Topic 10: Cooperative Code of the indivisible; benefitting members in proportion to

Philippines (RA 9520) their partonage of the cooperative’s bubsiness;

and, supporting other activities approved by the
I. Definition of Cooperative and membership.
Cooperative Principles
(4) Autonomy and Independence –
ART. 3. General Concepts. – A cooperative is Cooperatives are autonomous, self-help
an autonomous and duly registered association organizations controlled by their members. If
of persons, with a common bond of interest, they enter into aggreements with other
who have voluntarily joined together to achieve organizations, including government, or raise
their social, economic, and cultural needs and capital from external sources, they shall do so
aspirations by making equitable contributions on terms that ensure democratic control of their
to the capital required, patronizing their members and maintain their cooperative
products and services and accepting a fair autonomy.
share of the risks and benefits of the
(5) Education, Training and Information –
undertaking in accordance with universally
Cooperatives shall provide education and
accepted cooperative principles.
training for their members, elected and
ART. 4. Cooperative Principles. – Every appointed representatives, managers, and
cooperative shall conduct its affairs in employees, so that they can contribute
accordance with Filipino culture, good values effectively and efficiently to the development of
and experience and the universally accepted their cooperatives.
principles of cooperation which include, but are
(6) Cooperation Among Cooperatives –
not limited to, the following:
Cooperatives serve their members most
(1) Voluntary and Open Membership – effectively and strengthen the cooperative
Cooperatives are voluntary organizations, open movement by working together through local,
to all persons able to use their services and national, regional and international structures.
willing to accept the responsibilities of
(7) Concern for Community – Cooperatives
membership, without gender, social, racial,
work for the sustainable development of their
cultural, political or religious discrimination.
communities through policies approved by their
(2) Democrative Member Control – members.
Cooperatives are democratic organizations that
are controlled by their members who actively II. Organization and Registration of
participate in setting their policies and making Cooperatives
decisions. Men and women serving as elected
representatives, directors or officers are ART. 6. Purposes of Cooperatives. A
accountable to the membership. In primary cooperative may be organized and registered
cooperatives, members have equal voting for any or all of the following purposes:
rights of one-member, one-vote. Cooperatives
at other levels are organized in the same  To encourage thrift and savings
democratic manner. mobilization among the members;
 To generate funds and extend credit to
(3) Member Economic Participation – Members the members for productive and
contribute equitably to, and democratically provident purposes;
control, the capital of their cooperatives. At
 To encourage among members
least part of that capital is the common
systematic production and marketing;
property of the cooperative. They shall receive
 To provide goods and services and
limited compensation or limited interest, if any,
other requirements to the members;
on capital subscribed and paid as a condition
of membership. Members allocate surpluses  To develop expertise and skills among
for any or all of the following purposes: its members;
developing the cooperative by setting up  To acquire lands and provide housing
reserves, part of which should at least be benefits for the members;
  To insure against losses of the cooperative may reasonably and
members; necessarily require, subject to the
 To promote and advance the economic, limitations prescribed by law and the
social and educational status of the Constitution;
members;  To enter into division, merger or
 To establish, own, lease or operate consolidation, as provided in this Code;
cooperative banks, cooperative  To form subsidiary cooperatives and join
wholesale and retail complexes, federations or unions, as provided in this
insurance and agricultural/industrial Code;
processing enterprises, and public  To avail of loans, be entitled to credit
markets; and to accept and receive grants,
 To coordinate and facilitate the activities donations and assistance from foreign
of cooperatives; and domestic sources, subject to the
 To advocate for the cause of the conditions of said loans, credits, grants,
cooperative movements; donations or assistance that will not
 To ensure the viability of cooperatives undermine the autonomy of the
through the utilization of new cooperative. The Authority, upon written
technologies; request, shall provide necessary
 To encourage and promote self-help or assistance in the documentary
self-employment as an engine for requirements for the loans, credit,
economic growth and poverty grants, donations and other financial
alleviation; and support;
 To undertake any and all other activities  To avail of preferential rights granted to
for the effective and efficient cooperatives under Republic Act No.
