Republic of the Philippines
Congress of the Philippines
Metro Manila
Congress of the Philippines
Metro Manila
Fourteenth Congress
Second Regular Session
Second Regular Session
Republic Act No. 9520 February 17, 2009
AN ACT AMENDING THE COOPERATIVE
CODE OF THE PHILIPPINES TO BE KNOWN AS THE "PHILIPPINE COOPERATIVE CODE OF
2008"
Be it enacted by the Senate and
House of Representatives of the Philippines in Congress assembled::
SECTION 1. Articles 1, 2, 3, 4 and 5 of Chapter 1 on General Concepts
and Principles of Republic Act No. 6938, otherwise known as the
"Cooperative Code of the Philippines," are hereby amended to read as
follows:
CHAPTER I
GENERAL CONCEPTS AND PRINCIPLES
GENERAL CONCEPTS AND PRINCIPLES
"ARTICLE 1. Title. - This Act shall be
known as the "Philippine Cooperative Code of 2008".
"ART. 2. Declaration of Policy.- It is
the declared policy of the State 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.
The State shall encourage the private sector to undertake the actual formation
and organization of cooperatives and shall create an atmosphere that is
conducive to the growth and development of these cooperatives.
"Toward this end, the Government and all its
branches, subdivisions, instrumentalities and agencies shall ensure the
provision of technical guidance, financial assistance and other services to
enable said cooperatives to develop into viable and responsive economic
enterprises and thereby bring about a strong cooperative movement that is free
from any conditions that might infringe upon the autonomy or organizational
integrity of cooperatives.
"Further, the State recognizes the principle
of subsidiarity under which the cooperative sector will initiate and regulate
within its own ranks the promotion and organization, training and reserach,
audit and support services relative to cooperatives with government assistance
where necessary.
"ART. 3. General Concepts. - 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 cooperative principles.
"ART. 4. Cooperative Principles. -
Every cooperative shall conduct its affairs in accordance with Filipino
culture, good values and experience and the universally accepted principles of
cooperation which include, but are not limited to, the following:
"(1) Voluntary and Open Membership -
Cooperatives are voluntary organizations, open to all persons able to use their
services and willing to accept the responsibilities of membership, without
gender, social, racial, cultural, political or religious discrimination.
"(2) Democrative Member Control -
Cooperatives are democratic organizations that are controlled by their members
who actively participate in setting their policies and making decisions. Men
and women serving as elected representatives, directors or officers are
accountable to the membership. In primary cooperatives, members have equal
voting rights of one-member, one-vote. Cooperatives at other levels are
organized in the same democratic manner.
"(3) Member Economic Participation -
Members contribute equitably to, and democratically control, the capital of
their cooperatives. At least part of that capital is the common property of the
cooperative. They shall receive limited compensation or limited interest, if
any, on capital subscribed and paid as a condition of membership. Members
allocate surpluses for any or all of the following purposes: developing the
cooperative by setting up reserves, part of which should at least be
indivisible; benefitting members in proportion to their partonage of the
cooperative's bubsiness; and, supporting other activities approved by the
membership.
"(4) Autonomy and Independence -
Cooperatives are autonomous, self-help organizations controlled by their
members. If they enter into aggreements with other organizations, including
government, or raise capital from external sources, they shall do so on terms
that ensure democratic control of their members and maintain their cooperative
autonomy.
"(5) Education, Training and Information
- Cooperatives shall provide education and training for their members, elected
and appointed representatives, managers, and employees, so that they can
contribute effectively and efficiently to the development of their
cooperatives.
"(6) Cooperation Among Cooperatives -
Cooperatives serve their members most effectively and strengthen the cooperative
movement by working together through local, national, regional and
international structures.
(7) Concern for Community - Cooperatives
work for the sustainable development of their communities through policies
approved by their members.
