of regular meetings shall be sent in writing, by posting or publication, or through
other electronic means to all members of record.
1. Whenever necessary, a special meeting of the general assembly may be
called at any time by a majority vote of the board of directors or as
provided for in the bylaws: Provided, That a notice in writing shall be
sent one (1) week prior to the meeting to all members who are entitled
to vote. However, a special meeting shall be called by the board of
directors after compliance with the required notice within from at least
ten per centum (10%) of the total members who re entitled to vote to
transact specific business covered by the call.
2. If the board fails to call a regular or a special meeting within the given
period, the Authority, upon petition of ten per centum (10%) of all the
members of the cooperative who are entitled to vote, and for good
cause shown, shall issue an order to the petitioners directing them to call
a meeting of the general assembly by giving proper notice as required in
this Code or in the bylaws;
3. In the case of a newly approved cooperative, a special general assembly
shall be called, as far as practicable, within ninety (90) days from such
approval;
4. The Authority may call a special meeting of the cooperative for the
purpose of reporting to the members the result of any examination or
other investigation of the cooperative affairs; and
5. Notice of any meeting may be waived, expressly or impliedly, by any
member.
vi. Quorum in General Assembly of Cooperative
1. Ordinary Cooperative - A quorum shall consist of at least twenty-five

per centum (25%) of all the members entitled to vote.
2. Electric cooperatives registered under this Code - A quorum, unless
otherwise provided in the bylaws, shall consist of five per centum (5%)
of all the members entitled to vote.
3. Cooperative Bank - As a general rule, the quorum in the regular or
special meeting of general assembly is at least one half plus one of the
number of voting shares of all the members in good standing. However,
as an exception to general rule, the quorum in the meeting of general
assembly of a cooperative bank for the amendment of its articles of
cooperation or by-laws is at least 3/4 of all members with voting rights
present and constituting a quorum.
vii. Voting System. – Each member of a primary cooperative shall have only one
(1) vote. In the case of members of secondary or tertiary cooperatives, they shall
have one (1) basic vote and as many incentive votes as provided for in the
bylaws but not exceed five (5) votes. The votes cast by the delegates shall be
deemed as votes cast by the members thereof.
1. However, the bylaws of a cooperative other than a primary may provide
for voting by proxy. Voting by proxy means allowing a delegate of a
cooperative to represent or vote in behalf of another delegate of the
same cooperative.
viii. Composition and Term of the Board of Directors. – Unless otherwise

provided in the bylaws, the direction and management of the affairs of a
cooperative shall be vested in a board of directors which shall be composed of
not less than five (5) nor more than fifteen (15) members elected by the general
assembly for a term of two (2) years and shall hold office until their successors
are duly elected an qualified, or until duly removed for caused.
10 | P a g e RLACO/DSALES/NVALDERRAMA
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ix. Powers of the Board of Directors. – The board of directors shall be

responsible for the strategic planning, direction-setting and policy-formulation
activities of the cooperatives.
x. Directors (Qualifications of Directors in a Cooperative)
1. Any member of a cooperative who under the bylaws of the cooperative,

has the right to vote and who possesses all the qualifications and none
of the disqualifications provided in the laws or bylaws shall be eligible for
election as director.
2. The cooperative may, by resolution of its board of directors, admit as
directors, or committee member one appointed by any financing
institution from which the cooperative received financial assistance solely
to provide technical knowledge not available within its membership. Such
director or committee member not be a member of the cooperative and
shall have no powers, rights, nor responsibilities except to provided
technical assistance as required by the cooperative.
3. The members of the board of directors shall not hold any other position
directly involved in the day to day operation and management of the
cooperative.
a. Note: The members of the board of directors may hold the
position of chairman and vice-chairman of the board but are not
allowed to hold other official positions which shall be given to
persons outside the board.
4. Any person engaged in a business similar to that of the cooperative or
who in any way has a conflict of interest with it, is disqualified from
election as a director of said cooperative.
xi. Meeting of the Cooperative Board and Quorum Requirement
1. In the case of primary cooperatives, regular meetings of the board of

directors shall be held at least once a month.
2. Special meetings of the board of directors may be held at any time upon
the call of the chairperson or a majority of the members of the
board: Provided, That written notices of the meeting specifying the
agenda of the special meeting shall be given to all members of the board
at least one (1) week before the said meeting.
3. Directors cannot attend or vote by proxy at board meetings.
xii. Quorum in Board of Directors of Cooperative
1. Ordinary Cooperative - At least majority of the members of the Board

unless the bylaws provide otherwise.
2. Cooperative Bank - One-half plus one of all the members of the board of
directors.
xiii. Vacancy in the Board of Directors. – Any vacancy in the board of directors,
other than by expiration of term, may be filled by the vote of at least a majority
of the remaining directors, if still constituting a quorum; otherwise, the vacancy
must be filled by the general assembly in a regular or special meeting called for
the purpose. A director so elected to fill a vacancy shall serve only the unexpired
term of his predecessor in office.
xiv. Officers of the Cooperative. – The board of directors shall elect from among
themselves the chairperson and vice-chairperson, and elect or appoint other
officers of the cooperative from outside of the board in accordance with their
bylaws. All officers shall serve during good behavior and shall not be removed
except for cause after due hearing. Loss of confidence shall not be a valid
ground for removal unless evidenced by acts or omission causing loss of
confidence in the honesty and integrity of such officer. No two (2) or more
persons with relationships up to the third civil degree of consanguinity or affinity
nor shall any person engaged in a business similar to that of the cooperative nor
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who in any other manner has interests in conflict with the cooperative shall serve
as an appointive officer.
xv. Committees of Cooperatives
1. The bylaws may create an executive committee to be appointed by the

board of directors with such powers and duties as may be delegated to it
in the bylaws or by a majority vote of all the members of the board of
directors.
2. The bylaws shall provide for the creation of an audit, election, mediation
and conciliation, ethics, and such other committees as may be necessary
for the conduct of the affairs of the cooperative. The members of both
the audit and election committee shall be elected by the general
assembly and the rest shall be appointed by the board. The audit
committee shall be directly accountable and responsible to the general
assembly. It shall have the power and duty to continuously monitor the
adequacy and effectiveness of the cooperative’s management control
system and audit the performance of the cooperative and its various
responsibility centers.
3. Unless otherwise provided in the bylaws, the board, in case of a vacancy
in the committees, may call an election to fill the vacancy or appoint a
person to fill the same subject to the provision that the person elected or
appointed shall serve only for the unexpired portion of the term.
xvi. Functions, Responsibilities and Training Requirements of Directors,

Officers and Committee Members. – the functions and responsibilities of
directors, officers and committee members, as well as their training
requirements, shall be in accordance with the rules and regulations issued by the
Authority.
xvii. Liability of Directors, Officers and Committee Members. – Directors,

officers and committee members, who are willfully and knowingly vote for or
assent to patently unlawful acts or who are guilty of gross negligence or bad
faith in directing the affairs of the cooperative or acquire any personal or
pecuniary interest in conflict with their duty as such directors, officers or
committee members shall be liable jointly and severally for all damages or profits
resulting therefrom to the cooperative, members, and other persons.
1. When a director, officer or committee member attempts to acquire or
acquires, in violation of his duty, any interest or equity adverse to the
cooperative in respect to any matter which has been reposed in him in
confidence, he shall, as a trustee for the cooperative, be liable for
damages and shall be accountable for double the profits which otherwise
would have accrued to the cooperative.
xviii. Compensation of Directors of Cooperative
1. In the absence of any provisions in the bylaws fixing their compensation,

the directors shall not receive any compensation except for
reasonable per diems: Provided however, That the directors and officers
shall not be entitled to any per diem when, in the preceding calendar
year, the cooperative reported a net loss or had a dividend rate less than
the official inflation rate for the same year. Any compensation other
than per diems may be granted to directors by a majority vote of the
members with voting rights at a regular or special general assembly
meeting specifically called for the purpose: Provided, that no additional
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compensation other than per diems shall be paid during the first year of
existence of any cooperative.
2. The compensation of officers of the cooperative as well as the members
of the committee as well as the members of the committees created
pursuant to this Code or its bylaws may be fixed in the bylaws.
3. Unless already fixed in the bylaws, the compensation of all other
employee shall be determined by the board of directors.
xix. Dealings of Directors, Officers, or Committee Members – A contract

entered into by the cooperative with one (1) or more of its directors, officers,
and committee members is voidable, at the option of the cooperative, unless all
the following conditions are present.
1. That the presence of such director in the board meeting wherein
contract was approved was not necessary to constitute a quorum for
such meeting;
2. That the vote of such director was not necessary for the approval of the
contract;
3. That the contract is fair and reasonable under the circumstances; and
4. That in the case of an officer or committee member, the contract with
the officer or committee member has been previously authorized by the
general assembly or by the board of directors.
5. Where any of the first two conditions set forth in the preceding
paragraph is absent, in the case of a contract with a director, such
contract may be ratified by a three-fourths (3/4) vote of all the members
with voting rights, present and constituting a quorum in a meeting called
for the purpose: Provided, That full disclosure of the adverse interest of
the directors involved is made at such meeting, and that the contract is
fair and reasonable under the circumstances.
xx. Disloyalty of a Director. – A director who, by virtue of his office, acquires for
himself an opportunity which should belong to the cooperative shall be liable for
damages and must account for double the profits that otherwise would have
accrued to the cooperative by refunding the same, unless his act has been
ratified by a three-fourths (3/4) vote of all the members with voting rights,
present and constituting a quorum. This provision shall be applicable,
notwithstanding the fact that the director used his own funds in the venture.
xxi. Illegal Use of Confidential Information. – A director or officer, or an

associate of a director or officer, who, for his benefit or advantage or that of an
associate, makes use of confidential information that, if generally known, might
reasonably be expected to adversely affect the operation and viability of the
cooperative, shall be held:
1. Liable to compensate the cooperative for the direct losses suffered by
the cooperative as a result of the illegal use of information; and
2. Accountable to the cooperative for any direct benefit or advantage
received or yet to be received by him or his associate, as a result of the
transaction.
3. The cooperative shall take the necessary steps to enforce the liabilities
described in subsection (a)
xxii. Removal of Elected Officer or Director. – All complaints for the removal of
any elected officer shall be filed with the board of directors. Such officer shall be
given the opportunity to be heard. Majority of the board of directors may place
the officer concerned under preventive suspension pending the resolution of the
investigation. Upon finding of a prima facie evidence of guilt, the board shall
present its recommendation for removal to the general assembly.
1. An elective officer may be removed by three fourths (3/4) votes of the
regular members present and constituting a quorum, in a regular or
special general assembly meeting called for the purpose. The officer
concerned shall be given an opportunity to be heard at said assembly.
v. Privileges of Cooperative from Taxes
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i. Tax Treatment of Cooperative. - Duly registered cooperatives under this

Code which do not transact any business with non-members or the general
public shall not be subject to any taxes and fees imposed under the internal
revenue laws and other tax laws. Cooperatives not falling under this article shall
be governed by the succeeding section.
ii. Tax and Other Exemptions. Cooperatives transacting business with both
members and non-members shall not be subjected to tax on their transactions
with members. In relation to this, the transactions of members with the
cooperative shall not be subject to any taxes and fees, including not limited to
final taxes on members’ deposits and documentary tax. Notwithstanding the
provisions of any law or regulation to the contrary, such cooperatives dealing
with nonmembers shall enjoy the following tax exemptions:
1. Cooperatives with accumulated reserves and undivided net savings of

not more than Ten million pesos (P10,000,000.00) shall be exempt from
all national, city, provincial, municipal or barangay taxes of whatever
name and nature. Such cooperatives shall be exempt from customs
duties, advance sales or compensating taxes on their importation of
machineries, equipment and spare parts used by them and which are not
available locally a certified by the department of trade and industry
(DTI). All tax free importations shall not be sold nor the beneficial
ownership thereof be transferred to any person until after five (5) years,
otherwise, the cooperative and the transferee or assignee shall be
solidarily liable to pay twice the amount of the imposed tax and / or
duties.
2. Cooperatives with accumulated reserves and divided net savings of more

than Ten million pesos (P10,000,000.00) shall pay the following taxes at
the full rate:
a. Income Tax - On the amount allocated for interest on capitals:
Provided, That the same tax is not consequently imposed on
interest individually received by members: Provided, further,
That cooperatives regardless of classification, are exempt income
tax from the date of registration with the Authority;
b. Value-Added Tax – On transactions with non-

members: Provided, however, That cooperatives duly registered
with the Authority; are exempt from the payment of value-added
tax; subject to Section 109, sub-sections L, M and N of Republic
Act No. 9337, the National Internal Revenue Code, as
amended: Provided, That the exempt transaction under Section
109 (L) shall include sales made by cooperatives duly registered
with the Authority organized and operated by its member to
undertake the production and processing of raw materials or of
goods produced by its members into finished or process
products for sale by the cooperative to its members and non-
members: Provided, further, That any processed product or its
derivative arising from the raw materials produced by its
members, sold in then name and for the account of the
cooperative: Provided , finally, 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;
c. All other taxes unless otherwise provided herein; and
d. Donations to charitable, research and educational institutions
and reinvestment to socioeconomic projects within the area of
operation of the cooperative may be tax deductible.
3. All cooperatives, regardless of the amount of accumulated reserves and

undivided net savings shall be exempt from payment of local taxes and
taxes on transactions with banks and insurance companies: Provided,
That all sales or services rendered for non-members shall be subject to
the applicable percentage taxes sales made by producers, marketing or
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service cooperatives: Provided further, That nothing in this article shall

preclude the examination of the books of accounts or other accounting
records of the cooperative by duly authorized internal revenue officers
for internal revenue tax purposes only, after previous authorization by
the Authority.
iii. Other Privileges of a Cooperative

1. In areas where there are no available notaries public, the judge,
exercising his ex officio capacity as notary public, shall render service,
free of charge, to any person or group of persons requiring the
administration of oath or the acknowledgment of articles of cooperation
and instruments of loan from cooperatives not exceeding Five Hundred
Thousand Pesos (P500,000.00).
2. Any register of deeds shall accept for registration, free of charge, any
instrument relative to a loan made under this Code which does not
exceed Two Hundred Fifty Thousand Pesos (P250,000.00) or the deeds
of title of any property acquired by the cooperative or any paper or
document drawn in connection with any action brought by the
cooperative or with any court judgment rendered in its favor or any
instrument relative to a bond of any accountable officer of a cooperative
for the faithful performance of his duties and obligations.
3. Cooperatives shall be exempt from the payment of all court and sheriff’s
fees payable to the Philippine Government for and in connection with all
actions brought under this Code, or where such actions is brought by the
Authority before the court, to enforce the payment of obligations
contracted in favor of the cooperative.
4. All cooperatives shall be exempt from putting up a bond for bringing an
appeal against the decision of an inferior court or for seeking to set aside
any third party claim: Provided, That a certification of the Authority
showing that the net assets of the cooperative are in excess of the
amount of the bond required by the court in similar cases shall be
accepted by the court as a sufficient bond.
5. Cooperatives shall enjoy the privilege of depositing their sealed cash
boxes or containers, documents or any valuable papers in the safes of
the municipal or city treasurers and other government offices free of
charge, and the custodian of such articles shall issue a receipt
acknowledging the articles received duly witnessed by another person;
6. Cooperatives organized among government employees, notwithstanding
any law or regulation to the contrary, shall enjoy the free use of any
available space in their agency, whether owned or rented by the
Government;
7. Cooperatives rendering special types of services and facilities such as
cold storage, ice plant, electricity, transportation, and similar services
and facilities shall secure a franchise therefore, and such cooperatives
shall open their membership to all persons qualified in their areas of
operation;
8. In areas where appropriate cooperatives exist, the preferential right to
supply government institutions and agencies rice, corn and other grains,
fish and other marine products, meat, eggs, milk, vegetables, tobacco
and other agricultural commodities produced by their members shall be
granted to the cooperatives concerned;
9. Preferential treatment in the allocation of fertilizers, including seeds and
other agricultural inputs and implements, and in rice distribution shall be
granted to cooperatives by the appropriate government agencies;
10. Preferential and equitable treatment in the allocation or control of
bottomries of commercial shipping vessels in connection with the
shipment of goods and products of cooperatives;
11. Cooperatives and their federations, such as farm and fishery producers
and suppliers, market vendors and such other cooperatives, which have
for their primary purpose the production and/or the marketing of
products from agriculture, fisheries and small entrepreneurial industries
and federations thereof, shall have preferential rights in the
management of public markets and/or lease of public market facilities,
stalls or spaces: Provided, That these rights shall only be utilized
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exclusively by cooperatives: Provided, further, That no cooperative

forming a joint venture, partnership or any other similar arrangement
with a non-cooperative entity can utilize these rights;
12. Cooperatives engaged in credit services and/or federations shall be
entitled to loans credit lines, rediscounting of their loan notes, and other
eligible papers with the Development Bank of the Philippines, the Land
Bank of the Philippines and other financial institutions except the Bangko
Sentral ng Pilipinas (BSP);
13. The Philippine Deposit Insurance Corporation (PDIC) and other
government agencies, government-owned and controlled corporations
and government financial institutions shall provide technical assistance to
registered national federations and unions of cooperatives which have
significant engagement in savings and credit operations in order for
these federations and unions to establish and/or strengthen their own
autonomous cooperative deposit insurance systems;
14. A public transport service cooperative may be entitled to financing
support for the acquisition and/or maintenance of land and sea transport
equipment, facilities and parts through the program of the government
financial institutions. It shall have the preferential right to the
management and operation of public terminals and ports whether land
or sea transport where the cooperative operates and on securing a
franchise for active or potential routes for the public transport;
15. Cooperatives transacting business with the Government of the
Philippines or any of its political subdivisions or any of its agencies or
instrumentalities, including government-owned and controlled
corporations shall be exempt from prequalification bidding requirements
notwithstanding the provisions of Republic Act No.9184, otherwise
known as, the Government Procurement Act;
16. Cooperative shall enjoy the privilege of being represented by the
provincial or city fiscal or the Office of the Solicitor General, free of
charge, except when the adverse party is the Republic of the Philippines;
17. Cooperatives organized by faculty members and employees of
educational institutions shall have the preferential right in the
management of the canteen and other services related to the operation
of the educational institution where they are employed: Provided, That
such services are operated within the premises of the said educational
institution; and
18. The appropriate housing agencies and government financial institutions
shall create a special window for financing housing projects undertaken
by cooperatives, with interest rates and terms equal to, or better than
those given for socialized housing projects. This financing shall be in the
form of blanket loans or long-term wholesale loans to qualified
cooperatives, without need for individual processing.
19. The Authority, in consultation with the appropriate government agencies
and concerned cooperative sector, shall issue rules and regulations on all
matters concerning housing cooperatives.
w. Dissolution of a Cooperative
i. Voluntary Dissolution Where no Creditors are Affected. – If the

dissolution of a cooperative does not prejudice the rights of any creditor having a
claim against it, the dissolution may be affected by a majority vote of the board
of directors, and by a resolution duly adopted by the affirmative vote of at least
three-fourths (3/4) of all the members with voting rights, present and
constituting a quorum at a meeting to be held upon call of the
directors: Provided, That the notice of time, place and object of the meeting shall
be published for three (3) consecutive weeks in a newspaper published in the
place where the principal office of said cooperative is located, or if no newspaper
is published in such place, in a newspaper of general circulation in the
Philippines: Provided, further, That the notice of such meeting is sent to each
member of record either by registered mail or by personal delivery at least thirty
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(30) days prior to said meeting. A copy of the resolution authorizing the
dissolution shall be certified to by a majority of the board of directors and
countersigned by the board secretary. The Authority shall thereupon issue the
certificate of dissolution.
ii. Voluntary Dissolution Where Creditors Are Affected. – Where the

dissolution of a cooperative may prejudice the rights of any creditor, the petition
for dissolution shall be filed with the CDA. The petition shall be signed by a
majority of its board or directors or other officers managing its affairs, verified by
its chairperson or board secretary or one of its directors and shall set forth all
claims and demands against it and that its dissolution was resolved upon by the
affirmative vote of at least three-fourths (3/4) of all the members with voting
rights, present and constituting a quorum at a meeting called for that purpose.
iii. Grounds for Involuntary Dissolution of a Cooperative by order of a

competent court after due hearing
1. Violation of any law, regulation or provisions of its bylaws; or
2. Insolvency.
iv. Grounds for suspension or revocation, after due notice and hearing, of
certificate of registration of a cooperative by Cooperative Development
Authority
1. Having obtained its registration by fraud;
2. Existing for an illegal purpose;
3. Wilful violation, despite notice by the Authority, of the provisions of this
Code or its bylaws;
4. Wilful failure to operate on a cooperative basis; and
5. Failure to meet the required minimum number of members in the
cooperative.
x. Liquidation of Cooperative
i. Every cooperative whose charter expires by its own limitation or whose existence
is terminated by voluntary dissolution or through an appropriate judicial
proceeding shall nevertheless continue to exist for three (3) years after the time
it is dissolved; not to continue the business for which it was established but for
the purpose of prosecuting and defending suits by or against it; settlement and
closure of its affairs; disposition, conveyance and distribution of its properties
and assets.
ii. At any time during the said three (3) years, the cooperative is authorized and
empowered to convey all of its properties to trustees for the benefit of its
members, creditors and other persons in interest. From and after any such
conveyance, all interests which the cooperative had in the properties are
terminated.
iii. A cooperative shall only distribute its assets or properties upon lawful dissolution
and after payment of all its debts and liabilities, except in the case of decrease of
share capital of the cooperative and as otherwise allowed by Cooperative Code.
iv. Upon the winding up of the cooperative affairs, any asset distributable to any
creditor, shareholder or member who is unknown or cannot be found shall be
given to the federation or union to which the cooperative is affiliated with.
v. Upon dissolution and liquidation, subsidies, donations, legacies, grants, aids and
such other assistance from any local or foreign institution whether public or
private given to a cooperative which form part of the donated capital or fund of
the cooperative shall be escheated in favor of the Republic of the Philippines.
y. Merger or Consolidation of Cooperatives and Division of Cooperative
i. Definition of Merger - shall refer to a union of two or more existing

cooperatives belonging to the same category whereby the surviving cooperative,
retaining its identity, absorbs one or more constituent cooperatives.
ii. Definition of Consolidation - shall refer to a union of two or more existing

cooperatives belonging to the same category to a form a new cooperative called
the consolidated cooperative.
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iii. Procedures for Merger or Consolidation of Cooperatives

1. Two (2) or more cooperatives may merge or consolidate into a single
cooperative which shall either be one of the constituent cooperatives or
the consolidated cooperative.
iv. Required vote for merger of cooperatives - No merger or consolidation shall

be valid unless approved by three-fourths (3/4) vote of all the members with
voting rights, present and constituting a quorum of each of the constituent
cooperatives at separate general assembly meetings. The dissenting members
shall have the right to exercise their right to withdraw their membership
pursuant to Article 30.
v. Effects of merger of cooperatives
1. The constituent cooperatives shall become a single cooperative which, in

case of merger, shall be the surviving cooperative, and, in case of
consolidation, shall be the consolidated cooperative;
2. The separate existence of the constituent cooperatives shall cease,
except that of the surviving or the consolidated cooperative;
3. The surviving or the consolidated cooperative shall possess al the assets,
rights, privileges, immunities and franchises of each of the constituent
cooperatives;
4. The surviving or the consolidated cooperative shall possess all the
assets, rights, privileges, immunities and franchises of each of the
constituent cooperatives; and
5. The surviving or the consolidated cooperative shall be responsible for all
the liabilities and obligation of each of the constituent cooperatives in the
same manner as if such surviving or consolidated cooperative had itself
incurred such liabilities or obligations. Any claim, action or proceeding
pending by or against any such constituent cooperatives may be
prosecuted by or against the surviving or consolidated cooperative, as
the case may be. Neither the rights of creditors nor any lien upon the
property of any such constituent cooperatives shall be impaired by such
merger or consolidation.
vi. Division of Cooperatives - Any registered cooperative may, by a resolution

approved by a vote of three-fourths (3/4) of all the members with voting rights,
present and constituting a quorum, resolve to divide itself into the two (2) or
more cooperatives. The procedure for such division shall be prescribed in the
regulations of the Authority: Provided, That all the requirements set forth in this
Code have been complied with by the new cooperatives: Provided, further, That
no division of a cooperative in fraud of creditors shall be valid.
z. Capital, Property, and Funds of Cooperative

i. Sources of Capital of Cooperative
1. Member’s share capital;
a. Common Share Capital shall be issued only to regular
members. Its holders shall be entitled to vote and be voted
under the principle of one-man, one vote principle, and shall
receive interest, the rate which should not exceeded the normal
rate on investment.
b. Preferred Share Capital may be issued to regular and
associate members. Issuance and limitation on Preferred
Share Capital shall be prescribed in the By-laws of the
cooperative. However, associate Members shall not be eligible to
vote nor be voted on account of such shareholdings but shall be
entitled to, among others the following:
i. Preference in the payment of interest as provided for in
the Bylaws of the cooperative; and
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ii. In case of liquidation, priority in the distribution on

