Coverage
- Applies to all cooperatives previously registered under RA 6938 and RA 6939.
- Targets cooperatives that failed to meet the submission requirements of Article 144, RA 9520.
Jurisdiction
- Primary jurisdiction lies with the Extension Office of the Authority in the cooperative’s region.
- Exceptions: CDA Central Office oversees tertiary cooperatives, cooperative banks, electric cooperatives, and insurance cooperatives.
Cancellation Process
- The Authority sends a formal notice via registered mail informing the cooperative of failure to secure a new Certificate of Registration.
- Cooperative has 30 days from receipt of notice to comply.
- After 30 days, the Authority issues an Order of Cancellation.
Obligation to Undertake Liquidation Process
- Cancelled cooperatives must begin liquidation within 30 days of receiving the Order of Cancellation.
- Liquidation procedures:
- Form a Panel of Liquidators from previous officers/members.
- Inventory assets and liabilities.
- Pay creditors according to New Civil Code preference rules.
- Transfer statutory funds to beneficiaries.
- Distribute remaining assets to members.
- Submit final liquidation report to the Authority.
Panel of Liquidators
- Comprises 3 to 5 former officers and/or members.
- Allowed reasonable honorarium paid from cooperative funds.
Functions of the Panel of Liquidators
- Notify Authority of assumption and commencement.
- Inventory assets and liabilities (including share capital).
- Preserve existing assets.
- Convert assets to cash.
- Pay valid claims and obligations.
- Distribute remaining assets per guidelines.
- Submit final report to the Authority.
Payment of Creditors
- Creditors paid based on contractual obligations and New Civil Code provisions on preference and concurrence of credits.
Statutory Funds
- Disposal of statutory and other funds must comply with Article 86 of the Cooperative Code.
Treatment of Donated Capital
- Subsidies, donations, legacies, grants, aids from local or foreign sources are subject to escheat.
Distribution of Assets
- Remaining assets after creditors’ payment distributed to members as payment of share capital.
- If insufficient, distribution done proportionally based on share capital contributions.
Undistributed Assets
- Assets for unknown or unlocatable creditors/members go to the federation/union affiliated with the cancelled cooperative for cooperative development.
- If no affiliation, assets go to the relevant Local Government Unit.
- If no Local Government Unit, assets revert to the community where the cooperative operated.
Submission of Panel of Liquidators Final Report
- Final report submitted to members, Authority, federation/union, Local Development Councils, LGU Chief Executive.
- Report includes:
- Assets sold
- Assets written off as worthless
- Assets donated
- Liquidation expenses
- Payment of liabilities
- Settlement of reserves
- Refund of share capital and interests
- Other relevant matters
Remedy for Failure to Undertake Liquidation
- Members and interested parties may file civil or criminal actions against former officers for failure to liquidate.
Posting
- Authority via Extension Offices will publicly post the list of cancelled/delisted cooperatives in each jurisdiction.
Effectivity
- Guidelines become effective 15 days after publication in the Official Gazette or newspaper of general circulation.