COOPERATIVES members;

(R.A. 9520)
(6) To acquire lands and provide housing
COOPERATIVE benefits for the members;
• is an autonomous and duly registered
association of persons, with a common (7) To insure against losses of the members;
bond of interest, who have voluntarily
joined together to achieve their social, "(8) To promote and advance the economic,
economic, and cultural needs and social and educational status of the members;
aspirations by making equitable
contributions to the capital required, "(9) To establish, own, lease or operate
patronizing their products and services cooperative banks, cooperative wholesale and
and accepting a fair share of the risks retail complexes, insurance and
and benefits of the undertaking in agricultural/industrial processing enterprises,
accordance with universally accepted and public markets;
cooperative principles
FEDERATION OF COOPERATIVES: (10) To coordinate and facilitate the activities
• three or more primary cooperatives of cooperatives;
doing the same line of business
organized from the municipal to the (11) To advocate for the cause of the
principal level registered with the CDA cooperative movements;
to undertake business activities in
support of its members. (12) To ensure the viability of cooperatives
through the utilization of new technologies;
ORGANIZATION AND REGISTRATION
(13) To encourage and promote self-help or
Purposes of Cooperatives self-employment as an engine for economic
- A cooperative may be organized and growth and poverty alleviation; and
registered for any or all of the following
purposes: (14) To undertake any and all other activities
for the effective and efficient implementation
(1) To encourage thrift and savings of the provisions of this Code.
mobilization among the members;
REGISTRATION
(2) To generate funds and extend credit to the • A cooperative formed and organized
members for productive and provident acquires juridical personality from the
purposes; date the Authority issues a certificate of
registration under its official seal.
(3) To encourage among members systematic • All applications for registration shall be
production and marketing; finally disposed of by the Authority
within a period of sixty (60) days from
(4) To provide goods and services and other the filing thereof, otherwise the
requirements to the members; application is deemed approved, unless
the cause of the delay is attributable to
(5) To develop expertise and skills among its the applicant:
 ◦ in case of a denial of the application 5. Education, Training and Information -
for registration, an appeal shall lie • Cooperatives shall provide education
with the Office of the President and training for their members,
within ninety (90) days from receipt elected and appointed
of notice of such denial: representatives, managers, and
◦ failure of the Office of the President employees, so that they can
to act on the appeal within ninety contribute effectively and efficiently
(90) days from the filing thereof to the development of their
shall mean approval of said cooperatives.
application.
6) Cooperation Among Cooperatives
COOPERATIVE PRINCIPLES - Cooperatives serve their members
1. Voluntary and Open Membership most effectively and strengthen the
• Cooperatives are voluntary cooperative movement by working
organizations, open to all persons together through local, national,
able to use their services and willing regional and international structures.
to accept the responsibilities of
membership, without gender, social, (7) Concern for Community -
racial, cultural, political or religious Cooperatives work for the
discrimination. sustainable development of their
2. Democrative Member Control - communities through policies
• Cooperatives are democratic approved by their members.
organizations that are controlled by
their members who actively ORGANIZING A PRIMARY
participate in setting their policies COOPERATIVES
and making decisions. In primary 1. Fifteen (15) or more NATURAL persons
cooperatives, members have equal 2. FILIPINO citizen
voting rights of one-member, one- 3. of LEGAL age
vote. Cooperatives at other levels are 4. ACTUALLY residing or working in the
organized in the same democratic intended area of operations
manner 5. PROVIDED, a prospective member of a
3. Member Economic Participation - primary cooperative must complete a
• Members contribute equitably to, and pre-membership educatio seminar
democratically control, the capital of (PMES)
their cooperatives. At least part of
that capital is the common property ADMINISTRATION
of the cooperative. They shall
receive limited compensation or Composition of the General Assembly
limited interest, if any, on capital The general assembly shall be
subscribed and paid as a condition of composed of such members who are entitled to
membership. vote under the articles of cooperation and
4. Autonomy and Independence - bylaws of the cooperative.
• Cooperatives are autonomous, self- Powers of the General Assembly
help organizations controlled by their - The general assembly shall be the
members. highest policy-making body of the cooperative
and shall exercise such powers as are stated in Code shall have the following powers, rights
this Code, in the articles of cooperation and in and capacities:
the bylaws of the cooperative. The general
assembly shall have the following exclusive (1) To the exclusive use of its registered name,
powers which cannot be delegated: to sue and be sued;
(1) To determine and approve amendments to
the articles of cooperation and bylaws; (2) Of succession;
(2) To elect or appoint the members of the
board of directors, and to remove them for (3) To amend its articles of cooperation
cause;
(3) To approve developmental plans of the (4) To adopt bylaws not contrary to law, morals
cooperative: and or public policy, and to amend and repeal the
(4) Such other matters requiring a two-thirds same
(2/3) vote of all the members of the general
assembly, as provided in this Code. (5) To purchase, receive, take or grant, hold,
convey, sell, lease, pledge, mortgage, and
ARTICLES OF COOPERATION otherwise deal with such real and personal
property as the transaction of the lawful affairs
(a) The name of the cooperative which shall of the cooperative may reasonably and
include the word cooperative necessarily require, subject to the limitations
prescribed by law and the Constitution;
(b) The purpose or purposes and scope of
business for which the cooperative is to be (6) To enter into division, merger or
registered; consolidation

