COOPERATIVES (RA 9520)

Cooperative – autonomous and duly registered association of persons, with a common bond of interest, who have
voluntarily joined together to achieve their social, economic and cultural needs and aspirations by making equitable
contributions to the capital required, patronizing their products and services and accepting a fair share of the risks and
benefits of the undertaking in accordance with universally accepted cooperative principles.

COOPERATIVE PRINCIPLES (VEMDACC):

1. VOLUNTARY and Open Membership – open to all persons able to use their services and willing to accept the
responsibilities of membership, without gender, social, racial, cultural, political or religious discrimination.
2. EDUCATION, Training and Information – coops shall provide education and training for their members, elected
and appointed representatives, managers and employees, so that they can contribute effectively and efficiently
to the dev’t of their coops.
3. MEMBER Economic Participation – members contribute equitably to, and democratically control, the capital of
their coops.
a. Members must contribute and no share capital of individual member to exceed 10% of total contributed
capital
b. Par value of shares of a coop must not exceed P1,000
c. Members receive patronage refunds
d. Coops must maintain RESERVES:
i. Reserve Fund – at least 10% of net surplus provided that in the first 5 years of operation this
amount shall not be less than 50% of the net surplus (Used for stability of the coop and meet net
losses in its operations, upon dissolution this is not to be distributed to the members)
ii. Education and training Fund – not more than 10% of net surplus(half of this fund shall be spent
for education and training purposes while the other half is remitted to a union or federation
chosen by the coop.)
iii. Community dev’t fund – at least 3% of net surplus
iv. Optional Land and Building Fund – not more than 7% of net surplus
v. Interest – not more than the rate of return on investments
vi. Patronage fund – no less than 30% of the net surplus after deducting statutory reserves
4. DEMOCRATIC Member Control – coops are democratic organizations, controlled by their members who actively
participate in setting their policies and making decisions.
a. In primary coops, members have equal voting rights (one vote per one member)
b. In secondary and tertiary coops, members have 1 vote but may be increase to 5.
5. AUTONOMY and Independence – coops are autonomous, self-help organizations controlled by their members.
(with juridical personality separate and distinct)
6. COOPERATION among cooperatives – cooperatives serve their members most effectively and strengthen the
cooperative movement by working together through local, national, regional and international structures.
7. CONCERN for Community – coops work for the sustainable dev’t of their communities through policies approved
by their members.

DEFINITIONS:
1. Area of Business Operation – shall refer to the principal place of business of a coop
2. Associate member – member of coop who has no right to vote or be voted upon
3. Bond of membership – conditions where members associate themselves to attain their common goals and
objectives which may either be residential, occupational, associational, and institutional.
4. Capital – sum total of members share capital including deposits, revolving capital, subsidies, donations, legacies,
grants, aids, PPE and other assets.
5. Constituent Cooperatives – two or more existing coops which are parties to a merger or consolidation
6. Cumulative Interest – interest due to a member that must be added to in future interest if it is not paid when due.
7. Dissenting Member – member who voted against the proposed activity/project
8. Division – act of spiting a single into 2 or more coops, wherein the original coop shall be dissolved and the resulting
coops shall acquire separate and distinct juridical personalities.
9. Donated capital – subsidies, grants, donations and aids received by the coop