"ART. 5. Definition of Terms. – The
following terms shall mean:
"(1) Member includes a person either
natural or juridical who adhering to the principles set forth in this Code and
in the Articles of Cooperative, has been admitted by the cooperative as member;
"(2) General Assembly shall mean the
full membership of the cooperative duly assembled for the purpose of exercising
all the rights and performing all the obligations pertaining to cooperatives,
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 regulations of the
Cooperative Development Authority;
"(3) Board of Directors shall mean
that body entrusted with the management of the affairs of the cooperative under
its articles of cooperation and bylaws;
"(4) Committee shall refer to any body
entrusted with specific functions and responsibilities under the bylaws or
resolution of the general assembly or the board of directors;
"(5) Articles of Cooperation means the
articles of cooperation registered under this Code and includes a registered
amendment thereof;
"(6) Bylaws means the bylaws
registered under this Code and includes any registered amendment thereof;
"(7) Registration means the operative
act granting juridical personality to a proposed cooperative and is evidenced
by a certificate of registration;
"(8) Cooperative Development Authority
refers to the government agency in charge of the registration and regulation of
cooperatives as such hereinafter referred to s the Authority;
"(9) Universally Accepted Principles
means that body of cooperative principles adhered to worldwide by cooperatives;
"(10) Representative Assembly means
the full membership of a body of representatives elected by each of the
sectors, chapter or district o the cooperative duly assembled for the purpose
of exercising such powers lawfully delegated unto them by the general assembly
in accordance with its bylaws;
"(11) Officers of the Cooperative
shall include the members of the board of directors, members of the different
committee created by the general assembly, general manager or chief executive
officer, secretary, treasurer and members holding other positions as may be
provided for in their bylaws;
"(12) Social Audit is a procedure
wherein the cooperative assesses its social impact and ethical performance
vis-à-vis its stated mission, vision, goals and code of social responsibility
for cooperatives to be established by the Authority in consultation with the
cooperative sector. It enables the cooperative to develop a process whereby it
can account for its social performance and evaluate its impact in the community
and be accountable for its decisions and actions to its regular members;
"(13) Performance Audit shall refer to
an audit on the efficiency and effectiveness of the cooperative as a whole; its
management and officers; and its various responsibility centers as basis for
improving individual team or overall performance and for objectively informing
the general membership on such performance;
"(14) A Single-Line or Single-Purpose
Cooperative shall include cooperative undertaking activities which are
related to its main line of business or purpose;
"(15) Service Cooperatives are those
which provide any type of service to its members, including but not limited to,
transport, information and communication, insurance, housing, electric, health
services, education, banking, and savings and credit;
"(16) Subsidiary Cooperative refers to
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-cooperatives."
SEC. 2. Articles 6, 7, 9, 10, 11, 12, 13, 14, 16, 17, 18, 20, 21, 23,
24 and 25 of Chapter II on Organization and Registration of the same Code are
hereby amended to read as follows:
CHAPTER II
ORGANIZATION AND REGISTRATION
ORGANIZATION AND REGISTRATION
"ART. 6. Purposes of Cooperatives. – A
cooperative may be organized and registered for any or all of the following
purposes:
"(1) To encourage thrift and savings
mobilization among the members;
"(2) To generate funds and extend credit to
the members for productive and provident purposes;
"(3) To encourage among members systematic
production and marketing;
"(4) To provide goods and services and other
requirements to the members;
"(5) To develop expertise and skills among
its members;
"(6) To acquire lands and provide housing
benefits for the members;
"(7) To insure against losses of the members;
"(8) To promote and advance the economic,
social and educational status of the members;
"(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 the
cooperative movements;
"(12) To ensure the viability of cooperatives
through the utilization of new technologies;
"(13) To encourage and promote self-help or
self-employment as an engine for economic growth and poverty alleviation; and
"(14) To undertake any and all other
activities for the effective and efficient implementation of the provisions of
this Code.
"ART. 7. Objectives and Goals of a
Cooperative. – The primary objective of every cooperative is to help
improve the quality of life of its members. Towards this end, the cooperative
shall aim to:
"(a) Provide goods and services to its members
to enable them to attain increased income, savings, investments, 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;
"(b) Provide optimum social and economic
benefits to its members;
"(c) Teach them efficient ways of doing
things in a cooperative manner;
"(d) Propagate cooperative practices and new
ideas in business and management;
"(e) Allow the lower income and less privileged
groups to increase their ownership in the wealth of the nation; and
"(f) Cooperate with the government, other
cooperatives and people-oriented organizations to further the attainment of any
of the foregoing objectives.
"ART. 8. Cooperatives Not in Restraint of
Trade. – No cooperative or method or act thereof which complies with this
Code shall be deemed a conspiracy or combination in restraint of trade or an
illegal monopoly, or an attempt to lessen competition or fix prices arbitrarily
in violation of any laws of the Philippines.