(c) The term of existence of the cooperative; (7) To form subsidiary cooperatives and join
federations or unions
(d) The area of operation and the postal
addresses of its principal office; (8) To avail of loans, be entitled to credit and to
accept and receive grants, donations and
(e) The names, nationality, and the postal assistance from foreign and domestic sources,
addresses of the registrants; subject to the conditions of said loans, credits,
grants, donations or assistance that will not
(f) The common bond of membership; undermine the autonomy of the cooperative.

(g) The list of names of the directors who shall (9) To avail of preferential rights granted to
manage the cooperative; and cooperatives under in the grant of franchises to
establish, construct, operate and maintain
(h) The amount of its share capital, the names ferries, wharves, markets or slaughterhouses
and residences of its contributors and a and to lease public utilities, including access to
statement of whether the cooperative is extension and on-site research services and
primary, secondary or tertiary facilities related to agriculture and fishery
activities;
Cooperative Powers and Capacities
- A cooperative registered under this (10) To organize and operate schools
(11) To exercise such other powers granted by CAPITAL, PROPERTY & FUNDS
this Code or necessary to carry out its purpose
or purposes as stated in its Articles of CAPITAL REQUIREMENT FOR
cooperation COOPERATIVE
No cooperative, other than cooperative
PRIVILEGES OF COOPERATIVES union shall be registered unless the articles of
cooperation is accompanied with the bonds of
(1) Cooperatives shall enjoy the privilege of the accountable officers and a sworn statements
depositing their sealed cash boxes or of the treasurer share elected by the
containers, documents or any valuable papers subscribers showing that at least twenty-five
in the safes of the municipal or city treasurers per centum (25%) of the authorized capital has
and other government offices free of charge, been subscribed and at least twenty-five per
and the custodian of such articles shall issue a centum (25%) of the total subscription has been
receipt acknowledging the articles received paid.
duly witnessed by another person; The minimum paid up share capital is
Php15,000, subject to increase by the CDA
(2) Cooperatives organized among government upon consultation with the cooperative shall
employees, notwithstanding any law or not exceed Php1,000
regulation to the contrary, shall enjoy the free No member of primary cooperative
use of any available space in their agency, other than cooperative itself shall own or more
whether owned or rented by the Government; than 10% of the share capital of the cooperative

