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Cooperative reviewer in special law, Lecture notes of Cooperative Governance

Reviewer notes in cooperative, special law

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The Cooperative Code of the Philippines
RA 6938(old), as amended by RA 9520 (revised)
Including The Cooperative Development Authority
(RA 6939(coop development act) with annotations from the
Corporation Code
Cooperative Law
The law which governs cooperatives, prior to the recent enactment of
Republic Act No. 9520 (present)("Philippine Cooperative Code of
2008"), is
Republic Act No. 6938 ("Cooperative Code of the Philippines of 1990").
Present law - RA 9520
(mas mabenta sa rural kasi mas kailnagn nila entity)
Batangas electric coop
Can exist both rural and urban
What is a Cooperative*? CPALE
A cooperative is an autonomous and duly registered association of
persons, with a common bond of interest, who have voluntarily joined
together to achieve their social, economic, and cultural needs and
aspirations by making equitable contributions to the capital
required, patronizing their products and services and accepting a fair
share of the risks and benefits of the undertaking in accordance with
universally accepted principles (Art. 3, RA 9520).
1. Autonomous- members nagdedecide NOT BOD.
2. Duly Reg to CDA- COOPERATIVE DEVELOPMENT AUTHORITY
3. common bond – pare pareho farmers
4. voluntarily – NOT compulsory accept members regardless of age..
5. equitable contributions- maximum, not exceed 10% of shares of coop
6. patronizing- success of coop(tangkilikin)
Who is the implementing agency?
The Cooperative Development Authority (CDA), under the Office of the
President created under RA No. 6839, is the agency charged with the
authority and responsibility for implementing the program
of cooperatives development. It is further responsible for the
promotion, registration, development, and evaluation of all types of
cooperatives in the country.
Corporation- SEC
COOP- CDA
What is the basic purpose of a Cooperative?
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The Cooperative Code of the Philippines  RA 6938(old), as amended by RA 9520 (revised)  Including The Cooperative Development Authority  (RA 6939(coop development act) with annotations from the Corporation Code Cooperative Law  The law which governs cooperatives, prior to the recent enactment of Republic Act No. 9520 (present)("Philippine Cooperative Code of 2008 "), is  Republic Act No. 6938 ("Cooperative Code of the Philippines of 1990").  Present law - RA 9520 (mas mabenta sa rural kasi mas kailnagn nila entity) Batangas electric coop Can exist both rural and urban What is a Cooperative? CPALE*  A cooperative is an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted principles (Art. 3, RA 9520).

  1. Autonomous - members nagdedecide NOT BOD.
  2. Duly Reg to CDA - COOPERATIVE DEVELOPMENT AUTHORITY
  3. common bond – pare pareho farmers
  4. voluntarily – NOT compulsory accept members regardless of age.. 5. equitable contributions- maximum, not exceed 10% of shares of coop
  5. patronizing- success of coop(tangkilikin) Who is the implementing agency?  The Cooperative Development Authority (CDA), under the Office of the President created under RA No. 6839, is the agency charged with the authority and responsibility for implementing the program of cooperatives development. It is further responsible for the promotion, registration, development, and evaluation of all types of cooperatives in the country. Corporation- SEC COOP- CDA What is the basic purpose of a Cooperative?

 The declared purpose of the law, among others, is to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. NOTE: basic aim/purpose-para dumami ang coop 14 Purposes of Cooperative (Art. 6) A cooperative may be organized and registered for ANY OR All of the Following purposes:

  1. To encourage thrift and savings mobilization among its members
  2. To generate funds and extend credit to the members for productive and provident purposes (credit cooperative)
  3. To encourage among members systematic production and marketing (producer and marketing coop)
  4. To provide goods and services and other requirements to the members (producer coop)
  5. To develop expertise and skills among its members (worker coop)
  6. To acquire lands and provide housing benefits for its members (agrarian)
  7. To insure against losses of its members (insurance)
  8. To promote and advance economic, social and educational status of the members (basic obj)
  9. To establish, own, lease or operate cooperative banks, cooperative wholesale and retail complexes, insurance and agricultural/industrial processing enterprises, and public markets
  10. To coordinate and facilitate the activities of cooperatives
  11. To advocate for the cause of cooperative movements
  12. To ensure the viability of cooperatives through utilization of new technologies
  13. To encourage and promote self-help or self-employment as an engine for economic growth and poverty alleviation
  14. To undertake any and all other activities for the effective and efficient implementation of the Cooperative Code (Art. 6,RA

Objectives of Cooperative The primary objective of every cooperative is to help improve the quality of life of its members, thus Cooperative shall aim to:

