Law on Cooperatives
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Republic act covering cooperatives
Cooperative (defined)*
Characteristics of Cooperatives
Implementing agency of cooperatives
Cooperative Development Authority (defined)
Basic purpose of cooperatives
The Purposes of a Cooperative*
Primary Objective of a cooperative
Other objectives of a cooperative
Cooperative Principles (enumerated)*
open and voluntary membership (defined)
democratic member control (defined)
member economic participation (defined)
How democratic member control is exercised
autonomy and independence (defined)
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RA 6938 as amended by RA 9520
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 ac-
cepting a fair share of the risks and benefits of the undertaking in
accordance with universally accepted cooperative principles
1. autonomous
2. duly registered
3. common bond of interest
4. voluntary
5. equitable contributions
6. patronizing
Cooperative Development Authority (CDA)
authorized and responsible for cooperatives development
1. creation of cooperatives
2. growth of cooperatives
3. promoting self-reliance
4. harnessing people power towards economic development and
social justice
to encourage/provide the following to its members:
1. thrift and savings
2. generate funds and extend credit
3. systematic production and marketing
4. goods and services
5. develop expertise and skills
6. acquire land and provide housing
7. insure against losses
8. promotion of economic, social, and educations status
9. establish, own, lease, or operate cooperative banks and other
industries
10. activities of cooperatives
11. advocate cooperative movements
12. utilization of new technologies
13. promote self-help or self employment
14. any and all other activities
help improve the quality of life of its members
1. provide goods and services
2. provide social and economic benefits
3. teach efficient and cooperative ways of doing things
4. propagate cooperative practices and ideas
5. increase ownership in wealth
6. cooperate with the government and other cooperatives
1. open and voluntary membership
2. democratic member control
3. member economic participation
4. autonomy and independence
5. cooperative education
6. cooperation among cooperatives
7. concern for community
membership is voluntary and available to all
cooperatives are controlled by their members
members contribute equitably to the capital
1. policy-making
2. decision-making
cooperatives are controlled by their members
 Law on Cooperatives
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cooperation among cooperatives (defined)
concern for community (defined)
cooperative education (defined)
Principle of Subsidiarity (defined)
Principle of Transparency (defined)
Articles of Cooperation (defined)
Authorized Share Capital (defined)
By-laws of the cooperative (defined)
Dynamic (defined)
economic feasibility (defined)
economic survey (defined)
Most important part of the economic survey
Paid-up shares (defined)
Pledged shares (defined)
Thrift (defined)
Kind of person that can be a member
Members (defined)
General Assembly (defined)
Board of Directors (defined)
Representative Assembly (defined)
Officers of the Cooperative (enumerated)
Social Audit (defined)
Performance Audit (defined)
Single-line or Single-purpose Cooperative (defined)
Service Cooperative (defined) (old)
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1. cooperatives serve their members
2. cooperatives strengthen movement by working together
work towards sustainable development of the community
cooperatives have provisions for the education of the members,
employees, and the general public
No government intervention as much as possible and only when
necessary
The right to know and the backbone of democratic societies
legal document signed by the organizers that states the following:
1. name
2. goals
3. objectives
4. place of operation
5. others
1. amount approved by the CDA
2. amount set by the leaders and members
rules adopted for the management and regulation of members and
activities
1. lots of ideas and enthusiasm
2. energetic and forceful
3. active
the practicality of a cooperative within an economic situation
describes the:
1. structure;
2. purpose; and
3. economic feasibility of a cooperative
economic feasibility
shares paid by a member
shares subscribed to by a member
1. careful use of money
2. avoiding waste
1. natural
2. juridical
a person that has been admitted by the cooperative as a member
1. full membership of the cooperative
2. their delegates duly assembled
Body entrusted with the management of the affairs of the cooper-
ative
full membership of a body of representatives elected assembled
for the exercise of powers
