Types of Cooperatives

CATEGORIES OF COOPS
a. Cooperatives may be classified according to MEMBERSHIP, either as primary (members
are natural persons), secondary (members of which are primaries) or tertiary (members
are secondary cooperatives)
Primary- If you form a coop made up of five or more individual members and your
purpose is to provide services and employment for one another and promote community
development, then you will fall in the category of a primary cooperative.
Secondary- are formed when two or more primary cooperatives come together because
they are involved in similar activities and want to promote their services in the sector in
which they are active.
Tertiary- are formed by secondary cooperatives which come together to promote the
interests of their members to government bodies, the private sector and other
stakeholders.
b. In terms of TERRITORY, cooperatives are categorized according to areas of operations
which may or may not coincide with the political subdivisions of the country.
Profit Verses NonProfit CoOperatives
Cooperatives can be formed as either for profit or not for profit cooperatives. In both cases the
goal of the cooperative is to operate profitably, however, the surplus revenues are handled
differently in these two types of cooperatives.
ForProfit
Cooperatives: surpluses of the enterprise, after payment of dividends on shares and interest on
loans, are distributed at the discretion of the directors among the members in proportion to their
business transactions with the cooperative during the fiscal year.
NotForProfit
Cooperatives: operating surpluses of the enterprise are not distributed to the members and must
be returned to the cooperative's general reserve. The coop can use these funds to improve
services to members, distribute them to other non-profit cooperatives or give them to charity.

The types of cooperatives in the Philippines are as follows:

a) Credit Cooperative is one that promotes and undertakes savings and lending services
among its members. It generates a common pool of funds in order to provide financial assistance
and other related financial services to its members for productive and provident purposes;
A credit cooperative is a financial organization owned and operated by its members with the
following objectives:
"(1) To encourage savings among its members;
"(2) To create a pool of such savings for which loans for productive or provident purpose may be
granted to its members; and
"(3) To provide related services to enable its members to maximize the benefit from such loans.
b) Consumers Cooperative is one the primary purpose of which is to procure and distribute
commodities to members and non-members;
c) Producers Cooperative is one that undertakes a joint production whether agricultural or
industrial. It is formed and operated by its members to undertake the production and processing
of raw materials or goods produced by its members into finished or processed products for sale
by the cooperative to its members and non-members. Any end product or its derivative arising
from the raw materials produced by its members, sold in the name and for the account of the
cooperative, shall be deemed a product of the cooperative and its members;
d) Marketing Cooperative is one which engages in the supply of production inputs to
members and markets their products;
e) Service Cooperative is one which engages in medical and dental care, hospitalization,
transportation, insurance, housing, labor, electric .light and power, communication, professional
and other services;
A public service cooperative, within the meaning of this Code, is one organized to render public
services as authorized under a franchise or certificate of public convenience and necessity duly
issued by the appropriate government agency. Such services may include the following:
"(1) Power generation, transmission, and/or distribution;
"(2) Ice plants and cold storage services;
"(3) Communication services including telephone, telegraph, and communications:

"(4) Land and sea transportation cooperatives for passenger and/or cargo.
"(5) Public markets, slaughterhouses and other similar services; and
"(6) Such other types of public services as may be engaged in by any cooperative.

