COOPERATIVE LAW

QUIZZER

Atty. Macmod, C.P.A

T or F

1. A Cooperative is born when CDA issues the certificate of incorporation.

2. A Cooperative’s charter is called Articles of Incorporation like corporations.
3. Death of a cooperative member dissolves a cooperative.
4. Incorporators of a cooperative must be at least 5 persons.
5. The minimum investment to be a member is 1 share.
6. The minimum paid up in a coop is 25% of the subscribed share capital.
7. The maximum share capital in a cooperative for each member is 25% of total share
capital.
8. Majority of coop. incorporators must be residents of Philippines.
9. Life of a coop. is 50 years unless by-laws will provide.
10. Life of a coop. is extendible for another 50 years provided extension is made in the last 3
years of its original term.
11. The 2 year rule in a coop. is automatic like corporations.
12. The 5 year rule in a coop. in not automatic.
13. The primary purpose of a coop. is to develop skill among its members.
14. Coop. is an autonomous juridical entity controlled by its BOD’s.
15. A Federation of coop. is 2 or more coops joining with same/similar purpose.
16. A coop. can convert itself into a multipurpose one only after 3 years of operation.
17. BOD’s in a coop. must be at least 5 persons.
18. Term of a BOD in a coop. is 1 year unless otherwise by-laws provided.
19. BOD’s in a coop. are not entitled to compensation as a rule.
20. The holder of cooperative powers is the BOD’s.
21. The quorum for general assembly is 25% of share capital.
22. BOD’s can be removed by 2/3 votes in a general assembly.
23. BOD’s are disqualified to be executive officers in a coop. if by-laws provided.
24. Likewise, elective government officials are disqualified to be BOD’s in a coop. as a rule.
25. A member can sell or transfer his membership in a coop. anytime.
26. Membership in a coop. may be regular or special.
27. A coop. organized by minors is illegal.
28. An unregistered coop. is liable as general partnership like corporations.
29. A member of a coop may withdraw his membership for a valid for a valid cause by giving a
30-day notice.
30. 2/3 votes of BOD’s can also expel a member for a valid cause.
31. Effectivity audit refers to an audit of efficiency and effectiveness of a coop.
32. Performance audit is the audit on the social impact of a coop.
33. The external auditor of a coop must be a CPA and duly accredited by BIR.
34. Financial reports of a coop. must be filed with CDA within 90 days from close of its
calendar or fiscal year.
35. Cooperatives are tax-exempt whether dealing with members or non-members.
36. At least 50% of the profit or net surplus of a coop must be distributed as dividends.
37. Coops are required to spend at least 5% of its profit or net surplus for community
development.
38. Foreigners are allowed to join coop is reciprocity law allows.
39. Regular annual meeting of coop is within 90 days from close of its calendar/fiscal year.
40. Interest on share capital of coop. is at least 25% of its net surplus.
41. Interest on share capital cannot be greater than the normal rate of prevailing ROI.
42. Law requires at least 20% of net surplus to be kept as reserve funds.
43. A coop. may be dissolved by CDA due to insolvency.
44. A one-man coop. like corporation are also allowed provided operating profitably.
45. Voluntary dissolution of a coop may be done by majority vote of BOD’s and 2/3 votes of
members.
46. Rural banks can be an incorporator in a primary cooperative.
47. Amendment of cooperative charter requires 2/3 votes of general assembly.
48. Cooperatives have no right of succession.
49. Coop executive officers are chosen by the BODs.
50. President of Coop must be a director also like in corporation.