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R. No. 6938 Cooperative Code of the Philippines1990-2007 R. No. 9520 Philippine Cooperative Code of 20082008-presentGGGoo o vv v ee e rr r nn n ii i nn n gg g LLLaa a ww wSSSii i xx x IIImm m pp p oo o rr r tt t aa a nn n tt t PPPrr r ii i nn n cc c ii i pp p ll l ee e ss sAutonomy The government wi...

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BUSINESS LA AWS AND REGULATIONS BACHEELOR OF SCIENCE IN ACCOUNTANCY

C iddiicall Peerso Co omm mennceemeentt o of JJurrid ona alityy -issuance of Certificate of o Registration by CDA Note: Cooperative may be dissolved if it has not carried on business for 2 con nsecutive years.

G Governning g LLaw 19902007

2008present

• R.A. No. 6938 • Cooperative Code of thee Philippines • R.A. No. 9520 • Philippine Cooperative Code of 2008

V VoottinnggRRe equ ir ementtss Amendment of Articles of Cooperation (AOC) Amendment of ByLaws Power to Delegate Amendment Merger and Consolidation Termination of membership

SSiixx IIm porttanntt Pr inci ples Autonomy Duly Registered Association Common Bond of Interest

The government will not interfere in the manaagement and operations of cooper atives Cooperative Developpment Authority (CDA) –govverning body This is what makes a cooperative distinct from a corpooration

Social, Economic, Cultural and Aspirations (SECA)

Voluntary Membership Patronizing their own products Accepting a fair share of risk and benefits

Liability Term

Capital

Name Submission

 Cannot C be delegated to t Board the ଷ

A least of the members  At ସ

M vote of the BOD  Majority

RReg giisstra atiion of Coo op peera atiivess

Obtain by makin g equitable contributions. Members will buy from cooperative and pattronize their own products/servicees. Same set up principlees with a corporation.

A written approval or reccommendation from the concerned government aagency must be filed with CDA (if applicable)

C Catteg oriies Members are natural persons. Primary Secondary Members are primaries Members are secondary cooperatives. It Tertiary can be a federaation which comprises of three or moree cooperatives doing the same line of buusiness.

BBassicc R equuireem mentss Original Members

ଶ

 ଷ vote of the members BOD has no powers here B

 15 or more persons  Filipino citizens  Of legal age  Have common bond off interest  Residents in area of opeeration  Completed Pre-Membeership Education Seminar (PM MES)  Limited to the extent of ccontribution  50 years subject to exttension  No extension earlier thaan 5 years prior expiration

M Me em mber shiip Transfer of Shares Nature of Ownership

 25% of ASC is subscribedd  25% of subscription is paaid  15,000 minimum paid-up capital (100k for multi-purpose ccoop .)

Requiress approval of the applicatiion for member ship filed by the BOD B and shall exercise rights after payment of the shares  Personnal Right  Death or insanity of a member will terrminate his membership

KINDS OF MEMBERS 1. Regular members r and privileges of -Entitled to all the rights membership.

 Includes the word “Coooperative”  Economic Survey  Articles of Cooperationn  By-Laws (w/ names of thee directors) 1

BUSINESS LAWS AND REGULATIONS BACHELOR OF SCIENCE IN ACCOUNTANCY

2. Associate Members -Entitled only to such rights conferred by the bylaws. No right to vote and be voted. -May be regular members if he is:  Member for 2 continuous years  Patronizing cooperative as a member  Signifies his intention to be a regular member Note: BOD can terminate membership GROUNDS FOR TERMINATION 1. Failure to comply with his obligation (Continuous) 2. Violation of the by-laws/rules of coop. 3. Act or omission injurious or prejudicial to the interest of the welfare of the cooperative 4. Not patronizing the services of the cooperative for unreasonable period of time.



PPro ohhiib itiioonns  





DISQUALIFICATIONS OF GOV. EMPLOYEES



Apply to cooperatives with numerous and dispersed members. The required number of the members shall be at least 1,000.



An officer of the CDA is disqualified to be appointed to any position in the cooperative. An elective government official is disqualified to become officers and directors except to a partylist representative.

BBoard d oof D Dir eccttoorrss

General Rule: of the members entitled to vote in each sector, chapter or district. Exceptions:  Cooperative Banks  ½ + 1 of all members entitled to vote  ¾ of all the members entitled to vote in case of amendment of AOC and By-laws.  Electric Cooperative  5% of the members entitled to vote.



5-15 persons



Term of 2 years

TTypeess a annd d C Ca teegoorriiees 1. Credit Cooperative –promotes and undertakes savings and lending services among its members. 2. Consumers Cooperative –the primary purpose is to procure and distribute commodities. 3. Producers Cooperative –undertakes joint production whether agricultural or industrial. 4. Marketing Cooperative –engages in the supply of production inputs to members and markets their products. 5. Service Cooperatives –engages in medical, dental care, insurance and other services. 6. Advocacy Cooperative –promotes and advocates cooperativism among its members and public through education and training etc. (NGO)

C Ca piitalliizaatioonn



No member of a primary cooperative other than the cooperative itself shall own or hold

more than 10% of the share capital of the cooperative.

