.Arch3. HISTORY NATURE ETC. EDITED

FUNDAMENTALS
OF
COOPERATIVES
Cooperative Development Authority
Manila Extension Office
LEGAL BASIS
Legal Basis:
Article 44 of RA 9520
Functions, Responsibilities and Training
Requirements
• The functions and responsibilities of the directors, officers

and committee members, AS WELL AS THEIR TRAINING
REQUIREMENTS, shall be IN ACCRODANCE WITH THE
RULES AND REGULATIONS ISSUED BY THE AUTHORITY.
Legal Basis:
Rule 7, Section 5 of IRR
• Sec. 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.
Legal Basis:
CDA Memorandum Circulars
• MC No. 2011-01. GUIDELINES ON THE

ACCREDITATION OF COOPERATIVE
TRAINING PROVIDERS
 MC No. 2011-14. STANDARD TRAINING

CURRICULA FOR COOPERATIVE
OFFICERS
Legal Basis:
CDA Memorandum Circulars
 MC No. 2011-26. GUIDELINES ON THE

SUBMISSION OF COOPERATIVE’S LIST OF
OFFICERS AND TRAININGS UNDERTAKEN/
COMPLETED
 MC No. 2011-27. IMPLEMENTATION OF THE

TRAINING REQUIREMENTS FOR COOPERATIVE
OFFICERS
FUNDAMENTALS OF COOPERATIVE
THOUGHT & PRACTICE
Fundamentals of Cooperatives:
Why, What & How
Cooperative Values, Principles & Practices
The ‘Coop Difference’

Pre- Test
1. What is the name of your

cooperative?
Pre- Test
2.What is cooperative?
Pre- Test
3. Give at least 3 cooperative

principles?
Pre- Test
4. What government agency

regulates cooperatives?
Pre- Test
5. Give at least two mandatory

committees in your
cooperative?
Pre- Test
6. What is the vision and

Mission of your cooperative?
Pre- Test
7. Who is the highest policy

making body of the cooperative?
Pre- Test
8. How many Board of Directors

does your coop have?.
History, Nature, Practices,
Values & Principles
Cooperative Development Authority

Manila Extension Office
Why?
When?
How?
Cooperatives started
Video Presentation
“Ang Kasaysayan ng Kooperatiba”

Common Problem of the Community
Lack of job opportunity

Inadequate income
Lack of education,
knowledge & skills
Wrong values and beliefs
People are not united
“kanya-kanya”
Peace and order situation
extremely high cost of
goods or services
Lack of capital.
How do we respond?
1. Community Organization/Group Formation:
a. Informal (e.g Bayanihan, Paluwagan)

b. Formal (e.g Civic Organization,
Peoples Organization,
Cooperatives)
How do we respond?
2. Formal/informal Education thru:

a. Academic studies
b. Trainings
c. Seminars/workshops
d. Conferences, etc.
How do we respond?
3. Organized actions
“Advocating & mobilizing people for a noble
& productive endeavor”
Beginnings and Philosophy of
Cooperatives
Started in England in 1800.

Cooperatives
• Germany 1864.
Fredierick Wilhelm Raiffeisen,

in 1888, organized a total of 423 credit societies
with savings and lending business.
Cooperatives
• France
Charles Fourier, formed the first marketing cooperative.

The same time when Raiffeisen is working in Germany.
• Belgium
Fr. Jacques Melaerts, a priest formed the first

cooperative Credit Bank.
Cooperatives
• Israel
• Japan
• Taiwan
•Philippines
1896, during Spanish regime, Dr. Jose Rizal
organized a farmer’s marketing cooperative
while in exile in Dapitan.
Video Presentation
“Ano ang Kooperatiba”

