Question & AnswerQ&A (DA MEMORANDUM CIRCULAR)
The legal basis is Article 123 of Republic Act No. 6938, the Cooperative Code of the Philippines.
An Associate Member is one who has no right to vote nor be voted upon and shall be entitled only to such rights and privileges as the by-laws may provide.
Every cooperative must file a copy of its annual report with the Cooperative Development Authority within sixty (60) days from the end of its fiscal year.
Failure to file the Annual Report is a ground for revocation of the cooperative's authority to operate or cancellation of its certificate of registration. The Authority will notify the cooperative and may compel the filing through court mandamus.
No member other than a cooperative shall own or hold more than twenty percent (20%) of the subscribed share capital of the cooperative.
Interest on share capital shall not exceed the normal rate of return as determined by the Authority and such interest shall be noncumulative.
Preferred share capital may be offered to non-members provided the total amount does not exceed that offered or held by members, subject to articles of cooperation, by-laws, board and general assembly approval.
A merger is valid only if approved by two-thirds (2/3) of all members eligible to vote in each cooperative's general assembly meeting, and upon issuance of a certificate of merger by the CDA.
The constituent cooperatives cease to exist separately except for the surviving or consolidated cooperative which assumes all rights, assets, liabilities, and franchises of the constituent cooperatives.
Division must be approved by a two-thirds (2/3) vote of members in a general assembly; a plan must be prepared including financial statements and allocation of assets and liabilities; publication and notification to creditors is required; and registration with the Authority with submission of resolutions, new articles, and bonds.
The board may impose reasonable fines and issue payment reminders; failure to comply can lead to loss of good standing or withdrawal of privileges until compliance.
Laboratory cooperatives are cooperatives organized by minors, affiliated with a registered cooperative, governed by special guidelines under the second paragraph of Article 27 of the Code.
A guardian cooperative is a duly registered cooperative with which a laboratory cooperative is affiliated, responsible for training and value formation of minor cooperative members.
Membership may be terminated by voluntary withdrawal, death, insanity, majority vote of the board for non-patronage, failure to comply with obligations, violation of by-laws, acts prejudicial to the cooperative, or upon reaching age 18.
A cooperative undergoing voluntary or involuntary dissolution continues as a body for three years to settle affairs, elect liquidators, inventory assets and liabilities, pay obligations, and distribute assets; after which a final report is submitted and registration cancelled.