Cooperatives Flashcards
what are the main cooperative principles?
- Voluntary and Open Membership
- Democrative Member Control
- Member Economic Participation
- Autonomy and Independence
- Education, Training and Information
- Cooperation among cooperatives
- Concern for Community
In _____ cooperatives, members have a voting right of ____ per member
Primary, One Vote
At least part of the capital of the cooperative should be what?
Common property
Part of the reserves from the surplus should be?
Indivisible
Cooperatives are dependent
False they are independent and autonomous
Do cooperatives offer training to their members?
Yes
What does the CDA stand for?
Cooperative Development Authority
What are the requirements when filing the articles of cooperation?
- It shall be filed to the CDA
- Signed by the organizers (If natural persons)
- Signed by the chairpersons or secretaries (if juridical person)
If the articles of cooperation are signed by their respective signees, it should be before the?
Notary Public
What should be included in the articles of cooperation
- Name
- Purpose
- Term
- Area of operation and postal address of the principal office
- Name, nationalities, pd of the registrants
- Common Bond
- List of names of the directors
- Amount of its share capital
- Type of Cooperative (P, S, T)
Every group of individuals or cooperative intending to form a cooperative shall submit to the CDA a?
general statement and economic survey
What is a necessity of the staff in a cooperative staffing pattern?
a bookkeeper
What is included in the economic survey
- Area of Operation
- Size of membership
- other pertinent data
In a primary cooperative, how many members are required?
15 or more natural persons
What are the requirements of a natural person who wants to be a member of a primary cooperative
- Filipino
- Legal Age
- Having a common bond of interest
- Are actually residing or working in the intended area of operation
What should prospective members take before becoming a member?
A Pre-membership Education Seminar (PMES)
A single purpose cooperative could be a multi purpose cooperative only after how many years?
at least 2
What is amount required for a single purpose coop to transform into a multi purpose coop?
Whichever is higher between, 100,000 paid up capital or the amount required in the feasibility study
What is the minimum subscription required?
25% of authorized share capital
The 25% requirement of subscription only applies to?
common shares, and not preferred shares
If preferred shares are included in the bylaws, it shall
not exceed 25% of the total authorize share capital
can fractional shares be issued by the cooperative
NO
What is the minimum paid-up capital required?
25% of the total subscription but not less than 15,000 in amount
Corporations, compared to cooperatives have a minimum amount of ____ paid in capital
5,000
CDA shall re-assess the minimum required paid up capital every ?
5 years
When does the cooperative gain juridical personality
upon issuance of the certificate of registration under its official seal
Applications for registration shall be disposed of within a period of? What happens if there is no decision within that period?
60 days; The registration is considered accepted unless the cause of the delay is attributable to the applicant
In case of denial, the applicant can appeal to whom? within how many days? starting from what day?
The office of the president; 90 days; from the receipt of the notice of denial
Failure of the Office of the president to act on the appeal for registration within ___ days from the filing means?
90 days; acceptance of the appeal
What words should be included in the name of the cooperative?
Cooperative, Kooperatiba, or Cooperativa
What words in the name of cooperative are discouraged? Forbidden?
Development and integrated; Inc, Corp, Company, Partnership
As a general rule federation and union in the name is prohibited? T or F
True
When can the cooperative use the words federation and union in their name?
When the members came from such institution that bears that name
What is the minimum number of members and pai up capital of secondary and tertiary cooperatives?
Secondary:
1. Federation: 10: 500,000
2. Union: 15: N/A
Tertiary:
1. Federation: 10: 5,000,000
2. Union: 15: N/A
How much is the registration fee of the proposed federation?
1/10 of 1% of the authorized share capital or the amount in the schedule of fees, whichever is higher
Can you amend the articles of cooperation and by laws? How?
Yes. 2/3 vote of all the members with voting rights
What is the term for cooperatives?
Not exceeding 50 years from the date of registration. Can be extended not exceeding 50 years. Extension cannot be filed before the last 5 years
Can a cooperative be divided?