Preferred Share Capital shall be prescribed in the By-
laws of the cooperative.
2. Loans and barrowings including deposits;
3. Revolving capital which consists of the deferred payment of patronage
refunds, or interest on share capital. Revolving Capital - shall refer to
the amount available out of the deferred payment of the patronage
refund and interest on share capital of the members or by authorized
deduction of a percentage from the product sold or per unit of product
handled by the cooperative. The Board of Director shall issue revolving
capital certificates with serial number, name, amount, and rate of
interest to be paid and shall distinctly set forth the time of retirement of
such certificates and the amounts to be returned.; and
4. Subsidies, donations, legacies, grants, aids and such other assistance
from any local or foreign institution whether public or private: Provided,
That capital coming from such subsides, donations, legacies, grants, aids
and other assistance shall not be divided into individual share capital
holdings at any time but shall instead form part of the donated capital or
fund of the cooperative. Upon dissolution, such donated capital shall be
subject to escheat or forfeiture in favor of the government of the
Republic of the Philippines.
ii. Maximum limitation on Share on Share Capital Holdings of a member -

No member of primary cooperative other than cooperative itself shall own or
hold more than ten per centum (10%) of the share capital of the cooperative. .
The share capital contribution of the members shall be considered as equity.
Provided, that it shall not be withdrawn and should not be used in offsetting
obligations whether past due or current while the membership subsists.
iii. Maximum limit on the amount of “par value” of share of a cooperative

1. The term "share" refers to a unit of capital in a primary cooperative the
par value of which may be fixed to any figure not more than One
thousand pesos (P1,000.00).
iv. Interest on Share Capital. Interest on Share Capital shall not exceed the Rate
of Return on Investment. Unless otherwise provided for in the By-laws of the
cooperative, share capital shall earn interest; the Rate of Interest shall be
computed as follows:
Rate of Interest = X (Net Surplus less Statutory Reserves)/Total Average
Share Month Where: X shall be a percentage to be determined by the Board of
Directors allocated for interest on share capital.
1. Required vote for allocation of interest on share capital -
No allocation of interest on share capital shall be made without
the approval of the Board of Directors which may increase or
decrease any or both. The required vote for allocation of interest
on share capital is at least majority of all members of the board
of directors present and constituting a quorum.
2. Requirement vote for deferment of payment of interest
on share capital - Payment of interest, unless otherwise
provided for in the By-laws, must be made on such date as may
be determined by the Board of Directors. The
General/Representative Assembly may defer the payment of
such interest including Patronage Refund to raise Revolving
Capital. No cumulative interest shall be allowed for any kind or
class of share issued by the cooperative. Share Capital shall
receive a strictly limited Rate of Interest. The required vote for
determent of payment of interest on share capital is at least
majority of all members of General Assembly present and
constituting a quorum but only upon the recommendation of the
Board of Directors with a required vote of at least majority of all
members of the board of directors present and constituting a
quorum.
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v. Fines on unpaid subscribed share capital in a cooperative - The bylaws of

a cooperative may prescribe a fine on unpaid subscribed share capital. Provided,
that such fine is fair and reasonable under the circumstances.
vi. Assignment of Share Capital Contribution or Interest in a cooperative -

Subject to the provisions of Cooperative Code, no member shall transfer his
shares or interest in the cooperative or any part thereof unless: (Essential
requisites before a member may assign his share capital or interest in a
cooperative to another person)
1. He has held such share capital contribution or interest for not less than
one (1) year.
2. The assignment is made to the cooperative or to a member of the
cooperative or to a person who falls within the field of the membership
of the cooperative; and
3. The board of directors has approved such assignment.
vii. Capital Build-up of a cooperative - The by-laws of every cooperative shall

provide for a reasonable and realistic member capital build-up program to allow
the continuing growth of the members’ investment in their cooperative as their
economic conditions continue to improve.
viii. Revolving Capital of a cooperative - The general assembly of any

cooperative may authorize the board of directors to raise a revolving capital to
strengthen its capital structure by deferring the payment of patronage refunds
and interest on share capital or by the authorized deduction of a percentage
from the proceeds of products sold or services rendered, or per unit of product
or services handled. The board of directors shall issue revolving capital
certificates with serial number, name, amount, and rate of interest to be paid
and shall distinctly set forth the time of retirement of such certificates and the
amounts to be returned.
ix. Investment of Capital by a Cooperative - A cooperative may invest its

capital in any of the following:
1. In shares or debentures or securities of any other cooperative;
2. In any reputable bank in the locality, or any cooperative;
3. In securities issued or guaranteed by the Government;
4. In real state primarily for the use of the cooperative or its members; or
5. In any other manner authorized in the bylaws.
x. Annual Audit. – Cooperatives registered under this Code shall be subject to an

annual financial, performance and social audit.
1. The financial audit shall be conducted by an external auditor who
satisfies all the following qualifications:
a. He is independent of the cooperative or any of its subsidiary that
he is auditing; and
b. He is a member in good standing of the Philippine Institute of
Certified Public Accountants (PICPA) and is accredited by both
the Board and Accountancy and the Authority.
2. The social audit shall be conducted by an independent social auditor
accredited by the Authority.
3. Performance and social audit reports which contain the findings and
recommendations of the auditor shall be submitted to the board of
directors.
4. Audit Report. – The auditor shall submit to the board of directors and to
the audit committee the financial audit report which shall be in
accordance with the generally accepted auditing standards for
cooperatives as jointly promulgated by the Philippine Institute of
Certified Public Accountants (PICPA) and the Authority. "Thereafter, the
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board of directors shall present the complete audit report to the general
assembly in its next meeting.
xi. Member’s Right to Examine - A member shall have the right to examine the
records required to be kept by the cooperative under Article 52 of this Code
during reasonable hours on business days and he may demand, in writing, for a
copy of excerpts from said records without charge except the cost of production.
Any officer of the cooperative who shall refuse to allow any member of the
cooperative to examine and copy excerpts from its records shall be liable to such
member for damages and shall be guilty of an offense which shall be punishable
under Article 140 of this Code: Provided, That if such refusal is pursuant to a
resolution or order of the board of directors, the liability under this article shall
be imposed upon the directors who voted for such refusal: Provided, further,
That it shall be a defense to any action under this article that the member
demanding to examine and copy excerpts from the cooperative records has
improperly used any information secured through any prior examination of the
records of such cooperative or was not acting in good faith or for a legitimate
purpose in making his demand.
aa. Capital, Property, and Funds of Cooperative
i. Net Surplus. – Notwithstanding the provisions of existing laws, the net surplus
of cooperatives shall be determined in accordance with its bylaws. Every
cooperative shall determine its net surplus at the close of every fiscal year and at
such other times as may be prescribed by the bylaws. Any provision of law to the
contrary notwithstanding, the net surplus shall not be construed as profit but as
an excess of payments made by the members for the loans borrowed, or the
goods and services availed by them from the cooperative or the difference of the
rightful amount due to the members for their products sold or services rendered
to the cooperative including other inflows of assets resulting from its other
operating activities and which shall be deemed to have been returned to them if
the same is distributed as prescribed herein.
ii. Order of Distribution. – The net surplus of every cooperative shall be

distributed as follows:
1. An amount for the reserve fund which shall be at least ten per
centum (10%) of net surplus: Provided, That, in the first five (5) years of
operation after registration, this amount shall not be less than fifty per
centum (50%) of the net surplus:
a. The reserve fund shall be used for the stability of the
cooperative and to meet net losses in its operations. The general
assembly may decrease the amount allocated to the reserve
fund when the reserve fund already exceeds the share capital.
Any sum recovered on items previously charged to the reserve
fund shall be credited to such fund.
b. The reserve fund shall not be utilized for investment, other than
those allowed in this Code. Such sum of the reserve fund in
excess of the share capital may be used at anytime for any
project that would expand the operations of the cooperative
upon the resolution of the general assembly.
c. Upon the dissolution of the cooperative, the reserve fund shall
not be distributed among the members. The general assembly
may resolves:
i. To establish a usufructuary trust fund for the benefit of
any federation or union to which the cooperative is
affiliated; and
ii. To donate, contribute, or otherwise dispose of the
amount for the benefit of the community where the
cooperative operates. If the members cannot decide
upon the disposal of the reserve fund, the same shall go
to the federation or union to which the cooperative is
affiliated.
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2. An amount for the education and training fund, shall not be more
than ten per centum (10%) of the net surplus. The bylaws may provide
that certain fees or a portion thereof be credited to such fund. The fund
shall provide for the training, development and similar other cooperative
activities geared towards the growth of the cooperative movement:
a. Half of the amounts transferred to the education and training
fund annually under this subsection shall be spent by the
cooperative for education and training purposes; while the other
half may be remitted to a union or federation chosen by the
cooperative or of which it is a member. The said union or
federation shall submit to the Authority and to its contributing
cooperatives the following schedules:
i. List of cooperatives which have remitted their respective
Cooperative Education and Training Funds (CETF);
ii. Business consultancy assistance to include the nature
and cost; and
iii. Other training activities undertaken specifying therein
the nature, participants and cost of each activity.
b. Upon the dissolution of the cooperative, the unexpended balance
of the education and training fund appertaining to the
cooperative shall be credited to the cooperative education and
training fund of the chosen union or federation.
3. An amount for the community development fund, which shall not be

less than three per centum(3%) of the net surplus. The community
development fund shall be used for projects or activities that will benefit
the community where the cooperative operates.
4. An optional fund, a land and building, and any other necessary fund
the total of which shall not exceed seven per centum (7%).
5. The remaining net surplus shall be made available to the members in the
form of interest on share capital not to exceed the normal rate of
return our investments and patronage refunds: Provided, That any
amount remaining after the allowable interest and the patronage refund
have been deducted shall be credited to the reserve fund."The sum
allocated for patronage refunds shall be made available at the same rate
to all patrons of the cooperative in proportion to their individual
patronage: Provided, That:
a. In the case of a member patron with paid-up share capital
contribution, his proportionate amount of patronage refund shall
be paid to him unless he agrees to credit the amount to his
account as additional share capital contribution;
b. In the case of a member patron with unpaid share capital
contribution, his proportionate amount of patronage refund shall
be credited to his account until his account until his share capital
contribution has been fully paid;
c. In the case of a non-member patron, his proportionate amount

of patronage refund shall be set aside in a general fund for such
patrons and shall be allocated to individual non-member patrons
only upon request and presentation of evidence of the amount
of his patronage. The amount so allocated shall be credited to
such patron toward payment of the minimum capital contribution
for membership. When a sum equal to this amount has
accumulated at any time within a period specified in the bylaws,
such patron shall be deemed and become a member of the
cooperative if he so agrees or requests and complies with the
provisions of the bylaws for admission to membership; and
d. If within any period of time specified in the bylaws, any

subscriber who has not fully paid his subscribed share capital or
any non-member patron who has accumulated the sum
necessary for membership but who does not request nor agree
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to become a member or fails to comply with the provisions of

the bylaws for admission to membership, the amount so
accumulated or credited to their account together with any part
of the general fund for nonmember patrons shall be credited to
the reserve fund or to the education and training fund of the
cooperative, at the option of the cooperative."
bb. Responsibilities of a Cooperative
i. Address - Every cooperative shall have an official postal address to which all
notices and communications shall be sent. Such address and every change
thereof shall be registered with the Cooperative Development Authority.
ii. Cooperative Books
1. Every cooperative shall have the following documents ready and

accessible to its members and representatives of the Authority for
inspection during reasonable office hours at its official address:
a. A copy of this Code and all other laws pertaining to
cooperatives;
b. A copy of the regulations of the Authority;
c. A copy of the articles of cooperation and bylaws of the
cooperative;
d. A register of members;
e. The books of the minutes of the meetings of the general
assembly, board of directors and committee;
f. Share books, where applicable;
g. Financial statement; and
h. Such other documents as may be prescribed by laws or the

bylaws.
2. The accountant or the bookkeeper of the cooperative shall be

responsible for the maintenance of the cooperative in accordance with
generally accepted accounting practices. He shall also be responsible for
the production of the same at the time of audit or inspection.
3. The audit committee shall be responsible for the continuous and periodic
review of the books and records of account to ensure that these are in
accordance with generally accepted accounting practices. He shall also
be responsible for the production of the same at the time of audit or
inspection.
4. Each cooperative shall maintain records of accounts such that the true
and correct condition and the results of the operation of the cooperative
may be ascertained therefrom at any time. The financial statements,
audited according to generally accepted auditing standards, principles
and practices, shall be published annually and shall be kept posted in a
conspicuous place in the principal office of the cooperative.
5. Subject to the pertinent provisions of the National Internal Revenue

Code and other laws, a cooperative may dispose by way of burning or
other method of complete destruction any document, record or book
pertaining to its financial and nonfinancial operations which are already
more than five (5) years old except those relating to transactions which
are the subject of civil, criminal and administrative proceedings. An
inventory of the audited documents, records and books to be disposed of
shall be drawn up and certified to by the board secretary and the
chairman of the audit committee and presented to the board of directors
which may thereupon approve the disposition of said records.
iii. Reports of Cooperative
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1. Every cooperative shall draw up regular reports of its program of

activities, including those in pursuance of their socio-civic undertakings,
showing their progress and achievements at the end of every fiscal year.
The reports shall be made accessible to its members, and copies thereof
shall be furnished to all its members or record. These reports shall be
filed with the Cooperative Development Authority within one hundred
twenty (120) days from the end of the calendar year. The form and
contents of the reports shall be as prescribed by the rules of the
Cooperative Development Authority. Failure to file the required reports
shall subject the accountable officer/s to fines and penalties as may be
prescribed by the Cooperative Development Authority, and shall be a
ground for the revocation of authority of the cooperative to operate as
such. The fiscal year of every cooperative shall be the calendar year
except as may be otherwise provided in the bylaws.
2. If a cooperative fails to make, publish and file the reports required

herein, or fails to include therein any matter required by the Cooperative
Code, the Cooperative Development Authority shall, within fifteen (15)
days from the expiration of the prescribed period, send such cooperative
a written notice, stating its non-compliance and the commensurate fines
and penalties that will be imposed until such time that the cooperative
has complied with the requirements.
iv. Register of Member as Prima Facie Evidence - Any register or list of

members shares kept by any registered cooperative shall be prima facie evidence
of the following particulars entered therein:
1. The date on which the name of any person was entered in such register
or list of member; and
2. The date on which any such person ceased to be a member.
v. Probative Value of Certified Copies of Entries
1. A copy of any entry in any book, register or list regularly kept in the
course of business in the possession of a cooperative shall, if duly
certified in accordance with the rules of evidence, be admissible as
evidence of the existence of entry and prima facie evidence of the
matters and transactions therein recorded.
2. No person or a cooperative is possession of the books of such
cooperative shall, in any legal proceedings to which the cooperative is
not a party, be compelled to produce any of the books of the
cooperative, the contents of which can be proved and the matters,
transactions and accounts therein recorded, unless by order of a
competent court.
vi. Bonding of Accountable Officers
1. Every director, officer, and employee handling funds, securities or

property on behalf of any cooperative shall be covered by a surety bond
to be issued for a duly registered insurance or bonding company for the
faithful performance of their respective duties and obligations. The board
of directors shall determine the adequacy of such bonds.
2. Upon the filing of the application for registration of a cooperative, the
bonds of the accountable officers shall be required by the Cooperative
Development Authority. Such bonds shall be renewed manually and the
Cooperative Development Authority shall accordingly be informed of such
renewal.
vii. Preference of Claims
1. Notwithstanding the provisions of existing laws, rules and regulations to

the contrary, but subject to the prior claim of the Cooperative
Development Authority, any debt due to the cooperative from the
member shall constitute a first lien upon any raw materials, production,
inputs, and products produced; or any land, building, facilities,
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equipment, goods or services acquired and held, by such member

through the proceeds of the loan or credit granted by the cooperative to
him for as long as the same is not fully paid.
2. No property or interest on property which is subject to a lien under
paragraph (1) shall be sold nor conveyed to third parties without the
prior permission of the cooperative. The lien upon the property or
interest shall continue to exit even after the sale or conveyance thereof
until such lien has been duly extinguished.
3. Notwithstanding the provisions of any law to the contrary, any sale or
conveyance made in contravention of paragraph (2) hereof shall be void.
viii. Instrument for Salary or Wage Deduction

1. A member of a cooperative may, notwithstanding the provisions of
existing laws to the contrary, execute an instrument in favor of the
cooperative authorizing his employer to deduct from his/her salary or
wages, commutation of leave credits and any other monetary benefits
payable to him by the employer and remit such amount as maybe
specified in satisfaction of a debt or other demand due from the member
to the cooperative.
2. Upon the execution of such instrument and as may be required by the
cooperative contained in a written request, the employer shall make the
deduction in accordance with the agreement and deduction in
accordance with the agreement and remit forthwith the amount so
deducted within ten (10) days after the end of the payroll month to the
cooperative. The employer shall make the deduction for as long as such
debt or other demand remains unpaid by the employee.
3. The term "employer" as used in this article shall include all private firms
and the national and local governments and government-owned or
controlled corporations who have under their employer a member of a
cooperative and have agreed to carry out the terms of the instrument
mentioned in paragraphs (1) and (2) of this article.
4. The provisions of this article shall apply to all similar agreements referred
to in paragraph (1) and were enforced prior to the approval of the
Cooperative Code.
5. Notwithstanding the provisions of existing laws to the contrary, the
responsibilities of the employer as stated in paragraphs (1) and (2) of
this articles shall be mandatory: Provided, That in the case of private
employer, the actual and reasonable cost deducting and remitting maybe
collected.
ix. Primary Lien of a Cooperative - Notwithstanding the provision of any law

with the contrary, a cooperative shall have primary lien upon the capital,
deposits or interest of a member for any debt due to the cooperative from such a
member.
cc. Insolvency of a Cooperative

i. Proceedings Upon Insolvency of a Cooperative - In case a cooperative is
unable to fulfill its obligations to creditors due to insolvency, such cooperative
may apply for such remedies as it may deem fit under the provisions of Act No.
1956, as amended, otherwise known as the Insolvency Law or under FRIA 2010.
Nothing in this Article, however, precludes creditors from seeking protection from
said insolvency law or FRIA 2010.
RULES AND REGULATION IMPLEMENTING CERTAIN PROVISIONS

OF THE PHILIPPINE COOPERATIVE CODE OF 2008
(REPUBLIC ACT NO. 9520)
Pursuant to the provision of Art. 139 of Republic Act No. 952 otherwise known as the Philippine
Cooperative Code of 2008, the Cooperative Development Authority hereby issues the following rules and
regulations implementing certain provisions of the said Code.
TITLES AND DEFINITIONS
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Section 1. Title. These Rules shall be known as the "Rules and Regulations Implementing Certain
Provisions of the Philippine Cooperative Code of 2008."
Section 2. Definition of Terms. For the purpose of these Rules and regulations, the following terms are
defined as follows:
(1) Alternative Dispute Resolution - shall refer to any process or procedure used to resolve a dispute
or controversy, other than by adjudication of a presiding Judge of Court or an officer of a government
agency, in which a neutral third party participates to assist in the resolution of issue, which includes
arbitration, mediation, conciliation, early neutral evaluation, mini trial, or any combination thereof.
(2) Arbitrator - shall refer to the person appointed to render an Award/Decision, alone or with others, in
a dispute that is the subject of an Arbitration Agreement.
(3) Area of Business Operation - shall refer to the principal place of business of a cooperative where
the cooperative conducts its business as provided for in their Articles of Cooperative and By-laws.
(4) Area of Operation - shall refer to the area where the cooperative members come from as provided
for in their Articles of Cooperation and By-laws.
(5) Articles of Cooperation - shall refer to the Articles of Cooperation registered under the Code, with
includes a registered amendment thereto, if applicable.
(6) Associate Member - shall refer to member of a cooperative who has no right to vote or be voted
upon and shall be entitled only to such rights and privileges as the By-laws may provide.
(7) Authority - shall refer to the Cooperative Development Authority (CDA).
(8) Authorized Share Capital - shall refer to the capitalization of the cooperative as prescribed in the
Articles of Cooperation
(9) Award/Decision - shall refer to any partial or final decision by an Arbitrator in resolving the issue in
a controversy.
(10) Board of Liquidators/Trustees - shall refer to the body appointed by the Board of Directors or
elected by the General Assembly that shall cause the liquidation of the cooperative in case of voluntary
dissolution or appointed by the Authority/Court in case of involuntary dissolution of a cooperative.
(11) Bond of Membership - shall refer to the conditions where members associate themselves to attain
their common goals and objectives which may either be residential, occupational, associational, and
institutional.
(12) By-Laws - shall refer to the By-laws registered under the Code which includes any registered
amendments thereto.
(13) Capital - shall refer to the sum total of member's share capital including deposits, revolving capital,
subsidies, donations, legacies, grants, aids, land structures, plants, equipment facilities, machines and
other assets of a cooperative.
(14) Certificate of Merger - shall refer to the document issued by the Authority evidencing registration
of merger.
(15) Code - shall refer to the Republic Acts No. 9520, otherwise known as the Philippine Cooperative
Code of 2008.
(16) Conciliation - shall refer to the process whereby a neutral third party takes a vigorous and active
role in assisting disputants to formulate between and among them an acceptable solution in order to
reach an amicable settlement.
(17) Conservator - shall refer to any person appointed by the Authority empowered to take charge of
the assets, liabilities, and the management of the cooperative, after finding that the cooperative is in the
state of continuing illiquidity or unwillingness to maintain a condition of liquidity which is deemed
adequate to protect the interest of members and creditors of the cooperative.
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(18) Consolidation - shall refer to a union of two or more existing cooperatives belonging to the same
category to a form a new cooperative called the consolidated cooperative.
(19) Constituent Cooperatives - shall refer to two or more existing cooperatives which are parties to a
merger or consolidation.
(20) Credit Cooperative - shall refer to one that promotes and undertakes savings and lending services
among its members. It generates a common pool of funds in order to provide financial assistance and
other related financial services to its members for productive and provident purposes.
(21) Cumulative Interest - shall refer to the interest due to a member that must be added to in future
interest if it is not paid when due.
(22) Delay in the submission of reports - shall refer to the failure of the cooperatives to submit a
report on time.
(23) Dispute - shall refer to intra/inter cooperative controversy or grievance from any violation or
disagreement over any provisions, including any violations of the rights and conditions of membership
provided in the cooperative By-laws and/or in the Cooperative Code, which may be the subject of a
formal or informal request for conciliation/mediation or arbitration assistance sought by either one or
both parties.
(24) Dissenting Member - shall refer to a member present during the meeting and who actually voted
against the proposed activity/project of a cooperative.
(25) Division - shall refer to the act of spiting a single cooperative into two or more cooperatives,
wherein the original cooperative shall be dissolved and the resulting cooperatives shall acquire separate
and distinct juridical personalities.
(26) Donated Capital - shall refer to the subsidies, grants, donations and aids received by the
cooperative from any person, whether natural or juridical, local or foreign both government and private.
(27) Escheat - shall refer to the right of the State to succeed to property either real or personal, when
no heir or rightful claimant can be found through an appropriate legal proceeding.
(28) Equity - shall refer to the excess of cooperative assets over liabilities.
(29) Financial Statements - shall refer to the means i.e. Statement of Financial Condition (Balance
Sheet), Statement of Operation (Statement of Net Surplus) and Statement of Cash Flows, by which the
financial information accumulated and processed in financial accounting, is periodically communicated to
those who use it.
(30) Financial Service Cooperative (FSC) - shall refer to one organized for the primary purpose of
engaging in saving and credit services and other financial services regulated by the Bangko Sentral ng
Pilipinas (BSP).
(31) General Assembly - shall refer to the full membership of the cooperative duly assembled for the
purpose of exercising all the rights and performing all the obligations pertaining to cooperatives, as
provided by this Code, its Cooperation and By-laws.
(32) Guardian Cooperative - shall refer to duly registered cooperative to which a laboratory
cooperative is affiliated with.
(33) Internal Control - shall refer to all the system and procedures adopted to safeguard the
cooperative's assets, check the accuracy and reliability of its accounting data, promote operational
efficiency and encourage adherence to prescribed managerial policies.
(34) Involuntary Dissolution - shall refer to the termination of the juridical personality of the
cooperative through an appropriate judicial proceeding or by Order of the Authority.
(35) Laboratory Cooperative - shall refer to a cooperative duly recognized by the Authority, formed
and managed principally by minors and is affiliated with another registered cooperative which is called
the guardian cooperative.
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(36) Liquidation - shall refer to the process of settlement and closure of the cooperative affairs,
disposition, conveyance and distribution of its assets.
(37) Mediation - shall refer to the process in which a mediator, selected by the disputing parties,
facilities a communication and negotiation, and assists the parties in reaching a voluntary agreement
regarding a dispute.
(38) Merger - shall refer to a union of two or more existing cooperatives belonging to the same category
whereby the surviving cooperative, retaining its identity, absorbs one or more constituent cooperatives/s.
(39) Minor - shall refer to an individual below eighteen (18) years of age but at least seven (7) years
old.
(40) Multipurpose Cooperative - shall refer to a cooperative, which combines two (2) or more of the
business activities of the different types of cooperatives as enumerated under Art. 23 of the Code.
(41) Net worth - shall refer to equity inclusive of member's equity, donations, grants and reserve funds
less un-booked allowance for probable losses on loans, investment and other assets and other capital
adjustments as may be required by the CDA.
(42) Numerous and Dispersed Membership - shall refer to a cooperative whose membership are in
large number and geographically scattered/distributed by reason of geographical location, work shift or
other similar conditions making it impossible and difficult to conduct their general assembly meeting.
(43) Paid-up Share Capital - shall refer to the portion of the subscribed share capital, which has been
paid by the members of the cooperative.
(44) Parent Cooperative - shall refer to a cooperative, which initiates the organizational of another
cooperative called a subsidiary cooperative and provides technical, managerial, and financial assistance
thereto.
(45) Patronage Refund - shall refer to the amount returned to individual members who patronize the
goods and services of the cooperative in proportion to their individual patronage.
(46) Plan of Merger or Consolidation - shall refer to a written document containing the proposed
merger or consolidation of cooperatives duly approved by the General Assembly of each of the
constituent cooperatives at separate General/Representative Assembly Meetings.
(47) Primary Cooperative - shall refer to a cooperative, the members of which are natural persons.
(48) Receiver - shall refer to any person of recognized competence appointed by the Authority
empowered to take charge of all the assets and liabilities of the cooperative administer the same for the
benefit of its creditors and exercise such other powers as provided under the Revised Rules of Court.
(49) Registration - shall refer to the operative act gaining juridical personality to a proposed
cooperative as evidenced by a Certificate of Registration.
(50) Representative Assembly - shall refer to the full membership of the body of representatives
elected by each of the sectors, chapters or districts of the cooperative duly assembled for the purpose of
exercising such powers lawfully delegated unto them by the general assembly in accordance with its By-
laws.
(51) Reports - shall refer to any documents or statement required from cooperatives to be submitted to
the Authority on a regular basis.
(52) Representative/Delegate - shall refer to a member duly elected during the sector, chapter or
district meetings who shall represent his/her sector, chapter or district to the representative assembly
meeting.
(53) Revolving Capital - shall refer to the amount available out of the deferred payment of the
patronage refund and interest on share capital of the members or by authorized deduction of a
percentage from the product sold or per unit of product handled by the cooperative. The Board of
Director shall issue revolving capital certificates with serial number, name, amount, and rate of interest to
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be paid and shall distinctly set forth the time of retirement of such certificates and the amounts to be
returned.
(54) Risk Asset - shall refer to the total assets minus cash on hand, evidences of indebtedness, loans to
the extent covered by hold-outs or assignments of deposits, lands owned used for operations, buildings
and land improvements net of depreciation, furniture and fixtures and equipment net of depreciation, real
estate mortgage loan and other non-risk items as the Authority may, from time to time, authorized to be
deducted from total assets.
(55) Sanctions - shall refer to the penalties provided for in the cooperative bylaws, these rules, and
other administrative issuances, the Code and other related laws
(56) Secondary Cooperative - shall refer to a cooperative the members of which are primaries.
(57) Sector, Chapter or District - shall refer to a division of a cooperative, which may be by reason of
geographical location, scope of operation, cluster, work shift or such other similar sub-groupings.
(58) Settlement - shall refer to any compromise or arrangements between the disputants to settle the
matters in dispute and thus dispose of controversy. The term may be used in the sense of "payment" or
"adjustment" depending upon the circumstances under which, and the connection in which, use of the
term is made.
(59) Sequential Election of Representative/Delegate - shall refer to the election of the