(3) Cooperatives rendering special types of Capital Sources:

services and facilities such as cold storage, ice
plant, electricity, transportation, and similar (1) Member's share capital;
services and facilities shall secure a franchise
therefore, and such cooperatives shall open (2) Loans and barrowings including deposits;
their membership to all persons qualified in
their areas of operation; (3) Revolving capital which consists of the
deferred payment of patronage refunds, or
(4) In areas where appropriate cooperatives interest on share capital; and
exist, the preferential right to supply
government institutions and agencies rice, corn (4) Subsidies, donations, legacies, grants, aids
and other grains, fish and other marine and such other assistance from any local or
products, meat, eggs, milk, vegetables, tobacco foreign institution whether public or private:
and other agricultural commodities produced Provided, That capital coming from such
by their members shall be granted to the subsides, donations, legacies, grants, aids and
cooperatives concerned; other assistance shall not be divided into
individual share capital holdings at any time
(5) Preferential treatment in the allocation of but shall instead form part of the donated
fertilizers, including seeds and other capital or fund of the cooperative
agricultural inputs and implements, and in rice
distribution shall be granted to cooperatives by Investment of Capital
the appropriate government agencies; A cooperative may invest its capital in
any of the following: Code, its articles of cooperation and
bylaws
(a) In shares or debentures or securities of any ANNUAL AUDIT
other cooperative;
a) the financial audit shall be conducted by
(b) In any reputable bank in the locality, or any an external auditor who satisfies all the
cooperative; following qualifications:
1) he is independent of the cooperative
(c) In securities issued or guaranteed by the or any of its subsidiary that heis auditing
Government; 2) he is a member ingood standing of the
Philippine Institute of Certified Public
(d) In real state primarily for the use of the Accountants and the CDA
cooperative or its members; or
b) the social audit shall be conducted by an
(e) In any other manner authorized in the independent social author accredited by
bylaws. the CDA

MEMBERSHIP c) performance and social audit reports

which contain the findings and
Kinds of Membership. reccomendations of the audit shall be
A cooperative may have two (2) kinds of submitted to the board of directors
members, to wit: (1) regular members - one
who has complied with all the membership AUDIT REPORT
requirements and entitled to all the rights and - The auditor shall submit to the audit
privileges of membership committee a report of the audit which shall
contain a statement of the assets and liabilities
(2) associate members - An associate of the cooperative, including earnings and
member is one who has no right to vote nor be expenses, amount of net surplus as well as
voted upon and shall be entitled only to such losses and bad debts, if any. The audit
rights and privileges as the bylaws may committee shall forthwith furnish the board of
provide: directors a copy of the audit report. Thereafter,
Provided, That an associate considered a the board of directors shall present the
regular member if : complete audit report to the general assembly
1. continues to patronize the cooperative in its next meeting.
for two (2) years
2. signifies his/her intention to remain a Right to Examine
member shall be considered a regular - A member shall have the right to
member. examine the records required to be kept by the
cooperative during reasonable hours on
General Assembly business days and he may demand, in writing,
• shall mean the full membership of the for a copy of excerpts from said records
cooperative duly assembled for the without charge except the cost of reproduction.
purpose of exercising all the rights and Any officer of the cooperative who shall
performing all the obligations pertaining refuse to allow any member of the cooperative
to cooperatives, as provided by this to examine and copy excerpts from its records
shall be liable to such member for damages and its members for productive and provident
shall be guilty of an offense purposes;
• if such refusal is pursuant to a resolution
or order of the board of directors, the (b) Consumers Cooperative
liability under this article shall be - primary purpose of which is to procure
imposed upon the directors who voted and distribute commodities to members and
for such refusal: non-members;
• Provided, further, That it shall be a
defense of any action under this article (c) Producers Cooperative
that the member demanding to examine - undertakes joint production whether
and copy excerpts from the cooperative agricultural or industrial. It is formed and
records has improperly used any operated by its members to undertake the
information secured through any prior production and processing of raw materials or
examination of the records of such goods produced by its members into finished or
cooperative or was not acting in good processed products for sale by the cooperative
faith or for a legitimate purpose in to its members and non-members. Any end
making his demand. product or its derivative arising from the raw
materials produced by its members, sold in the
ALLOCATION AND DISTRIBUTION OF name and for the account of the cooperative,
FUNDS shall be deemed a product of the cooperative
and its members;
Net Surplus
- Notwithstanding the provisions of (d) Cooperative
existing laws, the net surplus of cooperatives - engages in the supply of production
shall be determined in accordance with its inputs to members and markets their products;
bylaws. Every cooperative shall determine its
surplus at the close of every fiscal year and at (e) Service Cooperative
such other time as may be prescribed by the - engages in medical and dental care,
bylaws. hospitalization, transportation, insurance,
Order of Distribution. - That net surplus of housing, labor, electric light and power,
every cooperative shall be distributed as communication, professional and other
follows: services;
(1) An amount for the reserve fund, which shall
be at least ten per centum (10%) of net surplus: (f) Multipurpose Cooperative
(2) The reserve fund shall be used for the -combines two (2) or more of the
stability of the cooperative and to meet net business activities of these different types of
losses in its operations. cooperatives;