implementation of the provisions of this 7160, otherwise known as the Local
Code. Government Code, and other laws,
particularly those in the grant of
ART. 7. Objectives and Goals of a franchises to establish, construct,
Cooperative. The primary objective of every operate and maintain ferries, wharves,
cooperative is to help improve the quality of life markets or slaughterhouses and to
of its members. lease public utilities, including access to
extension and on-site research services
ART. 9. Cooperative Powers and Capacities. and facilities related to agriculture and
A cooperative registered under this Code shall fishery activities;
have the following powers, rights and
 To organize and operate schools in
capacities:
accordance with Republic Act No. 9155,
 To the exclusive use of its registered Governance of Basic Education Act of
name, to sue and be sued; 2001 and other pertinent laws; and
 Of succession;  To exercise such other powers granted
 To amend its articles of cooperation in by this Code or necessary to carry out
accordance with the provisions of this its purpose or purposes as stated in its
Code; Articles of cooperation.
 To adopt bylaws not contrary to law, ART. 10. Organizing a Primary Cooperative.
morals or public policy, and to amend Fifteen (15) or more natural persons who are
and repeal the same in accordance with Filipino citizens, of legal age, having a common
this Code; bond of interest and are actually residing or
 To purchase, receive, take or grant, working in the intended area of operation, may
hold, convey, sell, lease, pledge, organize a primary cooperative under this
mortgage, and otherwise deal with such Code:
real and personal property as the
transaction of the lawful affairs of the
Provided, That a prospective member of a that the registration thereof has been
primary cooperative must have completed a cancelled.
Pre-Membership Education Seminar (PMES).
ART. 23. Type and Categories of
Any newly organized primary cooperative may Cooperatives. Types of Cooperatives
be registered as multipurpose cooperative only Cooperatives may fall under any of the
after compliance with the minimum following types:
requirements for multipurpose cooperatives to
be set by the Authority. 1. Credit Cooperative is one that promotes
and undertakes savings and lending
A single-purpose cooperative may transform services among its members. It generates a
into a multipurpose or may create subsidiaries common pool of funds in order to provide
only after at least two (2) years of operations. financial assistance to its members for
ART. 13. Term. A cooperative shall exist for a productive and provident purposes;
period not exceeding fifty (50) years from the 2. Consumers Cooperative is one of the
date of registration unless sooner dissolve or primary purpose of which is to procure and
unless said period is extended. The distribute commodities to members and
cooperative term, as originally stated in the non-members;
articles of cooperation, may be extended for 3. Producers Cooperative is one that
periods not exceeding fifty (50) years in any undertakes joint production whether
single instance by an amendment of the agricultural or industrial. It is formed and
articles of cooperation, in accordance with this operated by its members to undertake the
Code: production and processing of raw materials
or goods produced by its members into
Provided, That no extension can be made
finished or processed products for sale by
earlier than five (5) years prior to the original or
the cooperative to its members and non-
subsequent expiry date/dates unless there are
members. Any end product or its derivative
justifiable reasons for an earlier extension as
arising from the raw materials produced by
may be determined by the Authority.
