QuestionsQuestions (CDA MEMORANDUM CIRCULAR NO. 2013-04)
It cites Section 75 (Capital Build-Up) and Section 77 (Fines on unpaid subscribed share capital) of Republic Act No. 9520, which require cooperatives to have a reasonable member capital build-up program and allow by-laws to prescribe fair and reasonable fines on unpaid subscribed share capital.
The by-laws must provide for a reasonable and realistic member capital build-up program to allow continuing growth of members’ investment in the cooperative as members’ economic conditions improve.
It permits the by-laws of a cooperative to prescribe a fine on unpaid subscribed share capital, provided the fine is fair and reasonable under the circumstances.
Cooperatives are enjoined to adopt a policy of continuing subscription on share capital, including requiring members to subscribe additional capital upon full payment of their initial subscription.
They must execute a subscription agreement upon admission of members and whenever additional subscription is made by members upon full payment of their initial subscription.
It requires subscription agreements both upon admission and for subsequent additional subscriptions made after the member fully pays the initial subscription.
No. It is likewise prohibited for any cooperative to increase or decrease the par value of its share capital by way of amending the Articles of Cooperation and By-laws.
It implements the ‘capital build-up’ objective by ensuring ongoing member investment growth, tied to the member’s ability to pay the initial subscription in full.
It reinforces that while continuing subscription is required, any fine for unpaid subscribed share capital must comply with RA 9520’s rule that such fines must be fair and reasonable.
It was approved per CDA Board Resolution No. 047, s-2013 dated February 7, 2013, and it took effect immediately.
It references by-laws as the vehicle for capital build-up and possibly fines, requires subscription agreements upon admission and additional subscriptions, and restricts amending the Articles of Cooperation/By-laws to change the par value of shares.