Yes. into two or more as long as 3/4 of all the members present in the meeting agree.
Can a cooperative be merged?
Yes. Two or more cooperatives can be merged as long its approved by 3/4 of each cooperative at separate meetings for that purpose
Who owns the products from producer cooperatives?
The cooperative and its members
Primary cooperatives require members to be natural persons except
Electric Cooperative, water service cooperative, and other cooepratives
which shall refer to a cooperative the members of which are registered
cooperatives and/or federation
Union
which refers to a cooperative the members of which are primary
cooperatives doing the same line of busines
Federation
one who has complied with all the membership requirements and entitle to all the rights and privileges of membership
Regular member
is one who has no right to vote nor be voted upon and shall
be entitled only to such rights and privileges as the by-laws may provid
associate member
When can an associate member become a regular member?
When he has patronized the cooperative for 2 years, meets the minimum requirements of a regular member, and signifies his intent to join
when can a officer or employee of the CDA become a member of a cooperative?
when the cooperative is organized by the purpose of the employees of CDA
When can an elective official of the government become officers and directors of cooperative?
When a party list representative is an officer of a cooperative they are representing
What can’t an officer or employee of the CDA become in a cooperative?
Any position in a cooperative
Withdrawal of a membership shall ensue after how many days?
60 days with valid reason and given to the board of directors
In terms of monetary contributions, what is entitled to be given to dissenting members?
refund of his share capital contribution and all other interests in the
cooperative
What situation could warrant a non-return or refund of a dissenting member’s capital contribution?
If the refund would result to the cooperative’s asset to be less than their debts and liabilities exclusive his share capital contribution
What can be a valid ground for termination for primary cooperatives? what about secondary and tertiary cooperatives?
Primary Cooperatives: Death or Insanity
Secondary and Tertiary Cooperatives: Insolvency or Dissolution
What type of cooperative is the exception for termination by death or insanity? What is the procedure for it?
Agrarian Reform Cooperative; If a member is terminated due to the above ,the next of kin could shoulder the duties and responsibilities.
Termination of membership is decided by who and how many?
A majority vote of all of the Board of Directors
What are the following causes that may cause termination of membership?
- Do not patronize the services of the cooperative for an extended period of time
- Failure to comply with obligations
- Failure to follow the by-laws and rules of the cooperative
- Acts or omission injurious or prejudicial to the interest or welfare of the cooperative
The notice of the termination to the subjected member must be in what form?
Written
The decision of the board of directors must be delivered _______ and ______ or _________
written; in person; by registered mail
The terminated member by the board of directors can appeal to who? and within what period?
the general assembly, for 30 days from the receipt of the decision of the BOD
What do you call the committee that handles the appeals of termination
Appeals and Grievances Committe
Appeals and grievances committee have members’ lasting how long?
1 year
How many days have the appeals and grievances committee have upon the receipt of the appeal to make a decision?
30 days; failure to decide shall be given favor of the member. During the pendency of decision, the membership still stays.
A cooperative made by minors is called? What is the requirement for these cooperatives?
Laboratory Cooperatives; Must be affiliated with a registered cooperative
If laboratory cooperative is made from students of a school which cooperative should they be affiliated to?
A cooperative by the school they reside in or any affiliation of their choice within their area of operations
What do you call the affiliate of the laboratory cooperative?
Guardian Cooperative
If a laboratory cooperative is made from out of school youths, which should they be affiliated to?
Any cooperative of their choice within or nearest their area of operations.
What is the general assembly?
The highest policy making body of the cooperative. It is also composed of all the members of the cooperative who are entitled to vote.
What powers of the general assembly cannot be delegated?
- Amendments to the articles of cooperation and by laws
- To elect, appoint, or remove the BOD
- To approve development plans for the cooperative.
What cooperative board of directors are not elected by the general assembly?
Electric Cooperatives
A smaller body could be delegated of the powers of the GA through?