its members, sold in the name and for the
ART. 14. Articles of Cooperation. All account of the cooperative, shall be
cooperatives applying for registration shall file deemed a product of the cooperative and its
with the Authority the articles of cooperation members;
which shall be signed by each of the organizers 4. Marketing Cooperative is one which
and acknowledged by them if natural persons, engages in the supply of production inputs
and by the chairpersons or secretaries, if to members and markets their products;
juridical persons, before a notary public. 5. Service Cooperative is one which engages
ART. 15. Bylaws. Each cooperative to be in medical and dental care, hospitalization,
registered under this Code shall adopt bylaws transportation, insurance, housing, labor,
not inconsistent with the provisions of this electric light and power, communication,
Code. The bylaws shall be filed at the same professional and other services;
time as the articles of cooperation. 6. Multipurpose Cooperative is one which
combines two (2) or more of the business
ART. 16. Registration. A cooperative formed activities of these different types of
and organized under this Code acquires cooperatives;
juridical personality from the date the Authority 7. Advocacy Cooperative is a primary
issues a certificate of registration under its cooperative which promotes and advocates
official seal. cooperativism among its members and the
ART. 17. Certificate of Registration. A public through socially-oriented projects,
certificate of registration issued by the Authority education and training, research and
under its official seal shall be conclusive communication, and other similar activities
evidence that the cooperative therein to reach out to its intended beneficiaries;
mentioned is duly registered unless it is proved
8. Agrarian Reform Cooperative is one to small vessels, as defined or classified
organized by marginal farmers majority of under the Philippine maritime laws,
which are agrarian reform beneficiaries for organized under the provisions of this
the purpose of developing an appropriate Code;
system of land tenure, land development, 19. Water Service Cooperative is one
land consolidation or land management in organized to own, operate and manage
areas covered by agrarian reform; waters systems for the provision and
9. Cooperative Bank is one organized for the distribution of potable water for its members
primary purpose of providing a wide range and their households;
of financial services to cooperatives and 20. Workers Cooperative is one organized by
their members; workers, including the self-employed, who
10. Dairy Cooperative is one whose members are at same time the members and owners
are engaged in the production of fresh milk of the enterprise. Its principal purpose is to
which may be processed and/or marketed provide employment and business
as dairy products; opportunities to its members and manage it
11. Education Cooperative is one organized in accordance with cooperative principles;
for the primary purpose of owning and and
operating licensed educational institutions 21. Other types of cooperative as may be
notwithstanding the provisions of Republic determined by the Authority.
Act No. 9155, otherwise known as the
Governance of Basic Education Act of Categories of Cooperative
2001; Cooperatives shall be categorized according to
12. Electric Cooperative is one organized for membership and territorial considerations as
the primary purposed of undertaking power follows:
generations, utilizing renewable energy (a) In terms of membership, cooperative shall
sources, including hybrid systems, be categorized into:
acquisition and operation of
subtransmission or distribution to its  Primary The members of which are
household members; natural persons;
13. Financial Service Cooperative is one  Secondary The members of which are
organized for the primary purpose of primaries; and
engaging in savings and credit services and  Tertiary The members of which are
other financial services; secondary cooperatives; and
14. Fishermen Cooperative is one organized (b) In terms of territory, cooperatives shall be
by marginalized fishermen in localities categorized according to areas of operations
whose products are marketed either as which may or may not coincide with the political
fresh or processed products; subdivisions of the country.
15. Health Services Cooperative is one
organized for the primary purpose of
providing medical, dental and other health III. Membership
services; ART. 26. Kinds of Membership. A
16. Housing Cooperative is one organized to cooperative may have two (2) kinds of
assist or provide access to housing for the members, to wit:
benefit of its regular members who actively  regular members and
participate in the savings program for  associate members.
housing. It is co-owned and controlled by its
members; A regular member is one who has complied
17. Insurance Cooperative is one engaged in with all the membership requirements and
the business of insuring life and poverty of entitled to all the rights and privileges of
cooperatives and their members; membership.
18. Transport Cooperative is one which An associate member is one who has no right
includes land and sea transportation, limited to vote nor be voted upon and shall be entitled
only to such rights and privileges as the bylaws withdrawing member shall be entitled to a
may provide: refund of his share capital contribution and
 Provided, That an associate who meets all other interests in the cooperative:
the minimum requirements of regular Provided, That such fund shall not be made
membership, continues to patronize the if upon such payment the value of the
cooperative for two (2) years, and assets of the cooperative would be less
signifies his/her intention to remain a than the aggregate amount of its debts and
member shall be considered a regular liabilities exclusive of his share capital
member. contribution.
2. The death or insanity of a member in a
primary cooperative, and the insolvency or
dissolution of a member in a secondary or
ART. 27. Government Officers and tertiary cooperative may be considered
Employees. valid grounds for termination of
membership: Provided, That in case of
 Any officer or employee of the Authority death or insanity of an agrarian reform
shall be disqualified to be elected or beneficiary-member of a cooperative, the
appointed to any position in a next-of-kin may assume the duties and
cooperative: Provided, That the responsibilities of the original member.
disqualification does not extend to a 3. Membership in the cooperative may be
cooperative organized by the officers or terminated by a vote of the majority of all
employees of the Authority. the members of the board of directors for
 All elective officials of the Government causes provided under the code.