  1. Provide goods and services to its members to enable them to attain increased income, savings, productivity, and purchasing power, and promote among themselves equitable distribution of net surplus through maximum utilization of economies of scale, cost-sharing and risk-sharing; investments,
  2. Provide optimum social and economic benefits to its members;
  3. Teach them efficient ways of doing things in a cooperative manner;

NOTE: members ang nagdedecide

  1. Cooperation among cooperatives  Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures. Note: unite and cooperate para dumami
  2. Cooperative education (Education, Training and Information)  All cooperatives shall make provision for the education of their members, officers and employees and of the general public based on the principles of cooperation. NOTE: Kailangan may seminar pag wala bawal ka member
  3. Concern for community  Cooperatives work for the sustainable development of their communities through policies approved by their members. This is a new provision. NOTE: dito lang may principle na ganyan wala sa partnership at corp Principle of Subsidiarity“  It is enshrined in the Cooperative Code which means that there should be no government intervention as much as possible and government intervenes only when necessary. Note: Bayaan magdecide ang coop  The Principle of Transparency highlights one of the backbones of democratic societies like a cooperative. Note: members know what happening kase sila nagdededcide Definition of Terms *Articles of Cooperation  A legal document signed by the organizers stating the name, goals and objective, place of operation of the cooperative and others. Notes: yan finafile ng coop Articles of cooperation, bylaws, economic survey Authorized share capital  The mount approved by the CDA and set by the leaders and members of the cooperative to finance its business activities. By-laws of the Cooperative  The rules adopted by a cooperative for the management and regulation of its members and its activities. Note : internal rules Dynamic  Having a lot of ideas and enthusiasm; energetic and forceful; active Note : refers to member dapat active Economic feasibility  The practicality or workability of a cooperative with regards to the economic situation in community.

Note :okay ba na magtayo ng coop sa isang lugar Economic survey  A statement describing the structure, purposes and economic feasibility of the proposed cooperative. Note: isa sa finafile Paid-up shares  The number of subscribed shares paid by a member. Pledged shares  The number of shares that a member will subscribe. Thrift shares.  The careful use of money, especially by avoiding waste Member  ncludes a person either natural or juridical who adhering to the principles to set forth in this Code and in the Articles of Cooperative, has been admitted by the cooperative as member Note: revised pede na natural or jurical maging incorporator *General Assembly  shall mean the full membership of the cooperatively duly assembled for the purpose of exercising all the rights and performing all the obligation pertaining to cooperative, as provided by this Code, its articles Of cooperation and bylaws: Provided, That for cooperatives with numerous and dispersed membership, the general assembly may be composed of delegates elected by each sector, chapter or district of the cooperative in accordance with the rules and regulation of CDA. Note: lahat ng member sila ang decision body of Cooperative Full membership of authority Board of Directors  shall mean that body entrusted with the management of the affairs of the cooperative under its article of cooperation and bylaws. Note: pede baguhin ng ga ang decision ng bod Committee  shall refer to anybody entrusted with specific functions and responsibilities under the bylaws or resolution of the general assembly or the board of directors. Registration  means the operative act granting juridical personality to a proposed cooperative and is evidenced by a certificate of registration. Cooperative Development Authority

 Those which provide any type of service to its members, including but not limited to transport, info, and communication, insurance, housing, electric, health service, education, banking and savings credit Subsidiary Coop Three or more primary cooperatives doing the same line of business, organized at the municipal, provincial, city, special metropolitan political subdivision, or economic zones created by law, registered with the Authority to undertake business activities in support of its member cooperative. *Types of Cooperative 6938(old) still exsting Credit, consumer, producer, marketing, service, multipurpose Present law (New)  Advocacy, agrarian reform, coop bank, dairy coop, education coop, electric, financial service, fisherman, health service, housing, insurance, transport water service, workers, other coop may be determined *Types of Cooperatives *1. Credit Cooperative  promotes thrift and savings among its members and creates funds in order to grant loans for productive and provident purposes. It undertakes savings and lending services among its members. It generates a common pool of funds in order to provide financial assistance to its members. (utangan)

  1. Consumer Cooperative  the primary purpose is to procure and distribute commodities to members and non-members. (grocery)
  2. Producer Cooperative  undertakes joint production her agricultural or industrial.
  • raw to finished
  1. Marketing Cooperative  engages in the supply of production inputs to members, and markets their products. Diyan binebenta naproduce ng producer
  2. Service Cooperative'  engages in medical and dental care, hospitalization, transportation, insurance, housing, labor, electric light and power, communication and other services.
  3. Multi-purpose Cooperative*  combines two (2) or more of the business activities of these different types of Cooperatives. Types of Cooperatives (14) under 9520

