Objectives:

MEMBERSHIP 1. To identify and distinguish the different types of persons.

2. To recognize the ramifications of the different types of membership.
3. To apply the requirements of due process of law in the termination of co-op
membership.
4. To determine the effects of membership liabilities in relation to co-op
liabilities.
5. To determine the effects of a member’s separation from membership.

Who can be members of Cooperatives? Kinds of Membership:

✔ Natural Persons 1. Regular Members

✔ Juridical Persons - entitled to all rights and privileges
NOTE:
2. Associate Members
Primary cooperatives can only admit natural persons who are
citizens of the Philippines. - not entitled to vote or be voted
Secondary or tertiary cooperatives can admit only registered
cooperatives or nonprofit organizations with juridical
personality.
 Voting Shares
o Common Shares – shares sold to regular members
o Preferred Shares – shares sold to associate members
(NOTE: Maybe sold also to regular members [Rule 3 (b) Rules and
Regulations Implementing Certain Provisions of the Cooperative Code
of the Philippines (RRICPCCP)].
Nonvoting
Example:
❑ After all creditors have been paid, preferred share capital
holders have a priority in the distribution of the net assets of the
cooperative [Rule 3 (2), RRICPCCP].
Preferred shares have also a priority in the payment of the
limited interest on capital as provided for in the by-laws [Rule 3
(b) (1), RRICPCCP].
In cooperatives, preferred and common shares are noncumulative
and nonparticipating.
In corporate parlance, a cumulative status of a share means that if
dividends are omitted in any fiscal year due to low earnings or
some other reason, they accumulate from year to year until paid
out.
However, upon a cooperative’s dissolution, preferred shares do
enjoy the right of preference over common shares.
Membership of Government Officers and
Employees in Cooperatives
Elective officials of the government other than barangay officials are
ineligible to become officers and directors of cooperatives.
Barangay officials, however, are eligible to hold officerships or
directorships in a cooperative.
Government employees are eligible to serve as director, committee
member, treasurer, secretary, and general manager.
As a bona fide cooperative member, a government employee may be
allowed by his head of office to use official time to attend general
assemblies, board and committee meetings, co-op seminars,
conferences, workshops, technical meetings, or training courses, whether
locally staged or abroad, as long as the operations of the office concerned
are not paralyzed by such attendance.
Laboratory Cooperatives.
Minors can organize a cooperative but such a cooperative is
INCIDENTS OF
considered a laboratory cooperative and must be affiliated
with a registered cooperative. MEMBERSHIP
Students taking up cooperatives should take advantage of
this opportunity to hone their skills at cooperative
management and operations.

Application for Membership Application for Membership

A prospective member shall fill up an application form which will be submitted

to the board of directors for approval. NOTE:
An applicant is deemed to be a member after the approval of his membership
by the board. In case the board rejects the application for
After payment of the membership fee and an amount equal to the value of at membership. the rejected applicant can appeal to the
least one share capital - the member's acquired interest in the cooperative -
he shall exercise the rights and privileges of a member. general assembly and the decision of the general
The by-laws generally require a new membership payment for one share assembly shall be final. [Art. 29 of Code]
capital in order for him to be able to enjoy the rights and privileges of
membership.
Liability of Members
The liability of an individual member for the debts of the
cooperative is limited to the extent of his total subscribed capital
contribution to the share capital of the cooperative.
A member may be asked by creditors to pay his unpaid
subscribed share capital and unpaid loans to the cooperative. If
the member has fully paid up his subscribed share capital and
he has no debts to the cooperative, then nobody can compel
him to share payments on unpaid cooperative debts
A member may be expelled by a vote of the majority of all members of the
board of directors for any of the following causes [Art. 31, (3)(a)-(d)]:
non- patronage of the services of the cooperative for an unreasonable
length of time as may be fixed by the board
continuous failure comply with obligations
actions in violation of the by-laws and rules of the cooperative
acts or omissions injurious or prejudicial to the interest or welfare of the
cooperative
Termination of Membership
Membership in a cooperative may be terminated through resignation, automatic termination or
expulsion.
Any member, for any reason, may resign or withdraw his membership from the cooperative by
giving a sixty-day notice to the board of directors.
The resigning member shall be entitled to a refund of his share capital contribution and all
interests in the cooperative so long as the liabilities of the co-op do not exceed the assets
after the refund.
Death, insanity, insolvency, or dissolution causes automatic termination of membership.
A member may be expelled by a vote of the majority of all members of the board of directors
for any of the following causes: non- patronage of the services of the cooperative for an
unreasonable length of time as may be fixed by the board; continuous failure
Due Process in Expulsion Cases.
Expelling a member requires the observance of the substantive and
procedural requirements of due process of law.
Substantive due process requires a valid cause for expulsion which
may be any or all of those enumerated in Art. 31, (3) (a) to (d).
Procedural due process requires two notices and a hearing.
Two notices and a hearing.
The CODE is very explicit on the procedural aspect of due process. Appeal from the Decision of the Board.
On the first notice requirement it says that:
The decision of the board may be appealed to the general assembly within
“The member to be expelled shall be given a written notice informing him of 30 days after the decision is promulgated.
the intended action of the board of directors”.
The general assembly can meet in a general or special assembly and its
On the hearing requirement, the member: decision on the matter is final. However, pending a decision by the general
“Shall be given an opportunity to be heard before the said board makes its decision." assembly, the membership remains in force.
Further, on the second notice requirement, the Code says:
"The decision of the board shall be in writing and shall be communicated in
person or by registered mail to the member..."

REFUND OF All refund from the cooperative to be made to a former member

shall be paid to the member either by the cooperative itself or by

INTERESTS the approved transferee.

The approved transferee can be an existing member who is
willing to build up his share capital and savings/time deposits, or
a non-member who is qualified to be a member and is coming in
for the first time and is able to pay for the entire refund to be
made to the leaving member.