Law Summary
Policy
- The State promotes the creation and growth of cooperatives to foster self-reliance and economic and social development.
Purpose
- Ensure cooperatives are viable and meet registration requirements and Authority policies.
Coverage
- Applies to all types of cooperatives except those under Chapters XI, XII, XIII, and XV of the Cooperative Code (R.A. 6938).
Definitions
- Authority: Cooperative Development Authority.
- Cooperative: Registered association with a common bond and equitable capital contributions.
- Primary Cooperative: Members are natural persons.
- Secondary Cooperative: Members are primary cooperatives.
- Tertiary Cooperative: Members are secondary cooperatives or apex organizations.
- Federation: Primary/secondary cooperatives in the same economic activities.
- Cooperative Unions: Non-business function cooperatives representing various types.
- Laboratory Cooperative: Managed by minors, affiliated with registered cooperatives.
- Common Bond: Pre-existing condition linking members.
- Area of Operation: Territory of cooperative activities.
- Share: Unit of capital with minimum value of P1.00.
- Defines various cooperative types (Credit, Consumers, Producers, Marketing, Service, Multi-Purpose).
- Business and non-business cooperative functions defined.
Officers Responsible for Registration
- Extension Offices register primary and local secondary cooperatives.
- Central Office registers inter-regional/national secondary and tertiary cooperatives and special cooperatives except credit cooperatives.
Membership Requirements
- Primary cooperatives require at least 15 Filipino natural persons with a common bond.
- Secondary/tertiary cooperatives require at least 15 cooperatives; permit 5 initially if 15 achieved within 3 years.
Capital Requirements
- Share capital mandatory; 25% of authorized capital must be subscribed and 25% of subscribed paid upon registration.
- Primary cooperatives minimum paid-up capital is P2,000.
- Secondary/tertiary capitalization depends on economic survey.
Cooperative Name
- Must include "Cooperative".
- No use of "Incorporated" required.
- Cannot use "federation" or "union" unless registered as such.
Provisional Registration
- No provisional/conditional registrations allowed.
- Previously provisional cooperatives must comply with current requirements.
Registration Documents
- Submit: Economic Survey, notarized Articles and By-Laws, Treasurer's Affidavit on capital, bonds for accountable officers, and registration fee.
Document Submission
- Documents may be in English or the national language.
Common and Preferred Shares
- Common shares preferred; preferred shares allowed but not exceeding 25% of authorized capital.
- Rights of preferred shareholders must be in By-Laws.
- Subscription and paid-up requirements apply to common shares only.
Responsibility of Organizing Agencies/Individuals
- Entities aiding cooperative organization must assist pre- and post-registration up to self-reliance.
Certificate of Undertaking
- Chairman or representative must execute undertaking to change cooperative name if prior right exists.
Pre-Membership Education Seminar
- PMES is not mandatory but encouraged to impart cooperative principles.
Common Bond of Membership
- Four categories: Residential, Institutional, Associational, Occupational; only one bond adopted per cooperative.
Dual Membership
- By-laws must allow members of existing same-type cooperatives in same area to be members, provided they resign from former.
Conversion of Pre-Cooperatives and Self-Help Groups
- Conversion into cooperatives allowed upon registration application and document submission; audited financial statements substitute economic survey.
Registration of Amendments
- Submit 4 copies of amended Articles/By-Laws with underscored changes, certified by Secretary and board majority.
- Pay registration fee.
Bonding Requirements
- Bond required for Treasurer, Cashier, Manager, warehouseman, check signatories, and similar custodians.
- Acceptable bonds: Real estate, cash, surety/performance.
- Bond amount based on cooperative net worth at registration.
- Board determines adequacy.
Timelines and Appeals
- Registration decided within 30 days; deemed approved if delayed without applicant fault.
- Denial appealable to Office of the President within 90 days.
- Failure by President's Office to act within 90 days means approval.
Repeal
- Prior conflicting circulars and guidelines repealed or modified.
Effectivity
- Guidelines effective upon Board of Administrators approval.
Approval
- Approved on March 17, 1992 by the Board of Administrators.