Fundamentals of Cooperatives
What is a
Cooperative?
Its Nature and

Characteristics
Cooperative
Values
Cooperative
Principles
Organization &
Management
Cooperative
The word cooperative is rooted
from a French word “cooperari”.
The word co is an English word
which means “to be with”. And the
word “operari” is a Latin word,
which means “to operate”.
Working together to attain a

common vision is the underlying
principle of cooperativism.
KOO P E RAT I BA
CO-OPERATIVE
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
CO-OPERATIVE

principles
CO-OPERATIVE

principles
CO-OPERATIVE

principles
CO-OPERATIVE

principles
CO-OPERATIVE

principles
CO-OPERATIVE

principles
CO-OPERATIVE

principles
CO-OPERATIVE

principles
NATURE AND
CHARACTERISTICS
OF A
COOPERATIVE
NATURE & CHARACTERISTICS
OF COOPERATIVES
1. Cooperatives are Service- oriented:
Cooperatives are organized to serve their members by providing goods and
services at reasonable cost. Members contribute the capital of the cooperatives so that
goods and services can be appropriately provided through its business activities and
not to maximize the profit or dividends their capitals contributions will earn from the
business.
In servicing the members, don't act as charitable organizations. members are aware
that the benefits come from their contributions, patronage refund, and mutual efforts
to help one another. The motto is “Cooperatives are not for profits and not for charity
but for service”.
OF COOPERATIVES
2. Cooperatives are community- oriented:
Cooperatives work for the welfare of their members by

integrating themselves into the life of the community in particular
and the nation in general. Cooperatives enhance the people’s
welfare through increased productivity both members and the
communities where they are located. By the very nature of their
concerns, cooperatives strengthen the economic, social, cultural
and ecological base of the community where they operate.
OF COOPERATIVES
3. Cooperatives are people-oriented:
Cooperatives are not merely economic instruments concerned
with dividends and related economic and financial returns. They
are the mechanism of change for total human development of man
as human being in all the economic, political, cultural, and spiritual
aspects. It make the people with sense of both individual and joint
responsibility, so they may rise individually to a full personal life
and collectively to a full social life.
OF COOPERATIVES
4. Cooperatives are owned, managed and
patronized by members
Cooperatives are member-owned, member-controlled and member-used.
Ownership is a very important factor in the success of any cooperatives. It is very
important that members have full authority to manage and control their
cooperatives. If a cooperatives starts and operates solely from borrowed capital, it
violates the principle of self-help and loses much of its autonomous character.
Cooperatives must depend on the patronage of their members and not from
non-,members. However in certain cases a limited patronage by non-members may
allowed mainly for reasons of business viability and service to the community.
OF COOPERATIVES
5. Cooperatives are Business enterprises:
Cooperatives engage in businesses with social responsibility. they play a

meaningful economic role in the community life by serving and performing as
efficiently and responsively as the other financial and business enterprises.
Cooperatives have to generate surplus to be able to continually improve and
expand its services. They have to be viable, creative, enterprising, and efficient to
continually grow and serve the needs of their members. Increasing patronage can
not be maintain without good quality service, management, and performance.
The net surplus generated from the business operations are allocated to the
members at the end of each year.
OF COOPERATIVES
6. Cooperatives develop best through self-help and
mutual help
Cooperatives is inspired by “If you want something done, do it yourself” this
philosophy is responsible for the success of many cooperatives all over the world and it is
best alternative for the poor in any country to unite and help themselves out of their
depressed condition. this is not to say they should not be assisted. But assistance from
outside, whether technical or financial, must not stifle but stimulate initiatives, self-help
and self reliance. The principle of subsidiarity also applies that before asking or soliciting
aid from outside, self determination and self-capability, should be considered. They should
not interfere in the purely internal affairs of the cooperatives, taking care that they
preserve their autonomous and independent and self-help through mutual-help characters.
On the part of the cooperatives being assisted, they should do their part by seeing to it that
the objective of the assistance given is achieved, that they grow stronger rather the become
dependent upon such assistance.
OF COOPERATIVES
7. Cooperatives serve best when they answer the real
felt needs of the members:
We do expect the members to participate in the activities and to patronize the

business if the services they do needs and felt are serve. It is important therefore that the
proper approaches and techniques are employed to ensure that the needs of the members
are identified and recognized before any cooperatives is organized. The assistance should
begin from the organization stage and sustain through the developmental stage up to the
point when the cooperative begin to operate on a self-sustaining basis.
OF COOPERATIVES
8. Cooperatives develop best from bottom to top:
Organizationally, their development should be from the Primary level to the