"ART. 9. Cooperative Powers and Capacities. –
A cooperative registered under this Code shall have the following powers,
rights and capacities:
"(1) To the exclusive use of its registered
name, to sue and be sued;
"(2) Of succession;
"(3) To amend its articles of cooperation in
accordance with the provisions of this Code;
"(4) To adopt bylaws not contrary to law,
morals or public policy, and to amend and repeal the same in accordance with
this Code;
"(5) To purchase, receive, take or grant,
hold, convey, sell, lease, pledge, mortgage, and otherwise deal with such real
and personal property as the transaction of the lawful affairs of the
cooperative may reasonably and necessarily require, subject to the limitations
prescribed by law and the Constitution;
"(6) To enter into division, merger or
consolidation, as provided in this Code;
"(7) To form subsidiary cooperatives and join
federations or unions, as provided in this Code;
"(8) To avail of loans, be entitled to credit
and to accept and receive grants, donations and assistance from foreign and
domestic sources, subject to the conditions of said loans, credits, grants,
donations or assistance that will not undermine the autonomy of the
cooperative. The Authority, upon written request, shall provide necessary
assistance in the documentary requirements for the loans, credit, grants,
donations and other financial support;
"(9) To avail of preferential rights granted
to cooperatives under Republic Act No. 7160, otherwise known as the Local
Government Code, and other laws, particularly those in the grant of franchises
to establish, construct, operate and maintain ferries, wharves, markets or
slaughterhouses and to lease public utilities, including access to extension
and on-site research services and facilities related to agriculture and fishery
activities;
"(10) To organize and operate schools in
accordance with Republic Act No. 9155, Governance of Basic Education Act of
2001 and other pertinent laws; and
"(11) To exercise such other powers granted
by this Code or necessary to carry out its purpose or purposes as stated in its
Articles of cooperation.
"ART. 10. Organizing a Primary Cooperative.
– Fifteen (15) or more natural persons who are Filipino citizens, of legal age,
having a common bond of interest and are actually residing or working in the
intended area of operation, may organize a primary cooperative under this Code:
Provided, That a prospective member of a primary cooperative must have
completed a Pre-Membership Education Seminar (PMES).
"Any newly organized primary cooperative may
be registered as multipurpose cooperative only after compliance with the
minimum requirements for multipurpose cooperatives to be set by the Authority.
A single-purpose cooperative may transform into a multipurpose or may create
subsidiaries only after at least two (2) years of operations.
"ART. 11. Economic Survey. - 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 area of operation, the size of membership, and
other pertinent data in a format provided by the Authority.
"ART. 12. Liability. – A cooperative
duly registered under this Code shall have limited liability.
"ART. 13. Term. – A cooperative shall
exist for a period not exceeding fifty (50) years from the date of registration
unless sooner dissolve or unless said period is extended. The cooperative term,
as originally stated in the articles of cooperation, may be extended for
periods not exceeding fifty (50) years in any single instance by an amendment
of the articles of cooperation, in accordance with this Code: Provided,
That no extension can be made earlier than five (5) years prior to the original
or subsequent expiry date/dates unless there are justifiable reasons for an
earlier extension as may be determined by the Authority.
"ART. 14. Articles of Cooperation. –
(1) All cooperatives applying for registration shall file with the Authority
the articles of cooperation which shall be signed by each of the organizers and
acknowledged by them if natural persons, and by the chairpersons or
secretaries, if juridical persons, before a notary public.
"(2) The articles of cooperation shall set
forth:
"(a) The name of the cooperative which shall
include the word cooperative;
"(b) The purpose or purposes and scope of
business for which the cooperative is to be registered;
"(c) The term of existence of the
cooperative;
"(d) The area of operation and the postal
addresses of its principal office;
"(e) The names, nationality, and the postal
addresses of the registrants;
"(f) The common bond of membership;
"(g) The list of names of the directors who
shall manage the cooperative; and
"(h) The amount of its share capital, the
names and residences of its contributors and a statement of whether the
cooperative is primary, secondary or tertiary in accordance with Article 23
hereof.
"(3) The articles of cooperation may also
contain any other provisions not inconsistent with this Code or any related
law.
"(4) Four (4) copies each of the proposed
articles of cooperation, bylaws, and the general statement required under
Article 11 of this Code shall be submitted to the Authority.