3/4 of the votes of all the members present and constituting quorum
The general meetings of the general assembly shall be made when?
annually or if not stated in the by laws any date within 90 days after the end of the fiscal year.
special meetings of the general assembly are when?
can be made anytime by the majority vote of the BOD, as long as 1 week prior to the meeting a notice in writing shall be given
A special meeting shall be called by the _______ upon ____ month after receiving a request from ___% in ___ form of the total members of the cooperative that are entitled to vote.
BOD; 1; 10%; writing
If the board fails to call a meeting from the 10% of the total voting members, what can they do?
send a request to the CDA (authority)
Notice for a meeting may be done in?
Writing, posting or publication, or electronic meanss
Quorum of the general assembly is?
25% of all total voting members
Quorum of cooperative banks is?
1/2 + 1
Quorum for electric cooperatives?
5% of all voting members
The direction and management of the affairs of the cooperatives shall be vested in a Board of Directors
Board of Directors
What is the composition of the Board of directors?
not less than 5 but not more than 15
What is the term of board of directors?
2 years
What are the powers of the BOD?
- Strategic Planning
- Direction Setting
- Policy Formulation
Can a board of director be a non-member of the cooperative?
Yes. If by the decision of the board of directors, they appoint a director an appointed person by a financial institution, solely for their technical assistance.
Can a member of the BOD attain a position related to the day to day operations and management of the cooperative?
No
A person engaged in a business similar to the cooperative could be appointed as a director
False they are disqualified
the bod of primary cooperatives are required to call for regular meetings at least?
once per month
Special meeting of the bod may be called by the?
the chairperson or majority of the board members as long as a written notice of 1 week prior to the meeting is sent
What is the quorum of the bod?
Majority of the members of the board
the members of secondary or tertiary coooperatives have how many votes?
one basic votes and as many incentive votes provided in the by laws not exceeding 5 votes
Can the members of the general assembly be voted by someone other than themselves?
Votes casted by delegates are considered votes of the member. Voting by proxy may be allowed by the by laws of a cooperative other than a primary cooperative
Can directors vote or attend by proxy?
No
Who will fill up the vacancy of the board of directors?
If by Expiration of Term: The general Assembly
If by Other causes: The Board of Directors by majority vote, if they still constitute a quorum and will be elected only for the unexpired term of the previous director
What officers of the cooperative are gathered from inside and outside of the BOD?
Inside: Chairperson, Vice-Chair
Outside: Other officers
Can a loss of confidence be grounds for removal?
Generally, No. Unless, evidenced by acts or omission causing loss of confidence in the honesty and integrity of such officer
no __________ with relationships up to the ___________ nor any person engaged in a business ____ to the cooperative nor who in any other manner has interests in conflict with the cooperative shall serve as an appointive officer
2 or more persons; 3rd level of civil degree of consanguinity or affinity; similar
How can an executive committee be created and what are its powers and duties?
Creation should be under the by-laws and appointed by the Board of Directors. The powers are delegated by the by-laws and a majority vote of all the board of directors.
What are committees required to be under the by laws in order to be created?
- Audit
- Election
- Medication and conciliation
- Ethics
What are the committees whose members are elected by the general assembly?
- Audit
- Election
Directors, officers, and committee members shall be liable to what extent for all damages or profits
Jointly and severally; solidarily
Directors, officers and committee members shall be liable jointly and severally for all
damages or profits resulting therefrom to the cooperative, members and other persons
if they:
- Willfully and knowingly vote for unlawful acts
- Guilty of gross negligence or bad faith
- Acquire any personal and pecuniary interest in conflict with their duty
When a director, officer or committee member attempts to acquire or acquires, in
violation of his duty, any interest or equity adverse to the cooperative in respect to any
matter which has been reposed in him in confidence
shall be liable for damages and accountable for double the which otherwise would have accrued to the cooperative
What is the general rule for compensation of the directors?
No compensation
What are the exceptions to the general rule of compensation?
