Republic Act No.

9520             February 17, 2009

AN ACT AMENDING THE COOPERATIVE CODE OF THE PHILIPPINES TO BE

KNOWN AS THE "PHILIPPINE COOPERATIVE CODE OF 2008"

SECTION 1. Articles 1, 2, 3, 4 and 5 of Chapter 1 on General Concepts amended

CHAPTER I
GENERAL CONCEPTS AND PRINCIPLES

"ARTICLE 1. Title. - This Act shall be known as the "Philippine Cooperative

Code of 2008".

"ART. 2. Declaration of Policy.- It is the declared policy of the State to foster the
creation and growth of cooperatives as a practical vehicle for promoting self-
reliance and harnessing people power towards the attainment of economic
development and social justice. The State shall encourage the private sector to
undertake the actual formation and organization of cooperatives and shall create
an atmosphere that is conducive to the growth and development of these
cooperatives.

"Toward this end, the Government and all its branches, subdivisions,
instrumentalities and agencies shall ensure the provision of technical guidance,
financial assistance and other services to enable said cooperatives to develop into
viable and responsive economic enterprises and thereby bring about a strong
cooperative movement that is free from any conditions that might infringe upon
the autonomy or organizational integrity of cooperatives.

"Further, the State recognizes the principle of subsidiarity under which the
cooperative sector will initiate and regulate within its own ranks the promotion and
organization, training and research, audit and support services relative to
cooperatives with government assistance where necessary.

"ART. 3. General Concepts. - 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.

"ART. 4. Cooperative Principles. - Every cooperative shall conduct its affairs in

accordance with Filipino culture, good values and experience and the universally
accepted principles of cooperation which include, but are not limited to, the
following:

"(1) Voluntary and Open Membership - Cooperatives are voluntary

organizations, open to all persons able to use their services and willing to
accept the responsibilities of membership, without gender, social, racial,
cultural, political or religious discrimination.

"(2) Democrative Member Control - Cooperatives are democratic

organizations that are controlled by their members who actively participate
in setting their policies and making decisions. Men and women serving as
elected representatives, directors or officers are accountable to the
membership. In primary cooperatives, members have equal voting rights of
 one-member, one-vote. Cooperatives at other levels are organized in the
same democratic manner.

"(3) Member Economic Participation - Members contribute equitably to, and

democratically control, the capital of their cooperatives. At least part of that
capital is the common property of the cooperative. They shall receive
limited compensation or limited interest, if any, on capital subscribed and
paid as a condition of membership. Members allocate surpluses for any or
all of the following purposes: developing the cooperative by setting up
reserves, part of which should at least be indivisible; benefitting members
in proportion to their patronage of the cooperative's business; and,
supporting other activities approved by the membership.

"(4) Autonomy and Independence - Cooperatives are autonomous, self-

help organizations controlled by their members. If they enter into
agreements with other organizations, including government, or raise capital
from external sources, they shall do so on terms that ensure democratic
control of their members and maintain their cooperative autonomy.

"(5) Education, Training and Information - Cooperatives shall provide

education and training for their members, elected and appointed
representatives, managers, and employees, so that they can contribute
effectively and efficiently to the development of their cooperatives.

"(6) Cooperation Among Cooperatives - Cooperatives serve their members

most effectively and strengthen the cooperative movement by working
together through local, national, regional and international structures.

(7) Concern for Community - Cooperatives work for the sustainable

development of their communities through policies approved by their
members.