1. boards of directors
2. different committees
3. general manager/chief executive officer
4. secretary
5. treasurer
6. other positions
assessment of social impact and ethical performance against
what is stated
audit on the efficiency and effectiveness of the cooperative
cooperatives undertaking activities related to its main line of busi-
ness/purpose
provide any type of service to its members
 Law on Cooperatives
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Subsidiary Cooperative (defined)
Old types of cooperatives (enumerated)
Credit Cooperative (defined) (old)
Consumer Cooperative (defined) (old)
Producer Cooperative (defined) (old)
Marketing Cooperative (defined) (old)
Multi-purpose Cooperative (defined) (old)
Advocacy Cooperative (defined)
Agrarian Reform Cooperative (defined)
Cooperative Bank (defined)
Dairy Cooperative (defined)
Education Cooperative (defined)
Electric Cooperative (defined)
Financial Service Cooperative (defined)
Fishermen Cooperative (defined)
Health Services Cooperative (defined)
Housing Cooperative (defined)
Insurance Cooperative (defined)
Transport Cooperative (defined)
Water Service Cooperative (defined)
Workers Cooperative (defined)
GR on the number of cooperative banks in a province
Location of Additional Cooperative Bank in a Province if allowed
Other term for cooperative banks
Categories of Cooperatives (membership)
Primary Cooperative (defined)
Secondary Cooperative (defined)
Tertiary Cooperative (defined)
How Cooperatives are categorized according to territory
Federation of Cooperatives (defined)
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Primary cooperatives, doing the same line of business with the
authority to undertake business activities in support of its mem-
ber-cooperatives
1. Credit Cooperatives
2. Consumers Cooperative
3. Producers Cooperative
4. Marketing Cooperatives
5. Service Cooperatives
6. Multipurpose Cooperatives
1. promotes thrift and savings
2. undertakes savings and lending services
procures and distributes commodities
agricultural or industrial joint production
supply of production inputs and marketing of products
combines two or more business activities
Primary cooperative that promotes and advocates cooperativism
formed by agrarian reform beneficiaries to develop appropriate
systems of:
1. land tenure
2. development
3. consolidation
4. management
provides a wide range of financial services
production of fresh milk processed
owns and operated licensed educational institutions
undertakes power generation
Engaged in savings, credit services, and other financial services
formed by marginalized fishermen
provides health services
Provides access to housing to its members
insuring life and property of cooperatives and their members
includes and land and sea transportation
Owns, operates, and manages water systems
organized by workers to provide employment and business op-
portunities
G.R. only one cooperative bank per province
E. there can be more than one depending on the economic con-
ditions of the province
Located in the city or municipality other than the city or municipality
where the first cooperative bank is located
Cooperative Providing All Forms of Financial Services
1. Primary Cooperative
2. Secondary Cooperative
3. Tertiary Cooperative
members are natural persons of legal age
members are Primary Cooperatives
members are Secondary Cooperatives (federations and unions)
according to the areas of operation
three or more primaries doing the same line of business
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Function of Cooperatives (enumerated)
Cooperative Unions (defined)
Functions of Cooperative Unions (enumerated)*
Minimum number of members for registration of federations and
unions (secondary)
Minimum number of members for registration of federations and
unions (tertiary)
Minimum paid-up share capital for federations and unions (sec-
ondary)
Minimum paid-up share capital for federations and unions (ter-
tiary)
Principal Office (defined)
Branch Office (defined)
Success Factors of a Cooperative*
Number of members needed to organize a PRIMARY cooperative
Requirements of Members
How Multipurpose Cooperatives are formed
GR on the Minimum Paid-Up share capital
Limit on par value of share of primary cooperatives
Limit on member holdings of share capital in primary cooperatives
Limit on preferred share capital
Validity of Fractional shares
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1. cooperative enterprise
2. educational and advisory work
3. render services to encourage simplicity, efficiency, and econo-
my
4. Print, publish and circulate publications of interest
5. coordinate and facilitate activities of its members
6. enter joint ventures
7. other functions necessary to attain objectives