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 10. General Assembly – full membership of the coop duly assembled for the purpose of exercising all the rights and
performing all the obligations pertaining to coops; highest body in a coop.
11. Guardian Cooperative – duly registered coop to which a laboratory coop is affiliated with.
12. Internal control – all the system and procedures adopted to safeguard the cooperative’s assets, check the
accuracy and reliability of its accounting data, promote operational efficiency and encourage adherence to
prescribed managerial policies.
13. Laboratory Cooperative – coop duly recognized by the Authority, formed and managed principally by minors and
is affiliated with another registered coop which is called the guardian coop.
14. Net worth – shall refer to equity inclusive of member’s equity, donations, grants and reserve funds less un-booked
allowance for probable losses on loans, investments and other assets and other capital adjustments as may be
required by the CDA.
15. Patronage refund – amount returned to individual members who patronize the goods and services of the coop in
proportion to their individual patronage.
16. Representative assembly – full membership of the body of representatives elected by each of the sectors,
chapters or districts of the cooperative duly assembled for the purpose of exercising such powers lawfully
delegated unto them by the GA.
17. Representative/Delegate – member duly elected during the sector(composed of not less than 100 members),
chapter or district meetings who shall represent his/her sector in a representative assembly meeting.
18. Revolving Capital – amount available out of the deferred payment of the patronage refund and interest on share
capital of the members or by authorized deduction of a percentage from the product sold or per unit of product
handled by the coop.
a. BOD shall issue revolving capital certificates w/ serial no., name, amount and rate of interest to be paid
and shall distinctly set forth the time of retirement of such certificates and the amounts to be returned.
19. Risk Asset – total asset minus cash on hand, evidences of indebtedness, loans to the extent covered by hold-outs
or assignments of deposits, PPE real estate mortgage loaned and other non-risk items.
20. Social Audit – procedure wherein the coop assesses its social impact and ethical performance vis-à-vis its stated
mission, vision, goals and code of social responsibility.
21. Performance audit – audit on the efficiency and effectiveness of the coop as a whole, its management and officers,
and its various responsibility centers as a basis for improving individual team or overall performance and for
objectively informing the general membership on such performance.

OBJECTIVES AND GOALS: Improve the quality of life of its members.

a. Provide goods and services to its members to enable them to attain increased income, savings, investments,
productivity, and purchasing power and promote among themselves equitable distribution of net surplus through
maximum utilization of economies of scale, cost-sharing and risk-sharing;
b. Provide optimum social and economic benefits to its members;
c. Teach them efficient ways of doing things in a cooperative manner;
d. Propagate cooperative practices and new ideas in business and management;
e. Allow the lower income and less privileged groups to increase their ownership in the wealth of the nation; and
f. Cooperate with the gov’t, other coops and people-oriented organizations to further the attainment of any of the
foregoing objectives.
Note: No cooperatives shall be registered in restrained of Trade.

COOPERATIVE POWERS AND CAPACITIES:

1. The same with Corporation code.
2. Avail of loans, be entitled to credit and to accept and receive grants, donations and assistance from foreign and
domestic sources subject to conditions that will not undermine the autonomy of the coop.
a. The CDA, upon written request, shall provide necessary assistance in the documentary requirements for
the loans, credit, grants, donations and other financial support;
3. Avail of preferential rights granted to coops under LGC (RA 7160) and other laws, particularly those in the grant
of franchises to establish, construct, operate and maintain ferries, wharves, markets or slaughterhouses and to
lease public utilities, including access to extension and on-site research services and facilities related to agriculture
and fishery activities;
4. Organize and operate schools under RA 9155
5. Exercise such other powers granted by this code.
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ORGANIZING A PRIMARY COOP:
a. 15 or more natural persons
b. Filipino citizens
c. Legal age
d. Having common bond of interests
e. Residing or working in the intended are of operation
f. Members must have completed a Pre-Membership Education Seminar.

 Newly organized primary coop may be registered as multipurpose coop after compliance with minimum
requirements.
a. Only those coops with minimum paid-up capital of 100k or as required by the Financial Statements
whichever is higher can register as a multi-purpose coop
 Single-purpose coop may transform into a multipurpose or may create subsidiaries only after at least TWO YEARS
OF OPERATIONS.

Economic survey – every group of individuals or cooperatives intending to form a coop shall submit:
a. General statement describing, among others the structure and purposes of the proposed coop
b. Actual staffing pattern of the coop shall include a bookkeeper
c. Economic survey indicating the area of operation, size of membership and other pertinent data.
NOTE: Coops have limited liability

Term of Cooperative: not exceeding 50 years from the date of registration unless sooner dissolved or period is extended.
No extension can be made earlier than 5 years prior to the original or subsequent expiry date/dates unless there are
justifiable reasons for earlier extension. (Same as Corporations)

ARTICLES OF COOPERATION:
1. Contents of Articles:
a. Same with Corporation Code
b. Name of coop which shall include the word “cooperative”;
c. Common bond of membership
d. Amount of its share capital, the names and residences of its contributors and a statement of whether the coop
is primary, secondary or tertiary.
2. 4 copies each of the proposed articles, by laws and general statement required shall be submitted.
3. Minimum subscribed capital is 25% of authorized capital - 25% of which must be paid up but should not be less
than P15,000. (vs corp, 25%-25%-5000)
a. The CDA shall periodically assess the required paid-up capital and may increase it every 5 years when
necessary upon consultation with the cooperative sector and NEDA.