"ART. 5. Definition of Terms. – The following terms shall mean:

"(1) Member includes a person either natural or juridical who adhering to

the principles set forth in this Code and in the Articles of Cooperative, has
been admitted by the cooperative as member;

"(2) General Assembly shall mean the full membership of the cooperative

duly assembled for the purpose of exercising all the rights and performing
all the obligations pertaining to cooperatives, as provided by this Code, its
articles of cooperation and bylaws: Provided, That for cooperatives with
numerous and dispersed membership, the general assembly may be
composed of delegates elected by each sector, chapter or district of the
cooperative in accordance with the rules and regulations of the
Cooperative Development Authority;

"(3) Board of Directors shall mean that body entrusted with the

management of the affairs of the cooperative under its articles of
cooperation and bylaws;

"(4) Committee shall refer to any body entrusted with specific functions and

responsibilities under the bylaws or resolution of the general assembly or
the board of directors;
"(5) Articles of Cooperation means the articles of cooperation registered
under this Code and includes a registered amendment thereof;

"(6) Bylaws means the bylaws registered under this Code and includes any
registered amendment thereof;

"(7) Registration means the operative act granting juridical personality to a

proposed cooperative and is evidenced by a certificate of registration;

"(8) Cooperative Development Authority refers to the government agency in

charge of the registration and regulation of cooperatives as such
hereinafter referred to s the Authority;

"(9) Universally Accepted Principles means that body of cooperative

principles adhered to worldwide by cooperatives;

"(10) Representative Assembly means the full membership of a body of

representatives elected by each of the sectors, chapter or district o the
cooperative duly assembled for the purpose of exercising such powers
lawfully delegated unto them by the general assembly in accordance with
its bylaws;

"(11) Officers of the Cooperative shall include the members of the board of

directors, members of the different committee created by the general
assembly, general manager or chief executive officer, secretary, treasurer
and members holding other positions as may be provided for in their
bylaws;

"(12) Social Audit is a procedure wherein the cooperative assesses its

social impact and ethical performance vis-à-vis its stated mission, vision,
goals and code of social responsibility for cooperatives to be established by
the Authority in consultation with the cooperative sector. It enables the
cooperative to develop a process whereby it can account for its social
performance and evaluate its impact in the community and be accountable
for its decisions and actions to its regular members;

"(13) Performance Audit shall refer to an audit on the efficiency and

effectiveness of the cooperative as a whole; its management and officers;
and its various responsibility centers as basis for improving individual team
or overall performance and for objectively informing the general
membership on such performance;

"(14) A Single-Line or Single-Purpose Cooperative shall include

cooperative undertaking activities which are related to its main line of
business or purpose;

"(15) Service Cooperatives are those which provide any type of service to

its members, including but not limited to, transport, information and
communication, insurance, housing, electric, health services, education,
banking, and savings and credit;

"(16) Subsidiary Cooperative refers to three or more primary cooperatives,

doing the same line of business, organized at the municipal, provincial, city,
special metropolitan political subdivision, or economic zones created by
 law, registered with the Authority to undertake business activities in support
of its member-cooperatives."

SEC. 2. Articles 6, 7, 9, 10, 11, 12, 13, 14, 16, 17, 18, 20, 21, 23, 24 and 25 of Chapter II
on Organization and Registration of the same Code are hereby amended to read as
follows:

CHAPTER II
ORGANIZATION AND REGISTRATION

"ART. 6. Purposes of Cooperatives. – A cooperative may be organized and

registered for any or all of the following purposes:

"(1) To encourage thrift and savings mobilization among the members;

"(2) To generate funds and extend credit to the members for productive
and provident purposes;

"(3) To encourage among members systematic production and marketing;

"(4) To provide goods and services and other requirements to the

members;

"(5) To develop expertise and skills among its members;

"(6) To acquire lands and provide housing benefits for the members;

"(7) To insure against losses of the members;

"(8) To promote and advance the economic, social and educational status
of the members;

"(9) To establish, own, lease or operate cooperative banks, cooperative

wholesale and retail complexes, insurance and agricultural/industrial
processing enterprises, and public markets;

"(10) To coordinate and facilitate the activities of cooperatives;

"(11) To advocate for the cause of the cooperative movements;

"(12) To ensure the viability of cooperatives through the utilization of new

technologies;

"(13) To encourage and promote self-help or self-employment as an engine

for economic growth and poverty alleviation; and

"(14) To undertake any and all other activities for the effective and efficient
implementation of the provisions of this Code.