"(5) No cooperative, other than a cooperative
union as described under Article 25 hereof, shall be registered unless the
articles of cooperation is accompanied with the bonds of the accountable
officers and a sworn statements of the treasurer elected by the subscribers
showing that at least twenty-five per centum (25%) of the authorized
share capital has been subscribed and at least twenty-five per centum
(25%) of the total subscription has been paid: Provided, That in no case
shall the paid-up share capital be less than Fifteen thousand pesos
(P15,000.00).
"The Authority shall periodically assess the
required paid-up share capital and may increase it every five (5) years when
necessary upon consultation with the cooperative sector and the National
Economic and Development Authority (NEDA).
"ART. 15. Bylaws. – (1) Each
cooperative to be registered under this Code shall adopt bylaws not
inconsistent with the provisions of this Code. The bylaws shall be filed at the
same time as the articles of cooperation.
"(2) The bylaws of each cooperative shall
provide:
"(a) The qualifications for admission to
membership and the payment to be made or interest to be acquired as a
conditions for the exercise of the right of membership;
"(b) The rights and liabilities of
membership;
"(c) The circumstances under which membership
is acquired, maintained and lost;
"(d) The procedure to be followed in cases of
termination of membership;
"(e) The conditions under which the transfer
of a share or interest of the members shall be permitted;
"(f) The rules and procedures on the agenda,
time, place and manner of calling, convening, conducting meetings, quorum
requirements, voting systems, and other matters relative to the business
affairs of the general assembly, board of directors, and committees;
"(g) The general conduct of the affairs of
the cooperative, including the powers and duties of the general assembly, the
board of directors, committees and the officers, and their qualifications and
disqualifications;
"(h) The manner in which the capital, may be
raised and the purposes for which it can be utilized;
"(i) The mode of custody and of investment of
net surplus;
"(j) The accounting and auditing systems;
"(k) The manner of loaning and borrowing
including the limitations thereof;
"(l) The method of distribution of net
surplus;
"(m) The manner of adopting, amending,
repealing, and abrogating bylaws;
"(n) A conciliation or mediation mechanism for
the amicable settlement of disputes among members, directors, officers and
committee members of the cooperative; and
"(o) Other matters incident to the purposes
and activities of the cooperative.
"ART. 16. Registration. – A
cooperative formed and organized under this Code acquires juridical personality
from the date the Authority issues a certificate of registration under its
official seal. All applications for registration shall be finally disposed of
by the Authority within a period of sixty (60) days from the filing thereof,
otherwise the application is deemed approved, unless the cause of the delay is
attributable to the applicant: Provided, That in case of a denial of the
application for registration, an appeal shall lie with the Office of the President
within ninety (90) days from receipt of notice of such denial: Provided,
further, That failure of the Office of the President to act on the
appeal within ninety (90) days from the filing thereof shall mean approval of
said application.
"ART. 17. Certificate of Registration.
– A certificate of registration issued by the Authority under its official seal
shall be conclusive evidence that the cooperative therein mentioned is duly
registered unless it is proved that the registration thereof has been cancelled.
"ART. 18. Amendment of Articles of
Cooperation and Bylaws. – Unless otherwise prescribed by this Code and for
legitimate purposes, any provision or matter stated in the articles of
cooperation and by laws may be amended by two-thirds (2/3) vote of all the
members with voting rights, without prejudice to the right of the dissenting
members to exercise their right to withdraw their membership under Article 30.
Both the original and amended articles and/or
bylaws shall contain all provisions required by law to be set out in the
articles of cooperation and by laws. Amendments shall be indicated by
underscoring or otherwise appropriately indicating the change or changes made
and a copy of the amended articles or amended bylaws duly certified under oath
by the cooperative secretary and a majority of the directors stating the fact
that said amendment or amendments to the articles of cooperation and/or bylaws
have been duly approved by the required vote of the members. All amendments to
the article of cooperation and/or bylaws shall be submitted to the Authority.
The amendments shall take effect upon its approval by the authority or within
thirty (30) days from the date of filing thereof if not acted upon by the
Authority for a cause not attributable to the cooperative.
"ART. 19. Contracts Executed Prior to
Registration and Effects Thereof. – Contracts executed between private
persons and cooperatives prior to the registration of the cooperative shall
remain valid and binding between the parties and upon registration of the
cooperative. A formal written contract shall be adopted and made in the
cooperative’s name or on its behalf prior to its registration.
