QuestionsQuestions (CDA MEMORANDUM CIRCULAR NO. 05, S .1996)
A merger is the absorption of two or more existing cooperatives by another cooperative that survives and continues the combined business. Consolidation is the union of two or more cooperatives to form a new cooperative called a consolidated cooperative.
It may be initiated either by: (1) the Board of Directors through a resolution duly approved by a majority of the Board; or (2) the General Assembly represented by at least 10% of the total members with voting rights, with notice to the Board of Directors.
It must include: (a) the rationale; (b) for merger—names, addresses, registration dates/numbers, areas of operation of constituent cooperatives, and proposed amendments to the surviving cooperative’s articles and by-laws; (c) for consolidation—names/addresses and areas of operation of the consolidating cooperatives, and proposed articles and by-laws of the new consolidated cooperative; (d) duly audited financial statements including schedules of assets, liabilities, and capital; and (e) a list of members intending to merge/consolidate, duly certified and attested as specified.
The Boards of all merging/consolidating cooperatives must call their respective General Assembly Meetings with notice to all members of record and creditors at least 30 days prior to the scheduled meeting.
The plan must be approved by two-thirds (2/3) of all members eligible to vote for each constituent cooperative, but approval must be obtained in separate general assembly meetings for each cooperative.
Dissenting members may withdraw in accordance with Articles 31 and 32 of R.A. 6938. They are entitled to a refund of their share capital and all other interests within 30 days from the date of notice of withdrawal.
Within 7 days after approval, the officers must publish an announcement once a week for 3 consecutive weeks in a national or local newspaper in their areas of operation (radio/TV may supplement). Alternatively, they may post in at least 3 conspicuous public places including barangay/municipal/provincial halls within the areas of operation; expenses for publication/posting are paid from cooperative funds.
Officers must send letters by registered mail to the creditors of their respective cooperatives announcing the merger or consolidation.
Any person objecting must file objections with the CDA within 30 days after the last date of publication or posting of the announcement.
The CDA may conduct hearings to resolve objections. Such hearings must be terminated within 3 months from receipt of the objections.
Within 15 days from the last date of publication/posting, the officers must file in four (4) copies: (1) resolution of merger or consolidation certified/attested as required; (2) approved plan with duly notarized articles and adopted/approved by-laws (or proposed amendments for merger); (3) minutes of general assembly meetings with attendance sheets certified/attested; (4) bonds of accountable officers for the surviving/consolidated cooperative; (5) original certificate of registration of the merged/consolidated cooperatives; and (6) registration fee.
It becomes effective upon issuance of the Certificate of Merger or Certificate of Consolidation by the CDA.
No merger or consolidation may be made in fraud or in any manner that impairs the rights of creditors.
The surviving cooperative in a merger, or the consolidated cooperative in a consolidation, shall be responsible for all liabilities and obligations of each constituent cooperative.
Notice must be given 30 days prior to the scheduled meeting.