BYLAWS – must be filed at the same time as the articles of cooperation (vs corp. may be on or after registration)

REGISTRATION OF COOPERATIVES:
1. CDA must act upon an application for registration within 60days, otherwise the application is deemed approved,
unless the delay is caused by the applicant
2. In case of denial of registration, an appeal shall lie with the office of the president within 90days from receipt of
notice of such denial. Failure of the Office of the President to act on the appeal within 90 days from filing shall
mean approval of said application
 The Certificate of Registration shall be CONCLUSIVE EVIDENCE that the cooperative therein mentioned is duly
registered unless it is proved that the registration thereof has been cancelled.

Amending the Articles: The amendments shall take effect upon its approval by the authority or within 30 days (vs corp.
6mos) from the date of filing thereof if not acted upon by the CDA for a cause not attributable to the coop.
 Contracts Executed prior to registration shall remain valid and binding between the parties and upon registration
of the coop. A formal written contract shall be adopted and made in the cooperative’s name or on its behalf prior
to its registration.

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TYPES OF COOPERATIVES:
a. Credit Cooperative – is one that promotes and undertakes savings and lending services among its member It
generates a common pool of funds in order to provide financial assistance to its members for productive and
provident purposes;
b. Consumers cooperative – to procure and distribute commodities to members and non-members
c. Producers cooperative – undertakes joint production whether agricultural or industrial.
d. Marketing Cooperative – one which engages in the supply of production inputs to members and markets their
products;
e. Multipurpose cooperative – one which combines 2 or more of the business activities of these different types of
cooperatives
f. Advocacy cooperative – primary coop which promotes and advocates cooperativism among its members and the
public through socially-oriented projects, education and training, research and communication, and other similar
activities to reach out to its intended beneficiaries.
g. Agrarian Reform Cooperative – one organized by marginal farmers majority of which are agrarian reform
beneficiaries for the purpose of developing an appropriate system of land tenure, land development, land
consolidation or land management in areas covered by agrarian reform;
h. Cooperative bank – one organized for the purpose of providing a wide range of financial services to cooperatives
and their members;
i. Dairy cooperative – engaged in the production of fresh milk which may be processed and/or marketed as dairy
products;
j. Education Cooperative – primary purpose of owning and operating licensed educational institutions
k. Electric cooperative – undertaking power generations, utilizing renewable energy sources, including hybrid
systems, acquisition and operation of subtransmission or distribution to its household members.
l. Financial service cooperative – engaged in savings and credit services and other financial services
m. Fishermen Cooperative – organized by marginalized fishermen in localities whose products are marketed either
as fresh or processed
n. Health services cooperative – for medical, dental and other health services
o. Housing cooperative – assist or provide access to housing for the benefit of its regular members who actively
participate in the savings program for housing.
p. Insurance cooperative – engaged in the business or insuring life and property of cooperatives.
q. Transport cooperative – includes land and sea transportation limited to small vessels
r. Water service cooperative – organized to own, operate and manage water systems for the provision and
distribution of potable water for its members and their households;
s. Workers cooperative – organized by workers, including self-employed who are at same time the members and
owners of the enterprise to provide employment and business opportunities to its members and manage it.

CATEGORIES OF COOPERATIVES:
a. Primary – members are natural persons
b. Secondary – members are primaries
c. Tertiary – members are secondary coops

MERGER AND CONSOLIDATION – 1 or 2 or more coops may merge into a single coop which shall either be one of the
constituent coop or the consolidated coop.
a. CDA shall issue the guidelines governing the procedure of merger or consolidation.
b. Merger/Consolidation shall be effective upon the issuance of the certificate of merger/consolidation
c. Effects of Merger/Consolidation:
a. The surviving or consolidated coop shall possess all the assets, rights, privileges, immunities and franchises
of each of the constituent cooperatives
b. The surviving or consolidated coop shall be liable for all obligations of the constituent coops.