TYPES OF COOPERATIVES (g) Advocacy Cooperative

- primary cooperative which promotes
(a) Credit Cooperative and advocates cooperativism among its
- promotes and undertakes savings and members and the public through socially-
lending services amo oriented projects, education and training,
ng its members. It generates a common pool of research and communication, and other similar
funds in order to provide financial assistance to activities to reach out to its intended
beneficiaries; (o) Health Services Cooperative
- organized for the primary purpose of
"(h) Agrarian Reform Cooperative providing medical, dental and other health
organized by marginal farmers majority services;
of which are agrarian reform beneficiaries for
the purpose of developing an appropriate (p) Housing Cooperative
system of land tenure, land development, land - organized to assist or provide access to
consolidation or land management in areas housing for the benefit of its regular members
covered by agrarian reform; who actively participate in the savings program
for housing. It is co-owned and controlled by
"(i) Cooperative Bank its members;
- primary purpose of providing a wide
range of financial services to cooperatives and (q) Insurance Cooperative
their members; - engaged in the business of insuring life
and poverty of cooperatives and their members;
(j) Dairy Cooperative
- members are engaged in the (r) Transport Cooperative
production of fresh milk which may be - includes land and sea transportation,
processed and/or marketed as dairy products; limited to small vessels, as defined or classified
under the Philippine maritime laws
(k) Education Cooperative
- organized for the primary purpose of (s) Water Service Cooperative
owning and operating licensed educational - organized to own, operate and manage
institutions notwithstanding the provisions of waters systems for the provision and
Republic Act No. 9155, otherwise known as the distribution of potable water for its members
Governance of Basic Education Act of 2001; and their households;

(l) Electric Cooperative (t) Workers Cooperative

- organized for the primary purposed of organized by workers, including the self-
undertaking power generations, utilizing employed, who are at same time the members
renewable energy sources, including hybrid and owners of the enterprise. Its principal
systems, acquisition and operation of purpose is to provide employment and business
subtransmission or distribution to its household opportunities to its members and manage it in
members; accordance with cooperative principles