f) Multipurpose Cooperative is one which combines two (2) or more of the business activities
of these different types of cooperatives;
g) Advocacy Cooperative is a primary cooperative which promotes and advocates
cooperativism among its members and the public through socially-oriented projects, education
and training, research and communication, and other similar activities to reach out to its intended
beneficiaries;
h) Agrarian Reform Cooperative is one organized by marginal farmers majority of which are
agrarian reform beneficiaries for the purpose of developing an appropriate system of land tenure,
land development, land consolidation or land management in areas covered by agrarian reform;
"An agrarian reform cooperative as defined shall be organized for any or all of the following
purposes:
"(1) To develop an appropriate system of land tenure, land development, land consolidation or
land management in areas covered by agrarian reform;
"(2) To coordinate and facilitate the dissemination of scientific methods of production, and
provide assistance in the storage, transport, and marketing of farm products for agrarian reform
beneficiaries and their immediate family, hereinafter referred to as "beneficiaries";
"(3) To provide financial facilities to beneficiaries for provident or productive purposes at
reasonable
costs;
"(4) To arrange and facilitate the expeditious transfer of appropriate and suitable technology to
beneficiaries and marginal farmers at the lowest possible cost;
"(5) To provide social security benefits, health, medical and social insurance benefits and other
social and economic benefits that promote the general welfare of the agrarian reform
beneficiaries and marginal farmers;

"(6) To provide non-formal education, vocational/technical training, and livelihood programs to

beneficiaries and marginal farmers;
"(7) To act as conduits for external assistance and services to the beneficiaries and marginal
farmers;
"(8) To undertake a comprehensive and integrated development program in agrarian reform and
resettlement areas with special concern for the development of agro-based, marine-based,
And cottage-based industries;
"(9) To represent the beneficiaries on any or all matters that affects their interest; and
"(10) To undertake such other economic or social activities as may be necessary or incidental in
the pursuit of the foregoing purposes.
Privileges
Subject to such reasonable terms and conditions as the Department of Agrarian Reform (DAR)
and the Authority may impose, agrarian reform cooperatives may be given the exclusive right to
do any or all of the following economic activities in agrarian reform and resettlement areas;
"(1) Supply and distribution of consumer, agricultural, aqua-cultural, and industrial goods,
production inputs, and raw materials and supplies, machinery, equipment, facilities and other
services and requirements of the beneficiaries and marginal farmers at reasonable prices;
"(2) Marketing of the products and services of the beneficiaries in local and foreign markets;
"(3) Processing of the members products into finished consumer or industrial goods for
domestic consumption or for export;
"(4) Provision of essential public services at cost such as power, irrigation, potable water,
passenger and/or cargo transportation by land or sea, communication services, and public health
and medical care services;
"(5) Management, conservation, and commercial development of marine, forestry, mineral,
water, and other natural resources subject to compliance with the laws and regulations on
environmental and ecological controls; and
"(6) Provision of financial, technological, and other services and facilities required by the
beneficiaries in their daily lives and livelihood.
The Government shall provide the necessary financial and technical assistance to agrarian reform
cooperatives to enable them to discharge effectively their purposes under this article.

i) Cooperative Bank is one organized for the primary purpose of providing a wide range of
financial services to cooperatives and their members;
The cooperative banks registered under this Code shall be under the supervision of the BSP.
Cooperative organizations duly established and registered under this Code may organize a
cooperative bank, which shall likewise be considered a cooperative registrable under provisions
of this Code subject to the requirements and requisite authorization from the BSP. Only one
cooperative bank may be established in each province: Provided, That an additional cooperative
bank may be established in the same province to cater to the needs in the same province to cater
to the needs of the locality depending on the economic conditions of the province as may be
determined by the BSP: Provided, further, That the additional cooperative bank shall be located
in the City or municipality other that the city or municipality where the first cooperative bank is
located.
j) Dairy Cooperative is one whose members are engaged in the production of fresh milk
which may be processed and/or -marketed as dairy products;
k) Education Cooperative is one organized for the primary purpose of owning and operating
licensed educational institutions, notwithstanding the provisions of Republic Act No. 9155,
otherwise known as the Governance of Basic Education Act of 2001;
l) Electric Cooperative is one organized for the primary purpose of undertaking power
generation, utilizing renewable energy sources, including hybrid systems, acquisition and
operation of sub-transmission or distribution to its household members;
"Electric cooperatives may undertake power generation utilizing renewable energy sources,
including hybrid systems, acquisition and operation of sub-transmission or distribution as its
primary purposes.
Documents to be Submitted for Registration with the Authority. For purposes of registration,
electric cooperatives shall submit the following documents:
"(a) Copy of the board resolution certifying to the result of the vote approved through a
referendum approving the registration of the cooperative with the Authority in compliance with
Article 128;