"ART. 7. Objectives and Goals of a Cooperative. – The primary objective of every

cooperative is to help improve the quality of life of its members. Towards this end,
the cooperative shall aim to:

"(a) Provide goods and services to its members to enable them to attain
increased income, savings, investments, productivity, and purchasing
 power, and promote among themselves equitable distribution of net surplus
through maximum utilization of economies of scale, cost-sharing and risk-
sharing;

"(b) Provide optimum social and economic benefits to its members;

"(c) Teach them efficient ways of doing things in a cooperative manner;

"(d) Propagate cooperative practices and new ideas in business and

management;

"(e) Allow the lower income and less privileged groups to increase their
ownership in the wealth of the nation; and

"(f) Cooperate with the government, other cooperatives and people-

oriented organizations to further the attainment of any of the foregoing
objectives.

"ART. 8. Cooperatives Not in Restraint of Trade. – No cooperative or method or

act thereof which complies with this Code shall be deemed a conspiracy or
combination in restraint of trade or an illegal monopoly, or an attempt to lessen
competition or fix prices arbitrarily in violation of any laws of the Philippines.

"ART. 9. Cooperative Powers and Capacities. – A cooperative registered under

this Code shall have the following powers, rights and capacities:

"(1) To the exclusive use of its registered name, to sue and be sued;

"(2) Of succession;

"(3) To amend its articles of cooperation in accordance with the provisions

of this Code;

"(4) To adopt bylaws not contrary to law, morals or public policy, and to
amend and repeal the same in accordance with this Code;

"(5) To purchase, receive, take or grant, hold, convey, sell, lease, pledge,
mortgage, and otherwise deal with such real and personal property as the
transaction of the lawful affairs of the cooperative may reasonably and
necessarily require, subject to the limitations prescribed by law and the
Constitution;

"(6) To enter into division, merger or consolidation, as provided in this

Code;

"(7) To form subsidiary cooperatives and join federations or unions, as

provided in this Code;

"(8) To avail of loans, be entitled to credit and to accept and receive grants,
donations and assistance from foreign and domestic sources, subject to
the conditions of said loans, credits, grants, donations or assistance that
will not undermine the autonomy of the cooperative. The Authority, upon
written request, shall provide necessary assistance in the documentary
requirements for the loans, credit, grants, donations and other financial
support;
 "(9) To avail of preferential rights granted to cooperatives under Republic
Act No. 7160, otherwise known as the Local Government Code, and other
laws, particularly those in the grant of franchises to establish, construct,
operate and maintain ferries, wharves, markets or slaughterhouses and to
lease public utilities, including access to extension and on-site research
services and facilities related to agriculture and fishery activities;

"(10) To organize and operate schools in accordance with Republic Act No.
9155, Governance of Basic Education Act of 2001 and other pertinent laws;
and

"(11) To exercise such other powers granted by this Code or necessary to

carry out its purpose or purposes as stated in its Articles of cooperation.

"ART. 10. Organizing a Primary Cooperative. – Fifteen (15) or more natural

persons who are Filipino citizens, of legal age, having a common bond of interest
and are actually residing or working in the intended area of operation, may
organize a primary cooperative under this Code: Provided, That a prospective
member of a primary cooperative must have completed a Pre-Membership
Education Seminar (PMES).

"Any newly organized primary cooperative may be registered as multipurpose

cooperative only after compliance with the minimum requirements for
multipurpose cooperatives to be set by the Authority. A single-purpose
cooperative may transform into a multipurpose or may create subsidiaries only
after at least two (2) years of operations.

"ART. 11. Economic Survey. - Every group of individuals or cooperatives

intending to form a cooperative under this Code shall submit to the Authority a
general statement describing, among others the structure and purposes of the
proposed cooperative: Provided, That the structure and actual staffing pattern of
the cooperative shall include a bookkeeper; Provided, further, That they shall not
be allowed to operate without the necessary personnel and shall also submit an
economic survey, indicating therein the area of operation, the size of membership,
and other pertinent data in a format provided by the Authority.

