Law On Cooperatives Flashcards
What is the relevant law on this topic?
Republic act no. 9520 / “Philippine cooperative code of 2008”
What is a cooperative?
A cooperative is an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together.
What are the essential characteristics of cooperatives?
- Autonomy and due registration
- Voluntary membership
- Equitable capital contributions of members
- Patronizing by members of the products and services of the cooperative
- Share in the risks and benefits
What is a primary cooperative?
A cooperative whose members are natural persons.
What is a secondary cooperative?
Members are primary cooperatives
What is a tertiary cooperative?
Members are secondary cooperatives
Who may organize a primary cooperative?
15 or more natural persons who have the following requisites:
- Filipino citizens
- Of legal age
- Have common bond of interest
- Actually residing or working in the intended are of operation
Can a primary cooperative be registered as a multi-purpose cooperative?
Yes, as long as the primary cooperative will comply with the requirements to be set by the Cooperative Development Authority(CDA)
Can a single-purpose cooperative become a multi-purpose cooperative?
Yes. A single purpose cooperative may transform into a multi purpose coop or create subsidiaries but only at least two years of operation.
What is the extent of the liability of a duly registered cooperative?
Limited liability.
What is the legal life of a cooperative?
A cooperative shall exist for a period not exceeding 50 years from the date of registration, unless sooner dissolved or unless such period is extended.
What is the vole on the extension of cooperative life?
Shall be extended in any single instance by an amendment of the articles of cooperation.
However, the extension shall not be made earlier than 5 years prior to the original or subsequent expiry date, unless there are justifiable reasons for an earlier extension.
What is the capital requirement for a cooperative to register?
Rule applies to cooperatives only, not cooperative unions.
Articles of cooperation must show bonds of the accountable officers and a sworn statement from the treasurer duly elected by the subscribers that:
* at least 25% of the authorized share capital has been subscribed;
* at least 25% of the subscribed capital has been paid up
But the paid up share capital must be at least P15,000
When does a cooperative acquire juridical personality?
From the date the CDA issues a certificate of registration under its official seal.
What is the legal power of a certificate of registration?
Conclusively shows that the cooperative is duly registered, unless registration has been cancelled.
What are the types of cooperative membership?
- Regular member
* associate member
What is a regular member?
Che who has complied w all the requirements and is entitled to all the privileges and rights of a membership.
What is an associate member?
GR: One who does not have the right to vote nor the right to be voted upon.
Exception: unless he meets minimum requirements of the regular membership, and patronizes the cooperative for two years, and signifies his intention to remain a member.
Who shall be disqualified to become members or officials in a cooperative?
- official or employee in the CDA- disqualified to be elected / appointed in any position
- elective officials in the government - ineligible to become officers and in directors
What is the extent of a members’ liability?
A member shall be liable of the debts of the cooperative only limited to the extent of his contribution. In other words, limited liability.
May a member withdraw from his membership?
Yes, with valid reason and a 60 day notice to the BOD.
Will a withdrawing member be entitled with refund of his capital contribution
Yes, but with qualifications. Subject to the bylaws of the cooperative, the member can receive a refund if the aggregate assets will not be less than the liabilities exclusive of the member’s share capital contribution.
Can a member be removed from the cooperative?
Yes. With a vote of the majority of all members of the BOD, W/ any of the ff. reasons:
- not patronized any of the services of the cooperative in an unreasonable amount of time
- not complied with any of his obligations continuously
- has acted in violation of the by-laws and rules of the coop
- for any act or omission injurious to the welfare of the coop
What is the composition of the cooperatives’ General assembly?
Members who are entitled to vote under the articles of cooperation and by laws
What are the powers of a General assembly?
The general assembly is the highest policy making body in the coop.
Specifically its powers are (which cannot be delegated):
* to determine and approve the articles of cooperation and bylaws
* to elect or appoint the members board of directors (unless it is an electric cooperative, the election shall be in accordance with its bylaws or election guidelines)
* to approve developmental plans of the cooperative
When should regular meetings of a cooperative be held?
Annually, on the date that is fixed in its bylaws.
What if the bylaws do not fix a period for the regular meeting?
Shall be on any date within 90 days after the fiscal period closes.
What constitutes a quorum in regular meetings?
At least 25% of those who are entitled to vote.
Is the quorum same in all cooperatives?
No, there are exceptions.
- electric cooperatives - 5% of the GA
- cooperative banks (whether special or regular)- 1/2 plus 1 of all the members in good standing.
- in the meetings of the BOD - 1/2 plus 1 of all the members of the BOD,1 vote per director.
What is the voting system in meetings of cooperatives?
- Primary cooperatives - each member shall have one vote
- secondary and tertiary cooperatives -1 basic vote per member plus as many incentive votes (provided in the bylaws) not exceeding 5 votes
What is the composition of the BOD of a cooperative?
Not less than 5, but not more than 15 members
Who elects the members of the BOD?
The General assembly
What is the term of office of the BOD?
The term lasts for two years until their successors are duly elected and qualified or they are duly removed for cause.
What are the powers and functions of the BOD?
Direction and management of the affairs rt the cooperative