representatives during the meetings held, one after the other, in different days and/or at various venues,
by several sectors, chapters or districts of a cooperative for the purpose of electing their respective
Representatives/Delegates to the representative assembly meeting.
(60) Share Capital - shall refer to the money paid or required to be paid by the members for the
conduct of the operations of the cooperative.
(61) Simultaneous Election of Representatives/Delegates - shall refer to the election of the

representatives during the meetings held, on the same day and at various venues, by several sectors,
chapters, or districts of a cooperative for the purpose of electing their respective
Representatives/Delegates to the representative assembly meeting.
(62) Submission Agreement - shall refer to the written agreement signed by the disputing parties to
submit the dispute to voluntary arbitration.
(63) Subsidiary Cooperative - shall refer to any organization all or minority of whose membership or
shareholders come from a cooperative called a parent cooperative, organized for any other purpose
different from that of, and receives technical, managerial, and financial assistance from the said parent
cooperative.
(64) Tertiary Cooperative - shall refer to a cooperative, the members of which are secondary
cooperative.
(65) Total Average Share Month - shall refer to the sum total of the average share month, which is
determined by adding the monthly ending balances of the member's share capital and dividing the sum
by twelve (12) months.1avvphi1
(66) Unpaid Subscription - shall refer to the subscribed share capital, which is not yet fully paid by a
member.
(67) Voluntary Arbitration - shall refer to a dispute resolution process wherein any intra/inter
cooperative dispute is settled by a voluntary arbitrator/s chosen by the disputing parties from a list of
qualified and accredited arbitrators, who shall decide on the merits of the case by rendering an award.
(68) Voluntary Arbitrator/Arbitrators - shall refer to any authorized employee of the Authority or an
accredited private individual chosen by the parties to hear, decide, and render an award in a dispute.
(69) Voluntary Dissolution - shall refer to the termination of the juridical personality of the cooperative
at its own initiative or instance after complying with the requirements set forth in the Code and these
rules.
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RULE 1
REPRESENTTATIVE ASSEMBLY
Section 1. Legal Basis. The Legal basis for this rule is Art. 5 (2), (10) of the Code, quoted as follows:
"(2) General Assembly shall mean the full membership of the cooperative duly assembled for the purpose
of exercising all rights and performing all the obligations pertaining to cooperatives, as provided by this
Code, its articles of cooperation and by-laws. Provided; that for cooperatives with numerous and
dispersed membership, the district of the cooperative and in accordance with the rules and regulations of
the Cooperative Development Authority."
"(10) Representative Assembly shall refer to the full membership of the body of representative elected by
each of the sector, chapter, or district of the cooperative duly assembled for the purpose of exercising
such powers lawfully delegated unto them by the general assembly in accordance with its by-laws"
Section 2. Applicability - This rule shall apply to cooperatives, which by reason of having numerous and
dispersed membership, the conduct of the general assembly meetings becomes extremely difficult;
Provided, That the adoption of representative assembly shall be stipulated in the cooperative By-laws,
which shall specify the following matters:
a. The basis for dividing the cooperative into sector, chapter, or district;
b. The minimum number of regular members to compose each sector, chapter, or district;
c. The quorum required in the sector, chapter, or district assembly meeting;
d. The number of Representative/s or Delegate/s to be elected to represent the total number of the
regular members in the sector, chapter, or district;
e. The term of office of the Representative or Delegate;
f. The qualification and disqualification of the Representative or Delegate;
g. The powers, function and responsibilities of the Representative or Delegate;
h. The election of the sector, chapter, or district Representative or Delegate;
i. Vacancy in the sector, chapter, or district Representative or Delegate;
j. The resignation or removal as well as the appeal of the sector, chapter, or district Representative or
Delegate
k. The sector, chapter, or district assembly meetings;
l. The quorum required in the representative assembly meeting;
m. The powers of the Representative Assembly;
n. The conduct of the representative meeting;
o. The eligibility of the Representative/Delegate to be elected as Officers of the cooperative; and
p. Other matters relevant to the conduct or representative assembly meeting.
Section 3. Division of Cooperative into Sector, Chapter, or District. The Number of the members of the
cooperative, which shall be at least One Thousand (1,000) and the geographical location, scope of
operation cluster, work shift, or other similar conditions shall be the basis in dividing the cooperative into
sector, chapter, or district.
Section 4. Composition of the Regular Members of Each Sector, Chapter, or District. The Bylaws shall
provide for the number of the regular members to compose each sector, chapter, or district, which shall
not be less than one hundred (100) members.
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Section 5. Quorum Requirement for Sector, Chapter, or District. At least twenty-five per centum (25%) of
the members entitled to vote in each sector, chapter, or district shall constitute a quorum.
Section 6. Number of Sector, Chapter, or District Representative. The number of sector, chapter, or
district Representative or Delegate to be elected shall be provided in the By-laws but in no case, shall be
less than ten percent (10%) of the total number of the regular members entitled to vote of the sector,
chapter, or district.
Section 7. Term of Office of the Sector, Chapter, or District Representatives. The term of office of the
Representative or Delegate shall be provided in the By-laws but not exceed two (2) years, which shall
commence on the first regular representative assembly meeting.
Section 8. Qualifications and Disqualifications of the Representative or Delegate. The sector, chapter, or
district representative or delegate shall possess all the qualifications and none of the disqualifications as
provided in the cooperative By-laws.
Section 9. Powers, Functions, and Responsibilities of the Representative or Delegate. The Representative
or Delegate shall have the following powers, functions, and responsibilities:
(1) To represent the sector, chapter, or district in the Representative Assembly Meeting;
(2) To decided for and in behalf of the sector, chapter, or district he/she represents in the Representative
Assembly Meeting; and
(3) To inform his/her sector, chapter, or district of what transpired during the Representative Assembly
Meeting.
Section 10. Election of Sector, Chapter, or District Representative or Delegate. Each sector, chapter, or
district during the General Assembly meeting approving the adoption of the Representative Assembly
shall elect its Local election Committee that will conduct the election of sector, chapter, or district
Representative/Delegate to be held no later than sixty (60) days before the schedule date of the regular
representative assembly meeting as provided for in the By-laws.
The Board of Directors shall direct sector, chapter, or district Local Election Committee to conduct the
sector, chapter, or district assembly meeting to elect its Representative/s or Delegate/s, which may be
held either simultaneously or sequentially.
In case the sector, chapter, or district failed to elect its Representative/s or Delegate/s, the right to send
its Representative/s or Delegate/s on that particular representative or assembly meeting shall be deemed
and waived.
Section 11. Vacancy in the Sector, Chapter, or District Representative or Delegate. Any vacancy shall be
filled up in accordance with the provisions of the cooperative By-laws. The Delegate or Representative
elected/appointed to fill a vacancy shall serve only the unexpired term of his/her predecessor.
Section 12. Resignation and Removal of Sector, Chapter, or District Representative or Delegate. The
sector, chapter, or district Representative or Delegate may resign, for valid reason, as Representative or
Delegate of his sector, chapter, or district. Upon the receipt of the notice, the Board of Directors shall act
on the resignation letter within sixty (60) days otherwise, the resignation shall be deemed approved. Any
sector, chapter, or district Representative/Delegate may be removed by a vote of three-fourths (3/4) of
all the members with voting rights present and constituting a quorum at a sector, chapter, or district
meeting called for the purpose on the following grounds:
1. Failure to attend the immediate preceding representative assembly meeting for unjustifiable reason;
2. Non-performance of any functions and responsibilities stated in the By-laws;
3. Any violation of the provisions of the Code, the By-laws of the cooperative and other issuances of the
Authority; and
4. Any acts or omissions inimical or prejudicial to the interest of the cooperative.
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During the same meeting, the sector, chapter, or district shall fill the vacancy. In case the removed
Representative or Delegate is an incumbent Officer of the Cooperative, his/her position shall be declared
vacant and shall be filled up in accordance with the Rule of Succession as provided for in the By-laws of
the Cooperative. Unless otherwise provided for in their By-laws, such successor shall not necessarily
assume the position of his/her predecessor. However, in the case of the membership in the committee,
the vacated membership shall be filled up by the Board of Directors of the Cooperative from among the
Representatives/Delegates.
Section 13. Sector, Chapter, or District Assembly Meeting. The sector, chapter, or district meetings of the
cooperative adopting this scheme shall be as follows:
a. Regular
b. Special
The regular meeting shall be conducted to elect the sector, chapter, or district Representatives or
Delegates and for such other purposes as maybe provided in the Bylaws.
The special meeting shall be conducted to report what has transpired during the representative assembly
meeting and for such other purposes as maybe provided in the By-laws.
In either case, the conduct of the meeting shall be called and presided by the Lead Representative of
Delegate. Such Lead Representative or Delegate shall be Representative or Delegate who obtained the
highest number of votes during the last sector, chapter, or district election.
Section 14. Quorum Requirements for Representative Assembly. At least twenty-five per centum (25%)
of all Representatives/Delegates shall constitute a quorum for the representative assembly meeting.
Section 15. Power of the Representative Assembly. The Representative Assembly shall exercise the
powers as provided for in the By-laws.
Section 16. Conduct of Representative Assembly Meeting. Representative Assembly Meeting shall be
conducted in accordance with the provision of the cooperative By-laws. In the absence thereof, the
following shall be observed:
1. The representative assembly meeting shall be held in accordance with the order of business
addressing the agenda prepared by the Board of Directors;
2. The chairperson or in his/her absence, the Vice Chairperson or any member of the Board of Directors
shall preside over the meeting;
3. The Election Committee shall supervise the election of the Board of Directors and committee members
of the cooperative; and
4. Each Representative or Delegate shall be entitled to one (1) vote. The Votes of the sector, chapter, or
district Representatives or Delegates shall be considered the votes of all the members of the sector,
chapter, or district they represent.
The decision of the Representative Assembly shall be considered a valid cooperative act.
Section 17. Eligibility of the Representative or Delegate to be elected as Officers of the Cooperative. The
Officers of the cooperative shall come from the Representative/s or Delegate/s of the sector, chapter, or
district. These Officer shall be elected during the Representative Assembly Meeting for a term fixed in the
By-laws but not exceeding a term of two (2) years and shall hold office until their successor are duly
elected and qualified, or until duly removed for cause.
The term of office of the Officer of the Cooperative at the time of adoption of the Representative
Assembly shall expire on the first representative assembly meeting.
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RULE 2
SUBSIDIARY COOPERATIVE
Section 1. Legal Basis. The legal basis for this Rule is Art. 5 (16) of the Code, quoted as follows;
"Art. 5 (16) Subsidiary Cooperative refers to any organization all or majority of whose membership or
shareholders come from a cooperative, organized for any other purpose different from that of, and
receives technical, managerial and financial assistance from, a cooperative, in accordance with the rules
and regulations of the Authority."
Section 2. General Requirements. A parent cooperative may organize a subsidiary cooperative provided
that:
1. It has been in operation for at least two (2) years and has incurred no losses for the two (2) preceding
years of operation.
2. It has a net worth of at least Ten Million Pesos (Php 10,000,000.00) as shown in its latest Audited
Financial Statements.
3. All or majority of the Members of the Parent Cooperative are willing to become members of the
Subsidiary Cooperative.
4. The business of the Subsidiary Cooperative shall be different from that of the Parent Cooperative.
5. The creation of a Subsidiary Cooperative and the technical, managerial and financial assistance to be
provided shall be approved by at least three-fourths (3/4) vote of members of Parents Cooperative with
voting rights present and constituting a quorum in a regular special general assembly/representative
assembly meeting called for the purpose.
Section 3. Documentary Requirements for Registration of Subsidiary Cooperatives. In addition to the

requirements for registration of a new cooperative, an applicant Subsidiary Cooperative shall submit a
resolution from the Parent Cooperative approving the creation of such Subsidiary Cooperative and
accepting the responsibilities therewith.
Section 4. Conditions. The following conditions shall be considered in the registration and operation of
Subsidiary Cooperative:
1. Only assistance in the form of technical, managerial and financial assistance shall be provided by the
Parent Cooperative to its Subsidiary Cooperative;
2. Directors or Officers of the Parent Cooperative cannot be elected or appointed as Officers of the
Subsidiary Cooperative. However, the Parent Cooperative through its General Assembly may appoint its
Representative to act as Ex-Officio member of the Board of Directors of the Subsidiary Cooperative;
3. The Management Staff of the Parent Cooperative cannot be at the time the Management Staff of the
Subsidiary Cooperative;
4. Transfer of shares of members and other related interests from Parent Cooperative to Subsidiary
Cooperative and vice versa are prohibited; and
5. In case of dissolution of the Parent Cooperative, the Subsidiary Cooperative cannot be a recipient of
any grant, donations or other interests from the Parent Cooperative and vice versa.
Section 5. Name of Subsidiary Cooperative. The subsidiary Cooperative shall include in its name the word
"Subsidiary Cooperative of (Name of Parent Cooperative)".
Section 6. Assistance for Parent Cooperative. The financial assistance to be provided shall not exceed ten
(10%) of the net worth of the Parent Cooperative. The technical and managerial assistance shall depend
upon the needs of the Subsidiary Cooperative and capacity of the Parent Cooperative, which shall be
taken up in the book at actual cost.
The terms and conditions of the financial assistance provided by the Parent Cooperative to the Subsidiary
Cooperative shall be governed by a Memorandum of Agreement entered into by both parties.
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Section 7. Effect of Dissolution of Parent or Subsidiary Cooperative. The dissolution of either cooperative
shall not affect the existence of the other.
RULE 3
MULTI-PURPOSE COOPERATIVE
Section 1. Legal Basis. The legal basis for this Rule is Article 10 of the Code quoted as follows:
"Art. 10. Organizing a Primary Cooperative. - Any newly organized primary cooperative may be registered
as multi-purpose cooperative only after compliance with the minimum requirements for multi-purpose
cooperatives to be set by the Authority. A single-purpose cooperative may transform into a multi-purpose
or may create subsidiaries only after at least two (2) years of operation."
Section 2. Coverage. This Rule shall cover (a) all types of newly organized primary cooperative with
combined two (2) or more business activities of different types of cooperative as provided for in Art. 23
of the Code, (b) a single-purpose cooperative desiring to transform itself into a multi-purpose cooperative
after at least two (2) years of operation.
Section 3. Minimum Capitalization Requirements. Only those cooperative with a minimum paid-up capital
of One Hundred Thousand Pesos (P100,00.00) or as required in the feasibility study whichever is higher
shall qualified to register as a multi-purpose cooperative or can transform into a multi-purpose
cooperative.
Section 4. Requirements for registration. The following documents shall be submitted to the Authority:
(1) For a newly organized Multi-Purpose Cooperative:
1. Name Verification Slip;
2. Articles of Cooperative and By-Laws;
3. Treasurer's Affidavit;
4. Surety Bond of Accountable Officers;
5. Certificates of Pre-Membership Education Seminar (PMES);
6. Economic Survey;
7. Undertaking to Change Name in the event that another cooperative has acquired prior right to the use
of the proposed name;
8. Favorable Endorsement from Other government Agencies, if applicable;
9. Detailed Feasibility Study indicating viability of the proposed business activity;
10. Undertaking to comply with the auditing and accounting standards prescribed by the Authority; and
11. Registration fee.
(2) For existing cooperatives desiring to be transformed into a Multi-Purpose Cooperative:
1. Name Verification Slip, in case of change of name;
2. Amended Articles of Cooperative and By-Laws;
3. A Resolution certified by the cooperative's Secretary and by the majority of the Board of Directors
stating the fact that said amendments have been duly approved by at least two-thirds (2/3) vote of all
the members with voting rights;
5. Audited Financial Statement showing profitable operations for the past two (2) years;
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6. Undertaking to Change Name in the event that another cooperative has acquired a prior right to the
use of the proposed name;
7. Favorable Endorsement from Other Government Agencies, if applicable;
8. Detailed Feasibility Study indicating viability of the proposed business activities;
9. Certificate that the cooperative has complied with the auditing and accounting standards prescribed by
the Authority;
10. Proof of business track records of the cooperative; and
11. Amendment Fee.
Section 5. Book of Accounts. The new and existing cooperatives transformed into a Multi-Purpose
Cooperative are required to maintain separate Book of Accounts for each business activity.
RULE 4
DIVISION OF COOPERATIVES
Section 1. Legal Basis. The legal basis for this Rule is Art. 20 of the Code, quoted as follows:
"Art. 20. Division of Cooperatives. - Any registered cooperative, may by a resolution approved by a vote
of three-fourths (3/4) of all the members with voting rights, present and constituting a quorum, resolve
to divide itself into two (2) or more cooperatives. The procedure for such division shall be prescribed in
the regulations of the Authority. The new cooperatives shall become legally established upon registration
with the Authority: Provided, That all the requirements set forth in this Code have been complied with by
the new cooperatives: Provided, further, That no division of cooperative in fraud of creditors shall be
valid."
Section 2. Procedures. The following procedures shall be observed in the division of cooperatives:
1. Approval of Proposal to Divide;
2. Formulation of Plan of Division;
3. Presentation and Approval of the Plan of Division to the General Assembly;
4. Posting and Publication of the Notice of Division;
5. Written Notification to Creditors;
6. Filing with the Authority of the Required Documents for the Registration of Division; and
7. Issuance of the Certificate of Registration.
Section 3. Proposal of Division. The majority members of the Board of Directors or at least ten percent
(10%) of members with voting rights may propose for division, which must be approved by at least
majority of the members of the cooperative with voting rights present and constituting a quorum in a
general/representative assembly meeting called for the purpose. Upon approval of the proposal to divide,
a committee to formulate the Plan of Division shall be constituted by the General/Representative
Assembly.
Section 4. Preference of Members. Upon approval by the General/Representative Assembly in the

meeting called for the purpose, members of the original cooperative shall be allowed within two (2)
weeks to choose the new cooperative they prefer to join. The management of the original cooperative
shall then transfer the member's share and all other interests to his/her chosen cooperative.
Section 5. Presentation and Approval of the Plan of Division. The Board of Directors shall call a
General/Representative Assembly meeting to action such Plan of Division with notice to all members of
record and Creditors at least thirty (30) days prior to the scheduled meeting. The Plan of Division shall be
approved by a vote of three-fourths (3/4) of all members with voting rights, present and constituting a
quorum in such general/representative assembly meeting.
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Section 6. Right of a Dissenting Member. A dissenting member shall be entitled to a refund of his/her
share capital and all other interests under Art. 30 of the Code.
Section 7. Contents of the Plan of Division. The Plan of Division must include the following:
1. The rationale or justification for the division of the cooperative;
2. A Financial Statement duly certified by an independent Certified Public Accountant including a schedule
of assets, liabilities and share capital of the cooperative intending to divide;
3. A proposed revaluation of assets, determination of liabilities, statutory reserves, undivided net surplus
and members' share capital;
4. List of all the receivables of the cooperative;
5. List of all the Creditors and their respective claims against the cooperative;
6. Procedure for the division of assets, allocation and settlement of the obligations and the collection of
receivables of the cooperative;
7. Feasibility study ensuring the viability and sustainability of both cooperatives;
8. List of members showing their share capital contributions certified by the Secretary and attested by the
Board Chairperson of the cooperative;
9. The proposed name, address and area of operation of the new cooperatives; and
10. Benefit package for Management Staff to be affected by the plan.
Section 8. Publication. Within seven (7) days after the date of approval of the division of the cooperative,
the Secretary of the cooperative, duly noted by the Chairperson, shall publish such plan of division once a
week for three (3) consecutive weeks in a newspaper of general circulation within its area of operation.
Said publication may also be supplemented by radio and television announcements.
Alternatively, the announcement of the division may also be done by posting in at least three (3)
conspicuous public places for three (3) consecutive weeks within its area of operation.
Likewise, letters/notices duly signed by the Chairperson announcing such division shall be sent by the
Secretary of the cooperative through registered mails to their creditors.
Section 9. Objection by a Third Party. Within fifteen (15) days from the day of posting or from the last
day of publication, a party may file an objection or opposition to the Plan of Division before the Authority,
copy furnished the cooperative concerned, which shall be decided within sixty (60) days from receipt of
the objection or opposition. If the objection or opposition is meritorious, in order not to prejudice the
interest of the third party, the Authority shall cause the deferment or disapproval of the registration of
the new cooperatives.
After the lapse of the period to file an objection/opposition and no objection/opposition has been filed or
after all objections/oppositions have been resolved, the cooperative can file its application for
registration.
Section 10. Additional Requirements for Registration. In addition to the regular requirements for
registration of cooperatives, the following documents shall be filed with the Authority:
1. The resolution of division as approved by the General/Representative Assembly duly certified by the
Secretary and duly noted by the Chairperson;
2. The Plan of Division including all its attachments;
3. The Minutes of the General/Representative Assembly Meeting approving the Plan of Division;
4. The Financial Statements of each of the new cooperatives duly certified by the respective Treasurers
and Chairpersons;
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5. Proof of Notice of Publication and/or posting of the announcement of such division;
6. Proof of Notice to the Creditors;
7. Written Agreement to Settle Obligation; and
8. Original Certificate of Registration.
Section 11. Issuance of Certificate. Once the registration requirements are found to be completed and in
order, the Authority shall issue the Certificates of Registration to the new cooperatives. The Certificate of
Registration of the original cooperative shall be surrendered to the Authority for cancellation.
Section 12. Effect of Registration. Cooperatives formed and organized under this Rule shall acquire
juridical personality from the date the Authority issues a Certificates of Registration under the Authority's
official seal.
RULE 5
GUIDELINES GOVERNING THE PROCEDURE FOR
MERGER OR CONSOLIDATION
Section 1. Legal Basis. The legal bases for this Rule are Articles 21 and 22 of the Code, quoted as
follows:
"Art. 21. Merger and Consolidation of Cooperatives. -
Two (2) or more cooperatives may merge into a single cooperative, which shall be either one of the
constituent cooperatives or the consolidated cooperatives.
No merger or consolidation shall be valid unless approved by three-fourths (3/4) vote of all members with
voting rights, present and constituting a quorum of each of the constituent cooperatives at separate
general assembly meetings. The dissenting members shall have the right to exercise their right to
withdraw their membership pursuant to Article 30.
(3) The Authority shall issue the guidelines governing the procedure of merger or consolidation of
cooperatives. In any case, the merger or consolidation shall be effective upon the issuance of the
Certificate of Merger or Consolidation by the Authority.
Art. 22. Effects of Merger and Consolidation. - The merger or consolidation of the cooperatives shall have
the following effects:
(1) The constituent cooperatives shall become a single cooperative, which in case of merger shall be the
surviving cooperative, and in case of consolidation, shall be the consolidated cooperative.
(2) The separate existence of the constituent cooperatives shall cease, except that of the surviving or the
consolidated cooperative.
(3) The surviving or the consolidated cooperative shall possess all rights, privileges, immunities and
powers and shall be subject to all the duties and liabilities of a cooperative organized under this Code;
(4) The surviving or the consolidated cooperative shall possess all the assets, rights, privileges,
immunities and franchises of each of the constituent cooperatives; and
(5) The surviving or the consolidated cooperative shall be responsible for all the liabilities and obligations
of each of the constituent cooperatives in the same manner as if the surviving or consolidated
cooperative had itself incurred such liabilities or obligations. Any claim, action, or proceeding pending by
or against any such constituent cooperatives may be prosecuted by or against the surviving or
consolidated cooperative, as the case may be. Neither the rights of creditors nor any lien upon the
property of any of such constituent shall be impaired by such merger or consolidation."
Section 2. Parties to the Merger or Consolidation. Only cooperatives belonging to the same category can
be parties to Merger or Consolidation. A primary cooperative can only merge or consolidate with a
primary cooperative, a secondary with a secondary cooperative, and a tertiary with a tertiary cooperative.
Section 3. Procedures. The following are the procedures to the Merger or Consolidation of cooperatives:
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1. Approval of the proposal to merge or consolidate by the General/Representative Assembly of each

constituent cooperatives;
2. Formulation of Plan of Merger or Consolidation by the representatives of the constituent cooperatives;
3. Presentation to and Approval of the Plan of Merger or Consolidation by the General/Representative