formed by cooperatives and/or federations to represent the inter-
est and welfare of all the cooperatives
1. represent its members
2. acquire, analyze, and disseminate information
3. sponsor and publish studies in the phases of cooperation
4. promote cooperative principles and practices
5. develop cooperative movements
6. advise authorities on cooperatives
7. raise funds through fees, dues, and contributions
8. do and perform such other non-business activities
1. Federation - 10 primary coops
2. Union - 15 primary coops
1. Federation - 10 secondary coops
2. Union - 15 secondary coops
1. Federation - P500,000
2. Union - N/A
1. Federation - P5,000 or amount prescribed by feasibility study
requirement, whichever is higher
2. Union - N/A
where the central records and main books of accounts are kept
business office outside the principal office
1. recognition of common needs
2. determination to help themselves
3. conviction that group action is advantageous
4. good members and capable dedicated leaders
5. good record keeping system
6. frequent audit
7. continuous cooperative education
8. training of officers and members
9. proper guidance
At least 15 natural persons of legal age
1. Filipino Citizens
2. has a common bond of interest
3. resides or works in the intended area of operation
4. completed a Pre-Membership Education Seminar
1. after compliance with the minimum requirements of multipur-
pose cooperatives
2. from a single-purpose to a multipurpose after at least 2 years
of operations
G.R. it is P15,000 for primary cooperatives
E. for Multipurpose it is:
1. P100,000, or
2. Amount required by the feasibility study
shall not exceed P1,000
shall not exceed 10% of the share capital of the cooperative
shall not exceed 25% if the total authorized share capital
not allowed in cooperative
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1. Primary - 10 million
Pre-qualification Requirements (Minimum Paid-up capital of Prin-
2. Secondary - 15 million
cipal Office)
3. Tertiary - 20 million
1. Primary - 5 million
Pre-qualification Requirements (Operating Capital of Branch Of-
2. Secondary - 10 million
fice)
3. Tertiary - 15 million
Liability of Cooperatives Doctrine of Limited Liability
Extent of liability of members to the extent of their contribution to the share capital
Original Term of Cooperatives not exceeding 50 years from the date of registration
Extension of the Term of Cooperatives can be extended for a period not exceeding 50 years
G.R. extension can be made 5 years prior to the expiry date
GR on when extension of term can be made
E. can be extended earlier for justifiable reasons
Where articles of cooperation are filed filed with the CDA
it shall be signed before a notary public by:
Persons that sign the articles of cooperation 1. each of the organizers if natural
2. the chairpersons or secretaries if juridical
1. at least 25% of authorized share capital is subscribed
Capital Subscription and Paid up capital requirement 2. at least 25% of total subscriptions are paid
3. paid up capital shall be no less than 15,000
Period for filing by-laws filed at the same time as the articles of cooperation
from the issuance of the Certificate of Registration under the
When a cooperative is created
official seal
Period of disposal of registration to the CDA within 60 days from the filing
Effect if registration is not disposed of within the period allowed deemed approved
Period to appeal denial of application of registration within 90 days from notice of denial
Period for automatic approval of appeal of denied registration after 90 days from the filing thereof
conclusive evidence that the cooperative is duly registered unless
Certificate of Registration (defined)
it is proved that the registration is canceled
Vote to amend articles of cooperation and by-laws 2/3 of all members with voting rights
1. amendment of AOC and by-laws
When dissenting members can exercise the right of withdrawal
2. merger and consolidation
1. upon approval by the CDA
When amendments of AOC or By-laws take effect
2. within 30 days from the date of filing if not acted on
Validity of contracts of the cooperative executed prior to registra-
remains valid and binding
tion
1. regular members
kinds of members
2. associate members
regular members (defined) entitled to all the rights and privileges of membership
has no right to vote or be voted on. Has rights as provided for in
associate members (defined)
the by-laws
1. member for 2 continuous years
requirements for associate member to become a regular member 2. patronizes the cooperative
3. signifies intention to be a regular
Laboratory Cooperative (defined) organized by minors
1. 15 or more minors
requirements of a laboratory cooperative 2. affiliated with a guardian cooperative
