FREQUENTLY ASKED QUESTIONS

1. What is a cooperative?

A cooperative is a duly registered association of persons with a common bond of

interest who have voluntarily joined together to achieve a lawful, common social or
economic end and who contribute equitably to the capital required and accept a fair
share of the risk and benefits of the undertaking in accordance with universally
accepted cooperative principles [Chapter I Art.2 Sec.8 of RA 6938].

2. What government agency is charged with promotion and development of

cooperative?

The Cooperative Development Authority (CDA) which was created by Republic Act
No. 6939 is the government agency that has the obligation to promote and help
develop cooperatives.

3. What is meant by the registration of cooperative?

In law, the registration of the cooperative is the operative act that grants juridical
personality to a proposed cooperative and is evidenced by a certificate of registration
[Art. 5, par. 7].

4. What other documents have to be submitted to CDA for purposes of the

registration of a cooperative?

Document that describes the structure, purposes and economic feasibility of a

cooperative that is being organized, its area of operation, the size of membership and
other pertinent data are required to be submitted to the CDA [Art. 11]

5. With what CDA office may cooperatives be registered?

To facilitate registration, applicants for registration should go to the nearest CDA

office, which is located in the regional centers of the country, and ask for all the
papers required for the registration of cooperatives.

6. What remedy has an applicant for registration if the application is denied by the
CDA?

The applicant may appeal to the Office of the President within 90 days from receipt of
the notice of denial, provided that failure on the part of the Office of the President to
act on the appeal within 90 days from the filling thereof shall mean the approval of
the application [Art. 16].

7. Who is considered a member of cooperative?

Any natural or juridical person who adheres to the principles governing cooperatives
and to the articles of cooperation of particular cooperative and has been submitted to
its membership is a member thereof [Art. 5 (1)].
Who qualifies for membership of a cooperative?

Any natural person, who is a citizen of the Philippines and is of legal age or a juridical
person like a cooperative or non-profit organization is qualified to be a member of
cooperative, provided that the person meets the qualifications prescribed in the bylaws
of the cooperative [Art. 26].

9. But may minors also qualify to be members of cooperatives?

Yes, but only of laboratory cooperative.

10. When does an applicant for membership in a cooperative acquire his rights as a
member?

An applicant becomes a cooperative member when his application is approved by the

board of directors. He may exercise his rights as a member after he makes the
payments that are due to the cooperative [Art. 29].

11. How is membership in a cooperative terminated?

Membership in a cooperative may be terminated voluntarily or involuntarily [Art. 31].

12. May a member withdraw his membership from a coop?

The member may withdraw his membership from the cooperative by giving a 60-day
notice to the board of directors [Art. 31, par. 1]. Although the provision does not state
that the notice should be written.

13. What is the highest policy-making body of a cooperative?

The general assembly [Art. 34].

14. What is meant by a general assembly of cooperative members?

A general assembly of cooperative members is the meeting of the full membership for
the purpose of exercising the rights and discharging the obligations of the cooperative
as provided by the Code, its articles of cooperation and bylaws [Art. 5, par. 2].

15. Who conducts and manages the affairs of cooperative?

The board of directors [Art. 38].

16. What is the composition of the board of directors?

The board is composed of not less than 5 and not more than 15 members [Art. 38].

17. How many persons are needed to organize a cooperative?

Not less than 15 persons are needed to organize and register a cooperative. They must
also have a common bond of interest [Art. 10].
18. What qualifications are required of the persons organizing and registering
a cooperative?

They must be Filipino citizens and residents of or working in the area where the
cooperative will operate [Art. 10]. They must all be of legal age. However, minors
may organize laboratory cooperatives [see Nos. 16-18 & 66, above].

19. For what general purposes may cooperatives be organized?

In general, cooperatives may be organized for economic, social and educational

purposes [Art. 6].

20. What is life (term) of a cooperative?

A cooperative has a basic term of 50 years from the date of registration. The term may
be shortened by dissolving it [Art. 13], for example, by action of the general
assembly.

21. May the term of a cooperative be extended? For how long?

The term may be extended - for another 50 years provided that no extension may be
made earlier than 5 years prior to the original or subsequent expiry date of the term or
unless there are justifiable reasons for an earlier extension as may be determined by
the CDA [Art. 13].

22. What books, records of account and documents are required to be kept by a
cooperative?

The following books, records of account and documents are to be kept by a

cooperative at its office: (a) a copy of the Code and all other laws pertaining to
cooperatives; (b) a copy of the regulations of the CDA; (c) a copy of its articles of
cooperation and of its bylaws; (d) a register of members; (e) books of the minutes of
the meetings of the general assembly, board of directors and committees; (f) share
books, where applicable; (g) financial statements; and (h) such other documents as
may be prescribed by law or by the bylaws [Art. 53, par. 1 (a) to (h); see Nos. 211-
215].

23. Are cooperatives obliged to prepare annual reports of their status?

Yes, cooperatives are required to prepare annual reports.

24. What sanction is imposed upon a cooperative if it fails to make or submit an

annual report?

The failure of cooperative to prepare and submit an annual report is a ground for the
revocation of its certificate of registration or its authority to operate as such [Art. 54,
par. 1].

25. What are the sources of the capital of a cooperative?

The sources are: (a) the members share capital; (b) loans and borrowings including
deposits; (c) revolving capital consisting of deferred payment of
Patronage refunds or interests on share capital; and (d) subsidies, donations, legacies,
grants, aids and other assistance from local or foreign institutions whether public or
private [Art. 73].

26, What is the share capital of a cooperative?

The share capital of a cooperative is the money paid or required to be paid for the
conducts of its operations [Art. 77].

27, What is the extent of the right of members to examine cooperative records?

Members have the right to examine and copy cooperative records within reasonable
office hours on business days. Only the cost of reproduction of the documents they
copy shall be charged to them [Art. 84, par. 1; 216, 217, 346, 347].

28. What are some of the privileges of cooperative?

-To deposit sealed cash boxes or containers, documents or any valuable papers in the
public safes free of charge;
-Cooperatives organized among government employees shall enjoy the free use of any
available space in their agency;
-Preferential right to supply government institutions and agencies rice and other
grains, fish and other marine products, and other agricultural commodities produced
by their members,
-Preferential treatment in the allocation of fertilizers and in rice distribution;
-Cooperatives and their federations shall have preferential rights in management of
public market and/ or lease of public market facilities, stall or spaces; and
-Credit cooperatives and/or federation shall be entitled to loans, credit lines
rediscounting of their loan notes, and other illegible papers with the Development
Bank of the Philippines (DBP), the Philippines National Bank (PNB), and other
financial institutions except the Central Bank of the Philippines (CB).

29. What are some of the powers of a registered cooperative?

1. To sue and be sued in its cooperative name.

2. To enjoy the of corporate succession.

3. To acquire and dispose of property, both real and personal.

4. To accept and receive grants and donations.

 5. To exercise such other powers as are necessary to attain its purpose under the
Articles of Cooperation.

30. May government officials and employees be members of a cooperative?

Yes.

31. What is the Schedule of Fees in registration of cooperatives?

CDA Memorandum Circular No. 2004-05, Series of 2004 thereby amending MC No.
02-03, Series of 2002 provides the schedule of fees as follows:

The initial registration fee to be imposed shall be 1/10 of 1% of the authorized share
capital or the basic fee below whichever is higher.

TYPE OF COOPERATIVE FEES (Php)

Laboratory Cooperative No registration fee
Primary Cooperative Regular Lane 500.00
Primary Cooperative Express Lane 1,000.00
Secondary Cooperative 2,000.00
Tertiary Cooperative 3,000.00