"(b) Certified copy of the articles of incorporation/cooperation and bylaws as required by the
Authority;
"(c) Duly audited financial statements for the past two (2) years;
"(d) List of names of incumbent board of directors and their addresses certified by the board
secretary and attested by the chairperson;
"(e) Within six (6) months from the registration, the treasurer shall submit a sworn statement of
the authorized share capital, the subscribed share capital of members and the amount of paidup
share capital received by the treasurer; and
"(f) Bonds of accountable officers.
m) Financial Service Cooperative is one organized for the primary purpose of engaging in
savings and credit services and other financial services;
A financial service cooperative is a financial organization owned and operated by its members
and authorized to provide the following service, exclusively to its members:
"(a) The functions of credit cooperatives and other cooperatives, including multipurpose
cooperatives, that provide savings and credit to their members, and"(b) Other financial services
subject to regulation by the BSP.
"The articles of cooperation and bylaws of any financial service cooperative, or any amendment
thereto, shall be registered with the Authority only if accompanied by a certificate of authority
issued by the BSP, under its official seal.
"The authority granted this provision may be revoked by the BSP if any of the grounds for
receivership mentioned under Section 53 and 56 of Republic Act No. 8791 is present or if the
financial service cooperative has willfully violated this Code of any of the related rules and
regulations.
"The BSP shall issue a cease and desist order to cooperatives exercising the function of a
financial service cooperative without authority from the BSP.

"The BSP may charge equitable rates or fees, as may be prescribed by the Monetary Board for
licensing, examination and other services which it renders under this Code.
"Upon the favorable certification of the BSP and the prior approval of the Authority, a
cooperative, the main purpose of which is to perform savings and credit functions, may convert
to financial service cooperative subject to the required qualifications and procedures provided
under this Code and in the implementing rules and regulations.
n) Fishermen Cooperative is one organized by marginalized fishermen in localities whose
products are marketed either as fresh or processed products;
o) Health Services Cooperative is one organized for the primary purpose of providing
medical, dental and other health services;
p) Housing Cooperative is one organized to assist or provide, access to housing for the benefit
of its regular members who actively participate in the savings program for housing. It is coowned
and controlled by its members;
q) Insurance Cooperative is one engaged in the business of insuring life and property of
cooperatives and their members;
r) Transport Cooperative is one which includes land and sea transportation, limited to small
vessels, as defined or classified under the Philippine maritime laws, organized under the
provisions of this Code.
s) Water Service Cooperative is one organized to own, operate and manage water systems for
the provision and distribution of potable water for its members and their households;
t) Workers Cooperative is one organized by workers, including the self-employed, who are
at the same time the members and owners of the enterprise. Its principal purpose is to provide
employment and business opportunities to its members and manage it in accordance with
cooperative principles; and
u) Other types of cooperative as may be determined by the CDA.

Types of Co-operatives
Producer Co-operatives
Some co-operatives process and/or market, their members' products and

services directly.
Others may also sell the input necessary to their members' economic

activities (such as agricultural supply co-operatives).

Owned by members who either purchase their inputs or supply the products

and services they market.

Examples: Agricultural processing and marketing, farm supply, crafts,

livestock and crops, seed cleaning, pooling of equipment

Service Co-operatives
They provide services to their members (individuals or corporations).
They are owned by the users of the services.
They can range in size from small day care centres to large housing co

operatives.
Examples: Community development, electricity, natural gas housing, day

care centres and nurseries, health care, transportation and communication,

tourism
Financial Co-operatives
These co-operatives offer financial, loan or investment services, and insurance

services to their members.

