Share Capital Limitations for Cooperatives

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CDA MEMORANDUM CIRCULAR NO. 2011-05: Share Capital Limitations for Cooperatives

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Title Supreme Court: Share Capital Limitations for Cooperatives

Law: Cda Memorandum Circular No. 2011-05

Decision Date: Feb 22, 2011

CDA Memorandum Circular No. 2011-05 mandates that cooperatives must have at least 25% of their authorized share capital subscribed and paid, while limiting individual member ownership to a maximum of 10% of the total subscribed share capital.

cooperative law

authorized capital

A

Ownership Limitations on Share Capital in Primary Cooperatives

No member, except the cooperative itself, may own or hold more than 10% of the share capital of a primary cooperative.
This limitation is intended to prevent monopolization of ownership and to promote equitable participation among members.

Restrictions on Preferred Share Capital

If preferred shares are included in the by-laws, such preferred share capital shall not exceed 25% of the total authorized share capital.
This ensures that preferred shares do not unduly dominate the cooperative’s capital structure.

Prohibition on Fractional Shares

Both common and preferred share capital shall not be issued in fractional shares.
This provision promotes clarity and uniformity in share ownership.

Regulatory Approval and Effectivity

The guidelines were approved on February 22, 2011, under BOA Resolution No.31-2011.
The Board of Administrators enforces these conditions to uphold cooperative integrity and compliance with RA 9520.

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