QuestionsQuestions (Act No. 3425)
They must be operated primarily for the mutual benefit of members as producers, to promote, foster, and encourage intelligent and orderly marketing of agricultural products through cooperation, make distribution as direct as efficiently possible, and stabilize agricultural marketing.
It includes horticultural, forestry, dairy, livestock, poultry, and any farm products.
Fifteen or more persons may form an association, with a majority of them being residents of the Philippine Islands and engaged in the production of agricultural products.
They must communicate with the Director of the Bureau of Commerce and Industry for a survey/advice regarding marketing or economic conditions; non-compliance or unfavorable conditions may result in delay or refusal of the certificate of incorporation.
The Director may divide the Philippines into cooperative marketing districts/territories and may refuse incorporation of an association that proposes to operate in a district/territory where another association handling the same agricultural products already exists under the Act.
An association may not handle agricultural products of non-members except for storage.
Not less than five (5) directors.
It must state whether property rights/interest of each member are equal or unequal, the general rules determining those rights, and the provision for admission of new members to share in property with old members in accordance with the rule(s).
The treasurer’s sworn statement must show at least 20% of the entire capital stock is subscribed and at least 20% of that subscription is either paid in actual cash or transferred in trust to the Bureau for the association with fair valuation equal to 20%.
Adopted by majority vote of members or their written assent; signed by those voting/assenting; kept in the principal office for inspection; filed with the Director and attached to the articles upon certification/countersigning by the secretary and majority of directors.
No member shall have more than one vote regardless of amount of common stock/membership capital. Preferred stock owners without common stock have no voting power unless preferred dividends are unpaid for two years, in which case they gain notice and voting power.
It is the distribution of net profits over and above expenses and dividends on membership capital/capital stock actually subscribed and paid; distributed among members/common stock owners in proportion to the value or volume of agricultural products sold to or through the association during the relevant period.
A member/stockholder is not liable beyond the sum remaining unpaid on the membership fee or subscription to capital stock, including any unpaid balance on promissory notes given for such subscription.
Members and the association may enter marketing contracts requiring members to sell all or specified agricultural products exclusively to or through the association for a period not exceeding ten (10) years.
The association may obtain injunction and a decree of specific performance; it may also file a verified complaint with a sufficient bond to obtain a temporary restraining order.
Knowingly inducing/attempting to induce a member to breach the marketing contract, or maliciously and knowingly spreading false reports about the association’s finances or management, is punishable by a fine per offense and also gives the association a civil damages claim (as provided in the same section).
No association may pay dividends exceeding 8% per annum on membership capital and common stock, and 10% per annum on preferred stock.
Arbitrarily fixing or unduly enhancing the price of agricultural products; violating this rule constitutes abuse of powers and subjects the charter to forfeiture.