MEMBERSHIP:
1. Regular members – who can vote and be voted
2. Associate members – who cannot vote and cannot be voted

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  An associate who meets the minimum requirements of regular membership, continues to patronize the coop for
TWO YEARS, and signifies his/her intention to remain a member shall be considered a regular member.
 Gov’t officers, elected officials and employees are disqualified to be elected or appointed to any position in a
cooperative.
 Members are liable to the coop and its debts to the extent of his contribution
 A grievance committee may be created by the GA for the purpose of addressing membership concerns. The
members of the committee has a 1 year term. Failure of the committee to act upon the appeal within 30days,
shall be deemed approved in favor of the applicant.

TERMINATION OF MEMBERSHIP:
1. Withdrawal may be made by giving a 60-day notice to the BOD, the withdrawing member shall be entitled to a
refund of his share capital contribution and all other interests in the coop(no refund shall be made if it will make
the coop insolvent) vis-à-vis corporation exercise of appraisal right where stockholder receives the FV of his shares.
2. Death or insanity of a member in a primary coop
3. Insolvency or dissolution of a member in a secondary or tertiary coop(in an agrarian reform beneficiary-member
of a coop, the next-of-kin may assume the duties and responsibilities of the original member)
4. Membership in the coop may be terminated by a vote of the majority of all the members of the BOD:
a. Member has not patronized any of the services of the coop for an unreasonable period
b. Member continuously failed to comply with his obligations
c. Member has acted in violation of the bylaws and rules of the coop
d. For any act or omission injurious or prejudicial to the interest or the welfare of the coop.
 A member whose membership the BOD wish to terminate shall be informed in writing and shall be given an
opportunity to be heard before the said board makes its decision. The decision must be in writing and shall be
communicated in person or by registered mail to the said member. It is appealable within 30days from receipt
thereof to the GA whose decision shall be final.

ADMINISTRATION:
The GENERAL ASSEMBLY shall be composed of members who are entitled to vote; they shall be the HIGHEST POLICY-
MAKING BODY of coops.
Powers of GA that cannot be delegated:
1. Determine and approve amendments to the articles and bylaws
2. Elect, appoint and remove BOD
3. Approve developmental plans

MEETINGS – held annually or if not stated in the bylaws, within 90days after the close of each fiscal year.
 A special meeting shall be held for newly approved coop within 90days from such approval.
 Special meetings may be called by a majority vote of the BOD or as provided in the bylaws provided that notice in
writing shall be sent one week prior to the meeting to all members who are entitled to vote.
 Special meeting shall be called by the BOD after compliance with the required notice within from at least 10% of
the total members who are entitled to vote to transact specific business covered by the call.
 Notice of any meeting may be waived, express or implied by any member.
 Proxy voting is allowed

Quorum – 25% of all members entitled to vote, except electric coops which is only 5%
 The number of sector, chapter or district Representative/Delegate to be elected shall be provided in the bylaws
but in no case be less than 10% of the total number of regular members entitled to vote of the sector, chapter or
district (term is not exceeding 2 years which shall commence on the first regular representative assembly meeting)

Composition and term of BOD – not less than 5 but not more than 15, 2 year term
 No 2 or more persons within relationship up to the 3rd degree of consanguinity or affinity or a person engaged in
the same business as the coop be appointed as BOD.
 No proxies allowed

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  Coop may by resolution of its BOD, admit as directors, or committee member one appointed by any financing
institution from which the coop received financial assistance solely to provide technical knowledge not available
within its membership. (not a member and have no powers other than providing technical assistance)
 Meeting of BOD for primary coops shall be held at least once a month(same with corps)
 Loss of confidence shall not be a valid ground for the removal of a BOD unless there is evidence of dishonesty and
unethical practice

Committees to be created:
1. Audit – elected by GA (monitors the adequacy and effectiveness of the coops mgt control system and audit the
performance of the coop and its various responsibility centers
2. Election – elected by GA
3. Mediation and conciliation
4. Ethics
5. Others

Disloyalty of director – liable up to double the profits plus damages, can be ratified by ¾ votes (vs corporation, votes
required to ratify is 2/3)

Self-dealing director – same with corporation except that voting to ratify is ¾

a. Presence is not necessary to constitute a quorum
b. His vote is not necessary to validate the act
c. Contract is fair and reasonable

Compensation of BOD
1. Shall not receive compensation except reasonable per diems except if the coop suffered a loss or dividend rate is
less than the official inflation rate where no per diem is given.
2. No per diem is given during the coop’s first year

Illegal Use of Confidential Information.