- Fixed in the by laws
- Per Diems except:
2.1 if the year before, it was reported on a net loss
2.2 dividend rate less than the inflation rate of the year
2.3 by majority vote of the members
No additional compensation for directors aside from per diems shall be made during?
the 1st year of the cooperative
The compensation of the officers and comittee shall be determined by the?
by laws or if not the BOD
the grant of compensation to the BOD is to be approved by the?
General Assembly
After a suspension of per diems, the past per diems will be compounded
False, no recovery of per diems is allowed
contract entered into by the cooperative with one (1) or more of its directors, officers,
and committee members is?
voidable
The disloyalty of a director using his position, an opportunity which should belong to the cooperative shall be liable for damages and double the profits unless?
the act is ratified by 3/4 of all the members with voting rights, present and constituting a quorum.
If a director used his funds for acquiring an opportunity that would otherwise belong to the cooperative does not need ratification of the general assembly
False
Removal procedure of officers?
- complaints are filed to the board of directors
- officer is heard
- the majority of the board may suspend the officer
- upon finding prima facie evidence of guilt, a recommendation of removal is presented to the General Assembly
- Officer will be removed upon 3/4 of the member present
- the officer shall be heard at the assembly
How many percent of the primary cooperative sharee capital could a member hold?
not more than 10% of the total subscribed share capital
If a cooperative member dies, the heirs are entitled to the shares of the decedent except?
- the total share of the heir doesn’t exceed 10% upon receipt
- the heir qualifies and admitted as member of cooperative
If the heir of a decedent cooperative member fails to comply to be admitted to the cooperative or exceeds 10% of total share holdings, what will happen to the shares of the decedent?
it will revert to the cooperative upon paying the share value of which to the heir
The reserve fund should have the amount of?
at least 10% of the net surplus, provided that after 5 years of operation, it shall not be less than 50% of the net surplus
Can reserve fund be used for investment?
none, other than those allowed by ra 9520
What is done to the reserve fund after dissolution of the cooperative?
- Create a usufructuary trust fund
- To donate to the community where it operates
The general assemble can decrease the amount allocated to the reserve fund?
When it becomes more than the share capital
The amount to be included in the education training fund?
not more than 10% of net surplus
The allocation of the education and training fund?
half is for annual education and training, and half is remitted to a union or federation chose by the cooperative of na dapat member siya
Upon dissolution, the education and training fund will be credited to
the education and training fund of the chosen union or federation
The amount of community development fund should be??
not less than 3%
Optional fund amounts to?
not exceeding 7% of the net sirplus
How is a voluntary dissolution done?
a majority vote of the BOD, and affirmative vote of 3/4 of all the members present on a meeting called by the directors
How is the notice of voluntary dissolution done?
the time, place and object of the meeting is published for three consecutive weeks in a newspaper published located in the principal office of the cooperative or if none, general circulation in the PH
The notice is sent to each member of record by which form?
Registered mail or by personal delivery 30 days prior to meeting
The voluntary dissolution where creditors are affected a petition is created are signed by, verified by?
majority of the bod or other officers; chairperson or board secretary or one of tis directors
In a voluntary dissolution where creditors are affected, the CDA shall fix a date?
not less than 30 days or more than 60 days after the order
In a voluntary dissolution where creditors are affected, before the fixed data a copy of the order is published when?
3 consecutive weeks at least once a week
In a voluntary dissolution where creditors are affected, the copy of the order is posted when and where?
in three public places, for three consecutive weeks
how many days is the expiration notice to file objections in a voluntary dissolution where creditors are affected
5
What is the order of dissolution?
- Assets and Liabilities
- Claim of the Creditor
- Number of members
- The interest of the members
There are two ways for involuntary dissolution by court
- Violation of law, regulation or bylaws
- Insolvency
What are the grounds for involuntary dissolution by the CDA
- Registration by Fraud
- Illegal purpose
- Investment of Reserve fund
- Failure to cooperate
- Not meeting minimum members
Dissolution by Failure to Organize and Operate
- Not operate within 2 years after registration
- Not operating for 2 consecutive years
How many years can a cooperative exist after dissolution?
3 years after it is dissolved