secondary, tertiary and up to the Apex. Geographically, they should develop from
community to City, Regional, and National, to International. The Primary cooperatives are
the foundation stones of the whole cooperatives structure. Organizing the Apex before the
base is like building the roof of the house before the foundation. Sooner or later, in such a
case, the roof topples down because the foundation is weak and unable to support its load.
OF COOPERATIVES
9. Development of cooperatives is enhanced trhough
a multi-sectoral approach:
Having in mind the specific roles of each sector, the government, non-government
and the cooperatives sector, must play a multi-sectoral approach can ensure that all aspect
of development process are considered. This enhances the smooth
and continuous development of the cooperatives. This approach involves the participation
of all sectors from planning stage to the implementation, evaluation and monitoring of all
activities. Such approach enhances true people power,enlightened, democratic,
and participation in all levels, both organization and geographical.
COOPERATIVE
VALUES
What Cooperators
Believe in
Why I Joined
the Coop?
Video Presentation
“Coop Values”
COOPERATIVE VALUES
Cooperatives are based on the

values of:
Self-help
-we help people to help
themselves
COOPERATIVE VALUES
values of:
Self-responsibility
- we take responsibility for, and
answer to our actions ke
responsibility for, and answer to
our actions
COOPERATIVE VALUES
values of:
Democracy
- we give our members a say
in the way we run our
businesses give our members
a
COOPERATIVE VALUES
values of:
Equality
-no matter how much money a
member invests in their share
account, they still have one vote
COOPERATIVE VALUES
values of:
Equity
-we carry our business in
awe carry our business in a
way that is fair and unbiased
COOPERATIVE VALUES
values of:
Solidarity
mwe share interests and common purposes
with our members and other
co-operatives.
-on purposes with our members and other
co-operatives.
COOPERATIVE VALUES
values of:
self-help
self-responsibility
democracy
equality
equity
solidarity
ETHICAL VALUES
Cooperative members believe in the
ethical values of:
Openness
Honesty
Social Responsibility
Caring for Others.
Video Presentation
“Coop Principles”
COOPERATIVE
PRINCIPLES
COOPERATIVE PRINCIPLES
1. Voluntary and Open Membership
- no compulsory membership
- no discrimination against any person
- no artificial limitation for admission

of new members
- no artificial limitation of the righ to
withdraw from membership
1. Voluntary and Open Membership
- Common Bond of Membership
Residential
Institutional
Associational
Occupational
2. Democratic Member Control
- one man, one vote
- no proxy voting
- general assembly as supreme authority
- decision-making by majority vote
- equal status of members
- direct or indirect participation of all
members through election
- control through regular audit
ORGANIZATIONAL STRUCTURE
GENERAL ASSEMBLY
Audit Committee Board of Directors Election Committee
Board Secretary
Treasurer
Mediation/Conciliation Ethics Education & Training Other

Committee Committee Committee Committee
Management Staff
3. Member Economic Participation
- limited dividends on share capital
- patronage refund or rebates
- equality of treatment regardless of one’s
capital contribution
- limitation of share capital contribution up
to 10% of total subscribed capital
- provision of reserved funds
4. Autonomy and Independence

- self-determination
- self-government/self-control
- self-finance
-independent from other organizations
5. Continuous Education, Training and Information

- appointment of education and training
committee
- provision of an education fund out of net
income
- requirement of Pre-Membership Education
Seminar before admission
- owner/membership meetings
- continuous training of officers, members and
employees
6. Cooperation Among Cooperatives
- membership in secondary and
tertiary organizations
- participation in economic
integration projects
7. Concern for Community
- active participation in secondary and
tertiary organizations
- provision for fund out of net surplus
for community development
- assist in the attainment of community
aspirations.
COOPERATIVE
PRACTICES
COOP PRACTICES
1. Capital Formation
Savings mobilization
Capital build-up
2. Cash Trading
3. Selling at Market Price

COOP PRACTICES
4. Constant Expansion
5. Quality Standard Products
6. Cooperative Wholesale and

Inter-Lending
7. Minimize Expenditures.
The “COOP
DIFFERENCE”
Video Presentation
“Me and My Coop”

A Type of Business Depends On
•Who owns the business?