(1) A director or officer, or an associate of a director or officer, who, for his benefit or advantage or that of an
associate, makes use of confidential information that, if generally known, might reasonably be expected to adversely
affect the operation and viability of the cooperative, shall be held:
(a) Liable to compensate the cooperative for the direct losses suffered by the cooperative as a result of
the illegal use of information; and
(b) Accountable to the cooperative for any direct benefit or advantage received or yet to be received by
him or his associate, as a result of the transaction.
(2) The cooperative shall take the necessary steps to enforce the liabilities described in subsection (a)

CAPITAL, PROPERTY AND FUNDS

Capital Sources:
1. Member’s share capital – no member of primary coop shall own or hold more than 10% of the share capital of
the coop
2. Loans and borrowings including deposits
3. Revolving capital
4. Subsidies, donations, legacies, grants, aids and such other assistance from any local or foreign institutions (upon
dissolution, such capital shall be subject to escheat)

Note: No member shall transfer his shares or interest in the cooperative or any part thereof unless:
a. He has held such share capital for not less than 1 year
b. Assignment is made to the cooperative or to a member of the coop or to a person who falls within the field of
membership of the coop
c. The BOD has approved such assignment

Coops may invest in the following:

1. Share or debentures or securities of any other coop
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 2. In any reputable bank in the locality, or any cooperative
3. Securities issued or guaranteed by the Gov’t
4. Real state primarily for the use of cooperative or its members
5. Any other authorized in the bylaws

Audit – coops shall be subject to an annual financial performance and social audit. The financial audit shall be conducted
by an external auditor who satisfies all the ff:
a. Independent of the coop or any of its subsidiaries
b. Member in good standing of PICPA and accredited by both BOA and CDA

Audit Report – shall be submitted to the BOD and the Audit committee.
 The auditor is not liable to any person in an action for defamation based on any act, done or any statement made
by him in good faith in connection with any matter he is authorized or required to do pursuant to this code.
 A member shall have the right to examine the records required to be kept by the coop during reasonable hours
on business days and he may demand, in writing, for a copy of excerpts from said records without charge except
the cost of production.

RESPONSIBILITIES AND RIGHTS COOPERATIVE

1. Every coop shall have an official postal address to which all notices and communications shall be sent.
2. Make coop records accessible to members
3. Accountant/bookkeeper - maintenance of the cooperative’s FS in accordance with GAAP and production of the
same at the time of audit or inspection
4. The audit committee - continuous and periodic review of the books and records of account to ensure that these
are in accordance with GAAP.
5. To maintain records of accounts such that the true and correct condition and the results of the operation of the
cooperative.
6. Audited FS shall be published annually and shall be kept posted in a conspicuous place in the principal office of
the cooperative
7. Disposal of financial and nonfinancial records which are already more than 5 years old except those relating to
transactions which are the subject of civil, criminal and administrative proceedings. An inventory of the audited
documents to be disposed of shall be drawn upon and certified to by the board of secretary and the chairman of
the audit committee and presented to the BOD for approval.
8. Reports – made accessible to members every fiscal year and shall be filed with the authority within 120 days from
the end of the CALENDAR YEAR.
9. Failure to make, publish and file reports, the CDA within 15 days from the expiration of the prescribed period, shall
send a written notice of non-compliance and the commensurate fines.
10. Register of members is a PRIMA FACIA EVIDENCE of the following particulars:
a. Date on which the name of any person was entered in such register; and
b. Date on which any such person ceased to be a member
11. Preference of claims:
a. Debt Due to the coop by members - shall constitute a FIRST LIEN upon any goods(Invty, PPE) and/or
services acquired and held, by such member through the proceeds of the loan or credit granted by the
cooperative to him for as long as the same is not fully paid. No properties subject to lien shall be disposed
to 3rd parties w/o consent of the coop. Despite disposal, the coop still has the LIEN on such goods/services.
Any sale in contravention to the aforementioned shall be VOID.
12. A cooperative shall have primary lien upon the capital, deposits or interest of a member for any debt due to the
cooperative from such a member.
13. Tax Treatment of Cooperatives:
a. With undivided reserves of 10M or less –
i. all transactions duly registered with CDA - exempt
ii. All taxes and duties – exempt(Internal Revenue Taxes, Local Taxes, Custom Duties on items not
locally available)
Note: All tax free importations shall not be sold nor the beneficial ownership thereof be transferred to
any person until after 5 year otherwise, the coop and the transferee or assignee shall be severally liable
to pay TWICE the amount of the imposed tax and/or duties.
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 b. With undivided reserves of more than 10M – transactions with members only are exempt. Taxable with
non-members(All taxes except as provided by NIRC and other laws)
i. Donations to charitable, research and educational institutions and reinvestment to
socioeconomic projects within the area of operation of the cooperative may be tax deductible.
ii. All coops are exempted from payment of local taxes and taxes on transactions with banks and
insurance companies. However, all sales or services rendered for non-members shall be subject
to the applicable percentage taxes sales made by producers, marketing or service cooperatives.
14. Free notarial service from the judge exercising his ex-officio capacity as notary public to any person or group of
persons requiring the administration of oath or the acknowledgement of articles of cooperation and instruments
of loan from coops not exceeding 500k.
15. Registration of Register of Deed, free of charge relative to a loan made under this code w/c does not exceed 250k.
16. Exemption from the payment of all court and sheriff’s fees payable to the Philippine Government for and in
connection with all action brought under this Code.
17. Exemption in putting up a bond for bringing an appeal against the decision of an inferior court or for seeking to
set aside any third party claim:
a. Provided, that a certification of the CDA showing that the net assets of the coop are in excess of the
amount of the bond required by the court in similar cases shall be accepted by the court as a sufficient
bond.
18. Any security issued by cooperatives shall be exempt from the provisions of the securities act provided such
security shall not be speculative.

