Question & AnswerQ&A (CDA MEMORANDUM CIRCULAR NO. 2011-18)
A federation is a cooperative whose members are primary cooperatives doing the same line of business.
A primary cooperative is defined as a cooperative whose members are natural persons.
Registration is the operative act of the Authority granting juridical personality to a proposed cooperative, evidenced by a certificate of registration.
The members of a secondary cooperative are primary cooperatives.
Members of a tertiary cooperative are secondary cooperatives.
A union is a cooperative whose members are registered cooperatives and/or federations, organized to represent the interests and welfare of all types of cooperatives at provincial, city, regional, and national levels.
The minimum membership requirement for a secondary federation is three primary cooperatives.
The minimum paid-up share capital for a tertiary federation is Php 5,000,000.00 or the amount required by the feasibility study, whichever is higher.
A federation or union can be organized at the municipal/city, district, provincial, regional, or national levels.
Federations can engage in any cooperative enterprise authorized under Article 6 of RA 9520 that complements, augments, or supplements but does not conflict, compete with, or supplant the business activities of its members.
No, federations and unions are prohibited from conducting audit services for their members.
Accountable officers must be covered by a sufficient surety bond, the amount of which depends on the accountabilities handled as determined by the Board of Directors.
Required documents include a feasibility study or development plan, articles of cooperation, by-laws, treasurer’s affidavit, general assembly resolution, board of directors resolution on authorized representative, certification of compliance by member cooperatives, and other documents prescribed by the Authority.
Federations or unions should be registered at the Extension Office of the Authority where their principal office is located or at the Central Office if they are tertiary cooperatives with national coverage.
The registration fee is one-tenth (1/10) of one percent (1%) of the authorized share capital or the amount prescribed in the CDA schedule of fees, whichever is higher.