They are owned by user members or by subscribers to insurance.
Examples: Caisses populaires, credit unions, insurance co-operatives, mutual

companies.
Multi-Stakeholder Co-operatives
The membership of these co-operatives is made of different categories of
members who share a common interest in the organization; i.e. clients,
workers, investors, community organizations etc
Examples: Home care services, health services, community services
Consumer Co-operatives
They provide their members with goods for their personal use.
They are owned by the consumers of the goods sold by the co-operative.
Examples: Food, natural food, school supplies (stationery, school supplies,
computers and software), hardware, clothing
Worker Co-operatives
The purpose of these co-operatives is to provide their members with work by

operating an enterprise. They may be found in all economic sectors.

These co-operatives are owned by their employee members. They are mainly

part of the small or medium sized enterprise sector.

Examples: Agri-food, natural food, manufacture and sale of clothing,
communications and marketing, industrial production and manufacturing,
home nursing services

Agrarian Reform Cooperatives

"ART. 88. Definition and Purpose. An agrarian reform cooperative is one organized by
marginal farmers, majority of which are agrarian reform beneficiaries, for the purpose of
developing an appropriate system o land tenure, land development, land consolidation or land
management in areas covered by agrarian reform.
"An agrarian reform cooperative as defined shall be organized for any or all of the following
purposes:
"(1) To develop an appropriate system of land tenure, land development, land consolidation or
land management in areas covered by agrarian reform;
"(2) To coordinate and facilitate the dissemination of scientific methods of production, and
provide assistance in the storage, transport, and marketing of farm products for agrarian reform
beneficiaries and their immediate family, hereinafter referred to as "beneficiaries";
"(3) To provide financial facilities to beneficiaries for provident or productive purposes at
reasonable
costs;
"(4) To arrange and facilitate the expeditious transfer of appropriate and suitable technology to
beneficiaries and marginal farmers at the lowest possible cost;
"(5) To provide social security benefits, health, medical and social insurance benefits and other
social and economic benefits that promote the general welfare of the agrarian reform
beneficiaries and marginal farmers;
"(6) To provide non-formal education, vocational/technical training, and livelihood programs to
beneficiaries and marginal farmers;
"(7) To act as conduits for external assistance and services to the beneficiaries and marginal
farmers;
"(8) To undertake a comprehensive and integrated development program in agrarian reform and
resettlement areas with special concern for the development of agro-based, marine-based,
And cottage-based industries;
"(9) To represent the beneficiaries on any or all matters that affects their interest; and
"(10) To undertake such other economic or social activities as may be necessary or incidental in
the pursuit of the foregoing purposes.

"ART. 93. Privileges. Subject to such reasonable terms and conditions as the Department of
Agrarian
Reform (DAR) and the Authority may impose, agrarian reform cooperatives may be given the
exclusive right to do any or all of the following economic activities in agrarian reform and
resettlement areas;
"(1) Supply and distribution of consumer, agricultural, aqua-cultural, and industrial goods,
production inputs, and raw materials and supplies, machinery, equipment, facilities and other
services and requirements of the beneficiaries and marginal farmers at reasonable prices;
"(2) Marketing of the products and services of the beneficiaries in local and foreign markets;
"(3) Processing of the members products into finished consumer or industrial goods for
domestic consumption or for export;
"(4) Provision of essential public services at cost such as power, irrigation, potable water,
passenger and/or cargo transportation by land or sea, communication services, and public health
and medical care services;
"(5) Management, conservation, and commercial development of marine, forestry, mineral,
water, and other natural resources subject to compliance with the laws and regulations on
environmental and ecological controls; and
"(6) Provision of financial, technological, and other services and facilities required by the
beneficiaries in their daily lives and livelihood.
"The Government shall provide the necessary financial and technical assistance to agrarian
reform cooperatives to enable them to discharge effectively their purposes under this article. The
DAR, the
"ART. 94. Organization and Registration. Agrarian reform cooperatives may be organized
and registered under this Code only upon prior written verification by the DAR to the effect that
the same is needed and desired by the beneficiaries; results of a study that has been conducted
fairly indicate the economic feasibility of organizing the same and that it will be economically
viable in its operations; and that the same may now be organized and registered in accordance
with requirements of this Code.
"The Authority, in consultation with the concerned government agencies and cooperative sector,
shall issue appropriate rules and regulations pertaining to the provisions of this Chapter."
Cooperative Banks
"ART. 96. Supervision. The cooperative banks registered under this Code shall be under the
supervision of the BSP.