PRIVILEGES OF COOPS:
1. Deposit of sealed cash boxes or containers and valuable documents in the safes government offices FREE OF
CHARGE (custodian of such articles shall issue an acknowledgement receipt duly witnessed by another person);
2. Coops organized among gov’t employees, notwithstanding any law or regulation to the contrary, shall enjoy the
free use of any available space in their agency, whether owned or rented by the gov’t;
3. Cooperatives rendering special types of services and facilities such as cold storage, ice plant, electricity,
transportation and similar services and facilities shall secure a franchise therefore, and such cooperatives shall
open their membership to all persons qualified in their areas of operation;
4. Preferential right to supply government institutions and agencies rice, corn and other grains, fish and other marine
products, meat, eggs, milk, vegetables, tobacco and other agricultural commodities produced by their members
shall be granted to cooperatives in such areas;
5. Preferential treatment in the allocation of fertilizers, including seeds and other agricultural inputs and
implements, and in rice distribution shall be granted to cooperatives by the appropriate gov’t agencies;
6. Preferential and equitable treatment in the allocation or control of bottomries of commercial shipping vessels in
connection with the shipment of goods and products of cooperatives.
7. Cooperatives and their federations which have their primary purpose the production and/or the marketing of
products from agriculture, fisheries and small entrepreneurial industries and federations thereof, shall have
preferential rights in the management of public markets and/or lease of public market facilities, stalls or spaces:
a. Provided, that these rights shall only be utilized exclusively by cooperatives:
b. Provided further that no cooperative forming a joint venture, partnership or any other similar
arrangement with a non-cooperative entity can utilize these rights;
8. Coops engaged in credit series shall be entitled to loans credit lines, rediscounting of their loan notes, and other
eligible papers with the DBP LBP and other financial institutions except the BSP
a. PDIC and other gov’t agencies, GOCCs and government financial institutions shall provide technical
assistance to registered national federations and unions of coops which have significant engagement in
savings and credit operations in order for these federations and unions to establish and/or strengthen
their own autonomous cooperative deposit insurance systems
9. Public transport service coop may be entitled to financing support for the acquisition and/or maintenance of land
and sea transport equipment, facilities and parts through the program of the government financial institutions. It
shall have the preferential right to the management and operation of public terminals and ports whether land or
sea transport where the coop operates and on securing a franchise for active or potential routes for the public
transport;