Iba sa purpose of coop

  1. Advocacy Cooperative.  A primary cooperative which promotes and advocates cooperativism among its members and the public through socially-oriented projects, education and training, research and communication, and other similar activities to reach out to its intended beneficiaries.
  2. Agrarian Reform Cooperative.  Organized by marginal farmers majority of which are agrarian reform beneficiaries for the purpose of developing an appropriate system of land tenure, land development, land consolidation or land management in areas covered by agrarian reform.
  3. Electric Cooperative.  Organized for the primary purpose of undertaking power generations, utilizing renewable energy sources, including hybrid systems, acquisition and operation of subtransmission or distribution to its household members.
  4. Financial Service Cooperative.  One organized for the primary purpose of engaging in savings and credit services and other financial services. If credit di kasama ang other financial services unlike dito na kasama
  5. Fishermen Cooperative.  Organized by marginalized fishermen in localities whose products are marketed either as fresh or processed products;
  6. Cooperative Bank.  Organized for the primary purpose of providing a wide range of financial services to cooperatives and their members.
  7. Dairy Cooperative.  One whose members are engaged in the production of fresh milk which may be processed and/or marketed as dairy products.
  8. Education Cooperative.  Organized for the primary purpose of owning and operating licensed educational institutions notwithstanding the provisions of Republic Act No. 9155, otherwise known as the Governance of Basic Education Act of 2001.
  9. Health Cooperative.  Organized for the primary purpose of providing medical, dental and other health services.
  10. Housing Cooperative.  Organized to assist or provide access to housing for the benefit of its regular members who actively participate in the savings program for housing. It is co-owned and controlled by its members.
  11. Insurance Cooperative.  Engaged in the business of insuring life and cooperatives and their members.

 Aft. 119. Definition and Functions of Financial Service A financial service cooperative is a financial organization owned and operated by its members and authorized to provide services exclusively to its members. Its services are: a. The functions of credit cooperatives and other including multipurpose cooperatives that provide savings. and credit to their members; b. and other financial services subject to regulation by bsp Categories of Cooperatives (Art. 23)  According to membership and territory, the following are the categories of cooperatives: In terms of membership:

  1. Primary Cooperative-  the members of which are natural person of legal age;
  2. Secondary Cooperative --  the members of which are primaries
  3. Tertiary Cooperative Members of which are secondary cooperatives. Cooperatives whose members are cooperatives are called as the federation and unions. In terms of territory: cooperatives are categorized according to areas of operation, which may or may not coincide with the political subdivisions of the country It can be divided with membership or in terms of areas operation Federation of Cooperatives  Art. 5 - On the Definition of Terms, the term Federation of Cooperatives has been added which essentially means: "Three or more primary cooperatives doing the same line of business organized from the municipal to the provincial level registered with the CDA to undertake business activities in support of its members. Samahan siya ng cooperative na parepareho Functions of Federation Cooperative*
  • To carry on any cooperative enterprise authorized under Article 6 that complements augments, or supplements but does not conflict, complete with, nor supplant the business or economic activities of its members;
  1. To carry on, encourage, and assist educational and advisory work relating to its member cooperatives;
  2. To render services designed to encourage simplicity, efficiency, and economy in the conduct of the business Of its member cooperatives and to facilitate the implementation of their bookkeeping, accounting, and other systems and procedures;
  3. To print, publish, and circulate any newspaper or other publication in the interest of its member cooperatives and enterprises;
  4. To coordinate and facilitate the activities of its member cooperatives;
  1. To enter into joint ventures with national or international cooperatives of other countries in the manufacture and sale of products and/or services in the Philippines and abroad; and
  2. To perform such other functions as may be necessary to attain its objectives. *** (Art. 25) Cooperative Unions**  It is a cooperative the members of which are registered cooperatives and/or federations organized purposely to represent the interest and welfare all types of cooperatives at the provincial, city, regional, and national levels. Mas malaaki kesa sa federation Functions of Cooperative Unions*
  3. TO represent its members organization
  4. To analyze, and disseminate, economic, statistical, and other information relating to its members and to all types of cooperatives within its area of operation
  5. To sponsor studies in the economic, legal, financial, social and other phases of cooperation and publish the results thereof
  6. To promote the knowledge of cooperative principles and practices
  7. To develop cooperative movement in their respective jurisdictions
  8. TO the appropriate authorities on all questions relating to cooperative.
  9. To raise funds through membership fees, dues and contributions xxx
  10. To do and perform such other nonbusiness activities Requirement for Registration Principal/Main office or Branch Office Principal – registered head office