Assembly of each constituent cooperatives;
4. Formulation of the Amendment/New Articles of Cooperation and By-laws;
5. Posting/Publication of Merger or Consolidation;
6. Written Notification to Creditors through registered mail with return card and other applicable
electronic means;
7. Filing with the Authority the required documents for the registration of merger or consolidation; and
8. Issuance of Certificate of Registration of Merger/Consolidation by the Authority.
Section 4. Contents of Plan of Merger or Consolidation. The Plan of Merger or Consolidation shall include
the following:
1. Statement of Purpose of such Merger or Consolidation;
2. The Registered Names, Addresses and Registration/Confirmation Numbers, Contact Details and
Respective Areas of Operation of the Constituent Cooperatives;
3. The Proposed Amendments to the Surviving Cooperative's Articles of Cooperation and By-laws, in case
of Merger and with respect to Consolidation, the Proposed Articles of Cooperation and By-laws;
4. List of Members of each Constituent Cooperatives showing their Share Capital Contribution duly
certified by the respective Board Secretaries and attested by the respective Board Chairpersons;
5. The Name, Address and Area of Operation of the Surviving Cooperative, in case of Merger, the
Proposed Name, Address and Area of Operation, in case of Consolidation;
6. Feasibility Study indicating the Viability and Sustainability of the Merging/Consolidating Cooperatives;
7. The Audited Financial Statements as of the immediate preceding year including the schedule of assets,
liabilities and capital of the merging or consolidating cooperatives; and
8. Package Benefits of the Management Staff to be affected by the Plan.
Section 5. Proposal of Merger or Consolidation. The Proposal to Merge or Consolidate may be made by
the Board of Directors or by at least ten percent (10%) of the members with voting rights. It shall be
approved by at least majority of the members of each of the constituent cooperatives with voting rights,
present and constituting a quorum in separate general/representative assembly meetings called for the
purpose.
During the same meeting, the General/Representative Assembly shall appoint or elect the representatives
to the joint committee to draft the Plan of Merger or Consolidation.
Section 6. Approval of the Plan of Merger or Consolidation. The Plan of Merger or Consolidation jointly
prepared by representatives from the constituent cooperatives shall be submitted for approval to the
members of each constituent cooperative at separate general/representative assembly meetings duly
called for the purpose. Notice of such meeting shall be given to all members of the respective
cooperative, served either personally, or by registered mail with return card or electronic means within
the period as indicated in their By-laws.
The affirmative vote of members representing at least three-fourths (3/4) of all members with voting
rights, present and constituting a quorum of each of the constituent cooperatives at separate
general/representative assembly meetings shall be necessary for the approval of the Plan of Merger or
Consolidation, or amendments thereto, if any.
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Section 7. The Articles of Cooperation and By-Laws. In case of Merger, the Amended Articles of
Cooperation and By-Laws, if applicable, shall be attested by the Incumbent Directors of the Surviving
Cooperative while in Consolidation, the Articles and By-Laws shall be signed by the Cooperating Directors.
Section 8. Posting/Publication. Announcement of the Merger or Consolidation may be done by posting in

at least three (3) conspicuous places in their respective areas of operation; or publication in a newspaper
of general circulation once a week for three (3) consecutive weeks. Said publication may also be
supplemented by radio and television announcements or any other electronic means of communication.
Section 9. Notice to Creditors and Investors. The Officers of the Merging or Consolidating Cooperatives
shall also send letters by registered mail with return card to the Creditors and investors of their
respective cooperatives announcing such Merger or Consolidation.
Section 10. Objection/s by a Third Party. Within fifteen (15) days after the date of posting or from the
last day of publication, a third party may file an objection or opposition to the Plan of Merger or
Consolidation before the Authority which shall be decided within sixty (60) days from receipt of the
objection or opposition. Finding the objection or opposition meritorious, in order not to prejudice the
interest of the third party, the Authority will cause the deferment or disapproval of the registration of the
Merger or Consolidation.
After the lapse of the period to file an objection/opposition and no objection/opposition has been filed or
after all objections/oppositions have been resolved, the cooperative can file its application for
registration.
Section 11. Additional Requirements for Registration. The Officers of the merged or consolidated
cooperatives shall file with the Authority the following additional requirements for registration:
A. For Merger
1. The Original Certificate of Registration of the absorbed cooperative;
2. The General/Representative Assembly resolutions of both constituent cooperatives approving the Plan
of Merger duly certified by the Secretaries and attested by the respective Chairpersons;
3. The excerpts from the minutes of the general/representative assembly meeting stating among others
the approval of the Merger;
4. Certification of the Secretaries duly attested by the Chairpersons of the constituent cooperatives that
there was a quorum and the required number of votes for the approval was met;
5. The approved Plan of Merger and all its attachments as required under Section 4 of this Rule;
6. The proposed amendment to the Articles of Cooperation and By-laws of the Surviving Cooperative, if
necessary;
8. Proof of Publication/Posting of the Announcement of Merger;
9. Proof of Notice to Creditors;
10. Written Agreement to settle Obligations
11. The original Certificate of Registration of the Surviving Cooperative;
12. Favorable endorsement from the concerned government agency if necessary/applicable; and
13. Registration fee in accordance with the Schedule of Fees prescribed by the Authority.
B. For Consolidation
1. The Original Certificate of Registration of both constituent cooperatives;
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2. The General/Representative Assembly resolutions approving the consolidation of the cooperative duly
certified by the Secretaries and attested by the Chairpersons of the Consolidating Cooperatives;
3. The excerpts from the minutes of the General/Representative Assembly meetings of the Consolidating
Cooperatives with their respective attendance sheets duly certified by the Secretary and Chairperson or
Presiding Officer;
4. Certification of the Secretaries duly attested by the Chairpersons of the Constituent Cooperatives that
there was a quorum and the required number of votes for the approval was met;
5. The approved Plan of Consolidation and all its attachments as required under Section 4 of this Rule;
6. The Economic Survey;
7. The proposed Articles of Cooperation and By-laws of the Consolidated Cooperative;
9. Proof of Publication/Posting of the announcement of consolidation;
10. Proof of Notice to Creditors;
11. Written Agreement to settle Obligations;
12. The original Certificates of Registration of the Consolidating Cooperatives;
13. Undertaking to Change Name in the event that another cooperative has acquired prior right to the
use of the proposed name; and
14. Registration fee in accordance with the Schedule of Fees prescribed by the Authority.
Section 12. Issuance of Certificate. Once the registration requirements are complied with, the Authority
shall issue the Certificate of Merger, or new Certificate of Registration in case of consolidation. The
Certificate of Registration of the original cooperatives shall be surrendered to the Authority.
RULE 6
GUIDELINES FOR LABORATORY COOPERATIVES
Section 1. Legal Basis. The legal basis for this Rule is the third paragraph of Art. 26 of the Code, quoted
as follows:
"Art. 26. Kinds of Membership. - A cooperative organized by minors shall be considered a laboratory
cooperative and must be affiliated with a registered cooperative. A laboratory cooperative shall be
governed by special guidelines to be promulgated by the Authority."
Section 2. Organization of Laboratory Cooperative. Fifteen (15) or more minors who are Filipino citizens,
actually residing in the community or enrolled in an educational institution within or near the area of
operation of the Guardian Cooperative or out of school minor actually residing in the community, may
organize a Laboratory Cooperative composed of minors, which shall be seven (7) years old but below
eighteen (18) years of age.
Section 3. Purposes of Laboratory Cooperatives. A Laboratory Cooperative shall be organized for any or
all of the following purposes:
1. To serve as a training ground for its members to prepare them for membership in regular
cooperatives;
2. To teach the value of thrift and saving mobilization among its members;
3. To instill cooperative values, principles, financial discipline and leadership skills among its members;
4. To promote and advance Filipino social and cultural values, ecological awareness and sustainable
development.
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Section 4. Contents of the Articles of Cooperation. The Articles of Cooperation of a Laboratory

Cooperative signed by each of the organizers shall provide the following:
1. The name of the cooperative which shall include the words "Laboratory Cooperative";
2. The purpose or purposes for which it is organized;
3. The term of existence;
4. The area of operations and the postal address of the principal office of the laboratory cooperative;
5. The area of operations and the postal address of the principal office of the guardian cooperative;
6. The names, nationality, birthdates, and postal addresses of the cooperators;
7. The names, and postal addresses of members of the board of directors of its guardian cooperative;
and
8. The amount of its share capital, the names, and addresses of its members.
Section 5. Contents of the By-Laws. The By-laws of a Laboratory Cooperative shall provide for the
following:
1. The qualifications for admission to membership and the payment to be made or interest to be acquired
as a condition to the exercise of the right of membership;
2. The rights and liabilities of membership;
3. The circumstances under which membership is acquired, maintained and lost;
4. The procedures to be followed in cases of termination of membership;
5. The conditions under which the transfer of a share or interest of the members shall be permitted;
6. The rules and procedures on the agenda, time, place and manner of calling, convening, conducting
meetings, quorum requirements, voting systems, and other matters relative to the business affairs of the
general assembly, board of directors, and committees;
7. The general conduct of the affairs of the cooperative, including the powers and duties of the General
Assembly, the board of directors, committees and, officers, and their qualifications and disqualifications;
8. The manner in which the capital may be raised and the purposes for which it can be utilized;
9. The accounting and auditing systems;
10. The method of distribution of net surplus;
11. The manner of adopting and amending by-laws;
12. Other matters incident to the purposes and activities of the cooperative.
Section 6. Capitalization Requirements. The Laboratory Cooperative shall include in its Bylaws a program
on continuous Capital Build-Up.
Section 7. Affiliation. A Laboratory Cooperative must be affiliated with a duly registered cooperative, to be
known as the Guardian Cooperative, before the authority shall issue a Certificate of Recognition.
A Laboratory Cooperative primarily composed of students from a particular school shall be affiliated with
the school's cooperative, if any. If the Laboratory Cooperative is composed primarily of out-of-school
minors, it shall be affiliated with a cooperative of its choice within or nearest its area of operation.
In the absence of a duly registered cooperative in the area or refusal of a duly registered cooperative to
accept the affiliation of a Laboratory Cooperative, the said Laboratory Cooperative may request
assistance from the nearest CDA Office in identifying a possible Guardian Cooperative.
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Section 8. Responsibility of the Guardian Cooperative. The Guardian Cooperative shall supervise, monitor,
and act for and in behalf of the Laboratory Cooperative in their dealings, transactions with third parties
when capacity to contract is required.
It shall be responsible for the cooperative education and training of all officers and members of the
laboratory cooperative.
Submission of reports to the Authority on the activities and economic operations of the Laboratory
Cooperative shall likewise be the responsibility of the Guardian Cooperative.
Section 9. Liability of the Guardian Cooperative. - The Guardian Cooperative exercising parental authority
may be liable for any violations in the cooperative's operation.
Section 10. Requirements for Recognition of Laboratory Cooperative. A Laboratory Cooperative seeking
recognition as such shall submit, through the Guardian Cooperative, the following requirements to the
Authority for the issuance of a Certificate of Recognition:
1. Articles of Cooperation and By-laws; and
2. Resolution of the Board of Directors of the Guardian Cooperative accepting its responsibility and
liability as Guardian of the Laboratory Cooperative.
Section 11. Issuance of Certificate of Recognition. A Certificate of Recognition shall be issued by the
Authority under its official seal upon compliance with all the requirements set forth by this rule. The
Certificate shall be conclusive evidence that the Laboratory Cooperative therein mentioned is duly
recognized unless such recognition has been earlier revoked.
The issuance of the Certificate of Recognition does not bestow upon a Laboratory Cooperative with a
juridical personality.
Section 12. Termination of Membership. The following shall be conditions for termination of membership
in a Laboratory Cooperative:
1. Upon reaching the age of majority (18 years of age);
2. Those provided under Art. 30 of the Code; and
3. Such other conditions as may be provided for in the By-laws.
Section 13. Refund of Share Capital. Upon termination of membership, the former member shall be
entitled to a refund of his share capital contribution and all other interests in the Laboratory Cooperative
in accordance with Art. 31 of the Code.
Section 14. Option of Member Who Reaches the Age of Majority. Any member reaching the age of
majority may opt to join the Guardian Cooperative upon compliance of all the requirements for
membership.
Section 15. Limitation. A Guardian Cooperative shall supervise only one (1) laboratory cooperative.
RULE 7
FUNCTIONS, RESPONSIBILITIES AND TRAINING REQUIREMENTS OF DIRECTORS, OFFICERS
AND COMMITTEE MEMBERS
"Art. 44. Functions, Responsibilities, and Training Requirements of Directors, Officers, and Committee
Members. The functions and responsibilities of the directors, officers and committee members, as well as
their training requirements shall be in accordance with the rules and regulations issued by the Authority."
Section 2. Officers of the Cooperative. The Officers of the cooperative shall include the Members of the
Board of Directors, Members of the Different Committees created by the General Assembly, General
Manager or Chief Executive Officer, Secretary, Treasurer and Members holding other positions as maybe
provided for in their By-laws. As such they are entrusted with the power of exercising authority within the
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scope of their defined functions which is permanent in nature and include the exercise of control and
discretion in the performance of their duly.
Section 3. Committees of Cooperatives. The By-laws shall provide for the creation of the following
committees:
1. Audit Committee;
2. Election Committee;
3. Mediation and Conciliation Committee;
4. Ethics Committee; and
5. Other Committees as may be necessary for the conduct of the affairs of the cooperative.
The members of Audit Election Committees shall be elected by the General Assembly while the Board of
Directors shall appoint the rest.
Section 4. Functions and Responsibilities of the Officers of the Cooperative.
4.1 Board of Directors.
4.1.1 The Board of Directors shall have the following functions and responsibilities:
a. Provide general policy direction;
b. Formulate the strategic development plan;
c. Determine and prescribe the organizational and operational structure;
d. Review the Annual Plan and Budget and recommend for the approval of the General/Representative
Assembly;
e. Establish policies and procedures for the effective operation and ensure proper implementation of
such;
f. Evaluate the capability and qualification and recommended to the General/Representative Assembly the
engagement of the services of an External Auditor;
g. Appoint the members of the Mediation/Conciliation and Ethics Committees and other Officers as
specified in the Code and cooperative By-laws;
h. Decide election related cases involving the Election Committee or its members;
i. Act on the recommendation of the Ethics Committee on cases involving violations of Code of
Governance and Ethical Standards; and
j. Perform such other functions as may be prescribed in the By-laws or authorized by the
General/Representative Assembly.
4.1.2 The Chairperson shall:
a. Set the agenda foe board meetings in coordination with the other members of the Board of Directors;
b. Preside over all meetings of the Board of Directors and of the General/Representative assembly;
c. Sign contracts, agreements, certificates and other documents on behalf of the cooperative as
authorized by the Board of Directors or by the General/Representative Assembly;
d. Issue Certificate of Non-Affiliation with any Federation or Union; and
e. Perform such other functions as may be authorized by the Board of Directors or by the
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4.1.3 The Vice Chairperson shall:
a. Perform all duties and functions of the Chairperson in the absence of the latter;
b. To act as ex-officio Chairperson of the Education and Training Committee; and
c. Perform such other duties as may be delegated to him/her by the Board of Directors.
4.2 Treasurer. The Treasurer shall:
a. Ensure that all cash collections are deposited in accordance with the policies set by the Board of
Directors;
b. Have custody of all funds, securities, and documentation's relating to all assets, liabilities, income and
expenditures;
c. Monitor and review the financial management operations of the cooperative, subject to such limitations
and control as may be prescribed by the Board of Directors;
d. Maintain full and complete records of cash transactions;
e. Maintain a Petty Cash Fund and Daily Cash Position Report; and Perform such other functions as may
be prescribed in the By-laws or authorized by the General/Representative Assembly.
4.3 Secretary. The Secretary shall:
a. Keep an updated and complete registry of all members;
b. Record, prepare and maintain records of all minutes of meetings of the Board of Directors and the
General/Representative Assembly;
c. Ensure that necessary Board of Directors actions and decisions are transmitted to the management for
compliance and implementation;
d. Issue and certify the list of members who are in good standing entitled to vote as determined by the
Board of Directors;
e. Prepare and issue Share Certificates;
f. Serve notice of all meetings called and certify the presence of quorum of all meetings of the Board of
Directors and the General/Representative Assembly;
g. Keep copy Treasure's reports and other reports;
h. Keep and maintain the Share and Transfer Book;
i. Serve as custodian of the cooperative seal; and
Perform such other functions as may be prescribed in the By-laws or authorized by the General/
Representative Assembly.
4.4 Election Committee. The Election Committee shall:
a. Formulate election rules and guidelines and recommended to the General/Representative Assembly for
approval;
b. Implement election rules and guidelines duly approved by the General/Representative Assembly;
c. Recommended necessary amendments to the election rules and guidelines, in consultation with the
Board of Directors, for the General/Representatives Assembly's approval;
d. Supervise the conduct, manner and procedure of election and other election related activities and act
on the changes thereto;
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e. Canvass and certify the results of the election;
f. Proclaim the winning candidates;
g. Decide election and other election related cases except those involving the Election Committee or its
members; and
h. Perform such other functions as prescribed in the By-laws or authorized by the General/Representative
Assembly.
4.5 Audit Committee. The committee shall:
a. Monitor the adequacy and effectiveness of the cooperative's management and control system;
b. Audit the performance of the cooperative and its various responsibility centers;
c. Review continuously and periodically the books of account and other financial records to ensure that
these are in accordance with the cooperative principles and generally accepted accounting procedures;
d. Submit reports on the result of the internal audit and recommend necessary changes on policies and
other related matters on operation to the Board of Directors and General/Representative Assembly;
e. Perform such other functions as may be prescribed in the By-laws or authorized by the
4.6 Mediation and Conciliation Committee. The committee shall:
a. Formulate and develop the Conciliation-Mediation Program and ensure that it is properly implemented;
b. Monitor Conciliation-Mediation program and processes;
c. Submit semi-annual reports of cooperative cases to the Authority within fifteen (15) days after the end
of every semester;
d. Accept and file Evaluation Reports;
e. Submit recommendations for improvement to the Board of Directors;
f. Recommend to the Board of Directors any member of the cooperative for Conciliation-Mediation
Trainings as Cooperative Conciliator-Mediator;
g. Issue the Certificate of Non-Settlement (CNS);
h. Perform such other functions as may be prescribed in the By-laws or authorized by the
4.7 Ethics Committee. The committee shall:
a. Develop Code of Governance and Ethical Standards to be observed by the members, officers and
employees of the cooperative subject to the approval of the Board of Directors and ratification of the
General/Representative Assembly;
b. Disseminate, promote and implement the approved Code of Governance and Ethical standards;
c. Monitor compliance with the Code of Governance and Ethical Standards and recommend to the Board
of Directors measures to address the gap, if any;
d. Conduct initial investigation or inquiry upon receipt of a complaint involving Code of Governance and
Ethical Standards and submit report to the Board of Directors together with the appropriate sanctions.
e. Recommend ethical rules and policy to the Board of Directors;
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f. Perform such other functions as may be prescribed in the By-laws or authorized by the
4.8 Other Committees. Other Committees that may be created shall assist in the formulation of policies
and rules and in the implementation of the service of the cooperative. Their powers, functions, and
responsibilities shall be defined in the By-laws.
4.9 General Manager. The General Manager shall:
a. Oversee the overall day to day business operations of the cooperative by providing general direction,
supervision, management and administrative control over all the operating departments subject to such
limitations as may be set forth by the Board of Directors or the General/Representative Assembly;
b. Formulate and recommend in coordination with the operating departments under his/her supervision,
the Cooperative's Annual and Medium Term Development Plan, programs and projects, for approval of
the Board of Directors and ratification of the General/Representative Assembly;
c. Implement the duly approved plans and programs of the Cooperative and any other directive or
instruction of the Board of Directors.
d. Provide and submit to the Board of Directors monthly reports on the status of the Cooperative's
operation vis-à-vis its targets and recommend appropriate policy or operational changes, if necessary;
e. Represent the Cooperative in any agreement, contract, business dealing, and in any other official
business transaction as may be authorized by the Board of Directors;
f. Ensure compliance with all administrative and other requirements of regulatory bodies; and
g. Perform such other functions as may be prescribed in the By-laws or authorized by the
Section 5. Training Requirements for the Officers of the Cooperative. Officers of the cooperative shall be
required to undergo necessary training conducted by cooperatives, Federations and/or other trainers or
training institutions duly accredited by the Authority. The training program should contain the minimum
requirements in the module/curriculum as prescribed by the Authority. The initial courses or any
equivalent substitute thereof must be undertaken.
A. Board of Directors
1. Basic Cooperative Course primarily on:
a. Articles of Cooperative and By-laws;
b. Cooperative Vision;
c. Cooperative Mission;
d. Cooperative Strategic Plan;
e. Fundamentals of Cooperative;
f. Policies and Programs of Cooperatives;
g. Cooperative Code of 2008 (RA 9520);
h. Implementing Rules and Regulations of RA 9520;
2. Cooperative Management and Governance.
3. Policy Development.
4. Financial Management.
5. Conflict Management.
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6. Parliamentary Procedure
7. Leadership and Values Re-orientation
8. Strategic Planning
9. Orientation on Labor and Other Related Laws
B. Secretary
1. Basic Cooperative Course
2. Records Management for Non Financial Transaction
3. Parliamentary Procedure
4. Basic Computer Program
C. Treasurer
2. Records Management (Financial Transaction)
3. Basic Accounting for Non-Accountants
4. Cooperative Standards
5. Investment and Banking Procedures
6. Financial Management
D. Audit Committee
2. Audit Management
3. Records Management
4. Basic Accounting for Non-Accountant
6. Internal Control including Inventory System
E. Election Committee
3. Rules Formulation
4. Leadership and Value Re-orientation
F. Ethics Committee
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3. Conflict Management
G. Mediation/Conciliation Committee
3. Conflict Management
5. Effective Communication
H. General Manager / Chief Executive Officer
2. Cooperative Management and Governance
4. Human Resource Management
5. Effective Communication Skills
6. Entrepreneurial and Business Management Course
7. Labor and other related Laws
9. Computer Literacy Course
10. Strategic Planning and Management
Section 6. Compliance. The training is required for all cooperative officers. In cases where the incumbent
has not undergone the required training program, he/she shall undergo such training within twelve (12)
months from the effectivity of this Rule. Non-compliance with the required trainings shall be considered
grounds for disqualification for future election or appointment until such time that he/she has complied
with all the trainings required for the position.
Section 7. Duration of Trainings Attended. All trainings attended by cooperative officers shall be
considered valid compliance with the intent of this Rule for a period of five (5) years from date of
issuance of the Certificate of Training. After which, they shall be required to undergo re-training of the
same.
Section 8. Transitory Period. All cooperatives are hereby given two (2) years from effectivity of this Rule
to comply with the Training Requirements as provided above.
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RULE 8
REPORTS REQUIRED FOR COOPERATIVE
Section 1. Legal Basis. The legal basis for this rule is Art. 53 of this Code, quoted as follows:
"Art. 53. Report.
(1) Every cooperative shall draw up regular reports of its program of activities, including those in
pursuance of their socio-civic undertakings, showing their progress and achievements at the end of every
fiscal year. The reports shall be made accessible to its members of record. These reports shall be filed
with the Authority within one hundred twenty (120) days from the end of the calendar year. The form
and contents of the reports shall be prescribed by the rules of Authority. Failure to file the required
reports shall subject the accountable officer/s to fines and penalties as may be prescribed by the
Authority, and shall be a ground for the revocation of authority of the cooperative to operate as such.
The fiscal year of every cooperative shall be the calendar year, except as may be otherwise provided in
the by-laws.
(2) If a cooperative fails to make, publish and file the reports required herein, or fails to include therein
any matter required by this Code, the Authority within fifteen (15) days from the expiration of the
prescribed period, send such cooperative a written notice stating its non-compliance and the
commensurate fines and penalties that will be imposed until such time that the cooperative has complied
with the requirement."
Section 2. Required Regular Reports. The following reports shall submitted to the Authority:
1. Cooperative Annual Performance Report (CAPR);
2. Social Audit Report including its program of activities in pursuance of its socio-civic undertakings
showing its achievements and end of every fiscal year;
3. Performance Report;
4. Audited Financial Statements duly stamped "Received " by the BIR; and
5. List of Officers and Trainings Undertaken /Completed.
Section 3. Additional Reports for Federations and Unions. Federations and Unions shall submit to the
Authority the following additional reports:
1. List of cooperatives which have remitted their respective Cooperative Education and Training Funds
(CETF);
2. Business consultancy assistance to include the nature and cost; and
3. Other training activities undertaken specifying therein the nature, participants, and cost of each
activity.
Section 4. Filling. All registered cooperatives shall file with the Authority a copy of the required reports
either through personal, registered mail courier, or electronic means, within one hundred twenty
(120)days from the end of every year calendar year.
Section 5. Preparation of the Required Reports. The reports shall be typewritten or printed in a form
prescribed by the Authority. The Chairperson and the General Manager shall certify to the truthfulness of
the statement contained in the reports.
Section 6. Preparation of the Submit Reports on Time. Failure to submit reports on time shall be
considered as Delay or Default. However, if the failure to submit reports on time is due to fortuitous
events; such as fire and other natural calamities and public disorders including strike or lock-out or a
national emergency which affects the operation of the cooperative, the failure shall not be considered a
delay. Provided, That the Authority shall be officially notified of the occurrence of such fortuitous events.
Delay or default shall commence on the day following the last day required for the submission of reports.
However, should the last day of filing falls on a non-working day in the locality where the reporting
cooperative is situated. Delay or Default shall start to run\on the day following the next working day.
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For the purpose of establishing Delay or Default, the date of acknowledgement by the Authority
appearing on the copies of such reports filed or submitted or mailing postmarked on the envelope/the
date of registry or special delivery receipt, or the date the electronic mail was sent as the case may be
shall be considered as the date of filing.
Section 7. Sanction For Delayed Submission. Failure to file the required reports on time shall subject the
Accountable Officer to pay a fine of Php 100.00 per day of delay.
Within thirty (30) calendar days upon receipt of Statement of Accounts, the Accountable Officer may
request for Reconsideration of such fine on the grounds of fortuitous event and court litigation/order,
which the Authority shall act upon within sixty (60) calendar days otherwise the sanctions, shall be
deemed lifted. The decision of the Authority shall become final and executory.
Other than the imposition of monetary penalties, the Authority may dissolve/revoke, after due process,
the authority of the cooperative to operate as such.
RULE 9
GUIDELINES FOR THE LIQUIDATION OF COOPERATIVES
Section 1. Legal Basis. The legal bases for the Rule are Art. 69,70 and par. 2, Art. 72 (4) of the code,
quoted as follows:
"Art. 69. Liquidation of a Cooperative. - Every cooperative whose charter expires by its own limitation or
whose existence is terminated by voluntary dissolution or through an appropriate judicial proceeding shall
nevertheless continue to exist for three (3) years after the time it is dissolved, not to continue the
business for which was established but for the purpose of prosecuting and defending suits by or against
it; settlement6 and closure of its affairs, disposition, conveyance and distribution of its properties and
asset.
At any time during the said three (3) years, the cooperative is authorized and empowered to convey all
its properties to trustees for the benefit of its members, creditors and other persons in interest. From and
after any such conveyance, all interests which the cooperative had in the properties are terminated.
Upon the winding up the cooperative affairs, any6 asset distributable to any creditor, shareholder or
member(s) who is unknown or cannot be found shall be given to the federation or union to which the
A cooperative shall only distribute its assets or properties upon unlawful dissolution and after payment of
all its debts and liabilities, except in the case of decrease of share capital of the cooperative and as
otherwise allowed by this Code."
"Art. 70. Rules and Regulations on Liquidation. - The Authority shall issue the appropriate implementing
guidelines for the liquidation of cooperatives."
"Art. 72. Capital Sources.-xxx
(b) Subsidies, donations, legacies, grants, aids and such other assistance from any local or foreign
institution whether public or private: Provided, That capital coming from such subsidies, donations,
legacies, grants, aids and other assistance shall not be divided into individual share capital holding at any
time but shall instead from part of the donated capital or fund of the cooperative.
Upon dissolution, such donated capital shall be subject to escheat."
Section 2. Coverage of Liquidation. These Guidelines shall cover the following:
1. Cooperatives whose charter expires by its own limitation.
2. Cooperatives whose existence is terminated by voluntary dissolution.
3. Cooperatives whose existence is terminated by appropriate judicial proceedings.
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Section 3. Mode of Liquidation. The manner of liquidation or winding up may be provided for in the
cooperative By-laws and this would prevail unless it is inconsistent with law. In this jurisdiction, the
cooperative may avail of the following modes of liquidation:
(1) Liquidation by cooperative itself through a Board of Liquidators. The members of cooperative entitled
to vote shall elect from among themselves their Board Liquidators; and/or
By conveying all the cooperative assets to Trustee or Trustees who will take charge of liquidation.
Section 4. Procedure of Liquidation. The following procedure shall be observed in liquidation:
1. Constitution of the Board of Liquidators/Trustees.
2. Inventory of Assets and Liabilities of the Cooperative.
3. Payments of Creditors in accordance with the Provisions of the New Civil Code on the Preference and
Concurrence of Credits.
4. Transfer of the Statutory Funds to the intended beneficiaries.
5. Distribution of the remaining assets.
6. Submission of the Board of Liquidators/Trustees of the Liquidation's Final Report.
7. Cancellation of the Certificates of Registration and delisting of the name of the cooperative in the
Cooperative Registry.
Section 5. Board of Liquidators/Trustees.
Within sixty (60) days from receipt of the Order of Dissolution from the Authority or competent Court, the
board of Directors shall select/constitute the Board of Liquidators/Trustees. In the event the Board of
Directors fails or refuses to constitute the Board of Liquidators/Trustees, at least twenty five percent
(25%) of the members entitled to vote shall convene and select/appoint the Liquidators/Trustees. In case
the Board of Directors and the General/Representative Assembly fail to select the Board of
Liquidators/Trustees, the Authority shall appoint the same.
The Board of Liquidators/Trustees shall not be less than three (3) but not more than five (5) members.
They shall take their oath of office before the Authority prior to assumption of their functions and
responsibilities.
The Board of Liquidators/Trustees shall post an adequate bond as may be fixed by the Authority during
the period of liquidation, to be paid out of the funds of the cooperative.
The Board of Liquidators/Trustees shall be allowed to receive a reasonable honorarium to be paid out
from the funds of the cooperative which shall be equal to but not less than the honorarium being
received by the Board of Directors of the cooperative before its dissolution.
Section 6. Functions, Powers and Obligations of the Board of Liquidators/Trustees. The Board of
Liquidators/Trustees shall:
1. Make an inventory of all assets and to be determine all liabilities including Share Capital holdings;
2. Preserve the existing assets of the cooperative;
3. Convert all assets of the cooperative into cash;
4. Pay the outstanding obligations including any and all valid claims against the cooperative;
5. Distribute remaining assets pursuant to the provision of the Code and this Rules; and
6. Make final report on the liquidation and submit the same to the Authority.
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Section 7. Power to Sue and Be Sued. In the discharge of the above-mentioned functions, the Board of
Liquidators/Trustees may sue and be sued under the name of the cooperative in order to protects and
defend its rights and interests.
Section 8. Payment of Creditors. Payment of creditors shall be in accordance with the contract upon
which it is based and the provision of the New Civil Code on the Preference and Concurrence of Credits.
Section 9. Statutory Funds. All the statutory funds established by the cooperative shall be disposed of in
accordance with the provision for Art. 86 of the Code.
Section 10. Treatment of Donated Capital. All studies, donations, legacies, grants, aids and such other
assistance from any local or foreign institutions whether public or private shall be subjected to escheat.
Section 11. Distribution of Assets. Subject to the preceding sections and upon written authority from the
Authority, any assets remaining after the payments of the cooperative's obligations to its creditors shall
be distributed to the members in payments of their respective share capital. If the remaining assets is not
sufficient to pay the full share capital contribution of the members, the distribution shall be done in
proportion to their capital.
Section 12. Undistributed Assets. After the winding up of the affairs of the cooperative, the assets
distributable to creditor or member whose whereas about is unknown or cannot be found shall be given
to the federation/union to which the cooperative is affiliated with, for cooperative development, at the
option of the Board of Liquidators/Trustees. In case of non-affiliation, the undistributed assets shall be
given to the community where the cooperative operated.
Section 13. Periods Allowed for the Winding Up of the Affairs of the Cooperative. The dissolved
cooperative shall continue to exist for three (3) years from the issuance of the Order of Dissolution. The
purpose of which is not to continue the business for which it was established but for purpose of
prosecuting and defending suits filed or against the cooperative, settlement and closure of its affairs,
distribution of its assets.
Nevertheless, at any time during the said three (3) year period, the cooperative is authorized and
empowered to convey all its properties to Trustees for the benefits of its members, creditors and other
persons in interest, after which, all interest which the cooperative had in properties are terminated.
Section 14. Submission of the Board of Liquidators/Trustees' Financial Report. The Cooperative Board of
Liquidators/Trustees shall submit a final report to the members of the liquidated cooperative and to the
Authority, Federation, or Union to which the cooperative is affiliated with.
Upon receipt of the Final Report of the Board of Liquidators/Trustees and finding that said final report is
complete and in order, the Authority shall release the Liquidators/Trustees from their duties and
functions. Thereafter shall effect the cancellation of the Certificate of Registration of the subject
cooperative and delisting of the name of the cooperative in the Cooperative Registry.
For failure to submit the Final Report the Board of Liquidators/Trustees shall not be released from their
duties and functions, hence no clearance shall be issued by the Authority.
Section 15. Summary Proceedings. For cooperative with assets of not more that One Hundred Thousand
Pesos (P100,000.00) as shown in the Audited Financial Statements and with no known creditors, the
Authority may choose to initiate summary proceedings.
The following documents shall be required to be submitted by the Board of Directors to the Authority:
1. Schedule of Assets;
2. Proposal of Distribution of Assets to its members;
3. List of intended beneficiaries of the Statutory Funds;
4. Affidavit of No Creditors; and
5. Audited Financial Statement;
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Telephone : (043) 723 8412
After due evaluation by the Authority, the same shall issues a written authority to the Board of Directors
to distributed the assets of the cooperative. After which, the Board of Directors shall submit a final report.
Section 16. Suppletory Laws. The provisions of Chapter Two (2) and Three (3) of title 19 on the
Concurrence and Preference of Credit under the New Civil Code and the provisions of Rule 104 of the
Revised Rules of Court on the Voluntary Dissolution of Corporations shall be used as suppletory rules.
Section 17. Exception. The Authority, at its own discretion, may outrightly cancel the Certificate of
Registration of a cooperation of a cooperative which has been proven to have no assets, or in case the
cooperative can no longer be located despite the best to locate it. Such facts shall be stated in the Order
of Cancellation.
RULE 10
CAPITALIZATION AND ACCOUNTING PROCEDURES OF COOPERATIVES
"Art. 71. Capital. - The Capitalization of cooperatives and the accounting procedures shall be governed by
the provisions of this Code and the regulations which shall be issued."
Section 2. Capital Sources. Capitalization of a duly registered cooperative may be derived from any or all
of the following sources;
1. Members' Share Capital;
2. Loans and Borrowing Including Deposits;
3. Revolving Capital which consist of the deferred payment of patronage refunds, or interest on share
capital; and
4. Subsidies, donations, legacies, grants, aids and such other assistance from any local or foreign
institution whether public or private; Provided, That capital coming from such subsidies, donations,
legacies, grants, aids and other assistance shall not be divided into individual share capital holdings at
any time but shall instead form part of the donated capital or fund of the cooperative.
Section 3. Share Capital. The Share Capital of a cooperative, the per value of which may be fixed at any
figure not more than One Thousand Pesos (P1,000.00), may consist of common share capital and
preferred share capital if the latter is provided for under the cooperative's Articles of Cooperation and By-
laws. The share capital contribution of the members shall be considered as equity. Provided, that it shall
not be withdrawn and should not be used in offsetting obligations whether past due or current while the
membership subsists.
(a) Common Share Capital shall be issued only to regular members. Its holders shall be entitled to vote
and be voted under the principle of one-man, one vote principle, and shall receive interest, the rate
which should not exceeded the normal rate on investment.
(b) Preferred Share Capital may be issued to regular and associate members. However, associate
Members shall not be eligible to vote nor be voted on account of such shareholdings but shall be entitled
to, among others the following:
1. Preference in the payment of interest as provided for in the Bylaws of the cooperative; and
2. In case of liquidation, priority in the distribution on Preferred Share Capital shall be prescribed in the
By-laws of the cooperative.
Section 4. Preferred Shares. Issuance and limitation on Preferred Share Capital shall be prescribed in the
By-laws of the cooperative.
Section 5. Capital Build-Up. The By-laws of every cooperative shall provide for a reasonable and realistic
member capital build-up program to allow the continuing growth of the members' investment in their
cooperative as their own economic conditions continue to improve.
Section 6. Limitation on Share Capital Holdings. No member of a primary cooperative other that a
cooperative itself shall own or hold mere than ten percent (10%) of the share capital of the cooperative.
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Telephone : (043) 723 8412
In the case of Secondary and Tertiary Cooperatives, members should own not more that ten percent
(10%) of the share capital of the cooperative.
Section 7. Fines on Unpaid Subscribed Share capital. The By-laws of a cooperative shall prescribe a fine
on unpaid subscribed share capital. Provided, that such fine is fair and reasonable under the
circumstances as determined by the Board of Directors.
Section 8. Assignment of Share Capital Contribution or Interest. Subject to the provision of R.A. 9520, no
member shall transfer his/her shares or interest in the cooperative or any part thereof unless:
1. He/She has held such share capital contribution or interest for not less than one (1) year;
2. The assignment is made to the cooperative or to a person who falls within the field of membership of
the cooperative; and
3. The Board of Directors has approved such assignment.
Section 9. Interest on Share Capital. Interest on Share Capital shall not exceed the Rate of Return on
Investment.
Unless otherwise provided for in the By-laws of the cooperative, share capital shall earn interest; the Rate
of Interest shall be computed as follows:
Rate of Interest =
X (Net
Surplus less Statutory Reserves)
Total Average Share Month
Where: X shall be a percentage to be determined by the Board of Directors allocated for interest on share
capital.
No allocation of interest on share capital shall be made without the approval of the Board of Directors
which may increase or decrease any or both.
Payment of interest, unless otherwise provided for in the By-laws, must be made on such date as may be
determined by the Board of Directors. The General/Representative Assembly ',owever, upon the
recommendation of the Board of Directors, may defer the payment of such interest including Patronage
Refund to raise Revolving Capital.
No cumulative interest shall be allowed for any kind or class of share issued by the cooperative.
Share Capital shall receive a strictly limited Rate of Interest.
Section 10. Withdrawal of Share Capital. A member of a cooperative may, for any valid reason, withdraw
his/her membership from the cooperative by giving a sixty (60) days notice to the Board of Directors.
Subject to the By-laws of the cooperative, the withdrawing member shall be entitled to a refund of
his/her share capital contribution and all other interests in the cooperative. Provided, That such refund
shall not be made if upon such payment the value of the assets of the cooperative would be less than the
aggregate amount of its debts and liabilities exclusive of his/her share capital contribution.
Section 11. Patronage Refund. The principle of Patronage Refund is a principle of a equity wherein an
equal right of members to participate in the organization and to equitably share in the benefits accruing
is established. Under the principle, the Net Surplus shall not be construed as profit, but as excess
payments made by them from the cooperative and which shall be deemed to have been returned to them
if the same is distributed as prescribed by the Code and by this Rule. Provided, however, That the
amount allocated for patronage refund shall not be less than thirty percent (30%) of the net surplus after
deducting the statutory reserves based on the principle of equity. Provided, further, that in no case shall
the rate of patronage refund be more than twice the rate of interest on share capital.
Section 12. Accounting Procedure. The accounting system to be installed/maintained in the cooperative
shall be in accordance with the generally accepted accounting principles and practices, taking into
consideration cooperative principles and practices. The cooperative shall use the Standard Chart of
Accounts and its accompanying Accounting Manual prescribed by the Authority.
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Telephone : (043) 723 8412
RULE 11
SOCIAL AUDIT OF COOPERATIVE
Section 1. Legal Basis. The legal basis for this Rule is Art. 80, paragraph 4, 5 and 6 of the Code, quoted
as follows:
"Art. 80. Annual Audit. - Cooperatives registered under this Code shall be subject to an annual financial,
performance and social audit."
"The social audit shall be conducted by an independent social auditor accredited by the Authority."
"The Authority in consultation with the cooperative sector, shall promulgated the rules and standards for
the social audit of cooperatives."
Section 2. Coverage. All registered cooperatives regardless of types and categories shall be subject to
social audit.
Section 3. Social Audit. It is a procedure where the cooperative assesses its social impact and ethical
performance vis-à-vis its stated mission, vision, goals and code of social responsibility. It is a process to
assess the cooperative's contribution for the upliftment of the status not only to its members' economic
needs but also social needs and the community where it operates. The cooperative's actual performance
and accomplishment are compared to its vision, goals, and social responsibility as it relates to the impact
not only to the community but to its regular members as the immediate beneficiary of the decisions and
actions it promulgated, passed and implemented. Social Audit will serve as control mechanism to account
for its social performance and evaluate its impact in the community taking into account the community
development fund which shall be used for projects or activities that will benefit the community where the
cooperative operates.
Section 4. Objectives/Uses of Social Audit. Social Audit validates the support of the cooperative to the
seventh cooperative principles on the "Concern Community" and determines whether the cooperative
work for the community's sustainable development through policies approved by their members. The
audit focuses not only to the economic side of the cooperative but also the social aspect of the
organization and appraises the cooperative performance as valuebased organization usually participative,
user and community oriented and non-profit but service organization and how its social responsibility for
its members and the community as a whole was fulfilled. Social Auditing is the systematic review of the
attitudes, values, behavior, and degree of interaction of people within the cooperative as well as the
policies, programs and activities being implemented by the cooperative.
Section 5. Components and Social Audit Indicators. The Social Audit of the cooperative shall consists of
but not limited to the following major components/categories with its objectives:
1. Membership. To determine the effectiveness of the cooperative in meeting the needs of its members
vis-à-vis the socio-economic upliftment and empowerment of the members.
2. Assets building. To determine the cooperatives' performance in building up its economic capacity to
respond to its social responsibility and development income generating undertakings for its members.
3. Community Involvement and Solidarity. To determine the degree of community, social, environmental
involvement and solidarity of the cooperative. In relation to this, all cooperatives are encourage to
promote environmental awareness and instill environmental protection and conservation to their
members and the community where they operate, and as far as practicable to conduct tree-planting
activities in the community where they operate or its immediate environs.
4. Information accessing and dissemination. To determine the capability of the cooperative to access,
process and disseminate information from/to its members and community. It looks into the function of
the organization as an empowering and responsive mechanism.
5. Gender, Youth, Elderly, Children, and Persons with Disability. To determine how the cooperative has
contributed in the social capital development for the welfare of the youth, the elderly, children, and
persons with disability and the promotion of the gender fair culture and practices.
6. Leadership and Organizational Management. To highlight the attributes of the leaders/officers of the
cooperative and efficiency in managing the affairs of the organization as it relates with its members and
with government.
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Telephone : (043) 723 8412
Section 6. Social Audit Manual. The Authority shall develop a Social Audit Manual that will be used for the
purpose.
Section 7. Applicability. All registered cooperatives shall submit to the Authority the Annual social Audit
Report as conducted by an Independent Social Auditor accredited by the Authority.
Section 8. Sanctions. The failure of the cooperatives to the Authority of the required Social Audit Report
conducted by the Accredited Independent Social Auditor shall mean non-compliance with the required
reports and will be meted with corresponding penalties in accordance with R.A. 9520.
Section 9. Transitory Period. All cooperative are hereby given two (2) years from effectivity of this Rule to
comply with the Social Audit Requirements as provided above.
RULE 12
FINANCIAL SERVICE COOPERATIVE (FSC)
Section 1. Legal Basis. The legal basis for this Rule is Art. 121 (1) and (14) of the Code, quoted as
follows:
"Art. 121. Regulation and Supervision. - The Authority shall exercise lead regularity powers and
supervision over the operations of the financial service cooperatives, to wit:
(1) Issue rules and regulations for the safe and sound operations of financial service cooperatives. xxx
(14) Appoint a conservator or a receiver as may be necessary subject to the rules and regulations to be
promulgated by the Authority in coordination with the BSP, taking into consideration the grounds, powers
and procedures under Sections 29 and 30 of Republic Act. No. 7653 as may be deemed appropriate to
financial service cooperatives.
The Authority shall include in its rules and regulation appropriate sanctions and penalties, on the financial
service cooperatives, its members, and officers and responsible, its members, officers and responsible
persons, for any action that fails to adhere to sound and prudent management practices or are
inconsistent with the provisions of this Code xxx."
Section 2. Functions of FSC. A FSC is a financial organization owned and operated by its members and
authorized to provide the following services, exclusively to its members: (a) the functions of credit
cooperatives and other cooperatives, including multipurpose cooperatives, that provide savings and credit
to their members; and (b) other financial services subject to regulation by the BSP.
Section 3. Coverage. (1) All Financial Service Cooperative organized for the primary purpose of engaging
in savings and credit services and other financial services, and (2) Existing cooperatives with savings and
credit facilities which has formally notified the Authority of their intention to exercise enhanced functions
and satisfied the requirements of CDA for conversion to Financial Service Cooperative.
Section 4. Registration. The Articles of Cooperation and By-laws of any FSC, or any amendment thereto,
shall be registered with the Authority only if accompanied by a Certificate of Authority issued by the BSP,
under its official seal. Existing cooperative engaged in credit and multi purpose activities, after it has
notified the Authority of its decision to exercise enhanced functions and satisfied the requirements for the
conversion to Financial Service Cooperative, shall register its amended Articles of Cooperation and By-
laws to the Authority upon approval of the Authority and favorable certification of the BSP.
Section 5. Revocation of Authority. The authority granted, may be revoked by the BSP if any of the
grounds for receivership mentioned under Section 30 of Republic Act. No. 7653, otherwise known as The
New Central Bank Act and sections 53 and 56 of Republic Act No. 8791, otherwise known as An Act
Providing for the Regulation of the Organization and Operations of Banks, Quasi-Banks, Trust Entities and
for Other Purposes are present or if the FSC has willfully violated the Code or any of the related rules and
regulations.
Section 6. Minimum Capitalization Requirements. Only those cooperatives with minimum Paid-up capital
of at least Ten Million pesos (Php 10,000,000.00) shall qualify to register as FSC without prejudice to
additional capital requirements that maybe prescribed by the BSP for a particular financial service
regulated by the BSP that will be offered by the FSC.
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Telephone : (043) 723 8412
Section 7. Documentary Requirements. In addition to the documents required by the authority for
registration of new cooperative/amendments, the following shall be likewise submitted:
1. Certificate of Authority from BSP;
2. Resolution of the Board stating that:
2.1 The function or one of the functions of the cooperative shall be savings, credit and other financial
services;
2.2 The amount of paid-up capital allocated for such purposes shall be at least Ten Million Pesos (Php
10,000,000.00);
3. Undertaking to accomplish within a year from the issuance of Certificate of Registration to establish
the business site equipped with facilities, forms, stationeries, and vault and provide required special
training/seminar for officers of the cooperative;
4. Audited Financial Statement of the immediately preceding year in case of existing cooperative;
5. Other papers, which may be required by Authority.
Section 8. Reportorial Requirements. The FSC shall submit the regular reports as provided under Section
2 of Rule 8 of this Rule.
Section 9. Membership and Affiliation. A FSC shall have two (2) types of members: (1) Regular members,
who are natural persons; and (2) Associate members who are natural persons but who do not
immediately qualify under the requirements for membership set out in the By-laws of the cooperative. All
associate members who are natural persons shall be given two (2) years to become regular members.
Failure to convert within said period shall mean automatic withdrawal of their associate membership.
They may, however, re-apply as regular members after two (2) years. Minors who are dependents of
regular members can qualify as associate members. When they reach the age of majority and within two
(2) years from acceptance of their associate membership, they have the option to convert into regular
members. As associate members, they may open accounts, deposit funds, and withdraw from their
account, subject to the By-laws and rules of the cooperative, and the rules and regulations of the
Authority, notwithstanding the provisions of existing laws to the contrary.
Section 10. Officers. The officers of the FSC shall be composed of the Members of the Board of Directors,
Committee Members, General Manager or Chief Executive Officer, Secretary, Treasurer and Members
holding other positions as may be provided for in their By-laws.
Section 11. Bonding of Accountable Officers. Every Director, Officer, and Employees handling funds,
securities, or property on behalf of the FSC shall be covered by a surety bond to be issued by a duly
registered insurance or bonding company for the faithful performance of their respective duties and
obligations. The Board of Directors shall determine the adequacy of such bonds.
Section 12. Compensation. In the absence of any provision in the By-laws fixing their compensation, the
Directors, shall not receive any compensation except for reasonable per diems: Provided, however, That
the Directors and Officers shall not be entitled to any per diem when, in the preceding calendar year, the
cooperative reported a net loss or had dividend rate less than the official inflation rate for the year. Any
compensation other than per diems may be granted to Directors by a majority vote of the members with
voting rights at a regular or special general assembly meeting specifically called for the purpose: Provided
further, That no additional compensation other than per diems shall be paid during the first year of
existence of the FSC. Provided finally, That the immediately preceding proviso shall not apply to
cooperatives which converted into Financial Service Cooperative. The compensation of Officers as well as
the Members of the Committee created pursuant to the Code or its By-laws maybe fixed in By-laws.
Section 13. Removal of Officers. All complaints for the removal of any elected Officer shall be filed with
the Board of Directors. Such Officer shall be given the opportunity to be heard. Majority of the Board of
Directors may place the Officer concerned under preventive suspension pending the resolution of the
investigation which period shall be specified in the By-laws or policies of the cooperative duly approved
by the General/Representative Assembly. Upon finding of a prima facie evidence of guilt, the Board of
Directors shall present its recommendation for removal to the General/Representative Assembly.
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Telephone : (043) 723 8412
An Elective Officer may be removed by three-fourths (3/4) vote of the regular members present and
constituting a quorum in a regular or special general assembly meeting called for the purpose. The
Officer concerned shall be given an opportunity to be heard at said assembly.
Section 14. Net worth. The Net Worth of the FSC shall, at all times, not be less than an amount equal to
eight percent (8%) of its risk assets. The net worth positions should be sufficient to meet competitive
pressure and adverse economic conditions as they arise. It should enhance the safety of the members'
share and keep pace with growth in FSC assets.
Section 15. Deposit and Borrowing Operations. Savings and Time Deposits with FSC may be opened with
a minimum amount to be determined by the Board of Directors. Only members and its affiliate laboratory
cooperative may open savings and/or time deposit accounts. The FSC, through the Board of Directors as
authorized by the General Assembly, may borrow from any source at the best terms or conditions
available and in such amount that may be needed.
Section 16. Reserve Requirements against Deposit Liabilities. FSC shall maintain a Liquidity Reserve Fund
that will be restricted in nature equivalent to at least two percent (2%) of their savings and time deposit
liabilities.
Section 17. Loans. The Board of Directors shall be responsible for setting loan policies and lending
procedures. It shall comply with the provisions of R.A. 3765, otherwise known as the "Truth in Lending
Act" and shall make the true and effective cost of borrowing, an integral part of every loan contract.
Section 18. Investment Program. A sound investment program shall be the sole responsibility and
accountability of the Board of Directors. The scope of the program will depend largely on the FSC size
and the extent of its surplus funds. Investment policies should be in writing and should address the
safety, liquidity and yield, diversification, delegation of authority, and valuation/assessment of securities.
The FSC shall not invest in any single entity more than 20% of its net worth.
Section 19. Internal Control. The FSC shall adopt a proper plan of organization, accounting control,
accounting system, administrative control, internal control standards, accounting records procedures and
other measures to safeguard the FSC's assets, check the accuracy and reliability of accounting data,
promote operational efficiency, and encourage adherence to prescribed managerial policies.
Section 20. Performance Standards. A policy of transparency and openness must be always maintained
whereby the Books of Accounts, General/Representative Assembly, Board Resolutions and Committee
Reports are properly kept and made accessible to members, and the regular financial statements are
periodically prepared and made known to the members, to the Authority and to other parties interested
in the FSC's operations.
Section 21. Standard Chart of Accounts. All FSCs shall adopt the Standard Chart of Accounts and its
accompanying Accounting Manual for Credit and Other Types of Cooperatives with Credit Service issued
by the Authority.
Section 22. Manual of Rules and Regulations. The Authority shall develop a Manual that will cover: (1)
the Rules and Regulations for the safe and sound conduct of operations of Financial Service
Cooperatives; (2) Rules and Regulations for the appointment of a Conservator or a Receiver as may be
necessary in coordination with the BSP, taking into consideration the grounds, powers and procedures
under Section 29 and 30 of Republic Act No. 7653 as may deemed appropriate to Financial Service
Cooperatives; and (3) the appropriate sanctions and penalties on the Financial Service Cooperatives, its
Members, Officers and Responsible Persons, for any action that fails to adhere to sound and prudent
management practices or are inconsistent with the provisions of the Code, other applicable laws on
cooperatives, rules, regulations, circulars or orders issued by the Authority, and require the cooperative
to undertake corrective or remedial measures relative thereto.
The appropriate prudential Rules and Regulations applicable to the Financial Service Cooperatives will be
developed by the BSP, in coordination with the Authority.
Section 23. Prohibition. The terms 'Credit Cooperatives', 'Financial Service Cooperative', and 'Financial
Service Cooperative Federation' shall be used exclusively by those who are duly registered under the
Code, and no person, group of persons, or organization shall use the said terms unless duly registered
with the Authority. Violations of this prohibition shall be punishable in accordance with Art. 140 of the
Code.
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Telephone : (043) 723 8412
RULE 13
VOLUNTARY ARBITRATION
Section 1. Legal Basis. The legal basis for this Rule is Art. 137 of the Code quoted as follows:
"Art. 137. Settlement of Disputes, Conciliation, and Mediation Proceedings. - Disputes among members,
officers, directors, and committee members, and intra-cooperative, inter-cooperative, intra-federation or
intra-federation disputes shall, as far as practicable, be settled amicably in accordance with the
conciliation or mediation mechanism embodied in the bylaws of cooperatives and in such other applicable
laws.
The conciliation and mediation committee of the cooperative shall facilitate the amicable settlement of
intra-cooperative disputes and disputes among members, officers, directors, and committee members.
Should such conciliation and mediation proceedings fail, the matter shall be settled through voluntary
arbitration: Provided, however, That before any party can validly file a complaint with the Authority for
voluntary arbitration, it must first secure a certification from its conciliation and mediation committee and
from the cooperative union or federation to which it belongs that despite all efforts to settle the issues,
the same have failed.
The jurisdiction of the voluntary arbitration shall be exclusive and original and their decisions shall be
appealable to the Office of the President. The Authority shall issue and adopt the proper rules of
procedure governing arbitration as the primary and exclusive mode for dispute resolution in accordance
with the Alternative Dispute Resolution Act of 2004.
For this purpose, the Authority shall constitute a list of Qualified Voluntary Arbitrators."
Section 2. Exclusive and Original Jurisdiction of the Voluntary Arbitrator/Arbitrator. The Voluntary
Arbitrator/Arbitrator mutually chosen by the parties shall have exclusive and original jurisdiction over the
dispute, and their decision shall be appealable to the Office of the President of the Republic of the
Philippines.
Section 3. Powers/Authority of the Voluntary Arbitrator/s. The Voluntary Arbitrator/s shall have the
following powers/authority:
a. To hold hearings and to receive evidence necessary to resolve the issue/s subject of the dispute.
b. To require any person to attend hearing/s as witness or to cause production of documents when the
relevancy and the materiality thereof are vital to the resolution of the case.
c. To administer oath.
d. To cite contempt any person disturbing the proceeding and/or who willfully defy lawful orders of the
Voluntary Arbitrator/Arbitrators.
e. To issue a Writ of Execution, if necessary.
f. To exercise such other powers and functions as may be necessary to resolve the dispute.
Section 4. Nature of Proceedings. Voluntary Arbitration is an administrative proceeding. The technical

rules applicable to court or judicial proceedings may not apply strictly. However, the requirements of due
process must be observed at all times. The hearing may proceed even in the absence of any party,
provided the parties were duly notified and their failure to appear in such scheduled meeting is
unjustified as determined by the Voluntary Arbitrator/s handling the proceedings.
Section 5. Coverage. All intra/inter cooperative disputes not resolved amicably in accordance with the
Conciliation/Mediation Mechanisms embodied in the By-laws of a cooperative shall be governed by this
Rule.
Section 6. Commencement of Action. Any party of a dispute not resolved through Conciliation/Mediation
Proceeding in the primary and union/federation level can commence an action for Voluntary Arbitration
by filing a Verified Complaint with the Authority.
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Telephone : (043) 723 8412
In the case of a primary cooperative affiliated with any federation/union, the complaint shall be
accompanied by a Certificate of Non-Settlement issued by the said federation/union to which the primary
In the case of a primary cooperative not affiliated with any federation or union, the complaint shall be
accompanied by a Certificate of Non-Settlement issued by the Conciliation/Mediation Committee of such
primary cooperative together with a Certificate of Non-Affiliation with any Federation/Union signed by the
Chairperson of the Board of Directors of the same cooperative.
Section 7. Venue of Action. All complaints shall be filed with CDA-Extension Office having administrative
jurisdiction over the cooperatives. However, for complaints involving cooperatives registered with the
Central Office such complaint shall be filed with the latter.
Section 8. Contents of the Complaint. The complaint shall contain:
1. The Names and Addresses of the Complainant/s and Respondent/s;
2. A Brief Description of the Complaint and the Documentary Evidences, if any; and
3. The Relief Prayed For.
Section 9. Parties to the Dispute. The Party who filed the complaint shall be called the "Complainant/s"
and the Party complained of shall be called the "Respondent/s".
Section 10. Procedures. Upon receipt of the Complaint, the Authority shall issue a Notice/Summons to the
Respondent/s to file Answer/Comment. Upon receipt of the Answer/Comment, a Preliminary Conference
shall be scheduled.
Section 11. Preliminary Conference. A Notice shall be sent to all parties concerned, indicating the time
and date of the conference. The Notice shall be served on Counsel, or on the party who has no Counsel.
It shall be the duty of the parties or their Counsel to appear at the Preliminary Conference. The non-
appearance of a party may be excused only if a valid cause is shown therefore or if a Representative shall
appear in his/her behalf fully authorized in writing. The unjustified failure of the Complaint to appear in
the Preliminary Conference shall be cause for dismissal of the complaint. A similar failure on the part of
the Respondent at the first instance, a second Notice/Summons shall be issued. Non-compliance with the
second Notice/Summons by the Respondent/s shall be cause for the dismissal of the complaint. However,
a Certificate of Non-Resolution may be issued upon request of the Complainant.
Whenever the Respondent's whereabouts are unknown or cannot be ascertained by diligent inquiry, the
notice may be effected by publication in a newspaper of general circulation at the expense of the
complainant, otherwise the complaint shall be dismissed. However, a Certificate of Non-Resolution may
be issued to the Complainant.
Should the parties appear in the Preliminary Conference, the parties shall be required to sign a
Submission Agreement.
Section 12. Contents of the Submission Agreement. The Agreement shall contain, among other things,
the following matters:
1. The agreement to submit to Voluntary Arbitration;
2. The specific issue/s or dispute/s to be submitted for resolution;
3. The name of the Voluntary Arbitrator/s chosen by the parties;
4. The manner of paying the cost of arbitration proceedings including the Arbitrator's fee;
5. The name of the public official whom the parties may designate to execute the final decision or award,
if necessary; and
6. The Agreement to perform or abide by the Decision/Award.
Section 13. Arbitration Proceedings. All parties to the dispute shall attend the arbitration proceedings.
The attendance of any third party or the exclusion of any witness in the proceeding shall be determined
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by the Voluntary Arbitrator/s. Hearings may be adjourned for a valid cause or upon agreement of the
parties. Unless the parties agree otherwise, it is mandatory for the Voluntary Arbitrator/s to render a
Decision or Award within thirty (30) calendar days from the date the parties agreed to submit the case
for resolution.
Section 14. Decision/Award. The final disposition of the issue/s submitted to Voluntary Arbitration is the
Decision/Award.
The Decision or Award must be stated in clear, concise and definite terms. It shall include the facts and
the law and/or contract upon which the Decision/Award is based and shall be signed by the Voluntary
Arbitrator/s. A copy of this Decision/Award shall be furnished the Authority.
Section 15. Extent of Decision/Award. The Voluntary Arbitrator/s shall have the power to decide only the
matters which have been submitted for arbitration.
Section 16. Enforcement/Execution of Decision/Award. The parties shall comply voluntarily and faithfully
the Decision/Award. In instances of non-compliance, a Motion to Enforce or Execute may be filed with
the Voluntary Arbitrator/s who may issue a Writ Execution requiring either the sheriff of the Authority, if
any, or the regular courts or any public official whom the parties may designate in the submission
agreement to execute the final decision or award.
Section 17. Appeal to the Office of the President of the Republic of the Philippines. The Decision/Award
rendered shall be appealable to the Office of the President of the Republic of the Philippines. The Appeal
is taken by filing a Notice of Appeal within fifteen (15) days after receipt of the copy of the
Decision/Award appealed from. If no appeal is filed within the time as provided herein, such
Decision/Award becomes final and executory.
Section 18. Stenographic Notes/Transcript. The Voluntary Arbitrator/Arbitrator shall arrange the taking of
stenographic notes/transcript of the testimony when one or more parties request such a record, and such
party or parties thereof assume payment of the cost.
Section 19. Cost of Arbitration and Arbitrator's Fee. Unless agreed otherwise, the parties shall equally
share the cost of the proceedings including the Arbitrator's Fee.
Section 20. Accreditation of Voluntary Arbitrator/s. The Authority shall issue guidelines concerning the
accreditation and de-listing of Voluntary Arbitrator/s as well as the list of qualified Voluntary Arbitrator/s.
COMMON PROVISIONS
Section 1. Requirements. A copy of these Rules shall be among the documents required to be kept ready
and accessible for inspection and examination by the members of the cooperative and the Authority in
accordance with Art. 52 of the Code.
Section 2. Interpretation. Unless otherwise stated in these Rules, in case of doubt as to the meaning of
any provision of these Rules, the same shall be resolved and interpreted liberally in favor of the
cooperatives and their members.
Section 3. Suppletory Rule. Bureau of Local Government Finance Memorandum Circular No. ____ and
Bangko Sentral ng Pilipinas Circular No. 682, S-2010 shall from part of these Rules. Special Rules,
Circulars, Orders and other issuances by appropriate government agencies in pursuance of the provisions
of the Code and these Rules, and not inconsistent thereto, shall have suppletoy application to these
Rules.
Section 4. Mandate. The Authority is mandated to implement and enforce these Rules and Regulations.
Section 5. Applicability. The provisions of this Rule shall apply to Rules 1 to 13.
Section 6. Separability. If any provision of these Rules and Regulations is declared null and void or
unconstitutional, the other provisions not affected thereby shall continue to be in force and effect.
Section 7. Amendment. These Rules and Regulations shall be subject to automatic review three (3) years
after the effectivity thereof. Any amendment thereto, shall be subject to the review and approval of the
JCOCC.
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Section 8. Effectivity. These Rules and Regulations shall take effect fifteen (15) days after publication in
the Official Gazette or in a newspaper or general circulation.
SUMMARY OF VOTING REQUIREMENTS IN A COOPERATIVE

Cooperative Act Voting by Board of Directors Voting by Members (Regular Presence of
Members – Members with Appraisal
Voting Rights) Right or
Right to
Withdraw
Merger or Consolidation of Cooperatives Not Required ¾ of all members with voting Yes
rights, present and constituting a
quorum
Amendment of articles of cooperation Not Required 2/3 of all members with voting Yes
rights
Amendment of by-laws Not Required 2/3 of all members with voting Yes
rights
Division of Cooperatives into two or Not Required ¾ of all members with voting No
more Cooperatives rights, present and constituting a
quorum
Voluntary dissolution of cooperative Majority of all members ¾ of all members with voting No
where creditors are not affected (Mere submission of board resolution rights, present and constituting a
together with ratification by General quorum
Assembly)
Voluntary dissolution of cooperative Majority of all members (Filing of Formal ¾ of all members with voting No
where creditors are affected Petition with notice and hearing) rights, present and constituting a
quorum
Filing up of vacancy in the board of Not Allowed Majority of all members with voting No
directors if vacancy is due to expiration rights, present and constituting a
of term quorum
Filing up of vacancy in the board of Majority of the Remaining Directors if Majority of all members with voting No
directors if vacancy is not due to they still constitute a quorum; or rights, present and constituting a
expiration of term (death, removal or quorum
resignation)
Allocation of interest on share capital Majority of all members present and Not Required No
constituting a quorum
Deferment of payment of interest on Upon recommendation by Majority of all Approval by Majority of all No
share capital members present and constituting a members with voting rights,
quorum present and constituting a quorum
Removal of a member of cooperative Majority of all members Not Required No
for valid cause
Delegation of power of board of Majority of all members Not Required No
directors to an executive committee
Placing an elected cooperative officer Majority of all members Not Required No
under preventive suspension pending
resolution by the investigating
committee over his removal
Filling up of vacancy in the executive Majority of all members present and Not Required No
committees constituting a quorum
Recommending to the General Majority of all members present and Not Required (But approval of No
Assembly the removal of elected officer constituting a quorum General Assembly is necessary for
of the cooperative the decision regarding the removal)
Delegation of the delegable powers of Not Required ¾ of all members with voting No
General Assembly to the Board of rights, present and constituting a
Directors quorum
Ratification of contracts with self- Not Required ¾ of all members with voting No
dealing directors, officers or executive rights, present and constituting a
committee members of the cooperative quorum
Ratification of disloyalty of a director of Not Required ¾ of all members with voting No
a cooperative rights, present and constituting a
quorum
Removal of an elected officer upon Not Required (But recommendation by ¾ of all members with voting No
recommendation of the Board of the board is necessary prior to the rights, present and constituting a
Directors voting for the removal) quorum
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Quizzer in Philippine Cooperative Code
1. What is the title of Republic Act No. 9520?

a. Philippine Cooperative Code of 2008
b. Cooperative Code of the Philippines of 2004
c. Cooperative Law of the Philippines of 2006
d. Philippine Cooperative Law of 2010
2. It 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 capital required, patronizing their products
and services and accepting a fair share of the risks and benefits of the undertaking in accordance
with universally accepted cooperative principles.
a. Corporation
b. Cooperative
c. Joint Venture
d. Association
3. Which of the following is not a cooperative principle?

a. Democratic Member Control
b. Autonomy and Independence
c. Involuntary and Close Membership
d. Concern for Community
4. Which of the following is not a cooperative principle?

a. Education, Training and Information
b. Cooperation among Cooperatives
c. Member Economic Participation
d. Taxability of Cooperatives
5. This cooperative principle means that Cooperatives are voluntary organizations, open to all
persons able to use their services and willing to accept the responsibilities of membership,
without gender, social, racial, cultural, political or religious discrimination.
a. Democratic Member Control
b. Voluntary and Open Membership
c. Autonomy and Independence
d. Concern for Community
6. It refers to the government agency created by Cooperative Code entrusted with the supervision
and regulation of cooperatives in the Philippines.
a. Securities and Exchange Commission (SEC)
b. Bangko Sentral ng Pilipinas (BSP)
c. Cooperative Development Authority (CDA)
d. Insurance Commission (IC)
7. It refers to a type of audit wherein the cooperative assesses its social impact and ethical
performance vis-à-vis its stated mission, vision, goals and code of social responsibility for
cooperatives to be established by the CDA in consultation with the cooperative sector.
a. Social Audit
b. Performance Audit
c. Financial Statements Audit
d. Compliance Audit
8. It refers to a type of audit on the efficiency and effectiveness of the cooperative as a whole; its
management and officers; and its various responsibility centers as basis for improving individual
team or overall performance and for objectively informing the general membership on such
performance.
a. Social Audit
b. Performance Audit
c. Financial Statements Audit
d. Compliance Audit
9. It refers to a type of cooperative that is undertaking activities which are related to its main line of
business or purpose.
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a. Single-Line or Single-Purpose Cooperative

b. Service Cooperative
c. Multi-Purpose Cooperative
d. Subsidiary Cooperative
10. It is a type of cooperative that promotes cooperativism among its members and the public
through socially-oriented projects, education and training, research and communication, and
other similar activities to reach out to its intended beneficiaries.
a. Education Cooperative
b. Advocacy Cooperative
c. Training Cooperative
d. Learning Cooperative
11. It is a type of cooperative that promotes and undertakes savings and lending services among its
members. It generates a common pool of funds in order to provide financial assistance to its
members for productive and provident purposes.
a. Insurance Cooperative
b. Credit Cooperative
c. Cooperative Bank
d. Financial service Cooperative
12. It is a type of cooperative that is organized for the primary purpose of engaging in savings and
credit services and other financial services.
a. Insurance Cooperative
b. Credit Cooperative
c. Cooperative Bank
d. Financial service Cooperative
13. It is a type of cooperative the primary purpose of which is to procure and distribute commodities
to members and non-members.
a. Marketing Cooperative
b. Producers Cooperative
c. Consumers Cooperative
d. Client Cooperative
14. It is a type of cooperative that combines two (2) or more of the business activities of these
different types of cooperatives.
a. Multi-purpose Cooperative
b. Single-line Cooperative
c. Dual-purpose Cooperative
d. No-purpose Cooperative
15. It is a type of cooperative the members of which are natural persons.

a. Primary Cooperative
b. Secondary Cooperative
c. Tertiary Cooperative
d. Intermediate Cooperative
16. It is a type of cooperative that engages in medical and dental care, hospitalization,
transportation, insurance, housing, labor, electric light and power, communication, professional
and other services.
a. Consumers Cooperative
b. Producers Cooperative
c. Credit Cooperative
d. Service Cooperative
17. It is a type of cooperative organized for the primary purpose of undertaking power generations,
utilizing renewable energy sources, including hybrid systems, acquisition and operation of
subtransmission or distribution to its household members.
a. Electric Cooperative
b. Insurance Cooperative
c. Water Service Cooperative
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d. Dairy Cooperative
18. It is a type of cooperative organized to assist or provide access to housing for the benefit of its
regular members who actively participate in the savings program for housing. It is co-owned and
controlled by its members.
a. Transport Cooperative
b. Housing Cooperative
c. Workers Cooperative
d. Fishermen Cooperative
19. It is a type of cooperative organized by workers, including the self-employed, who are at same
time the members and owners of the enterprise. Its principal purpose is to provide employment
and business opportunities to its members and manage it in accordance with cooperative
principles
a. Transport Cooperative
b. Housing Cooperative
c. Workers Cooperative
d. Fishermen Cooperative
20. It is a type of cooperative whose members are engaged in the production of fresh milk which
may be processed and/or marketed as dairy products.
a. Dairy Cooperative
b. Meat Cooperative
c. Vegetable Cooperative
d. Fruits Cooperative
21. The following are the purposes of a cooperative, except

a. To encourage thrift and savings mobilization among the members
b. To generate funds and extend credit to the members for productive and provident
purposes
c. To encourage among members systematic production and marketing
d. To promote monopoly and restraint of trade
22. Which of the following is a purpose of a cooperative?

a. To promote and advance the economic, social and educational status of the members
b. To discriminate against non-members of a cooperative
c. To discourage self-help or self-employment as an engine for economic growth and
poverty alleviation
d. To provide goods and services and other requirements to the non-members
23. Which of the following is the purpose of a cooperative?

a. To encourage thrift and savings mobilization among the members
b. To maximize the control of wealthy people of businesses
c. To acquire land for development as condominium projects for commercial purposes
d. To advocate strike, rally and boycott
24. Which of the following is not a purpose of a cooperative?

a. To promote and advance the economic, social and educational status of the members
b. To encourage and promote self-help or self-employment as an engine for economic
growth and poverty alleviation
c. To generate funds and extend credit to the members for productive and provident
purposes;
d. To create monopoly or business considered as restraint of trade
25. Which of the following is an objective of a cooperative?

a. To provide goods and services to its members to enable them to attain increased income,
savings, investments, productivity, and purchasing power, and promote among
themselves equitable distribution of net surplus through maximum utilization of
economies of scale, cost-sharing and risk-sharing
b. To teach members of inefficient ways of doing things in a cooperative manner
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c. To allow the higher income and more privileged groups to increase their ownership in the
wealth of the nation
d. To provide minimal social and economic benefits to its members
26. The following are the functions of a Federation of Cooperatives, except

a. To carry on any cooperative enterprise that complements augments, or supplements but
does not conflict, complete with, nor supplant the business or economic activities of its
member cooperatives.
b. To carry on, encourage, and assist educational and advisory work relating to its member
cooperatives.
c. To render services designed to encourage simplicity, efficiency, and economy in the
conduct of the business of its member cooperatives and to facilitate the implementation
of their bookkeeping, accounting, and other systems and procedures.
d. To print, publish, and circulate any newspaper or other publication in the interest of its
member cooperatives and enterprises.
e. To coordinate and facilitate the activities of its member cooperatives.
f. To develop the cooperative movement in their respective jurisdictions.
27. The following are the purposes of Cooperative Unions, except

a. To represent its member organizations.
b. To acquire, analyze, and disseminate, economic, statistical, and other information
relating to its members and to all types of cooperatives within its area of operation.
c. To sponsor studies in the economic, legal, financial, social and other phases of
cooperation, and publish the results thereof.
d. To develop the cooperative movement in their respective jurisdictions.
e. To advise the appropriate authorities on all questions relating to cooperatives.
f. To raise funds through membership fees, dues and contributions, donations, and
subsidies from local and foreign sources whether private or government.
g. To enter into joint ventures with national or international cooperatives of other countries
in the manufacture and sale of products and/or services in the Philippines and abroad.
28. Which of the following statements is true if a cooperative complies with the provisions of
Philippine Cooperative Code of 2008?
a. Such cooperative shall be deemed a conspiracy or combination in restraint of trade.
b. Such cooperative shall be implied an illegal monopoly.
c. Such cooperative shall be considered an attempt to lessen competition or to fix price
arbitrarily.
d. None of the above.
29. The following are the qualifications of organizers or cooperators of a prospective cooperative,
except
a. They are 15 or more natural persons.
b. They are all Filipino citizens.
c. They are all actually residing or working in the intended area of operation.
d. They have a common bond of interest.
e. They must be incapacitated persons.
30. What is the number of cooperators or founders of a primary cooperative?

a. 15 or more natural persons
b. Not less than 5 but not more than 15 natural persons
c. 5 but not more than 10 natural persons
d. 10 or more natural persons
31. What is the maximum foreign investment or ownership in a cooperative?

a. 100%
b. 40%
c. 30%
d. 0%
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32. It shall refer to a cooperative duly recognized by the Authority, formed and managed principally
by minors and is affiliated with another registered cooperative which is called the guardian
cooperative.
a. Laboratory Cooperative
b. Guardian Cooperative
c. Student Cooperative
d. Youth Cooperative
33. The following are the purposes of laboratory cooperative, except

a. To serve as a training ground for its members to prepare them for membership in regular
cooperatives
b. To teach the value of thrift and saving mobilization among its members
c. To instil cooperative values, principles, financial discipline and leadership skills among its
members
d. To promote and advance Filipino social and cultural values, ecological awareness and
sustainable development.
e. To accumulate or to raise fund for the setting of guardian cooperative
34. It shall refer to duly registered cooperative to which a laboratory cooperative is affiliated with.
a. Laboratory Cooperative
b. Guardian Cooperative
c. Student Cooperative
d. Youth Cooperative
35. The following are the qualifications of organizers or founders of a laboratory cooperative, except
a. Fifteen (15) or more minors
b. They are all Filipino citizens.
c. They are actually residing in the community or enrolled in an educational institution
within or near the area of operation of the Guardian Cooperative or out of school minor
actually residing in the community.
d. They are all gainfully employed.
36. What is the age of members of laboratory cooperative?

a. At least 7 years old but below 18 years of age
b. At least 12 years old but below 18 years of age
c. At least 15 years old but below 18 years of age
d. At least 10 years old but below 18 years of age
37. What is the minimum years of operation of a single-purpose cooperative in order to transform
into a multi-purpose cooperative or in order for a single-purpose cooperative to create a
subsidiary cooperative?
a. At least one year of operations
b. At least two years of operations
c. At least three years of operations
d. At least four years of operations
38. It refers to the document signed and acknowledged before a notary public by the organizers of a
cooperative that will be filed to CDA in order for the prospective cooperative to be created.
a. Articles of Co-Partnership
b. Articles of Cooperation
c. Articles of Incorporation
d. Articles of Association
39. Each cooperative to be registered before CDA shall adopt by-laws not inconsistent with the
provisions of Cooperative Code. When shall the cooperative by-laws be filed to the CDA?
a. Within 30 days from the issuance of CDA of Certificate of Registration of the Cooperative
b. Within 20 days from the issuance of CDA of Certificate of Registration of the Cooperative
c. Within 10 days from the issuance of CDA of Certificate of Registration of the Cooperative
d. At the same time the Articles of Cooperation is submitted to the CDA.
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40. What is the minimum prescriptive period to lapse from the filing of application for registration as
a new cooperative for the inaction of CDA to be considered an implied approval of the
registration?
a. At least 30 days
b. At least 60 days
c. At least 90 days
d. At least 120 days
41. What is the minimum prescriptive period to lapse from the filing of application for amendment of
articles of cooperation or by laws for the inaction of CDA to be considered an implied approval of
the amendment?
a. At least 30 days
b. At least 60 days
c. At least 90 days
d. At least 120 days
42. When shall the amendments of Articles of Cooperation and By-Laws of the Cooperative take
effect?
a. Upon its approval by the CDA or
b. Upon the lapse of 30 days from law f the date of filing amendment of articles or
cooperation or by-laws if not acted upon by the CDA for a cause not attributable to the
cooperative.
c. Either A or B
d. Neither A nor B
43. What is the minimum subscribed shares before a prospective cooperative be registered with
CDA?
a. At least 25% of authorized share capital
b. At least 1/3 of authorized share capital
c. At least ¾ of authorized share capital
d. At least majority of authorized share capital
44. What is the minimum paid-up capital before a prospective cooperative be registered with CDA?
a. At least 25% of the actual total subscription or P5,000, whichever is higher.
b. At least 25% of the actual total subscription or P15,000, whichever is higher.
c. At least 50% of the actual total subscription or P5,000, whichever is higher.
d. At least 75% of the actual total subscription or P15,000, whichever is higher.
45. What is the voting requirement for registration or formation of an electric cooperative with
Cooperative Development Authority?
a. At least 20% of all members in good standing
b. At least 25% of all members in good standing
c. At least 5% of all members in good standing
d. At least 10% of all members in good standing
46. When does a cooperative formed and organized under Cooperative Code acquire juridical
personality?
a. From the date of execution of Articles of Cooperation by the members.
b. From the date of submission of Articles of Cooperation to CDA.
c. From the date of issuance by CDA of Certificate of Registration under its official seal.
d. From the date of meeting of minds among the members.
47. What is a conclusive evidence of juridical personality of a cooperative and its due registration
with CDA unless it is proved that such registration has been cancelled?
a. Articles of Cooperation signed by the members
b. Cooperative By-laws signed by the members
c. Certificate of Registration issued by CDA under its official seal
d. Certificate of Registration issued by BIR under its official seal
48. What is the required vote for amendment of the provisions of Articles of Cooperation of a
Cooperative?
a. At least 2/3 of all members with voting rights
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b. At least 2/3 of all regular members and associate members

c. At least majority of all members with voting rights
d. At least ¾ of all members with voting rights
49. What is the required vote for amendment of the provisions of By-Laws of a Cooperative?
a. At least 2/3 of all members with voting rights
b. At least 2/3 of all regular members and associate members
c. At least majority of all members with voting rights
d. At least ¾ of all members with voting rights
50. What is the nature of liability of Cooperative duly registered under CDA?
a. Absolute liability
b. Unlimited liability
c. Limited liability
d. Supreme liability
51. What is the term of a cooperative?

a. A cooperative shall exist for a term no exceeding 20 years from the date of registration
unless sooner dissolve or unless said period is extended but the term is subject to
unlimited renewals at a period not exceeding 20 years in any single instance provided
that no extension can be made earlier than 2 years prior to the original or subsequent
determined by CDA.
b. A cooperative shall exist for a term not exceeding 30 years from the date of registration
determined by CDA.
c. A cooperative shall exist for a term not exceeding 40 years from the date of registration
determined by CDA.
d. A cooperative shall exist for a term not exceeding 50 years from the date of registration
determined by CDA.
52. He is a type of a cooperative member who has complied with all the membership requirements
and entitled to all the rights and privileges of membership. Common shares shall only be issued
to this type of member. Therefore, this type of member may invest in common shares and/or
preferred shares.
a. Regular member
b. Common member
c. Ordinary member
d. Normal member
53. He is a type of a cooperative member who has no right to vote nor be voted upon and shall be
entitled only to such rights and privileges as the bylaws may provide. This type of member can
only invest in preferred share.
a. Associate member
b. Probationary member
c. Preferred member
d. Extraordinary member
54. What is the required vote for the termination of a membership in a cooperative for any of the
valid causes enumerated by Cooperative Code?
a. At least 2/3 of all the members of the cooperative with right to vote
b. At least ¾ of all the members of the cooperative with right to vote
c. At least ¾ of all the members of the board of directors of the cooperative
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d. At least majority of all the members of the board of directors of the cooperative
55. The following are the requirements before an associate member shall be considered a regular
member, except
a. He has met the minimum requirements of regular membership.
b. He continues to patronize the cooperative for at least two years.
c. He signifies his intention to remain a member.
d. He has been elected a director of the cooperative.
56. What is the extent or nature of liability of a member of a cooperative for the latter’s debts to
third persons?
a. He is liable prorata and subsidiarily up to the extent of his separate assets.
b. He is liable solidarily and subsidiaraly up to the extent of his separate assets.
c. He is liable up to the extent of his contribution to the share capital of the cooperative.
d. He is liable equally and subsidiarily up to the extent of his separate assets.
57. What is the minimum number of days of giving notice to the board of directors before a member
may withdraw his membership from the cooperative for any valid reason?
a. 60 days notice
b. 30 days notice
c. 90 days notice
d. 120 days notice
58. What is the right of a withdrawing member of a cooperative?

a. He shall be entitled to a refund of his share capital all other interests in the cooperative.
b. He shall be entitled to a refund of his share capital only.
c. He shall be entitled to a refund of the fair market value of his share capital.
d. He shall not be entitled to any refund.
59. What is the capital structure of a cooperative before a refund be given to a withdrawing
member?
a. The value of the assets of the cooperative must be equal its liabilities before the
refunding.
b. The value of the assets of the cooperative must be equal or exceed its liabilities after the
refunding.
c. The value of the assets of the cooperative must be less than its liabilities before the
refunding.
d. The value of the assets of the cooperative must be less than its liabilities after the
refunding.
60. Which of the following may be considered ground for termination of membership of a member in
a primary cooperative?
a. Death of a member
b. Insanity of a member
c. Either A or B
d. Neither A nor B
61. Which of the following may be considered ground for termination of membership of a member in
a secondary or tertiary cooperative?
a. Insolvency of a cooperative member
b. Dissolution of a cooperative member
c. Either A or B
d. Neither A nor B
62. What is the required vote for termination of membership of a member of a cooperative?
a. At least majority vote of all members of board of directors
b. At least majority vote of all members of board of directors and ratification by at least 2/3
of cooperative members with voting rights
c. At least majority vote of all members of board of directors and ratification by at least 3/4
of cooperative members with voting rights
d. At least ¾ vote of all cooperative members with voting rights
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63. The following are grounds for termination of membership of a member in a cooperative, except
a. When a member has not patronized any of the services of the cooperative for an
unreasonable period of time as may be previously determined by the board of directors.
b. When a member has continuously failed to comply with his obligations.
c. When a member has acted in violation of the bylaws and the rules of the cooperative.
d. For any act or omission injurious or prejudicial to the interest or the welfare of the
cooperative.
e. When a member of a cooperative engages in another employment or business.
64. It shall be the highest policy-making body of the cooperative and shall exercise such powers as
are stated in the Cooperative Code, in the articles of cooperation and in the bylaws of the
cooperative.
a. General Assembly
b. Board of Directors
c. Board of Trustees
d. Executive Committee
65. What is the composition of General Assembly of the cooperative?

a. The general assembly shall be composed of such members who are entitled to vote
under the articles of cooperation and bylaws of the cooperative.
b. The general assembly shall be composed of regular members and associate members.
c. The general assembly shall be composed of associate members.
d. The general assembly shall be composed all members whether with voting rights or
without voting rights.
66. The General Assembly may delegate some cooperative powers to the Board of Directors.
However, the following are exclusive powers that cannot be delegated by General Assembly to
the Board of Directors, except
a. To determine and approve amendments to the articles of cooperation and bylaws.
b. To elect or appoint the members of the board of directors, and to remove them for
cause.
c. To approve developmental plans of the cooperative.
d. To determine the strategic planning, direction-setting and policy-formulation activities of
the cooperatives.
67. What is the required vote for the valid delegation by the General Assembly of some of its
delegable powers to a smaller body of the cooperative for purposes of prompt and intelligent
decision-making?
a. At least three-fourths (3/4) vote of all its members with voting rights, present and
constituting a quorum.
b. At least three-fourths (3/4) vote of all its members, present and constituting a quorum.
c. At least three-fourths (2/3) vote of all its members with voting rights, present and
constituting a quorum.
d. At least three-fourths (2/3) vote of all its members, present and constituting a quorum.
68. How often shall the regular meeting by the general assembly of a cooperative be held?
a. At least annually
b. At least monthly
c. At least quarterly
d. At least weekly
69. In the absence of a date fixed in the cooperative by-laws, when shall the regular meeting by the
general assembly of the cooperative be held?
a. Any date within 90 days after the close of each fiscal year
b. Any day of April
c. April 15
d. Any day of December
70. What is the quorum in the meeting of the general assembly of an ordinary cooperative?
a. At least majority of all the members entitled to vote
b. At least 25% of all the members entitled to vote
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c. At least ¾ of all the members entitled to vote

d. At least 5% of all the members entitled to vote
71. What is the quorum in the meeting of the general assembly of an electric cooperative?
a. At least majority of all the members entitled to vote
b. At least 25% of all the members entitled to vote
c. At least ¾ of all the members entitled to vote
d. At least 5% of all the members entitled to vote
72. As a general rule, what is the quorum in the regular or special meeting of general assembly of a
cooperative bank?
a. At least one half plus one of the number of voting shares of all the members in good
standing
b. At least 25% of all members entitled to vote
c. At least 5% of all members entitled to vote
d. At least 3/4 of all members with voting rights present and constituting a quorum
73. As an exception to general rule of quorum in a cooperative bank, what is the quorum in the
meeting of general assembly of a cooperative bank for the amendment of its articles of
cooperation or by-laws?
a. At least one half plus one of the number of voting shares of all the members in good
standing
b. At least 25% of all members entitled to vote
c. At least 5% of all members entitled to vote
d. At least 3/4 of all members with voting rights present and constituting a quorum
74. What is the number of vote that a regular member of a primary cooperative has?
a. Only one vote
b. Based on the number of shares held
c. Number of shares held multiplied by sits in Board of Directors
d. None
75. What is the voting rights of the members of a cooperative bank?

a. Each individual member shall have only one vote.
b. The voting rights of the members shall be proportionate to the number of their paid-up
shares.
c. Each individual member shall have one (1) basic vote and as many incentive votes as
provided for in the bylaws but not exceed five (5) votes.
d. Each individual member shall have five (5) basic votes.
76. What is the number of vote that member cooperatives of a secondary or tertiary cooperative
have?
a. They shall have one (1) basic vote and as many incentive votes as provided for in the
bylaws but not exceed five (5) votes.
b. They shall have two (2) basic votes and as many incentive votes as provided for in the
bylaws but not exceed ten (10) votes.
c. They shall have three (3) basic votes and as many incentive votes as provided for in the
bylaws but not exceed fifteen (15) votes.
d. They shall have four (4) basic vote and as many incentive votes as provided for in the
bylaws but not exceed twenty (20) votes.
77. It shall be the body in a cooperative responsible for the strategic planning, direction-setting and
policy-formulation activities of the cooperatives.
a. General Assembly
b. Board of Directors
c. Board of Trustees
d. Executive Committee
78. What is the composition of board of directors of a cooperative?
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a. not less than (5) nor more than (15) members

b. not less than (3) nor more than (12) members
c. not less than (4) nor more than (10) members
d. not less than (10) nor more than (25) members
79. What is the term of office of directors of a cooperative?

a. One year
b. Two years
c. Three years
d. Five years
80. What is the quorum necessary for validity of meeting of Board of Directors of ordinary
cooperative?
a. At least majority of the members of the Board unless the bylaws provide otherwise
b. One-half plus one of all the members of the board of directors
c. At least 3/4 of the members of the Board unless the bylaws provide otherwise
d. At least 2/3 of the members of the Board unless the bylaws provide otherwise
81. What is the quorum necessary for validity of meeting of Board of Directors of cooperative bank?
a. At least majority of the members of the Board unless the bylaws provide otherwise
b. One-half plus one of all the members of the board of directors
c. At least 3/4 of the members of the Board unless the bylaws provide otherwise
d. At least 2/3 of the members of the Board unless the bylaws provide otherwise
82. The members of the board of directors of a cooperative shall not hold any other position directly
involved in the day to day operation and management of the cooperative. Which of the following
positions in a cooperative may be held concurrently of a director of a cooperative?
a. Chairman or Vice-chairman of the Board of Directors of the Cooperative
b. President of the Cooperative
c. Secretary of the Cooperative
d. Treasurer of the Cooperative
83. What reason of vacancy in the Board of Directors of a cooperative will disqualify the remaining
directors despite constituting quorum to fill-up the vacancy, thus, requiring the general assembly
to fill-up such vacancy?
a. Expiration of term of a director
b. Death of a director
c. Disqualification of a director
d. Resignation or abandonment of office by a director
84. There are ten sits in the Board of Directors of a particular cooperative. Three sits are vacant due
to death, resignation and disqualification of a director. How may the three vacancies be filled-up?
a. By the vote of at least a majority of the remaining directors, if still constituting a quorum
b. By the general assembly in a regular or special meeting called for the purpose
c. Either A or B
d. Neither A nor B
85. There are nine sits in the Board of Directors of a particular cooperative. Five sits are vacant due
to death, resignation, abandonment, disqualification or removal of a director. How shall the five
vacancies be filled-up?
a. By the vote of at least a majority of the remaining directors even not constituting quorum
c. Either A or B
d. Neither A nor B
86. There are five sits in the Board of Directors of a particular cooperative. One sit is vacant due to
expiration of term of such director. How shall the vacancy be filled-up?
a. By the vote of at least a majority of the remaining directors, if still constituting a quorum
c. Either A or B
d. Neither A nor B
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87. How may an executive committee in a cooperative be created?

a. By provision in the by-laws
b. By mere resolution of board of directors despite no authorization in the by-laws
c. Either A or B
d. Neither A nor B
88. How may the powers of the executive committee in a cooperative be delegated to it?
a. By provision in the by-laws
b. By a majority vote of all the members of the board of directors
c. Either A or B
d. Neither A nor B
89. As a general rule, the directors, officers and committee members are not personally liable for the
liabilities of the cooperative. The following are the exceptional cases wherein directors, officers
and committee members shall be liable jointly and severally for all damages or profits resulting
therefrom to the cooperative, members, and other persons, except
a. They willfully and knowingly vote for or assent to patently unlawful acts.
b. They are guilty of gross negligence or bad faith in directing the affairs of the cooperative.
c. They acquire any personal or pecuniary interest in conflict with their duty as such
directors, officers or committee members.
d. They exercise business judgment bona fide to operate the cooperative.
90. In the absence of provision in the by-laws fixing their compensation, to what extent of benefits
are directors of a cooperative entitled to?
a. Reasonable per diems
b. Compensation
c. Salary
d. Employee benefits
91. What is the required vote in order for directors of a cooperative to be exceptionally entitled to
compensation other than reasonable per diems?
a. At least majority vote of the members with voting rights
b. At least 2/3 vote of the members with voting rights
c. At least 3/4 vote of the members with voting rights
d. Unanimous vote of the members with voting rights
92. In case there is a provision in the by-laws fixing compensation of directors, to what extent of
benefits are directors of a cooperative entitled to during the first year of existence of any
cooperative?
b. Compensation
c. Both A and B
d. Neither A nor B
93. In case there is a provision in the by-laws fixing compensation of directors, to what extent of
benefits are directors of a cooperative entitled in the current year when the cooperative reported
net loss in the preceding year or when the cooperative reported a dividend rate less than the
official inflation rate for the same year?
b. Compensation
c. Both A and B
d. Neither A nor B
94. When are the directors of a cooperative not entitled to any reasonable per diems and
compensation?
a. When the cooperative reported net loss in the preceding year
b. When the cooperative reported a dividend rate less than the official inflation rate for the
same year
c. Either A or B
d. Neither A nor B
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95. How shall the compensation of officers of cooperatives as well as members of the committees be
fixed?
a. It may be fixed in the bylaws.
b. It must be fixed by at least majority vote of the members with voting rights.
c. It must be fixed by at least majority vote of the members of board of directors.
d. It must be provided in the articles of cooperation.
96. How shall the compensation of other employees of cooperatives be fixed?

a. It may be fixed in the bylaws.
b. It must be fixed by at least majority vote of the members with voting rights.
c. It must be fixed by at least majority vote of the members with and without voting rights.
d. It may be fixed by at least majority vote of the members of board of directors present in
a meeting with quorum.
97. How often shall the regular meeting of the board of directors of a primary cooperative be held?
a. At least monthly
b. At least weekly
c. At least annually
d. At least quarterly
98. The following are considered valid grounds for removal of an officer of a cooperative, except
a. Mere loss of confidence
b. Loss of confidence in the honesty and integrity as evidenced by acts or omissions
c. Such officer has a relative within third civil degree of consanguinity or affinity who is also
an officer of the same cooperative.
d. Such officer has conflict of interest with employing cooperative.
e. Such officer is engaged in a business similar to that of his employing cooperative.
99. As a general rule, what is the status of contract entered into by the cooperative with one or more
of its directors, officers or committee members also known as contract with self-dealing directors
or officers?
a. Voidable on the part of the cooperative
b. Unenforceable
c. Void
d. Rescissible
100. What is the required vote for ratification of voidable contract entered by a cooperative
with a self-dealing director?
a. At least 2/3 of members with voting rights, present and constituting a quorum
b. At least 3/4 of members with voting rights, present and constituting a quorum
c. At least majority of members with voting rights, present and constituting a quorum
d. At least 25% of members with voting rights, present and constituting a quorum
101. The cooperative has 15 sits in the board of directors. A contract with a self-dealing
director will be the subject matter of the meeting of the board of directors. In which of the
following scenarios will the contract with such self- dealing directors be considered perfectly valid
even without ratification by members?
Present directors including self-dealing director Approving present directors including self-
dealing director
a. 9 directors 5 directors
b. 8 directors 6 directors
c. 11 directors 6 directors
d. 9 directors 6 directors
102. What is the liability or obligation of a director of a cooperative who by virtue of his office,
acquires for himself an opportunity which should belong to the cooperative?
a. He shall be liable but only up to the extent of his capital contribution.
b. He shall be liable but only up to the extent of his compensation and reasonable per
diems.
c. He shall be liable for damages and must account for double the profits that otherwise
would have accrued to the cooperative by refunding the same.
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d. He shall be liable for damages and must account for the profits that otherwise would
have accrued to the cooperative by refunding the same.
103. What is the required vote for ratification of acquisition made by a director of a
cooperative who by virtue of his office, acquires for himself an opportunity which should belong
to the cooperative?
104. What is the liability of a director or officer, or an associate of a director or officer, who,
for his benefit or advantage or that of an associate, makes use of confidential information that, if
generally known, might reasonably be expected to adversely affect the operation and viability of
the cooperative?
a. Such director or officer shall be liable to compensate the cooperative for the direct losses
suffered by the cooperative as a result of the illegal use of information.
b. Such director or officer shall be accountable to the cooperative for any direct benefit or
advantage received or yet to be received by him or his associate, as a result of the
transaction.
c. Both A and B.
d. Neither A nor B.
105. What is the required vote for removal of an officer or a director of a cooperative?
106. Which of the following are disqualified to be an appointed officer of a cooperative?

a. Two (2) or more persons with relationships up to the third civil degree of consanguinity
or affinity
b. Any person engaged in a business similar to that of the cooperative nor who in any other
manner has interests in conflict with the cooperative
c. Either A or B
d. Neither A nor B
107. Up to what civil degree of consanguinity or affinity shall two or more persons be
disqualified from being appointed officers of a cooperative?
a. Up to third civil degree of consanguinity or affinity
b. Up to second civil degree of consanguinity or affinity
c. Up to first civil degree of consanguinity or affinity
d. Up to fourth civil degree of consanguinity or affinity
108. What type of cooperative is absolutely exempted from all taxes and fees imposed by
national internal revenue taxes and other tax laws even without qualification?
a. Duly registered cooperative with CDA that does not transact business with non-members
or the general public.
b. Duly registered cooperative with CDA that transacts business with members, non-
members and the general public.
c. Duly registered cooperative with CDA with accumulated reserves and undivided net
savings of not more than P10,000,000.
d. Duly registered cooperative with CDA with accumulated reserves and undivided net
savings of more than P10,000,000.
109. In what type of transaction will a cooperative transacting with both members and non-
members be absolutely exempted from national tax and local even without qualification?
a. Transaction of cooperative with the general public.
b. Transaction of cooperative with non-members.
c. Transaction of cooperative with their members.
d. All of the above.
110. What type of cooperative dealing with nonmembers shall enjoy the tax exemption from
all national, city, provincial, municipal or barangay taxes of whatever name and nature and
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customs duties, advance sales or compensating taxes on their importation of machineries,

equipment and spare parts used by them and which are not available locally a certified by the
department of trade and industry?
a. Duly registered cooperative with CDA with accumulated reserves and undivided net
b. Duly registered cooperative with CDA with accumulated reserves and undivided net
c. Duly registered cooperative with CDA with accumulated reserves and undivided net
d. Duly registered cooperative with CDA with accumulated reserves and undivided net
savings of more than P40,000,000.
111. The following are the types of taxes or custom duties will a cooperative dealing with
nonmembers with accumulated reserves and undivided net savings of not more than
P10,000,000 be exempted, except
a. All national taxes
b. All provincial, city, municipal and barangay taxes
c. Customs duties, advance sales or compensating taxes on their importation of
machineries, equipment and spare parts used by them and which are not available locally
a certified by the department of trade and industry
d. All customs duties and tariffs
112. In which type of taxes will a cooperative dealing with nonmembers with accumulated
reserves and undivided net savings of more than P10,000,000 be exempted?
a. Income tax
b. Value added tax
c. Local tax and national tax on transaction with banks and insurance companies
d. All other tax unless otherwise exempted by Cooperative Code
113. The following statements concerning other privileges given by Cooperative Code to
cooperatives duly registered with CDA are correct, except
a. In areas where there are no available notaries public, the judge, exercising his ex
officio capacity as notary public, shall render service, free of charge, to any person or
group of persons requiring the administration of oath or the acknowledgment of articles
of cooperation and instruments of loan from cooperatives not exceeding Five Hundred
Thousand Pesos (P500,000.000.
b. Any register of deeds shall accept for registration, free of charge, any instrument relative
to a loan made under this Code which does not exceed Two Hundred Fifty Thousand
Pesos (P250,000.00) or the deeds of title of any property acquired by the cooperative or
any paper or document drawn in connection with any action brought by the cooperative
or with any court judgment rendered in its favor or any instrument relative to a bond of
any accountable officer of a cooperative for the faithful performance of his duties and
obligations.
c. Cooperatives shall be exempt from the payment of all court and sheriff’s fees payable to
the Philippine Government for and in connection with all actions brought under
Cooperative Code, or where such actions is brought by the CDA before the court, to
enforce the payment of obligations contracted in favor of the cooperative
d. All cooperatives shall be exempt from putting up a bond for bringing an appeal against
the decision of an inferior court or for seeking to set aside any third party
claim: Provided, That a certification of the CDA showing that the net assets of the
cooperative are in excess of the amount of the bond required by the court in similar
cases shall be accepted by the court as a sufficient bond.
e. Any security issued by cooperatives shall be exempted from the provisions of the
Securities Regulation Code even those securities which are considered to be speculative.
114. If the dissolution of a cooperative does not prejudice the rights of any creditor having a
claim against it, what is the proper procedure for voluntary dissolution of a cooperative?
a. By submitting a resolution duly adopted by Board of Directors and members to CDA.
b. By filing a petition for dissolution with CDA.
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c. By filing a petition for dissolution with RTC.

d. By filing a petition for dissolution with SEC.
115. If the dissolution of a cooperative prejudices or affects the rights of any creditor having a
claim against it, what is the proper procedure for voluntary dissolution of a cooperative?
a. By submitting a resolution duly adopted by Board of Directors and members to CDA.
b. By filing a petition for dissolution with CDA.
c. By filing a petition for dissolution with RTC.
d. By filing a petition for dissolution with SEC.
116. What is the required vote for the voluntary dissolution of a cooperative?
a. By at least majority vote of the board of directors and by a resolution duly adopted by
the affirmative vote of at least 2/3 of all members with voting rights, present and
b. By at least majority vote of the board of directors and by a resolution duly adopted by
the affirmative vote of at least 3/4 of all members with voting rights, present and
c. By at least majority vote of the board of directors and by a resolution duly adopted by
the affirmative vote of at least majority of all members with voting rights, present and
d. By at least majority vote of the board of directors and by a resolution duly adopted by
the affirmative vote of at least 25% of all members with voting rights, present and
117. The following are valid grounds for involuntary dissolution of a cooperative by order of a
competent court after due hearing, except
a. Violation of any law or rules and regulations
b. Violation of the cooperative's by laws
c. Insolvency of the cooperative
d. Incurring net loss in the cooperative's operation
118. The following are valid grounds for suspension or revocation, after due notice and
hearing, of certificate of registration of a cooperative by Cooperative Development Authority
(CDA), except
a. The cooperative has obtained its certificate of registration by fraud.
b. The cooperative is existing for an illegal purpose.
c. The cooperative willfully violated any of the provisions of Cooperative Code or its bylaws
despite notice given by CDA.
d. The cooperative willfully failed to operate on a cooperative basis.
e. The cooperative failed to meet the required number of members in the cooperative.
f. The cooperative created a subsidiary cooperative after two years of operation.
119. What are the modes of dissolution of a cooperative?

a. By the expiration of its charter or certificate of registration for failure to renew its term
on the deadline provided by law.
b. By termination of its existence through voluntary dissolution.
c. By termination of its existence through an appropriate judicial proceeding also known as
involuntary dissolution.
d. Any of the above.
120. After the dissolution of a cooperative through any of the modes provided by Cooperative
Code, what is the maximum period provided by Cooperative Code for the liquidation of the
dissolved cooperative?
a. For three years from the time it is dissolved.
b. For two years from the time it is dissolved.
c. For one year from the time it is dissolved.
d. For four years from the time it is dissolved.
121. The following transactions may be done by a dissolved cooperative during the three-year
liquidation period, except
a. Prosecuting and defending suits by or against it.
b. Continuing business for which it was established.
c. Settling and closing its affairs.
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d. Disposing, conveying and distributing of its properties and assets to creditors and
members.
122. In the winding up or liquidation of a cooperative, to whom shall any cooperative's asset
distributable to any creditor, shareholder or member who is unknown or cannot be found be
given?
a. To the city or municipality where the asset is located
b. To the federation or union to which the cooperative is affiliated with
c. It will be escheated in favor of the Republic of the Philippines.
d. To the members of the cooperative
123. In the winding up or liquidation of a cooperative, what will happen to the subsidies,
donations, legacies, grants, aids and such other assistance from any local or foreign institution
whether public or private given to such dissolved cooperative?
a. It will be given to city or municipality where the asset is located.
b. It will be given to federation or union to which the cooperative is affiliated with.
c. It will be escheated in favor of the Republic of the Philippines.
d. It will be given to the members of the cooperative.
124. It refers to a union of two or more existing cooperatives belonging to the same category
whereby the surviving cooperative, retaining its identity, absorbs one or more constituent
cooperatives.
a. Consolidation
b. Business combination
c. Merger
d. Quasi-reorganization
125. What is the required vote for the validity of merger of two or more cooperatives?
126. What is the required vote for division of cooperative to two or more cooperatives?
a. At least 3/4 of all the members with voting rights, present and constituting a quorum
b. At least 1/3 of all the members with voting rights, present and constituting a quorum
c. At least 2/3 of all the members with voting rights, present and constituting a quorum
d. At least majority of all the members with voting rights, present and constituting a
quorum
127. The following are the sources of capital, property and funds of a cooperative, except
a. Member's share capital consisting of common shares and/or preferred shares
b. Loans and borrowings including deposits
c. Revolving capital which consists of the deferred payment of patronage refunds, or
interest on share capital
d. Subsidies, donations, legacies, grants, aids and such other assistance from any local or
foreign institution whether public or private
e. Investment or capital contribution by stockholder
128. What are the types of share capital in a cooperative?

a. Common shares
b. Preferred shares
c. Both a and b
d. Neither a nor b
129. To what type of members of cooperative may common shares be issued?

a. Regular members
b. Associate members
c. Either a or b
d. Neither a nor b
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130. Which of the following statements about common shares in a cooperative is correct?
a. Its holders shall be entitled to vote and be voted under the principle of one-man, one
vote principle.
b. Its holders shall receive interest, the rate which should not exceeded the normal rate on
investment.
c. Either a or b
d. Neither a nor b
131. To what type of members of cooperative may preferred shares be issued?

a. Regular members
b. Associate members
c. Either a or b
d. Neither a nor b
132. Which of the following statements about preference share holders (associate members)
in a cooperative is correct?
a. Issuance and limitation on Preferred Share Capital shall be prescribed in the By-laws of
the cooperative
b. Associate Members shall not be eligible to vote nor be voted on account of such
shareholdings but shall be entitled to.
c. Holders of preference shares be entitled to, among others the following: (1) Preference
in the payment of interest as provided for in the Bylaws of the cooperative; and (2) In
case of liquidation, priority in the distribution on Preferred Share Capital shall be
prescribed in the By-laws of the cooperative
d. All of the above.
133. What is the maximum limitation on share capital holdings of a member of a cooperative?
a. No more than 10% of the share capital of the cooperative
b. No more than 5% of the share capital of the cooperative
c. No more than 20% of the share capital of the cooperative
d. No more than 15% of the share capital of the cooperative
134. What is the maximum par value of a share of a cooperative?

a. No more than P5
b. No more than P1,000
c. No more than P10
d. No more than P1
135. To what types of annual audit shall a cooperative registered under CDA be subjected to?
a. Financial statements audit
b. Social audit
c. Performance audit
d. All of the above
136. Who shall perform the annual financial statements audit of a cooperative registered
under CDA?
a. Independent CPA in good standing with PICPA and accredited by PRC-BoA and CDA.
b. Independent social auditor accredited by CDA.
c. Internal auditor of the Cooperative.
137. The following are the qualifications of financial statement auditor of cooperative, except
a. He must be a member in good standing of PICPA.
b. He must be accredited by PRC-BoA as CPA practitioner.
c. He must be accredited by CDA.
d. He must be accredited by SEC.
138. Who shall perform the annual social audit of a cooperative registered under CDA?
a. Independent CPA in good standing with PICPA and accredited by PRC-BoA.
b. Independent social auditor accredited by CDA.
c. Internal auditor of the Cooperative.
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139. A member shall have the right to examine the records required to be kept by the
cooperative under Article 52 of the Cooperative Code during reasonable hours on business days
and he may demand, in writing, for a copy of excerpts from said records without charge except
the cost of production. What are the legal implications of refusal by the officer to allow a member
to exercise this right?
a. Such officer shall be liable to such member for civil damages.
b. Such officer shall be guilty of offense or crime punishable by Cooperative Code.
c. Both A and B.
d. Neither A nor B.
140. Which of the following is a valid ground for refusing to furnish the requested records by a
member?
a. The member has improperly used any information secured through any prior examination
of the records of such cooperative.
b. The member is not acting in good faith in making his demand.
c. The member will not be using the records for legitimate purpose.
d. Any of the above
141. It shall not be construed as profit but as an excess of payments made by the members
for the loans borrowed, or the goods and services availed by them from the cooperative or the
difference of the rightful amount due to the members for their products sold or services rendered
to the cooperative including other inflows of assets resulting from its other operating activities
and which shall be deemed to have been returned to them if the same is distributed as
prescribed in Cooperative Code.
a. Retained earnings
b. Accumulated profits
c. Net surplus
d. Contributed capital
142. How shall the net surplus of a cooperative be determined or computed?

a. By the existing provisions of Corporation Code.
b. By the provisions of the by-laws of the Cooperative.
c. By the provisions of full PAS/PFRS.
d. By the provisions of PFRS for SMES.
143. What is the first priority in the distribution of the net surplus of a cooperative?
a. Reserve fund
b. Education and training fund
c. Community development fund
d. Optional fund
e. Interest on share capital of members and patronage refunds
144. This fund shall be used for the stability of the cooperative and to meet net losses in its
operations but shall not be utilized for investment, other than those allowed in the Cooperative
Code.
a. Reserve fund
d. Optional fund
145. What is the minimum amount of reserve fund in the first five years of operation of a
cooperative?
a. At least 50% of net surplus
b. At least 10% of net surplus
c. At least 3% of net surplus
d. At least 7% of net surplus
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146. After the first five years of operation of a cooperative, what is the minimum amount of
reserve fund of a cooperative?
147. This fund shall provide for the training, development and similar other cooperative
activities geared towards the growth of the cooperative movement.
a. Reserve fund
d. Optional fund
148. What is the maximum amount of education and training fund of a cooperative?
a. Not more than 50% of net surplus
b. Not more than 10% of net surplus
c. Not more than 3% of net surplus
d. Not more than 7% of net surplus
149. This fund shall be used for projects or activities that will benefit the community where
the cooperative operates.
a. Reserve fund
d. Optional fund
150. What is the minimum amount of community development fund of a cooperative?

151. What is the maximum amount of optional fund of a cooperative?

d. Not more than 7% of net surplus
152. What is the maximum interest on share capital that may be distributed by a cooperative?
d. Not more than the normal rate of return of investments
153. What is the required vote for allocation of interest on share capital?
a. Majority of all members of the board of directors present and constituting a quorum
b. Majority of all members of general assembly present and constituting a quorum
c. 3/4 of all members of general assembly present and constituting a quorum
d. Majority of all members of the board of directors present and constituting a quorum and
3/4 of all members of general assembly present and constituting a quorum
154. What is the required vote for recommendation for the deferment of distribution or
payment of interest on share capital to cooperative members?
b. Majority of all members of general assembly present and constituting a quorum
d. Majority of all members of the board of directors present and constituting a quorum and
3/4 of all members of general assembly present and constituting a quorum
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155. What is the required vote for approval of the deferment of distribution or payment of
interest on share capital to cooperative members?
b. Majority of all members of cooperatives with voting rights present and constituting a
quorum
d. 2/3 of all members of general assembly present and constituting a quorum
156. It refers to the portion of net surplus allocated to the amount returned to individual
members who patronize the goods and services of the cooperative in proportion to their
individual patronage.
a. Patronage refund
b. Interest on share capital
c. Dividend
d. Return of investment
157. What is the minimum amount of net surplus allocated as patronage refund?
a. At least 30% of the net surplus after deducting the statutory reserves based on the
principle of equity.
b. At least 20% of the net surplus after deducting the statutory reserves based on the
c. At least 10% of the net surplus after deducting the statutory reserves based on the
d. At least 5% of the net surplus after deducting the statutory reserves based on the
158. What is the maximum amount of net surplus allocated as patronage refund?
a. No more than twice the rate of interest on share capital.
b. No more than the rate of interest on share capital.
c. No more than thrice the rate of interest on share capital.
d. No more than half the rate of interest on share capital.
159. It is a principle of equity wherein an equal right of members to participate in the

organization and to equitably share in the benefits accruing is established.
a. Principle of Patronage Refund
b. Principle of Preference Shares
c. Principle of Cooperation
d. Principle of Control
160. In what fund shall the remaining net surplus be credited after the allowable interest and
the patronage refund have been deducted?
a. Reserve fund
d. Optional fund
161. It refers to shall refer to the amount available out of the deferred payment of the
patronage refund and interest on share capital of the members or by authorized deduction of a
percentage from the product sold or per unit of product handled by the cooperative.
a. Revolving capital
b. Escrow capital
c. Deferred capital
d. Contributed capital
162. Which of the following is a fund in a cooperative?

a. Revolving fund
b. Deferred fund
c. Escrow fund
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d. Endowment fund
163. What is the right available to a member of a cooperative who dissents to a cooperative
acts provided by Cooperative Code?
a. Preemptive right
b. Right of first refusal
c. Right to withdraw membership
d. Right to dissolve the cooperative
164. The following are the cooperative acts when a dissenting member of a cooperative
exercise his right to withdraw his membership and demand the refund of his share capital and
interest a.k.a. appraisal right, except
a. Amendment of Articles of Cooperation or By-laws
b. Amendment of By-Laws
c. Merger or Consolidations of two or more cooperatives
d. Granting compensation to directors
165. The following are cooperative acts that require ¾ vote of members with voting rights for
validity, except
a. Amendment of articles of cooperation or amendment of corporate by-laws
b. Merger or consolidation of cooperatives
c. Dissolution of a cooperative
d. Removal of director of a cooperative
166. Which of the following statements is false about the privileges of a cooperative?
a. Cooperatives engaged in credit services and/or federations shall be entitled to loans
credit lines, rediscounting of their loan notes, and other eligible papers with the Bangko
Sentral ng Pilipinas (BSP)
b. A public transport service cooperative may be entitled to financing support for the
acquisition and/or maintenance of land and sea transport equipment, facilities and parts
through the program of the government financial institutions. It shall have the
preferential right to the management and operation of public terminals and ports
whether land or sea transport where the cooperative operates and on securing a
franchise for active or potential routes for the public transport.
c. Cooperatives organized by faculty members and employees of educational institutions
shall have the preferential right in the management of the canteen and other services
related to the operation of the educational institution where they are employed:
Provided, That such services are operated within the premises of the said educational
institution
d. The appropriate housing agencies and government financial institutions shall create a
special window for financing housing projects undertaken by cooperatives, with interest
rates and terms equal to, or better than those given for socialized housing projects. This
financing shall be in the form of blanket loans or long-term wholesale loans to qualified
cooperatives, without need for individual processing.
167. Which of the following statements is true?

a. Cooperative’s financial statements have to be in accordance with Philippine Financial
Reporting Standards.
b. Auditors of cooperative shall comply in accordance with Philippine Standards on Auditing.
c. Auditors of cooperative have to be in good standing and have to be registered only with
the Cooperative Development Authority but not with PRC-Board of Accountancy.
d. None of the above.
168. The following are the incentives of electric cooperative registered before Cooperative
Development Authority, except
a. The electric cooperatives registered with the Authority with existing loans obtained from
NEA after June 26, 2001 shall continue to observe the terms of such loans until full
payment or settlement thereof
b. Except as provided in letter A, the NEA shall no longer exercise regulatory or supervisory
powers on electric cooperatives duly registered with the CDA
c. Electric cooperatives registered with the CDA are entitled to congressional allocations,
grants, subsidiaries and other financial assistance for rural electrification which can be
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coursed through the Department of Energy, the CDA and/or local government units. The
electric cooperatives registered under Cooperative Code can avail of the financial services
and technical assistance provided by the government financial institutions and technical
development agencies on terms respecting their independence as autonomous
cooperatives
d. All condoned loans, subsidies, grants and other assistance shall form part of the donated
capital and funds of the electric cooperatives and as such, it shall not be sold, traded nor
be divided into shareholdings at any time; these donated capital/fund shall be valuated
for the sole purpose of determining the equity participation of the members: Provided,
That in the case of dissolution of the cooperative, said donated capital shall be subject to
escheat.
e. Electric cooperatives are not required to submit audited financial statements to CDA.
169. This cooperative principle means that cooperatives are democratic organizations that are
controlled by their members who actively participate in setting their policies and making
decisions. Men and women serving as elected representatives, directors or officers are
accountable to the membership. In primary cooperatives, members have equal voting rights of
one-member, one-vote. Cooperatives at other levels are organized in the same democratic
manner.
a. Democratic member control
b. Member economic participation
c. Autonomy and independence
d. Concern for community
170. This cooperative principle means that members contribute equitably to, and
democratically control, the capital of their cooperatives. At least part of that capital is the
common property of the cooperative. They shall receive limited compensation or limited interest,
if any, on capital subscribed and paid as a condition of membership. Members allocate surpluses
for any or all of the following purposes: developing the cooperative by setting up reserves, part
of which should at least be indivisible; benefitting members in proportion to their patronage of
the cooperative's business; and, supporting other activities approved by the membership.
171. This cooperative principle means that cooperatives are autonomous, self-help
organizations controlled by their members. If they enter into agreements with other
organizations, including government, or raise capital from external sources, they shall do so on
terms that ensure democratic control of their members and maintain their cooperative autonomy.
172. This cooperative principle means that cooperatives work for the sustainable development
of their communities through policies approved by their members
For the Glory of God
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Telephone : (043) 723 8412

Philippine Cooperative Code

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Philippine Cooperative Code

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No. 125 Brgy.

Regulatory Framework for Business Transactions

a. Definition of Cooperative – A Cooperative is an autonomous and duly registered

i. Voluntary and Open Membership - Cooperatives are voluntary

i. Member includes a person either natural or juridical who adhering to the

i. To encourage thrift and savings mobilization among the members;

c. Objectives and Goals of a Cooperative.

d. Powers and Capacities of Cooperative

i. To the exclusive use of its registered name, to sue and be sued;

maintain ferries, wharves, markets or slaughterhouses and to lease public

e. Types and Categories of Cooperatives

i. Single-Line or Single-Purpose Cooperative shall include cooperative

a. The functions of credit cooperatives and other cooperatives,

f. Functions of a Federation of Cooperatives (Organization of Cooperatives) – A

g. Purposes of Cooperative Unions (Organization of cooperatives and federations

h. Cooperatives Not in Restraint of Trade. – No cooperative or method or act thereof

i. Organization of Primary Cooperative

j. Economic Survey before Formation of a Proposed Cooperative - Every group of

k. Liability of Cooperative duly registered under this Code - A cooperative duly

i. Contents of Articles of Cooperation

ii. Contents of Cooperative By-Laws - Each cooperative to be registered under

iii. Requirement for Registration with CDA

accompanied with the bonds of the accountable officers and a sworn

n. Juridical Personality of Cooperative - A cooperative formed and organized under

o. Evidence of juridical personality of cooperative A certificate of registration issued

p. Amendment of Articles of Cooperation and By-laws - Unless otherwise prescribed

q. Types of Membership in cooperatives

iii. Required Vote for Termination of Membership in a Cooperative -

1. When a member has not patronized any of the services of the

v. Procedures for Termination of Membership in a Cooperative - Member

i. Composition of the General Assembly – The general assembly shall be

iii. Nondelegable Powers of General Assembly

iv. Procedure and Required Vote for Delegation of Powers of General

v. Cooperative Meetings. – A regular meeting shall be held annually by the

vi. Quorum in General Assembly of Cooperative

1. Ordinary Cooperative - A quorum shall consist of at least twenty-five

viii. Composition and Term of the Board of Directors. – Unless otherwise

ix. Powers of the Board of Directors. – The board of directors shall be

x. Directors (Qualifications of Directors in a Cooperative)

1. Any member of a cooperative who under the bylaws of the cooperative,

xi. Meeting of the Cooperative Board and Quorum Requirement

1. In the case of primary cooperatives, regular meetings of the board of

xii. Quorum in Board of Directors of Cooperative

1. Ordinary Cooperative - At least majority of the members of the Board

xv. Committees of Cooperatives

1. The bylaws may create an executive committee to be appointed by the

xvi. Functions, Responsibilities and Training Requirements of Directors,

xvii. Liability of Directors, Officers and Committee Members. – Directors,

xviii. Compensation of Directors of Cooperative

1. In the absence of any provisions in the bylaws fixing their compensation,

xix. Dealings of Directors, Officers, or Committee Members – A contract

xxi. Illegal Use of Confidential Information. – A director or officer, or an

v. Privileges of Cooperative from Taxes

i. Tax Treatment of Cooperative. - Duly registered cooperatives under this

1. Cooperatives with accumulated reserves and undivided net savings of

2. Cooperatives with accumulated reserves and divided net savings of more

b. Value-Added Tax – On transactions with non-

3. All cooperatives, regardless of the amount of accumulated reserves and

service cooperatives: Provided further, That nothing in this article shall

iii. Other Privileges of a Cooperative

exclusively by cooperatives: Provided, further, That no cooperative

i. Voluntary Dissolution Where no Creditors are Affected. – If the