"ART. 12. Liability. – A cooperative duly registered under this Code shall have
limited liability.

"ART. 13. Term. – A cooperative shall exist for a period not exceeding fifty (50)
years from the date of registration unless sooner dissolve or unless said period is
extended. The cooperative term, as originally stated in the articles of cooperation,
may be extended for periods not exceeding fifty (50) years in any single instance
by an amendment of the articles of cooperation, in accordance with this
Code: Provided, That no extension can be made earlier than five (5) years prior to
the original or subsequent expiry date/dates unless there are justifiable reasons
for an earlier extension as may be determined by the Authority.

"ART. 14. Articles of Cooperation. – (1) All cooperatives applying for registration

shall file with the Authority the articles of cooperation which shall be signed by
each of the organizers and acknowledged by them if natural persons, and by the
chairpersons or secretaries, if juridical persons, before a notary public.

"(2) The articles of cooperation shall set forth:

 "(a) The name of the cooperative which shall include the word cooperative;

"(b) The purpose or purposes and scope of business for which the
cooperative is to be registered;

"(c) The term of existence of the cooperative;

"(d) The area of operation and the postal addresses of its principal office;

"(e) The names, nationality, and the postal addresses of the registrants;

"(f) The common bond of membership;

"(g) The list of names of the directors who shall manage the cooperative;
and

"(h) The amount of its share capital, the names and residences of its
contributors and a statement of whether the cooperative is primary,
secondary or tertiary in accordance with Article 23 hereof.

"(3) The articles of cooperation may also contain any other provisions not
inconsistent with this Code or any related law.

"(4) Four (4) copies each of the proposed articles of cooperation, bylaws, and the
general statement required under Article 11 of this Code shall be submitted to the
Authority.

"(5) No cooperative, other than a cooperative union as described under Article 25

hereof, shall be registered unless the articles of cooperation is accompanied with
the bonds of the accountable officers and a sworn statements of the treasurer
elected by the subscribers showing that at least twenty-five per centum(25%) of
the authorized share capital has been subscribed and at least twenty-five per
centum (25%) of the total subscription has been paid: Provided, That in no case
shall the paid-up share capital be less than Fifteen thousand pesos (P15,000.00).

"The Authority shall periodically assess the required paid-up share capital and
may increase it every five (5) years when necessary upon consultation with the
cooperative sector and the National Economic and Development Authority
(NEDA).

"ART. 15. Bylaws. – (1) Each cooperative to be registered under this Code shall
adopt bylaws not inconsistent with the provisions of this Code. The bylaws shall
be filed at the same time as the articles of cooperation.

"(2) The bylaws of each cooperative shall provide:

"(a) The qualifications for admission to membership and the payment to be

made or interest to be acquired as a conditions for the exercise of the right
of membership;

"(b) The rights and liabilities of membership;

"(c) The circumstances under which membership is acquired, maintained

and lost;
 "(d) The procedure to be followed in cases of termination of membership;

"(e) The conditions under which the transfer of a share or interest of the
members shall be permitted;

"(f) The rules and procedures on the agenda, time, place and manner of
calling, convening, conducting meetings, quorum requirements, voting
systems, and other matters relative to the business affairs of the general
assembly, board of directors, and committees;

"(g) The general conduct of the affairs of the cooperative, including the
powers and duties of the general assembly, the board of directors,
committees and the officers, and their qualifications and disqualifications;

"(h) The manner in which the capital, may be raised and the purposes for
which it can be utilized;

"(i) The mode of custody and of investment of net surplus;

"(j) The accounting and auditing systems;

"(k) The manner of loaning and borrowing including the limitations thereof;

"(l) The method of distribution of net surplus;

"(m) The manner of adopting, amending, repealing, and abrogating bylaws;

"(n) A conciliation or mediation mechanism for the amicable settlement of

disputes among members, directors, officers and committee members of
the cooperative; and

"(o) Other matters incident to the purposes and activities of the

cooperative.