shall be ineligible to become officers and
directors of cooperatives: Provided, That IV. Administration
the disqualification does not extend to a
party list representative being an officer ART. 32. Composition of the General
of a cooperative he or she represents; Assembly. The general assembly shall be
 Any government employee or official composed of such members who are entitled to
may, in the discharge of his duties as a vote under the articles of cooperation and
member in the cooperative, be allowed bylaws of the cooperative.
by the end of office concerned to use ART. 32. Powers of the General Assembly.
official time for attendance at the The general assembly shall be composed of
general assembly, board and committee such members who are entitled to vote under
meetings of cooperatives as well as the articles of cooperation and bylaws of the
cooperative seminars, conferences, cooperative.
workshops, technical meetings, and
training courses locally or abroad: ART. 33. Powers of the General Assembly.
Provided, That the operations of the The general assembly shall be the highest
office concerned are not adversely policy-making body of the cooperative and
affected. shall exercise such powers as are stated in this
Code, in the articles of cooperation and in the
ART. 29. Liability of Members. A member bylaws of the cooperative.
shall be liable for the debts of the cooperative
to the extent of his contribution to the share ART. 34. Meetings. A regular meeting shall be
capital of the cooperative. held annually by the general assembly on a
date fixed in the bylaws, or if not so fixed, on
ART. 30. Termination of Membership. any dated within ninety (90) days after the
1. A member of a cooperative may, for any close of each fiscal year: Provided, That notice
valid reason, withdraw his membership from of regular meetings shall be sent in writing, by
the cooperative by giving a sixty (60) day posting or publication, or through other
notice to the board of directors. Subject to electronic means to all members of record.
the bylaws of the cooperative, the
Also, whenever necessary, a special meeting  The separate existence of the
of the general assembly may be called at any constituent cooperatives shall cease,
time by a majority vote of the board of directors except that of the surviving or the
or as provided for in the bylaws. consolidated cooperative;
ART. 35. Quorum. A quorum shall consist of at  The surviving or the consolidated
least twenty-five per centum (25%) of all the cooperative shall possess al the assets,
members entitled to vote. In the case of rights, privileges, immunities and
cooperative banks, the quorum shall be as franchises of each of the constituent
provided in Article 99 of this Code. In the case cooperatives;
of electric cooperatives registered under this  The surviving or the consolidated
Code, a quorum, unless otherwise provided in cooperative shall possess all the assets,
the bylaws, shall consist of five per centum rights, privileges, immunities and
(5%) of all the members entitled to vote. franchises of each of the constituent
cooperatives; and
V. Merger and Consolidation of  The surviving or the consolidated
Cooperatives cooperative shall be responsible for all
ART. 21. Merger and Consolidation of the liabilities and obligation of each of
Cooperatives. the constituent cooperatives in the same
manner as if such surviving or
 Two (2) or more cooperatives may
consolidated cooperative had itself
merge into a single cooperative which
incurred such liabilities or obligations.
shall either be one of the constituent
Any claim, action or proceeding pending
cooperatives or the consolidated
by or against any such constituent
cooperative.
cooperatives may be prosecuted by or
 No merger or consolidation shall be against the surviving or consolidated
valid unless approved by a three-fourths cooperative, as the case may be.
(3/4) vote of all the members with voting Neither the rights of creditors nor any
rights, present and constituting a lien upon the property of any such
quorum of each of the constituent constituent cooperatives shall be
cooperatives at separate general impaired by such merger or
assembly meetings. The dissenting consolidation.
members shall have the right to exercise
their right to withdraw their membership
pursuant to Article 30. fdzg
 The Authority shall issue the guidelines
governing the procedure of merger or
consolidation of cooperatives. In any
case, the merger or consolidation shall
be effective upon the issuance of the
certificate of merger or consolidation by
the Authority.
ART. 22. Effects of Merger and
Consolidation. The merger or consolidation of
cooperatives shall have the following effects:
 The constituent cooperatives shall
become a single cooperative which, in
case of merger, shall be the surviving
cooperative, and, in case of
consolidation, shall be the consolidated
cooperative;