"ART. 97. Organization, Membership and Establishment of a Cooperative Bank. (1)

Cooperative organizations duly established and registered under this Code may organize a
cooperative bank, which shall likewise be considered a cooperative registrable under provisions
of this Code subject to the requirements and requisite authorization from the BSP. Only one
cooperative bank may be established in each province: Provided, That an additional cooperative
bank may be established in the same province to cater to the needs in the same province to cater
to the needs of the locality depending on the economic conditions of the province as may be
determined by the BSP: Provided, further, That the additional cooperative bank shall be located
in the City or municipality other that the city or municipality where the first cooperative bank is
located.
"(2) Membership in a cooperative bank shall either be regular or associate. Regular membership
shall be limited to cooperative organizations which are holders of common shares of the bank.
Associate members are those subscribing and holding preferred shares of the bank, which may
include but are not limited to the following: "(a) Individual members of the banks member
primary cooperatives; and
"(b) Samahang Nayon and Municipal Katipunan ng mga Samahang Nayon (MKSN) which held
common shares of cooperative banks prior to the effectivity of this Act shall apply for conversion
to full-pledged cooperatives in order to maintain their status as regular members of cooperative
banks: Provided, That they shall notify the cooperative bank concerned their intention to convert
within a period of ninety (90) days from the effectivity of this Act. Samahang Nayon and MKSN
are hereby given a period of one (1) year from the effectivity of this Act to complete their
conversion as cooperatives. Cooperative bank shall exert reasonable efforts to inform their
member Samahang Nayon and MKSN to finally convert or to give the notice of conversion
within the prescribed period.
Upon the failure of the Samahang Nayon and MKSN to finally convert to a full-pledged
cooperative within the maximum period of one (1) year, the cooperative bank concerned may
convert the common shares held by such associations to preferred shares.
"(3) The articles of cooperative and bylaws of a cooperative bank, or any amendment thereto,
shall be registered with the Authority only when accompanied by a certificate of authority issued
by the BSP, under its official seal.
"ART. 101. Capital Requirements of Cooperative Banks. (1) A cooperative bank shall have a
minimum paid-up capital in such amount as may be required by the BSP.
PUBLIC SERVICE COOPERATIVES
"ART. 109. Definition and Coverage. A public service cooperative, within the meaning of this
Code, is one organized to render public services as authorized under a franchise or certificate of

public convenience and necessity duly issued by the appropriate government agency. Such
services may include the following:
"(1) Power generation, transmission, and/or distribution;
"(2) Ice plants and cold storage services;
"(3) Communication services including telephone, telegraph, and communications:
"(4) Land and sea transportation cooperatives for passenger and/or cargo.
"(5) Public markets, slaughterhouses and other similar services; and
"(6) Such other types of public services as may be engaged in by any cooperative. Such
cooperative shall be primarily governed by this Chapter and the general provisions of this Code
insofar as they may be applicable unless they are inconsistent herewith.
CREDIT COOPERATIVES
"ART. 115. Definition and Objectives. A credit cooperative is a financial organization owned
and operated by its members with the following objectives:
"(1) To encourage savings among its members;
"(2) To create a pool of such savings for which loans for productive or provident purpose may be
granted to its members; and
"(3) To provide related services to enable its members to maximize the benefit from such loans.
"ART. 116. Organization and Registration. Credit cooperatives shall be organized and registered
in accordance with the general provisions of this Code.
Financial Service Cooperative
"ART. 119. Definition and Functions of Financial Services Cooperatives. A financial service
cooperative is a financial organization owned and operated by its members and authorized to
provide the following service, exclusively to its members:
"(a) The functions of credit cooperatives and other cooperatives, including multipurpose
cooperatives, that provide savings and credit to their members, and"(b) Other financial services
subject to regulation by the BSP.
"The articles of cooperation and bylaws of any financial service cooperative, or any amendment
thereto, shall be registered with the Authority only if accompanied by a certificate of authority
issued by the BSP, under its official seal.

