Law On Cooperatives

Question 1

What is the relevant law on this topic?

Answer 1

Republic act no. 9520 / “Philippine cooperative code of 2008”

Question 2

What is a cooperative?

Answer 2

A cooperative is an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together.

Question 3

What are the essential characteristics of cooperatives?

Answer 3

• 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

Question 4

What is a primary cooperative?

Answer 4

A cooperative whose members are natural persons.

Question 5

What is a secondary cooperative?

Answer 5

Members are primary cooperatives

Question 6

What is a tertiary cooperative?

Answer 6

Members are secondary cooperatives

Question 7

Who may organize a primary cooperative?

Answer 7

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

Question 8

Can a primary cooperative be registered as a multi-purpose cooperative?

Answer 8

Yes, as long as the primary cooperative will comply with the requirements to be set by the Cooperative Development Authority(CDA)

Question 9

Can a single-purpose cooperative become a multi-purpose cooperative?

Answer 9

Yes. A single purpose cooperative may transform into a multi purpose coop or create subsidiaries but only at least two years of operation.

Question 10

What is the extent of the liability of a duly registered cooperative?

Answer 10

Limited liability.

Question 11

What is the legal life of a cooperative?

Answer 11

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.

Question 12

What is the vole on the extension of cooperative life?

Answer 12

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.

Question 13

What is the capital requirement for a cooperative to register?

Answer 13

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

Question 14

When does a cooperative acquire juridical personality?

Answer 14

From the date the CDA issues a certificate of registration under its official seal.

Question 15

What is the legal power of a certificate of registration?

Answer 15

Conclusively shows that the cooperative is duly registered, unless registration has been cancelled.

Question 16

What are the types of cooperative membership?

Answer 16

• Regular member

* associate member

Question 17

What is a regular member?

Answer 17

Che who has complied w all the requirements and is entitled to all the privileges and rights of a membership.

Question 18

What is an associate member?

Answer 18

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.

Question 19

Who shall be disqualified to become members or officials in a cooperative?

Answer 19

• 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

Question 20

What is the extent of a members’ liability?

Answer 20

A member shall be liable of the debts of the cooperative only limited to the extent of his contribution. In other words, limited liability.

Question 21

May a member withdraw from his membership?

Answer 21

Yes, with valid reason and a 60 day notice to the BOD.

Question 22

Will a withdrawing member be entitled with refund of his capital contribution

Answer 22

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.

Question 23

Can a member be removed from the cooperative?

Answer 23

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

Question 24

What is the composition of the cooperatives’ General assembly?

Answer 24

Members who are entitled to vote under the articles of cooperation and by laws

Question 25

What are the powers of a General assembly?

Answer 25

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

Question 26

When should regular meetings of a cooperative be held?

Answer 26

Annually, on the date that is fixed in its bylaws.

Question 27

What if the bylaws do not fix a period for the regular meeting?

Answer 27

Shall be on any date within 90 days after the fiscal period closes.

Question 28

What constitutes a quorum in regular meetings?

Answer 28

At least 25% of those who are entitled to vote.

Question 29

Is the quorum same in all cooperatives?

Answer 29

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.

Question 30

What is the voting system in meetings of cooperatives?

Answer 30

• 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

Question 31

What is the composition of the BOD of a cooperative?

Answer 31

Not less than 5, but not more than 15 members

Question 32

Who elects the members of the BOD?

Answer 32

The General assembly

Question 33

What is the term of office of the BOD?

Answer 33

The term lasts for two years until their successors are duly elected and qualified or they are duly removed for cause.

Question 34

What are the powers and functions of the BOD?

Answer 34

Direction and management of the affairs rt the cooperative