3. certificate of recognition
G.R. Government Officials and Employees can be members of a
GR on government officials and employee as being members of cooperative as long as their work is not adversely affects
a cooperative E. Government Officials and Employees cannot be an officer or
director
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 Law on Cooperatives
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E.E. if they are a party list representative, they can be an officer
or director
1. participate in decision-making in meeting/assemblies
2. vote on all matters brought to the attention of the assembly
3. seek any elective position
rights and duties of members
4. receive interest on capital and patronage refund
5. inspect and examine records of the cooperative
6. exercise all the rights and privileges of members
When a person is deemed a member after the approval of the board of directors
1. after making payment for the membership
when a member can exercise his rights
2. after acquiring interest as prescribed in the bylaws
remedy if membership is refused or denied appeal to the general assembly
action of general assembly in cases of appeal of denied member-
appeal and grievance committee
ship
term of the members of the appeal and grievance committee 1 year
period for the appeal and grievance committee to decide on de-
must decide within 30 days from the receipt
nied membership application
effect if period for the appeal and grievance committee to decide
appeal is deemed approved in favor of the applicant
on denied membership application lapses
1. develop habits of thrift and wise use of money
Economic Benefits of being a member of a cooperative
2. availability of loans at reasonable rates of interest
1. awareness in solving common problems or needs
Social Benefits of being a member of a cooperative 2. love and concern for fellowmen
3. inculcates unified participation in community affairs
any valid reason which includes:
1. in primary coop - death or insanity
Grounds for withdrawal from membership
2. in secondary/tertiary coop - insolvency or dissolution
3. any other valid reason
Period for notice to BOD for withdrawal of membership 60 days
entitled to a refund of:
Right of member after withdrawal 1. share capital contribution
2. other interest in the cooperative
1. failure to patronize for an unreasonable period
2. failure to comply with his obligations
Grounds for termination of a member by the BOD
3. violation of the by-laws and rules
4. prejudicial acts to the interest and welfare of the cooperative
Vote to terminate a member by the BOD M of the members of the BOD
Period to appeal the termination of a member within 30 days from the receipt
period for the appeal and grievance committee to decide on ter-
must decide within 30 days from the receipt
minated membership
Effect if period for the appeal and grievance committee to decide
appeal is deemed approved in favor of the applicant
on terminated membership lapses
Effect of the pending decision of the appeal and grievance com-
remains in force
mittee on the termination of membership on the membership
members who:
1. paid membership fees and has at least one stock
2. pays dues on time
3. abides by the rules, regulations, and bylaws
Members of good standing (defined)
4. performs their duties
5. attends required seminars and activities
6. patronizes the cooperative
7. participates in elections and decision-making
Policy-making body of the cooperative the general assembly

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 Law on Cooperatives
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vote to delegate powers of the general assembly to smaller bodies
Powers of the GA that cannot be delegated
GR on date of regular meetings of the GA
Date of special meetings
vote to hold special meetings
GR on the quorum of cooperatives
Number of votes a member has (primary)
Number of votes a member has (secondary and tertiary)
voting by proxy (defined)
Person that can vote (secondary and tertiary)
number of members in the BOD
term of the BOD
period to elect chairman and vice-chairman of the BOD
Role of the BOD
Limitations on the BOD
date for regular meetings of the BOD
date of special meetings of the BOD
GR on Quorum for the BOD
How a vacancy due to expiration of term is filled (BOD)
How a vacancy due to causes other than expiration of term is filled
(BOD)
Term of elected member of the BOD if elected to fill a vacancy due
to causes other than expiration of term
Who elects the officers of the cooperative other than the chairper- the BOD shall elect other officers from outside the BOD in accor-
son and vice chairperson
Who can remove officers and BOD
Persons that cannot be Officers
Officers elected by the general assembly