(m) Financial Service Cooperative CATEGORIES OF COOPERATIVE

- organized for the primary purpose of A) IN TERNS OF MEMBERSHIP
engaging in savings and credit services and 1. Primary - members are natural
other financial services; persons
2. Secondary - member are primaries
(n) Fishermen Cooperative 3. Tertiary - members are secondary
- organized by marginalized fishermen coopratives
in localities whose products are marketed either
as fresh or processed products; B) IN TERMS OF TERRITORY
• cooperatives shall be categorized
 according to area s of operations privileges, immunities and powers and shall be
which may or may not coincide with subject to all the duties and liabilities of a
the political suvdivisions of the cooperative organized under this Code;
country (4) The surviving or the consolidated
cooperative shall possess all the assets, rights,
MERGER AND CONSOLIDATION OF immunities and franchise of each of the
COOPERATIVES constituent cooperatives; and
(5) The surviving or the consolidated
Merger and Consolidation of Cooperatives cooperative shall be responsible for all the
(1) Two (2) or more cooperatives may liabilities and obligations of each of the
merge into a single cooperative which shall be constituent cooperatives in the same manner as
one of the constituent cooperatives or may if such surviving or consolidated cooperative
consolidate into a new single cooperative had itself incurred such liabilities or obligations
which shall be the consolidated cooperative.
(2) No merger or consolidation shall be DISSOLUTION
valid unless approved by two-thirds (2/3) of all
the members eligible to vote of each of the Voluntary Dissolution Where no Creditors are
constituent cooperatives at separate general Affected
assembly meetings. The dissenting members - majority vote of the board of directors,
shall have the right to exercise their right to and by a resolution duly adopted by the
withdraw their membership pursuant to Articles affirmative vote of at least twothirds (2/3) of all
31 to 32. the members with voting rights
(3) The Cooperative Development
Authority shall issue the guidelines governing Voluntary Dissolution Where Creditors Are
the procedure of merger or consolidation of Affected
cooperatives. In any case, the merger or - the petition for dissolution shall be
consolidation shall be effective upon the filed with the Cooperative Development
issuance of the certificate of merger to Authority. The petition
consolidation by the Cooperative Development shall be signed by a majority of its board of
Authority directors or other officers managing its affairs,
shall be verified by its president or secretary or
Effects of Merger and Consolidation. - The one of its directors and shall set forth all claims
merger or consolidation of cooperatives shall and demands against it and that its dissolution
have the following effects: (1) The was resolved upon all the members with voting
constituent cooperatives shall become a single rights
cooperative which, in case of merger shall be
the surviving cooperative, and in case of The Securities Regulation Code
consolidation, shall be the consolidated
cooperative; Securities
(2) The separate existence of the - are shares, participation or interests in
constituent cooperatives shall cease, except that a corporation or in a commercial enterprise or
of the surviving or the consolidated profit-making venture and evidenced by a
cooperative; certificate, contract, instruments, whether
(3) The surviving or the consolidated written or electronic in character. It includes:
cooperative shall possess all the rights, (a) Shares of stocks, bonds, debentures, notes
evidences of indebtedness, asset-backed agencies on all aspect of the securities market
securities; and propose legislation and amendments
(b) Investment contracts, certificates of interest thereto;
or participation in a profit sharing agreement, (c) Approve, reject, suspend, revoke or require
certifies of deposit for a future subscription; amendments to registration statements, and
(c) Fractional undivided interests in oil, gas or registration and licensing applications;
other mineral rights; (d) Regulate, investigate or supervise the
(d) Derivatives like option and warrants; activities of persons to ensure compliance;
(e) Certificates of assignments, certificates of (e) Supervise, monitor, suspend or take over
participation, trust certificates, voting trust the activities of exchanges, clearing agencies
certificates or similar instruments (f) and other SROs;
Proprietary or nonproprietary membership (f) Impose sanctions for the violation of laws
certificates in corporations; and and rules, regulations and orders, and issued
(g) Other instruments as may in the future be pursuant thereto;
determined by the Commission. (g) Prepare, approve, amend or repeal rules,
regulations and orders, and issue opinions and
SECURITIES AND EXCHANGE provide guidance on and supervise compliance
COMMISSION with such rules, regulation and orders;
• composed of a chairperson and (4)
Commissioners, appointed by the
President for a term of (7) seven years
each and who shall serves as such until
their successor shall have been
appointed and qualified.
• natural-born citizens of the Philippines,
at least forty (40) years of age for the
Chairperson and at least thirty-five (35)
years of age for the Commissioners
• of good moral character, or
unquestionable integrity, of known
probity and patriotism, and with
recognized competence in social and
economic disciplines
• the majority of Commissioners,
including the Chairperson, shall be
members of the Philippine Bar.

POWERS AND FUNCTIONS

(a) Have jurisdiction and supervision over all
corporations, partnership or associations who
are the grantees of primary franchises and/or a
license or a permit issued by the Government;
(b) Formulate policies and recommendations
on issues concerning the securities market,
advise Congress and other government