Policy and purpose
- The State policy is to foster the creation and growth of cooperatives as practical vehicles for promoting self-reliance and harnessing people power toward economic development and social justice. (Section 2)
- The guidelines are issued to ensure that proposed cooperatives are viable and comply with registration requirements under the Code and CDA policies. (Section 3)
Scope of coverage
- These guidelines cover all types and categories of cooperatives except cooperatives covered by Chapters XI, XII, XIII, and XV of the Cooperative Code (R.A. 6938). (Section 4)
- The Cooperative Code reference in the coverage clause points to R.A. 6938 as the baseline Cooperative Code for the covered exclusions. (Section 4)
Key definitions for registration
- “Authority” refers to the Cooperative Development Authority. (Section 5(a))
- “Cooperative” means a duly registered association of persons with a common bond of interest who voluntarily join to achieve a lawful common social or economic end, making equitable capital contributions and accepting a fair share of risks and benefits under universally accepted cooperative principles. (Section 5(b))
- “Registration” is the operative act granting juridical personality to a proposed cooperative, evidenced by a Certificate of Registration. (Section 5(c))
- Primary cooperative refers to a cooperative whose members are natural persons. (Section 5(d))
- Secondary cooperative refers to a cooperative whose members are primaries. (Section 5(e))
- Tertiary cooperative refers to a cooperative whose members are secondaries upward to one (1) or more apex organizations. (Section 5(f))
- Federation of cooperatives is a cooperative whose members are primary and/or secondary and are engaged in the same line of economic activities. (Section 5(g))
- Cooperative unions are cooperatives at appropriate levels performing non-business functions and organized to represent the interest and welfare of all types of cooperatives regardless of their line of business. (Section 5(h))
- Laboratory cooperative is formed and managed principally by minors and affiliated with a registered cooperative. (Section 5(i))
- “Common bond of membership” is a pre-existing condition or conditions causing individuals to associate, know each other, share common objectives and purposes, and work together. (Section 5(j))
- “Area of operation” means a territory wherein the cooperative operates, which may or may not coincide with political boundaries. (Section 5(k))
- “Share” is a unit of share capital with par value fixed at any figure but not less than One Peso (P1.00); it may be divided into common share capital and preferred share capital. (Section 5(l))
- Credit cooperative primarily promotes thrift, creates funds, and grants loans for productive and providential purposes. (Section 5(m))
- Consumers cooperative procures and distributes commodities to members and non-members as its primary purpose. (Section 5(n))
- Producers cooperative undertakes joint production, agricultural or industrial. (Section 5(o))
- Marketing cooperative supplies production inputs to members and markets their products. (Section 5(p))
- Service cooperative engages in medical and dental care, hospitalization, transportation, insurance, housing, labor, electric light and power, communication, and other services. (Section 5(q))
- Multi-purpose cooperative combines two (2) or more business activities of different types of cooperatives. (Section 5(r))
- Business functions are transactions such as marketing, distribution, credit, banking, housing, insurance, trading, transportation, utilities, and other cooperative activities where surplus can be earned. (Section 5(s))
- Non-business functions are representation, education, training, audit, research, and other allied services needed by members or other cooperatives. (Section 5(t))
Registration officers and offices
- CDA Extension Offices, within their respective jurisdictions, register primary cooperatives and secondary cooperatives at the city, municipal, provincial and regional levels. (Section 6(a))
- CDA Central Office registers secondary and tertiary cooperatives at the inter-regional and national levels. (Section 6(b)(1))
- CDA Central Office registers cooperatives governed by the special provisions of the Cooperative Code except credit cooperatives. (Section 6(b)(2))
Membership, share capital, name rules
- A primary cooperative requires fifteen (15) or more natural persons who are Filipino citizens, with a common bond of interest, residing or working in the intended area of operations. (Section 7(a))
- A secondary and tertiary cooperative requires at least fifteen (15) cooperatives for registration. (Section 7(b))
- For secondary and tertiary cooperatives, at least five (5) cooperatives may apply for registration with the condition that the secondary cooperative will reach the required fifteen (15) member-cooperatives within three (3) years from registration. (Section 7(b))
- All cooperatives must be organized with share capital. (Section 8(a))
- Authorized share capital must be provided in the Articles of Cooperation. (Section 8(a))
- Cooperatives must subscribe and pay the minimum share capital: at least twenty-five percent (25%) of authorized share capital must be subscribed, and at least twenty-five percent (25%) of the subscribed share capital must be paid upon registration. (Section 8(a))
- The paid-up capitalization for primary cooperatives must never be less than Two Thousand Pesos (P2,000.00). (Section 8(b))
- For secondary and tertiary cooperatives, the required paid-up capitalization is evaluated based on the activities to be undertaken per the economic survey submitted. (Section 8(c))
- The word “Cooperative” must be included in the cooperative’s name, and no organization may use the word “cooperative” in its business name or title unless duly registered with CDA. (Section 9(a))
- The word “Incorporated” (or equivalent abbreviation) is not required in the name of a cooperative for SEC distinction. (Section 9(b))
- A cooperative must not include the words “federation” or “union” in its name unless it applies for registration as a federation or union. (Section 9(c))
Prohibited conditional registration
- No cooperative may be registered provisionally or conditionally. (Section 10(a))
- Cooperatives provisionally registered under previous laws must be registered as new cooperatives after complying with the Cooperative Code registration requirements; they must submit a copy of their audited financial statements covering the last fiscal year. (Section 10(b))