Q m Qu orruum



Cannot issue multiple types of common shares with different par value share. Par Value cannot be increased or decreased by way of amending it AOC and By-Laws.

LIMITATIONS ON SHARE CAPITAL HOLDINGS

RRep pr eseenttat ivve e A Assseembly 

Share Agreement –shall be issued by the Cooperative at the end of every calendar year based on the number of shares fully paid for the said period.

Issuance of Preferred Share Capital  Shall be prescribed in the By-Laws  Shall not exceed 25% of the total authorized capital. Subscription Agreement –additional subscription is allowed only when initial subscription is fully paid. 2

BUSINESS LAWS AND REGULATIONS BACHELOR OF SCIENCE IN ACCOUNTANCY

7. Multipurpose Cooperative –combines 2 or more of the business activities of these different types of cooperative. Notes:  No cooperative shall be registered as a multipurpose cooperative unless it has been in operation for at least 2 years.

C Com mmerrc ciia all V Vss. C Coo oooperra at ivve e COMMERCIAL BANK

Acceptance of Deposits Governing Agency Minimum Capital

Cooperatives with a minimum paid-up capital of 100k or as required in the feasibility study, whichever is higher may be allowed to transform into a MP Cooperative except agriculture cooperatives and agrarian reform cooperatives. 8. Agrarian Cooperatives –organized by marginal farmers majority of which are agrarian reform beneficiaries for the purpose of developing an appropriate system of land tenure, development, consolidation or management in areas covered by agrarian reform. 9. Dairy Cooperative –its members are engaged in the production of fresh milk which may be processed and/or marketed as dairy products. 10. Education Cooperative –Organized for the primary purpose of owning and operating licensed educational institutions notwithstanding the provisions of R.A. 9155(Governance of Basic Education Act of 2001). 11. Cooperative Bank –organized for the primary purpose of providing a wide range of financial services to cooperatives and their members. 12. Electric Cooperative –organized for undertaking of power generations, utilizing renewable energy sources, including hybrid systems, acquisition and operation of subtransmission or distribution to its household members.  Minimum paid up capital : P15,000  Energy Regulation Commission (ERC) shall within 45 days from the close of each fiscal year, issue a certificate to the electric coop. concerned on the total amount collected for capital contributions. 

 Members  Non-Members  SEC  BSP (supervise) 2B - 5B

COOPERATIVE BANK

 Members  CDA  BSP (supervise) 10M - 200M

13. Credit Cooperative (Financial Service) – organized for the primary purpose of engaging in savings and credit services and other financial services. 14. Fishermen Cooperative -organized by marginalized fishermen in localities whose products are marketed either as fresh or processed products. 15. Health Services Cooperative -organized for the primary purpose of providing medical, dental and other health services. 16. 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. 17. Insurance Cooperative. Engaged in the business of insuring life and property of cooperatives and their members. Failure to secure the Certificate of Authority from the Insurance Commission within two (2) years from the date of its registration with CDA shall be a ground for the revocation/cancellation of the Certificate of Registration. 18. Transport Cooperative. Includes land and sea transportation, limited to small vessels, as defined or classified under the Philippine maritime laws, organized under the provisions of this Code. 19. Water Service Cooperative. Organized to own, operate and manage waters systems for the provision and distribution of potable water for its members and their households. 3

BUSINESS LAWS AND REGULATIONS BACHELOR OF SCIENCE IN ACCOUNTANCY

20. Labor Service Cooperative -engaged in providing a specific labor, job, or service to a principal under a contracting or subcontracting arrangement.  “Cabo” a prohibited activity where a person /group of persons or a labor group, in the guise of cooperative, supplies individual members or workers to an employer, with or without any monetary or other consideration, whether in the capacity of an agent of the employer or as an ostensible independent contractor.

 Authority may cancel the cooperatives Certificate of Registration if it is proven that the cooperative has no assets, or its whereabouts is unknown, despite diligent efforts to ascertain it. These facts shall be stated in the Order of Cancellation. No winding up shall be observed.

TTax Tre eattmeenntt Transactions with: MEMBERS NON-MEMBERS BOTH

21. Workers Cooperative -organized by workers, including the self-employed, who are at the same time members and owners of the enterprise. The principal purpose is to provide employment and business opportunities to its worker members and manage it in accordance with the cooperative principles.

A diit Auud Shall be conducted by:  External Auditor  Member(good standing) of the PICPA  Accredited by BOA and CDA TWO KINDS OF AUDIT 1. Social Audit -assessment of its social impact and ethical performance vis-à-vis its stated mission. 2. Performance Audit -efficiency and effectiveness of the cooperative as a whole and its management and officer.

M Me errg gerr and dC Coonnsoli da tiioonn PROCEDURES:

Board Resolution -by each constituent cooperatives. Memorandum of Understanding -stating the creation of a joint committee to formulate the plan and proposal to merge/consol. General/Representative Assembly's Approval -of proposal plan and new AOC and By-Laws

D Disssoolluuttionn 1. 2. 3. 4.

Exempt Taxable Pro rata

Expiration of Charter Voluntary Dissolution Judicial Proceedings Dissolved by Order of the Authority

PROCEDURES:  Board of Liquidators/Trustees shall submit its Final Report. 4...