Agricultural Credit Cooperative Associations Act

To accumulate funds cooperatively.
Extend credit to members exclusively for agricultural operations on reasonable terms.
Encourage thrift, activity, and punctuality among members in meeting obligations.

Loans must be secured by promissory note and either personal, pignorative security, or mortgage.
Personal security requires bond signed by at least two solvent persons in municipality.
Pignorative security can include stock pledged (up to one-third of paid-up capital), crops, machinery, livestock, or other separable property (loan max 50% property value).
Mortgages must be first liens on unincumbered real estate; loan limits:
- 50% market value for unregistered titles.
- 60% for registered titles.
Borrowers must own at least one share and not be indebted on prior loans.
Directors cannot vote or act as sureties on loans involving themselves or close relatives.
Loans repayable in installments or full payment before due with interest discount.
Interest rates capped at 10% per annum.
Loans overdue by three months may be declared due immediately.
Association may purchase mortgaged properties and must sell real estate within three years.
Maximum loan duration is one year, extendable annually up to five years.

Associations may accept deposits payable on notice or fixed time.
Deposits cannot exceed paid-up capital stock.
Depositors have a prior right to association’s assets over other creditors.
Married women and minors can deposit under their own names.
Withdrawal of deposits on notice requires maximum 30 days’ notice.
If funds are insufficient for withdrawal, no new loans or investments may be made from depositors’ funds.
Officers violating this provision face penalties of imprisonment up to one year or fines up to one thousand pesos.

Fund sources: admission fees, share subscriptions, reserve fund, other lawful funds.
Admission fees and conveyance fees accrue to general fund.
Articles of incorporation fix capital and shares; minimum capital and dissolution on capital depletion may be provided.
Shares have maximum par value of 5 pesos; one person may hold shares up to 500 pesos.
Payment for shares made in full upon issuance.
Shares are registered; transfer, mortgage, pledge require board approval.
Delinquent shareholders may be fined.
Reserve fund comprises at least 20% of net profits annually until it reaches 50% of paid-up capital.
Reserve fund invested under Executive Secretary’s approval and used for covering deficits.

By-laws set qualification, admission, expulsion, appeal, and withdrawal rules.
Members must be honest, industrious residents of the municipality.
One member, one vote regardless of share ownership.
Withdrawal effective end of association year; refunds limited and paid in order of withdrawal applications.
Outgoing members not entitled to reserve fund participation.
Outgoing members liable for proportionate losses during membership.

Governance entrusted to board of directors (5 members) and stockholders’ general assembly.
Directors must be members and hold shares which cannot be encumbered during tenure.
Directors elected for two years with staggered renewal.
Monthly meetings required; special meetings may be called.
Board elects president and secretary-treasurer annually.
Majority of directors form quorum; loans need affirmative votes of at least three directors.
Directors removable by two-thirds stockholder vote.
Directors jointly liable for illegal operations, except if protested.
General assembly holds regular annual sessions and special meetings as needed.

Must be adopted within 30 days of organization.
Include regulations on name, purpose, membership, directors, meetings, employees, inspections, funds, arbitration, and dissolution.
Approved and amended by stockholders' assembly with Executive Secretary’s approval.
Filed with Executive Bureau.

Board prepares annual balance sheet and profit/loss report.
Dividends paid only from net profits after deducting losses and bad debts.
Bad debts defined as debts with unpaid interest over six months unless secured.
Malicious misstatement of profits or unlawful dividend distribution punishable by fines up to 2,000 pesos and imprisonment up to two years.

Associations may dissolve on:
- Expiry of incorporation period.
- Two-thirds stockholder vote.
- Court order for fraudulent or injurious activities.
- Bankruptcy or insolvency.
Board usually handles liquidation; court may appoint liquidators if necessary.
Liquidation period limited to one year.

Executive Secretary acts as legal adviser and supervisor.
Approves by-laws, issues operational rules.
Semi-annual audits ensure compliance.
Can order corrections and call special stockholder meetings for director removal.

Must maintain detailed records of meetings and transactions.
Maintain member registers with articles of incorporation and by-laws translated into local dialect.
Member records include names, shares, payments, admission signatures.
Books open to member inspection during office hours.