QuestionsQuestions (Republic Act No. 6938)
The State policy is to foster the creation and growth of cooperatives as a practical vehicle for self-reliance and “people power” toward economic development and social justice; to encourage private sector formation; and to provide technical guidance, financial assistance and other services while ensuring cooperatives’ autonomy and organizational integrity. It also recognizes subsidiarity—cooperative sector initiates and regulates its promotion, organization, training, research, audit and support services with government assistance where necessary.
A cooperative is a duly registered association of persons with a common bond of interest who voluntarily join to achieve a lawful common social or economic end, make equitable contributions to required capital, and accept a fair share of risks and benefits in accordance with universally accepted cooperative principles.
Open and Voluntary Membership; Democratic Control (one-member-one-vote in primary cooperatives); Limited Interest in Capital; Division of Net Surplus among members (for specified purposes); Cooperative Education; and Cooperation Among Cooperatives.
At least fifteen (15) persons who are citizens of the Philippines, with a common bond of interest, and residing or working in the intended area of operation.
Any group intending to form a cooperative must submit to the Cooperative Development Authority (CDA) a general statement describing structure, purposes, economic feasibility, area of operation, size of membership, and other pertinent data.
A cooperative acquires juridical personality on the date the CDA issues a certificate of registration under its official seal.
CDA must finally dispose of applications within thirty (30) days from filing; otherwise the application is deemed approved, unless the delay is attributable to the applicant.
An appeal lies with the Office of the President within ninety (90) days from receipt of notice of denial. If the Office of the President fails to act within ninety (90) days from filing the appeal, the application is deemed approved.
Articles must be accompanied by bonds of accountable officers and a sworn statement by the treasurer showing: at least 25% of authorized share capital has been subscribed, and at least 25% of total subscription has been paid; in no case shall paid-up share capital be less than PHP 2,000.00.
They must include: name including the word “cooperative”; purpose/scope of business; term of existence; area of operation and postal address; names/nationality/postal addresses of registrants; common bond of membership; list of directors; amount of share capital, names/residences of contributors, and whether primary/secondary/tertiary.
They must provide rules on membership qualifications, rights and liabilities; acquisition/maintenance/loss/termination; transfer of shares; agenda, meetings, quorum and voting procedures for general assembly/board/committees; powers/duties and qualifications/disqualifications of bodies/officers; raising/custody/investment of net surplus; accounting/auditing; loaning/borrowing limitations; distribution of net surplus; amendment procedures; and a conciliation/mediation mechanism for disputes.
For legitimate purposes and unless otherwise prescribed, amendments require a two-thirds (2/3) vote of all members with voting rights. Dissenting members have the right to withdraw their membership under Articles 31 and 32.
Types: Credit, Consumers, Producers, Marketing, Service, and Multipurpose. Categories by membership: Primary (natural persons), Secondary (primaries), Tertiary (secondaries upward to apex organizations/federations or unions). Territorial: categorized according to area of operation which may or may not coincide with political subdivisions.
Determine and approve amendments to articles/bylaws; elect/appoint and remove directors for cause; approve developmental plans; and other matters requiring a two-thirds (2/3) vote as provided in the Code.
Unless otherwise provided in bylaws, quorum is twenty-five percent (25%) of all members entitled to vote.
Primary: one-member-one-vote, one vote per member. Secondary/tertiary: voting rights as delegate of member-cooperatives but limited to five (5) votes; delegates’ votes are treated as votes of their members. Voting agreements to evade one-member-one-vote are invalid except as provided. Proxy voting for members of primary cooperatives is not allowed unless specifically provided in bylaws.
Membership may be withdrawn by a member with 60 days’ notice, with refund rules subject to creditor-debt asset sufficiency. It can also terminate automatically upon death/insanity/insolvency/dissolution of a member. Termination by the board of directors requires majority board vote for specified grounds (e.g., non-patronage for unreasonable period, continuous failure to comply, violation of bylaws, or acts/omissions injurious to cooperative). The member must be informed in writing of intended action, given opportunity to be heard, and the written decision must be communicated; it is appealable to the general assembly within 30 days, whose decision is final. Pending general assembly decision, membership remains in force.