Question & AnswerQ&A (CDA MEMORANDUM CIRCULAR NO. 2011-17)
The legal basis is Republic Act No. 6939 and RA 9520, which empower the Authority to promote cooperatives as instruments of equity, social justice, and economic development, and to implement comprehensive cooperative development programs.
The purpose is to provide orderly and systematic guidelines for the establishment and operation of cooperative branches, including minimum requirements, to promote continuous growth and business expansion.
All cooperatives intending to set up a branch or with existing branches are covered except cooperative banks.
A branch is a business office outside the principal office with full cooperative activities and business operation.
The branch must have an office with signage, operational structure with manual of operation, management staff, operational plan and budget, books of accounts, full business operation, cooperative activities, and display of certificate of registration, certificate of authority, and business permit.
Primary cooperatives require Php 2 Million, secondary require Php 5 Million, and tertiary require Php 10 Million paid-up capital.
Primary cooperatives must have at least Php 1 Million, secondary Php 3 Million, and tertiary Php 5 Million as start-up operating capital per branch.
The letter must be signed by the cooperative chairman or general manager and include a business plan, general assembly resolution authorizing the branch, organizational setup of the branch, and certification of manual of operations and exact location.
No, operation of a cooperative branch without a Certificate of Authority issued by the CDA is not allowed.
For primary and secondary cooperatives, the Extension Office Director where the cooperative is registered approves. For tertiary cooperatives, the Executive Director approves.
The new location must be within the registered area of operation or have amended certificate, notice of relocation must be posted three months prior, and CDA must be notified three months before actual transfer.
The cooperative must post a notice of closure three months prior, send a notice of closure with reasons by registered mail to the CDA extension office, and submit a certification signed by the branch manager and chairman with a copy of the board resolution authorizing closure.
Violations may lead to cancellation of the certificate of authority and closure of branch, administrative sanctions under RA 9520, non-issuance of Certificate of Good Standing for one year, and a fine of Php 10,000 on certifying officers if false certifications are submitted.
Net Worth equals total equity inclusive of member equity, donations, grants, and reserve funds minus unbooked allowances, probable losses, receivables, and investments.
The EO where the branch is located is authorized to conduct validation of branch operations for reporting and monitoring while the branch reports directly to its principal office.
A Satellite Office is an office within the area of operation providing limited service or business to complement activities of the principal office.