BUSINESS LAWS AND REGULATIONS

(MTH 5:30-7:00)

GROUP 11
COOPERATIVE LAW

MEMBERS:

Evangelista, Cassey P.
Manrique, Lorren Shyne
Bitago, Ma. Lindsey

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 TABLE OF CONTENTS

General Provisions

Definition of Cooperative……….………………………………………………… 3

Cooperative vs. Corporation……………………………………………...……….. 3

Cooperative Development Authority (CDA)…………………..……………………….. 3

Type of Cooperatives……….……………………………………………………... 3

Categories of Cooperatives………………………………………………………… 4

Cooperative Term………………………………………………………………….. 4

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Cooperative Name……...…………………………………………………………..

Organization and Registration

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Purposes of Cooperatives………………………………………………………….
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Articles of Cooperations…….…………………………………………………….
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Bylaws………………….…………………………………………………………
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Registration and Certificate of Registartion………………………………………
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Merger and Consolidation…………………………………………………………
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Capitalization Requirements……………………………………………………….

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 COOPERATIVE LAW

General Provisions

I. Definition of Cooperative
R.A. 9520 PHILIPPINE COOPERATIVE CODE OF 2008
ARTICLE 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.

II. Cooperative vs. Corporation

Corporation is a legal entity that stands separate from its owners.
Cooperative an association of individuals voluntarily cooperating for the promotion of mutual,
social, cultural, and economic benefits.

III. Cooperative Development Authority (CDA)

The CDA is the government agency responsible for the promotion, regulation, and supervision of
cooperatives across the country.

R.A. 9520, 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 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) Democratic Member Control- are controlled by 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
 I primary cooperatives, members have equal voting rights of one member one-vote.

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

control, the capital of their cooperative.
(4) Autonomy and Independence- Cooperatives are autonomous, self-help organizations
controlled by their members.
(5) Education, Training and Information- shall provide education and training for their
members, elected and appointed representatives, managers, and employees.

(6) Cooperations Among Cooperatives-Cooperatives serve their members. Most effectively

and strengthen the cooperative movement by working together through local, national,
regional, and intonational structures.

IV. Types of Cooperatives

TYPES OF COOPERATIVES
1. Credit Cooperative- promotes and undertakes savings and lending services among its
members.
2. Consumer Cooperative- procure and distribute commodities to members and non-
members
3. Marketing Cooperative- is one which engages in the supply of production inputs to
members and markets their products.

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 4. Producers Cooperative- 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.
5. Service Cooperative- engages in medical and dental care, hospitalization, transportation,
insurance, housing, labor, electric light and power, communication, professional and
other services.
6. Multi-Purpose Cooperative- combines two (2) or more of the business activities of these
different types of cooperatives.
7. Advocacy Cooperative- promotes and advocates cooperativism among its members and
the public.
8. Agrarian Reform Cooperative- organized by marginal farmers majority of which are
agrarian reform beneficiaries for the purpose of developing an appropriate system of land
tenure.
9. Cooperative Bank- providing a wide range of financial services to cooperatives and their
members:
10. Education Cooperative- owning and operating licensed educational institutions,
notwithstanding the provisions of Republic Act No. 9155, otherwise known as the
Governance of flat is Education Act of 2001.
11. Dairy Cooperative- engaged in the production of fresh milk which may be processed
and/or marketed as dairy products.
12. Electric Cooperative- undertaking power generation, utilizing renewable sources,
including hybrid systems. Acquisition.

V. Categories of Cooperatives

CATEGORIES OF COOPERATIVES

1. Primary-the members of which are natural people.

2. Secondary-the members of which are primaries.

3. Tertiary-the members of which are secondary cooperatives

VI. Cooperative Term

COOPERATIVE TERM

Article 13
Term A cooperative shall exist for a period not exceeding fifty (50) yeans from the date of
registration unless sooner is dissolved or unless said period is extended. The cooperative term as
originally stated in the articles of cooperation, may be extended for periods not exceedingly 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.

1. The name of the cooperative, which name shall likewise specify the type of
profession and “service” as the type of cooperative in accordance with Article 23
(a) of RA 9520

2. No cooperative name shall be allowed by the Cooperative Development Authority

if the proposed name is identical or deceptively or confusingly similar to that of
any existing cooperative, contrary to public policy, and mocals, existing laws.

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The use of the word’s “development” and “integrated” in the cooperative name shall be
discouraged.

VII. Cooperative Name

COOPERATIVE NAME

The use of “Incorporated”, “Corporation”, “Company”, “Incorporation”, “Partnership”, or other

similar connotation and abbreviation shall be not allowed.
The use of the word “federation”, and “union” in the name of the proposed primary cooperative
is prohibited except if it is part of the registered name of association or institution where the
members of the proposed cooperative came from.
The proposed cooperative name shall incorporate the word “cooperative” and specifying the type
in accordance with the economic activity.

Organization and Registration

I. Purposes of Cooperatives

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 provide 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 ensure 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 movement;
(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.

II. Articles of Cooperatives

ART. 14. Articles of Cooperatives -

(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;
© The term of existence of the cooperative;
(d) The area of operation and the postal address of its principal office;
€ The names, nationality, and the postal addresses of the registrants;
(f) The common bond of membership

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 (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 statement 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 a”cess’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)

III. By-Laws

By-laws- It refers to the By-laws registered under the Philippine Cooperative Code of 2008
which includes any registered amendments thereto.

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 condition for the exercise of the right of membership;
(b) The rights and liabilities of membership;
© The circumstances under which membership is acquired, maintained and lost;
(d) The procedure to be followed in cases of termination of membership;
€ The conditions under which 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.

VI. Registration and Certificate of Registration

Registration- It refers to the operative act of the Cooperative Development Authority granting
judicial personality to a proposed cooperative and is evidenced by the Certificate of Registration.

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ART. 17. Certificate of Registration.

A certificate 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.

VII. Merger and Consolidation

Merger- It refers to a union of two or more existing cooperatives belonging to the same category
whereby the surviving cooperative, retaining its identity, absorbs one or more constituent
cooperative/s.

Consolidation- It refers to a union of two or more existing cooperatives belonging to the same
category to form a new cooperative called the consolidated cooperative.

VIII. Capitalization Requirements

Least amount of share capital that members or shareholders must commit to and partially pay for
when establishing a cooperative or corporation.
In a cooperative, members must subscribe to at least 25% of the total share capital and pay at
least P1,000 of this amount.
In a corporation, shareholders must subscribe to at least 25% of the authorized capital stock and
pay at least 25% of the subscribed amount.