Documents required and submission rules
- For registration, the Authority requires four (4) copies of the Economic Survey describing: organizational structure; purposes; economic feasibility study; area of operation specifying which barangay, municipality, etc.; number of initial members and potential members; and other pertinent data such as all types of cooperatives operating in the area. (Section 11(a))
- For registration, the Authority requires four (4) copies of duly notarized Articles of Cooperation and the approved By-Laws. (Section 11(b))
- For registration, the Authority requires four (4) copies of the Treasurer’s Affidavit stating: the minimum twenty-five percent (25%) subscription; the minimum twenty-five percent (25%) paid-up percentage; and the amount of paid-up capital received by the Treasurer. (Section 11(c))
- For registration, the Authority requires four (4) copies of the bonds required for accountable officers. (Section 11(d))
- For registration, the Authority requires the registration fee payable to the Authority in cash or Postal Money Order form. (Section 11(e))
- Registration documents may be written in English or the national language of the Philippines. (Section 12)
Shares: common and preferred limits
- If common and preferred shares are used, statements must appear in the Articles of Cooperation specifying the amounts for common shares and preferred shares. (Section 13(a))
- It is preferable that only the common share be offered. (Section 13(a))
- If preferred share capital is included, the rights and privileges of preferred shareholders must be placed in the By-Laws. (Section 13(b))
- Preferred share capital must not exceed one-fourth of the total authorized share capital. (Section 13(c))
- The twenty-five percent (25%) subscribed and paid-up rule applies to common share capital contribution only. (Section 13(c))
Education, common bond categories, membership rules
- Organizing agencies and individuals (federations, unions, training centers, non-government organizations, government organizations, and individuals concerned with organization and promotion) are morally obliged to render assistance in the pre- and post-registration of cooperatives up to the point of self-reliance. (Section 14)
- Upon submission of the economic survey, the chairman or duly authorized representative must execute a certificate of undertaking in the form provided to change the proposed cooperative name if another cooperative acquires a prior right to the use of the proposed name. (Section 15)
- Pre-Membership Education Seminar (PMES) for new cooperatives is not a mandatory requirement for registration; CDA encourages PMES to inculcate cooperative principles and practices, and regular PMES shall be conducted in accordance with the cooperative’s by-laws. (Section 16)
- Common bond of membership is categorized into four (4) categories, and the cooperative must adopt only one (1) common bond or field:
- residential;
- institutional (exclusive for employees of a corporation, agency, institution, or other organization, whether public or private);
- associational (exclusive for members of an association, organization, religious or civic group); and
- occupational (exclusive for groups of professionals such as lawyers, doctors, accountants, engineers, or other similar recognized professions). (Section 17)
- A prospective cooperative must include in its By-Laws a provision allowing members of existing cooperatives of the same type within the same area of operation to be members of the proposed cooperative unless they resign from the former. (Section 18)
Conversion of self-help groups
- Pre-cooperatives, samahang nayons, and other self-help groups engaging in economic activities may be converted into cooperatives upon application for registration and submission of the registration documents required under Section 11. (Section 19(a))
- For conversion, audited financial statements by the Audit and Inventory Committee must be submitted in lieu of an economic survey. (Section 19(a))
Amendments registration requirements
- Amendments registration follows Article 18 of the Cooperative Code, requiring:
- four (4) copies of amended articles/sections conforming to all provisions required by law, with amendments indicated by underscoring or otherwise appropriately indicating changes; (Section 20(a))
- all copies duly certified under oath by the cooperative’s Secretary and a majority of the board of directors stating that amendments were duly approved by at least two-thirds (2/3) of all members with voting rights; (Section 20(b))
- a fee for registration of amendments payable to the Authority in cash or Postal Money Order. (Section 20(c))
Bonds for accountable officers
- Accountable officers/employees must submit bonds for faithful performance in accordance with Articles 14(5) and (57) of the Cooperative Code and the bonding subsections. (Section 21)
- The following persons must be bonded: treasurer and cashier; manager; warehouseman; signatories of checks and other financial instruments; and such other persons authorized by the cooperative to act as custodian of funds, merchandise, inventories, securities, and other assets. (Section 21(a))
- Acceptable bond types are: Real Estate Bond, Cash Bond, Surety/Performance Bond, and others included per Board Resolution No. 212, s. 1992. (Section 21(b))
- The bond amount is based on the cooperative’s initial networth, including paid-up capital, membership fees, and other assets at the time of registration. (Section 21(c))
- Every director, officer, and employee handling funds, securities, or property for the cooperative must execute and deliver adequate bonds; the board of directors determines adequacy. (Section 21(d))
Processing deadlines and appeals
- The Authority must finally dispose of a registration application within thirty (30) days from filing; otherwise, the application is deemed approved unless delay is attributable to the applicant. (Section 22(a))
- If the Authority denies the application, appeal may be sent to the Office of the President within ninety (90) days from receipt of the notice of denial. (Section 22(b))
- Failure of the Office of the President to act on the appeal within ninety (90) days from filing means approval of the application. (Section 22(c))
Undertakings, repeals, effectivity rules
- All previous circulars and guidelines issued by CDA that are inconsistent with these guidelines are repealed or modified accordingly. (Section 23)
- The guidelines take effect upon approval of the Board of Administrators. (Section 24)