Pede isa lang ang tawag one person corporation Organizing a Cooperative  Any newly organized primary cooperative may be registered as multipurpose cooperative only after compliance with the minimum requirements for multipurpose cooperatives. Single-purpose cooperative*  May transform into a multipurpose or may create subsidiaries only after at least two (2) years of operations. (RA 9520, Art. 10) Economic Survey (Art. 11)  Every group of individuals or cooperatives intending to form a cooperative under this Code shall submit to the Authority a general statement describing, among others the structure and purposes of the proposed cooperative: Provided, That the structure and actual staffing pattern of the cooperative shall include a bookkeeper; Provided, further, That they shall not be allowed to operate without the necessary personnel and shall also submit an economic survey, indicating therein the (1) Area of operation, (2) The size of membership, and (3) Other pertinent data in a format provided by the Authority. Para malaman kung visible or viable What is the minimum paid-up share capital?  The minimum paid-up share capital is PhP15, OOO.OO for primary cooperatives, except for multipurpose cooperative - PIOO, OOO.OO or as required by the feasibility study whichever is higher  The par value of shares of a primary cooperative shall not exceed PhP1, OOO.  No member of primary cooperative other than cooperative itself shall own or hold more than 10% of the share capital of the cooperative. Other requirements  Should preferred share capital be provided in the by-laws, it shall not exceed 25% of the total authorized share capital of the cooperative.  Finally, for both common and preferred share capital, no fractional shares shall be issued. PRE qualification Requirements

Liability Limited liability extent only to his contribution to share capital Doctrine of Corporate Fiction. Separate and distinct personality Terms Section 13 bago Maximum period not exceeding 50 yrs Extend maximum 50 yrs Kelan eextend 5 yrs except pede mas maaga determined by Authority(CDA) Corporate term

Cooperative Bylaws Sa revised na CORPORATION LA NA MINIMUM PAID UP Sa coop Sec 15 yung Sec 46 Corpo yon Bylaws Kelan finafile ang bylaws no period both coop at corp at pageelect officers but maximum of 5 yrs for CORPORATION Registration

CERTIFICATE OF REG Iniissue sa coop Denial Registration OFFICE approved or deny 60 days decide CDA 90 days appeal 90 days decide Pres Ph deemed approved pag lagpas no action or within 60 or 90 days Anong document finafile? Article of Cooperation Ceetificate of reg inissue Certificate of Registration

Magtatake effect siya if not acted upon within 30 days simula ng bilang nung filing Contracts Executed Prior to Registration and Effects Thereof Wala pa cooperative pero may contract na is it valid? Yes Division of Cooperatives Kalimitan ay ¾ ang voting except sa ammendment Kaya division kasi nga for creation and growth Except no limitation if in fraud Who may be members? (Art. 26)  New members may only be admitted to the cooperative after undergoing Pre-Membership Education Seminar. There are two kinds of members:

  1. Regular members. Entitled to all the rights and privileges of membership, including the right to vote and be voted upon. (voting shares)
  1. Associate members, has no right to vote nor be voted upon and shall be entitled only to such rights and privileges as the bylaws may provide. (nonvoting shares) However, an associate member shall be considered a regular member if: (a) He has been a member for 2 continuous years; (b) He patronizes the cooperative as its member; and (c) He signifies his intention of becoming a regular member A member shall be liable for the debts of the cooperative to the extent of his contribution to the share capital of the cooperative Kinds of Membership  A cooperative organized by minors shall be considered a Laboratory cooperative and must be affiliated with a registered cooperative. A cooperative may assist in the organization of a laboratory cooperative of minimum 15 or more individuals who are minors who may be students or out of school minors, Filipino citizens and are actually studying or residing within the nearest area of operation at the intended guardian cooperative. (given a Certificate of Recognition) Guardian Cooperative —  it refers to a duly registered cooperative to which a laboratory cooperative is affiliated with. Can government officers and employees join a cooperative? (Art. 27) Yes, provided that:
  2. Any officer or employee of the CDA shall be disqualified to be elected or appointed to any position in a cooperative; (bawal ka magofficer pero pede member)
  3. All Elected officials of the government shall be ineligible to become officers and directors of cooperatives; and (same sa 1 pero mga mayor to)
  4. Any government employee or official may, in the discharge of his duties as member in the cooperative, use his official time provided that the operations of the office where he works are not adversely affected.
  5. That the disqualification does not extend to a party list representative being an officer of a cooperative he or she represents (di ka pede maging congressman kung hindi ka officer ng coop) Iba officer vs employee Rights and Duties of Members The rights and duties of a member are to: