Rules on Cooperative Code Implementation

Annual report required at fiscal year-end, to be published and furnished to members of record and CDA within 60 days.
Failure to file may lead to revocation of authority to operate.
Format includes General Information, Organizational Aspects, Economic Aspects.
Prepared by bookkeeper/accountant, certified by chairman or general manager.
Fiscal year is calendar year unless otherwise provided.

Capitalization governed by cooperative code and related regulations.
Share capital may include common (voting) and preferred (non-voting but with preferences) shares.
Accounting must follow generally accepted accounting principles adapted for cooperatives.
No single member (except another cooperative) may hold more than 20% of subscribed share capital.
Members may withdraw membership with 60 days’ notice, subject to financial capacity of cooperative.

Interest rate on share capital limited and non-cumulative.
Interest rate computation formula based on net surplus minus statutory reserves and total average share month.
Patronage refund must be at least 30% of net surplus (after statutory reserves) but cannot exceed twice interest rate.
Payment of interest dates determined by board; can be deferred by general assembly.
Patronage refund distributes net surplus equitably based on members’ transactions.

By-laws may impose fines on unpaid subscriptions.
Board issues reminders/calls for payment according to agreements or policies.
Board determines reasonable fines if not covered by by-laws.
Sanctions include declaring members not in good standing or withdrawal of privileges until compliance.

Allows two or more cooperatives to merge (one survives) or consolidate (new entity).
Requires approval by two-thirds vote of members eligible to vote in each cooperative.
Cooperative Development Authority issues guidelines; merger/consolidation effective upon CDA certification.
Plan includes rationale, details of cooperatives, financial statements, list of members.
Requires general assembly meetings with notices, public announcements, and notification of creditors.
Surviving/consolidated cooperative assumes all rights, assets, liabilities, and obligations.
Rights of creditors and liens remain unimpaired.

A cooperative may divide into two or more cooperatives by two-thirds vote of members.
Plan initiated by board or at least 10% of members, includes financial statements and division of assets and liabilities.
Members choose preferred new cooperative; those refusing refund of share capital.
Public notice required; objections can be filed.
Registration requirements include resolutions, articles, financial statements, bonds, and fees.
Division invalid if made to defraud creditors; debts jointly assumed by resulting cooperatives.

Guidelines issued for liquidation upon charter expiration, dissolution, or court termination.
Cooperative continues as body for three years to settle affairs, not to conduct business.
General assembly meeting convened to inform members and elect cooperative board of liquidators.
Liquidators inventory assets, preserve property, convert assets to cash, pay liabilities.
Three-year period to wind up; extensions or receivers may be appointed.
Statutory funds disposed per Code; residual assets distributed to members.
Undistributed assets held in trust and eventually turned over to community.
Final report submitted to members and Authority; upon approval, registration cancelled.

Minors’ cooperatives affiliated with registered cooperatives, governed by special rules.
Organized by at least 15 minors, purposes include training, thrift, fund generation, skill development.
Powers include suing through guardian cooperative, managing contracts, holding property with adviser approval.
Articles include name, purpose, term, area, founders, common bond, officers, and guardian cooperative.
By-laws specify powers of board of advisers and guardian cooperative.
Affiliation mandatory; guardian cooperative responsible for training and value formation.
Board of advisers aids management; membership open to minors.
Membership may terminate voluntarily, by death or insanity, for violations, or reaching age 18.
Meetings require adviser presence; division prohibited.