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3/4 of members
1. amendment of the AOC and bylaws
2. elect, appoint, and remove members of the BOD
3. approve developmental plans
G.R. held annually on date fixed in the bylaws
E. if not fixed, any date within 90 days after close of the fiscal year
called at any time
M of the BOD
G.R. a quorum is 25% of all members entitled to vote
E. it is different in:
1. cooperative banks - majority of the number of voting shares of
all members
2. Electric cooperatives - 5% of all the members entitled to vote
only 1 per member
1. 1 basic vote
2. as many incentive votes as provided for but not exceeding 5
allowing a delegate of a cooperative to vote on behalf of another
delegate of the same cooperative
1. delegates on behalf of members
2. proxy if provided for
an odd number between 5 to 15
2 years
within 10 days from their election
1. strategic planning
2. direction-setting
3. policy-formulation activities
1. shall not hold any position involving the day-to-day operations
of the BOD
2. cannot engage in a business similar to the cooperative
3. who has a conflict of interest
at least once a month
any time upon the call of the chairperson or majority of the BOD
G.R. Majority of the members of the BOD constitute a quorum
E. if bylaws provide otherwise
by the general assembly
M of the remaining directors if there is quorum
only the unexpired term of his predecessor
dance with the bylaws
the General Assembly
1. loss of confidence with evidenced
2. two or more officers with a relationship up to the third degree of
consanguinity or affinity
3. engaged in a business similar to the cooperative
4. with a conflict of interest
1. BOD
2. Audit Committee
3. Election committee
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1. treasurer
2. secretary
3. Members of Committees
Officers elected by the BOD
4. Members of the BOD to fill vacancy for reasons other than
expiration of term
5. general manager
issued to all types of cooperatives after compliance with the rules
Certificate of Compliance (defined)
of the Authority
Executive Committee (defined) Created by the bylaws appointed by the BOD
1. powers granted to it by the bylaws
Power of the executive committee
2. powers granted by a M of the BOD
1. standard training curricula for officers
Rules of the Authority (defined)
2. optional training for officers
1. willfully and knowingly vote for patently unlawful acts
2. guilty of gross negligence or bad faith in directing the coopera-
Grounds for Solidary liability for all damages of directors, officers,
tive
and committee members
3. acquiring personal or pecuniary interest in conflict with their duty
as directors, officers, or committee members
as a trustee for the cooperative they shall be liable for:
remedy for violation of duty and acquisition of interest adverse to
1. damages
the cooperative reposed to him in confidence
2. double the profit which would have accrued to the cooperative
G.R. directors shall not receive any compensation
GR on the compensation of directors E. they shall receive reasonable per diems
E.E. bylaws provide for their compensation
1. no per diems if coop reported net loss for the preceeding year
Limitation on Per Diems 2. no per diem if dividend rate less than official inflation rate for the
same year
Compensation allowed for first year of existence no additional compensation other than per diems
vote to grant compensation to directors M of all members with voting rights
1. presence of the director was not necessary to constitute quorum
2. vote of director was not necessary for approval
Requirements for valid self-dealing directors, officers, and com-
3. contract is fair and reasonable
mittee members
4. in case of an officer or committee member, contract has been
previously authorized by the GA or the BOD
Effect if the requirements for valid self-dealing directors, officers,
voidable
and committee members is missing
1. 3/4 of all the members with voting rights
requirements to ratify voidable self-dealing directors, officers, and
2. disclosure of adverse interest
committee members
3. contract is fair and reasonable under the circumstances
a director who by virtue of his office acquires an opportunity that
Disloyalty of director (defined)
should belong to the cooperative
1. damages
Liability of disloyal directors 2. account for double the profits the would have accrued to the
cooprating
Vote to ratify the acts of a disloyal director 3/4 of all members with voting rights
use of confidential information that if generally known is expected
Illegal use of confidential information (defined)
to adversely affect the operation and viability of the cooperative
1. compensate the cooperative for direct losses suffered