•Who controls the business?
•Who uses the business?
•Who gets the profits?
Individually Owned Business
One Person
•Owns
•Controls
•Operates
•Benefits/profits
Partnership
Two or more owners
•Own
•Control
•Operate
•Share in risks and profit
Corporations
• Multiple owners
• Variety of goods and services
• Physical facilities
• State chartered
• Investors
• Profits shared among investors
Comparison between Cooperative and Corporation
Corporation Cooperative
Number of person At least 5 person At least 15 persons

required to form
Judirical Personality Must be registered Must be registered

with SEC with CDA
Required documents Articles of Articles of
Incorporation, By- Cooperation , By-
laws & bank laws economic
statement survey, bonds &
Treasurers affidavit
Capitalization Stockholders pay for Members contributes

the share not more than 10%
Management B.O.D. has final G.A. makes final

structure decision decision
Voting Rights Vote proportionate One member, one
to capital with proxy vote & no proxy
voting voting
liability Limited up to until Limited up to

authorized capital subscribed capital
share
Taxability Taxable Non-taxable
When stockholder Continues, heirs Continues, heirs

or member passed inherit shares become member if
away qualified
Motive Profit Service above profit.

Cooperatives Have Unique
Principles
•User – Owner
•User – Control
•User - Benefit
User-Owner Principle
Membership
Certificate
SHARE
User-Owner Principle
The people who own and finance the

cooperative are those who use it.
User-Control Principle
VOTE
User-Control Principle
The people who use the cooperative are

those who control the cooperative
Members Exercise Control By
•Voting & participation at
G.A.s
•Electing Board of Directors
& committee members
•Making decisions on major
cooperative issues
User-Benefit Principle
The cooperative’s sole purpose
is to provide and distribute
benefits to members on the
basis of their use/participation..

.Arch3. HISTORY NATURE ETC. EDITED

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FUNDAMENTALS

• The functions and responsibilities of the directors, officers

• Sec. 5. Training Requirements for the

• Federations and/or other trainers or

• MC No. 2011-01. GUIDELINES ON THE

 MC No. 2011-14. STANDARD TRAINING

 MC No. 2011-26. GUIDELINES ON THE

 MC No. 2011-27. IMPLEMENTATION OF THE

Cooperative Values, Principles & Practices

The ‘Coop Difference’

1. What is the name of your

3. Give at least 3 cooperative

4. What government agency

5. Give at least two mandatory

6. What is the vision and

7. Who is the highest policy

8. How many Board of Directors

Cooperative Development Authority

“Ang Kasaysayan ng Kooperatiba”

Lack of job opportunity

a. Informal (e.g Bayanihan, Paluwagan)

2. Formal/informal Education thru:

Started in England in 1800.

Fredierick Wilhelm Raiffeisen,

Charles Fourier, formed the first marketing cooperative.

Fr. Jacques Melaerts, a priest formed the first

“Ano ang Kooperatiba”

Its Nature and

Working together to attain a

A cooperative is an autonomous and duly

A cooperative is an autonomous and duly

A cooperative is an autonomous and duly

A cooperative is an autonomous and duly

A cooperative is an autonomous and duly

A cooperative is an autonomous and duly

A cooperative is an autonomous and duly

A cooperative is an autonomous and duly

A cooperative is an autonomous and duly

Cooperatives work for the welfare of their members by

Cooperatives engage in businesses with social responsibility. they play a

We do expect the members to participate in the activities and to patronize the

Organizationally, their development should be from the Primary level to the

Cooperatives are based on the

- no artificial limitation for admission

Audit Committee Board of Directors Election Committee

Mediation/Conciliation Ethics Education & Training Other

4. Autonomy and Independence

5. Continuous Education, Training and Information

3. Selling at Market Price

5. Quality Standard Products

6. Cooperative Wholesale and

“Me and My Coop”

•Who owns the business?

Number of person At least 5 person At least 15 persons

Judirical Personality Must be registered Must be registered

Capitalization Stockholders pay for Members contributes

Management B.O.D. has final G.A. makes final

liability Limited up to until Limited up to

Taxability Taxable Non-taxable

When stockholder Continues, heirs Continues, heirs

Motive Profit Service above profit.

The people who own and finance the