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 10. Coops transacting business with the Government of the Philippines or any of its political subdivisions or any of its
agencies or instrumentalities including GOCCs shall be exempt from prequalification bidding requirements
notwithstanding the provisions of RA 9184.
11. Cooperative shall enjoy the privilege of being represented by the provincial or city fiscal or the Office of the
Solicitor General, free of charge except when the adverse party is the Republic of the Phil.
12. Cooperatives organized by faculty members and employees of educational institutions shall have the preferential
right in the management of the canteen and other services related to the operation of the educational institution
where they are employed: Provided that such services are operated within the premises of the said educational
institution; and
13. Appropriate housing agencies and government financial institutions shall create a special window for financing
housing projects undertaken by cooperatives, with interest rates and terms equal to, or better than those given
for socialized housing projects. This financing shall be in the form of blanket loans or long-term wholesale loans
to qualified cooperatives, without need for individual processing.

 A parent cooperative may organize a subsidiary cooperative provided:

a. It has been in operation for at least 2 years and has incurred no losses for the 2 preceding years of
operations
b. Net worth of at least 10M as shown in its latest Audited FS
c. All or majority of Members of the Parent Coop are willing to become members of the subsidiary coop
d. Business of the subsidiary shall be different from that of the parent
e. Creation of the subsidiary and the technical managerial and financial assistance to be provided shall be
approved by at least ¾ vote of member of parents coop with voting rights present and constituting a
quorum in a regular or special assembly called for that purpose.

DISSOLUTION OF COOPERATIVES:
1. Voluntary Dissolution where no Creditors are affected:
a. Publication for 3 consecutive weeks in a newspaper in the place where the principal office of the coop is
located.
b. Notice of such meeting is sent to each member of record either by registered mail or by personal delivery
at least 30 days prior to the said meeting.
2. Voluntary Dissolution where Creditors are affected:
a. Petition shall be signed by majority of its BOD verified by its chairperson or board secretary and shall set
forth all claims and demands against it and that its dissolution was resolved upon by the affirmative vote
of at least ¾ of all members with voting rights present and constituting a quorum at a meeting called for
that purpose.
b. If the petition is sufficient in form and substance, the purpose must be recited to the authority which shall
not be less than 30 days nor more than 60 days after the entry of the order. Notice shall be published the
same with no.1 above
c. Upon expiry of the 5 day notice to file objections the CDA shall proceed to hear the petition and try any
issue raised in the objection filed; and if the objection is sufficient and the material allegations of the
petition are proven, it shall issue an order to dissolve the coop and direct the disposition of its assets in
accordance with existing rules and regulations.
3. Involuntary Dissolution
a. Violation of law, regulation or provisions of its bylaws
b. Insolvency
c. Ordered by Authority
i. Registration obtained by fraud
ii. Existing for an illegal purpose
iii. Willful violation, despite notice by CDA of the provisions of this Code or its bylaws
iv. Willful failure to operate on a cooperative basis
v. Failure to meet the required minimum number of members
d. Failure to organize and operate within 2 consecutive years
 The coop shall continue to exist for 3 years for liquidation purposes.

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VOTING REQUIREMENTS:
1. Amendment of Articles of Cooperation and bylaws – 2/3 vote of all the members with voting rights, without
prejudice to the dissenting members to exercise their right to withdraw their membership. (vs corp. appraisal right
for dissenting stockholder)
2. Division of Coops – ¾ of all the members with voting rights, presenting and constituting a quorum. (no division
shall be allowed in fraud of creditors, and only allowed when there is at least 1000 members)
3. Merger or consolidation – ¾ vote of all the members with voting rights, present and constituting a quorum of
each of the constituent cooperatives at separate GA meetings. Dissenting members shall have the right to exercise
their right of withdrawal of membership. (vs corp. appraisal right)
4. Delegation of some of GA’s powers – ¾ of all its members with voting rights, present and constituting a quorums
5. Removal of BOD - by ¾ votes of regular members present and constituting a quorum provided that the director
will be given an opportunity to be heard at the said assembly.
6. Voluntary Dissolution – majority of BOD and affirmed by ¾ of all members with voting rights present and
constituting a quorum at a meeting to be held upon called by the directors.
7. Creation of the subsidiary and the technical managerial and financial assistance to be provided shall be approved
by at least ¾ vote of member of parents coop with voting rights present and constituting a quorum in a regular or
special assembly called for that purpose.

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