"ART. 16. Registration. – A cooperative formed and organized under this Code

acquires juridical personality from the date the Authority issues a certificate of
registration under its official seal. All applications for registration shall be finally
disposed of by the Authority within a period of sixty (60) days from the filing
thereof, otherwise the application is deemed approved, unless the cause of the
delay is attributable to the applicant: Provided, That in case of a denial of the
application for registration, an appeal shall lie with the Office of the President
within ninety (90) days from receipt of notice of such denial: Provided, further,
That failure of the Office of the President to act on the appeal within ninety (90)
days from the filing thereof shall mean approval of said application.

"ART. 17. Certificate of Registration. – A certificate of registration issued by the

Authority under its official seal shall be conclusive evidence that the cooperative
therein mentioned is duly registered unless it is proved that the registration thereof
has been cancelled.

"ART. 18. Amendment of Articles of Cooperation and Bylaws. – Unless otherwise

prescribed by this Code and for legitimate purposes, any provision or matter
stated in the articles of cooperation and by laws may be amended by two-thirds
(2/3) vote of all the members with voting rights, without prejudice to the right of the
dissenting members to exercise their right to withdraw their membership under
Article 30.

"ART. 19. Contracts Executed Prior to Registration and Effects Thereof. –

Contracts executed between private persons and cooperatives prior to the
registration of the cooperative shall remain valid and binding between the parties
and upon registration of the cooperative. A formal written contract shall be
adopted and made in the cooperative’s name or on its behalf prior to its
registration.

"ART. 20. Division of Cooperatives. – Any registered cooperative may, by a

resolution approved by a vote of three-fourths (3/4) of all the members with voting
rights, present and constituting a quorum, resolve to divide itself into the two (2) or
more cooperatives. The procedure for such division shall be prescribed in the
regulations of the Authority: Provided, That all the requirements set forth in this
Code have been complied with by the new cooperatives: Provided, further, That
no division of a cooperative in fraud of creditors shall be valid.

ART. 23. Type and Categories of Cooperatives. – (1) Types of Cooperatives –

Cooperatives may fall under any of the following types:

"(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 to its members for productive and
provident purposes;

"(b) Consumers Cooperative is one of the primary purpose of which is to

procure and distribute commodities to members and non-members;

"(c) Producers Cooperative is one that undertakes 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;

"(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;

"(i) Cooperative Bank is one organized for the primary purpose of providing

a wide range of financial services to cooperatives and their members;

"(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 purposed of

undertaking power generations, utilizing renewable energy sources,
including hybrid systems, acquisition and operation of subtransmission or
distribution to its household members;

"(m) Financial Service Cooperative is one organized for the primary

purpose of engaging in savings and credit services and other financial
services;

"(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 co-owned and controlled by its
members;

"(q) Insurance Cooperative is one engaged in the business of insuring life

and poverty 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 waters 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 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 Authority.

"(2) Categories of Cooperative – Cooperatives shall be categorized according to

membership and territorial considerations as follows:

"(a) In terms of membership, cooperative shall be categorized into:

"(i) Primary – The members of which are natural persons;

"(ii) Secondary – The members of which are primaries; and

"(iii) Tertiary – The members of which are secondary cooperatives;

and

"(b) In terms of territory, cooperatives shall be categorized according to

areas of operations which may or may not coincide with the political
subdivisions of the country.

"ART. 24. Functions of a Federation of Cooperatives. A federation of cooperatives

may be registered by carrying out the formalities for registration of a cooperative.

"Registered cooperatives may organize a federation according to the type of

business activity engaged in by the cooperatives.

"ART. 25. Cooperative Unions. – Registered cooperatives and federations at the

appropriate levels may organize or join cooperative unions to represent the
interest and welfare of all types of cooperatives at the provincial, city, regional,
and national levels. Cooperative unions may have the following purposes:

"(a) To represent its member organizations; ….

"Cooperative unions may assist the national and local governments in the
latter’s development activities in their respective jurisdictions."