"The authority granted this provision may be revoked by the BSP if any of the grounds for
receivership mentioned under Section 53 and 56 of Republic Act No. 8791 is present or if the
financial service cooperative has willfully violated this Code of any of the related rules and
regulations.
"The BSP shall issue a cease and desist order to cooperatives exercising the function of a
financial service cooperative without authority from the BSP.
"The BSP may charge equitable rates or fees, as may be prescribed by the Monetary Board for
licensing, examination and other services which it renders under this Code.
"Upon the favorable certification of the BSP and the prior approval of the Authority, a
cooperative, the main purpose of which is to perform savings and credit functions, may convert
to financial service cooperative subject to the required qualifications and procedures provided
under this Code and in the implementing rules and regulations.
"ART. 120. Membership and Affiliation. A financial service cooperative shall have the two (2)
types of members:
"(1) Regular members, who are natural persons; and
"(2) Associate members, who are natural persons but who do not immediately qualify under the
requirements for membership set out in the bylaws of the cooperative. All associate members
who are natural persons shall be given two (2) years to become regular members. Failure to
convert within the said period shall mean automatic withdrawal of their associate membership.
They may, however, reapply as regular members after two (2) years.
"Minors who are dependents of regular members can qualify as associate members. When they
reach the age of majority and within two (2) years from acceptances of their associate
membership, they have the option to convert into regular members. As associate members, they
may open accounts, deposit funds and withdraw from their account, subject to the bylaws and
rules of the cooperative, and the rules and regulations of the Authority, notwithstanding the
provisions of existing laws to the contrary.
ELECTRIC COOPERATIVE
"ART. 126. Coverage. The provisions of this Code shall apply to all electric cooperatives
registered with the Authority. This shall also cover new distribution utilities that will register
with the Authority.
"Electric cooperatives may undertake power generation utilizing renewable energy sources,
including hybrid systems, acquisition and operation of sub-transmission or distribution as its
primary purposes.

"ART. 127. Registration of Electric Cooperatives. The registration of an electric cooperative

with the Authority under this Code shall be submitted for approval to the members through a
referendum, called for the purpose as provided for under Articles 183 and 129 of this Code.
"ART. 129. Documents to be Submitted for Registration with the Authority. For purposes of
registration, electric cooperatives shall submit the following documents:
"(a) Copy of the board resolution certifying to the result of the vote approved through a
referendum approving the registration of the cooperative with the Authority in compliance with
Article 128;
"(b) Certified copy of the articles of incorporation/cooperation and bylaws as required by the
Authority;
"(c) Duly audited financial statements for the past two (2) years;
"(d) List of names of incumbent board of directors and their addresses certified by the board
secretary and attested by the chairperson;
"(e) Within six (6) months from the registration, the treasurer shall submit a sworn statement of
the authorized share capital, the subscribed share capital of members and the amount of paidup
share capital received by the treasurer; and
"(f) Bonds of accountable officers.
"ART. 130. Registration Options of Electric Cooperatives. Electric Cooperatives registered
with the National Electrification Administration (NEA) under Presidential Decree No. 269, as
amended which opt not to register with the Authority are allowed to retain the word cooperative
in their registered names:
Provided, That they shall not be entitled to the benefits and privileges under this Code.