Remedy for illegal use of confidential information 2. accountable for any direct benefit or advantage received or to
be received
Removal of elected officers filed with the BOD with due process
elected officers with pending complaints can be suspended from
Preventive suspension (defined)
their position until the resolution of the investigation

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 Law on Cooperatives
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vote to remove elected officers
Mandatory Committees (AMCEE)
Who elects the members of the audit and election committees
Who elects the members of committees other than audit and
election committees
Accountability of the Audit Committee
Powers unique to the cooperative
Privileges of Cooperatives
Additional Privileges of Cooperatives
Capital Sources of Cooperatives
Treatment of donated capital upon dissolution
Fine for Unpaid subscribed Share Capital (defined)
GR on the right of heir to the shares of a deceased member
Effect if heir of a member does not inherit the shares
Requirement to transfer shares of the cooperative
Reserve Requirement Ratio (defined)
Net Surplus (defined)
Order of Distribution of Net Surplus and rate (RECOP)
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3/4 of the regular members
A - Audit committee
MC - Mediation and Conciliation Committee
E - Ethics committee
E - Election committee
general assembly
BOD
directly accountable and responsible to the general assembly
1. to enter into division, merger, or consolidation
2. form subsidiary cooperatives and join federations or unions
3. avail of loans, be entitled to credit, and accept and receive grants
4. avail of preferential rights
5. organize and operate schools
1. deposit sealed cash boxes and valuable papers in government
offices free of charge
2. if organized by government employees, free use of any available
space owned or rented by the government
3. Preferential right to supply government institutions and other
agencies with commodities
4. preference in the allocation of fertilizers and rice
5. preference in management of public markets
6. preference in credit transactions
7. exempt from prequalification bidding requirements
8. privilege of representation free of charge, except when adverse
party is the government
1. preferential rights
2. financial support for transport cooperatives
3. special window for financing housing project
1. share capital
2. loans and borrowings
3. revolving capital
4. subsidies, donations, legacies, other assistance
subject to escheat
bylaws may prescribe fine provided it is fair and reasonable under
the circumstances
G.R. the heir shall be entitled to the shares of the decedent
E. he is not entitled to the shares if:
1. holdings of the heir will exceed 10% of the share capital
2. heir does not qualify and is not admitted as a member of the
cooperative
shares will revert to the cooperative upon payment of their value
to the heir
1. held for more than 1 year
2. assigned to the cooperative or to a member
3. BOD approval
This is for thrift, savings, and cooperative banks. The ratio is 4%
it is the excess payment for:
1. loans borrowed
2. goods and services availed
3. rightful amount for goods sold and services rendered
R - Reserve Fund (10%)
E - Education and Training Fund (10%)
C - Community Development Fund (3%)
O - Optional or Land & Building Fund (7%)
P - Patronage Refunds and Interest on Share Capital (70%)
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Remedy if member has a debt due to the cooperative
Responsibility of Audit Committee
Period to file regular reports
Period for issuing written notice for noncompliance with the re-
porting requirements
Effect of failure to file required reports
Reports to be filed by a Primary cooperative (CALPS)
Cooperative Annual Performance Report (Preparation)
Audited Financial Statement (Preparation)
List of Officers and Trainings Completed (Preparation)
Performance of Audit Report (Preparation)
Social Audit Report (Preparation)
GR on who approves the regular reports to be filed
Reports to be filed by a Secondary and Tertiary cooperative
Reporting Requirement for All CDA registered Cooperatives
Effect of partial compliance with the reporting requirements
Qualifications of external auditor for cooperatives
Requirement for disposal of cooperative books
GR on the disposal of cooperative books
GR on the means of settling intracooperative disputes
Effect of decision by the voluntary abitrators
conciliation (defined)
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cooperative shall have first lien over the following as long as the
member has not yet paid:
1. any materials acquired and products produced using the pro-
ceeds of the debt; and
2. real properties acquired and held using the proceeds of the
debt.
1. review of books and records of account
2. ensuring records are in accordance with standards
3. production of records at the time of audit or inspection
120 days from the end of the calendar year
issued within 15 days from the expiration
the cooperative and its officers will be subject to
1. fines and penalties
2. revocation of the right to operate
1. Cooperative Annual Performance Report
2. Audited Financial Statement
3. List of Officers and Trainings Completed
4. Performance of Audit Report
5. Social Audit Report
Compliance Officer
Finance Manager or Accountant
Education and Training Committee
Internal Auditor or Audit Committee
Internal Auditor or Audit Committee
G.R. the Chairman of the BOD approves it
E. for Cooperative Annual Performance Report it can be approved
by:
1. General Manager
2. Chairman of the BOD
1. Business Consultancy Assistance
2. Audited Financial Report
3. List of Officers and Trainings Undertaken
4. List of Affiliates and Cooperatives
5. Performance Audit Report
6. Social Audit Report
7. Other Training Activities
List of members issued with share capital certificate
considered as non-compliance
1. independent of the cooperative and its subsidiaries
2. member of PICPA
3. accredited by BOA
4. accredited by the CDA
1. disposed of through a method of complete destruction
2. more than 5 years old
G.R. They can be disposed of if they meet the requirements
E. they cannot be disposed of if they relate to transactions subject
to civil, criminal, or administrative proceedings
G.R. conciliation and mediation committee and mechanisms pro-
vided for in the bylaws;
E. if unable to settle, voluntary arbitrators
their decision takes effect and is appealable only to the president
Reconciling the two parties
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Mediation (defined) Suggesting a resolution
Arbitration (defined) Decides for the parties themselves
certification of failure to settle issue despite all efforts from:
requirement for settlement through voluntary arbitrators 1. conciliation and mediation committee
2. the cooperative
Vote to approve merger or consolidation of cooperatives 3/4 of all members
1. constituents become a single cooperative
2. separate existence shall cease, except of the surviving consol-
idated cooperative
Effect of merger or consolidation 3. Surviving cooperative possesses all assets, rights, privileges,
immunities, and franchises
4. surviving cooperative is responsible for all liabilities and oblig-
ations
1. voluntary
Methods of dissolution
2. involuntary
1. with creditors
Types of voluntary dissolution
2. without creditors
1. by competent court
Types of involuntary dissolution
2. by the CDA
Vote for voluntary dissolution where no creditors are affected M of the BOD + 3/4 of all members
Requirement for voluntary dissolution when creditors are affected petition for dissolution filed with the CDA
1. violation of laws, regulations, or bylaws
Instances of Involuntary dissolution by a competent court
2. insolvency
1. fraudulent registration
2. illegal purpose
Instances of suspension or Involuntary dissolution by order of the
3. willful violation of the cooperative code or by laws
CDA (Fra Ill Vi Fa FA)
4. willful failure to operate
5. willful failure to meet minimum membership requirements
1. failure to operate within 2 year
Period of inactivity for dissolution by failure to organize
2. continuous inoperation for 2 years
Effect if cooperative fails to organize or does not operate for 2 1. CDA will send formal notice of show cause
years 2. failure to provide justifiable cause will result in dissolution
Period for liquidation of cooperatives three years after its dissolution
Remedy of creditor or owner of asset is unknown or cannot be 1. given to federation or union affiliated with
found 2. escheat
Persons who will wind up the cooperative liquidators/trustees constituted by the CDA
number requirement for the board of liquidators not less than 3 not more than 5
punishable with:
Penalty for using the name cooperative without proper registration 1. imprisonment
2. fine
G.R. they are punishable
GR on the penalty for using the name cooperative without proper
E. those registered with the National Electrification Administration
registration
are exempt
1. economic survey
2. pre-membership seminar
Basic steps in forming a cooperative 3. general meeting
4. documents (AOC and bylaws)
5. Registration
the notarized AOC must be accompanied by:
1. bonds of accountable officers
Additional requirements attached to the AOC for registration
2. notarized sworn statement of treasurer for the subscription
requirements

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 Law on Cooperatives
Study online at https://quizlet.com/_9o4m9n
Requirements for the registration of the cooperative
Why do cooperatives need to be registered
Effect of cooperatives registered with NEA opt not to register with
the CDA
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1. economic survey
2. by-laws
3. Articles of cooperation
4. three years projected financial statements
5. organizational structure
7. sketch map of office
8. certificate of appointment of core management team and inter-
nal control system
9. Certificate of pre-membership education seminar
10. submission of reportorial requirements
11. verification slip and P50 fee
cooperatives need legal personality to act
1. allowed to retain the word cooperative in their name
2. not entitled to the benefits and privileges of cooperatives