"ART. 20. Division of Cooperatives. –
Any registered cooperative may, by a resolution approved by a vote of three-fourths
(3/4) of all the members with voting rights, present and constituting a quorum,
resolve to divide itself into the two (2) or more cooperatives. The procedure
for such division shall be prescribed in the regulations of the Authority: Provided,
That all the requirements set forth in this Code have been complied with by the
new cooperatives: Provided, further, That no division of a
cooperative in fraud of creditors shall be valid.
"ART. 21. Merger and Consolidation of
Cooperatives. – (1) Two (2) or more cooperatives may merge into a single
cooperative which shall either be one of the constituent cooperatives or the
consolidated cooperative.
"(2) No merger or consolidation shall be valid
unless approved by a three-fourths (3/4) vote of all the members with voting
rights, present and constituting a quorum of each of the constituent
cooperatives at separate general assembly meetings. The dissenting members
shall have the right to exercise their right to withdraw their membership
pursuant to Article 30.
"(3) The Authority shall issue the guidelines
governing the procedure of merger or consolidation of cooperatives. In any
case, the 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:
"(1) 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;
"(2) The separate existence of the
constituent cooperatives shall cease, except that of the surviving or the
consolidated cooperative;
"(3) The surviving or the consolidated
cooperative shall possess al the assets, rights, privileges, immunities and
franchises of each of the constituent cooperatives;
"(4) The surviving or the consolidated
cooperative shall possess all the assets, rights, privileges, immunities and
franchises of each of the constituent cooperatives; and
"(5) The surviving or the consolidated
cooperative shall be responsible for all the liabilities and obligation of each
of the constituent cooperatives in the same manner as if such surviving or
consolidated cooperative had itself incurred such liabilities or obligations.
Any claim, action or proceeding pending by or against any such constituent
cooperatives may be prosecuted by or against the surviving or consolidated cooperative,
as the case may be. Neither the rights of creditors nor any lien upon the
property of any such constituent cooperatives shall be impaired by such merger
or consolidation.
"ART. 23. Type and Categories of
Cooperatives. – (1) Types of Cooperatives – Cooperatives may fall under any
of the following types:
"(a) Credit Cooperative is one that
promotes and undertakes savings and lending services among its members. It
generates a common pool of funds in order to provide financial assistance to
its members for productive and provident purposes;
"(b) Consumers Cooperative is one of
the primary purpose of which is to procure and distribute commodities to
members and non-members;
"(c) Producers Cooperative is one that
undertakes joint production whether agricultural or industrial. It is formed
and operated by its members to undertake the production and processing of raw
materials or goods produced by its members into finished or processed products
for sale by the cooperative to its members and non-members. Any end product or
its derivative arising from the raw materials produced by its members, sold in
the name and for the account of the cooperative, shall be deemed a product of
the cooperative and its members;
"(d) Marketing Cooperative is one
which engages in the supply of production inputs to members and markets their
products;
"(e) Service Cooperative is one which
engages in medical and dental care, hospitalization, transportation, insurance,
housing, labor, electric light and power, communication, professional and other
services;
"(f) Multipurpose Cooperative is one
which combines two (2) or more of the business activities of these different
types of cooperatives;
"(g) Advocacy Cooperative is 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;
"(h) Agrarian Reform Cooperative is
one 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;
"(i) Cooperative Bank is one organized
for the primary purpose of providing a wide range of financial services to cooperatives
and their members;
"(j) Dairy Cooperative is one whose
members are engaged in the production of fresh milk which may be processed
and/or marketed as dairy products;
"(k) Education Cooperative is one
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;
"(l) Electric Cooperative is one
organized for the primary purposed of undertaking power generations, utilizing
renewable energy sources, including hybrid systems, acquisition and operation
of subtransmission or distribution to its household members;
"(m) Financial Service Cooperative is
one organized for the primary purpose of engaging in savings and credit
services and other financial services;
"(n) Fishermen Cooperative is one
organized by marginalized fishermen in localities whose products are marketed
either as fresh or processed products;
"(o) Health Services Cooperative is
one organized for the primary purpose of providing medical, dental and other
health services;
"(p) Housing Cooperative is one
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;
"(q) Insurance Cooperative is one
engaged in the business of insuring life and poverty of cooperatives and their
members;
"(r) Transport Cooperative is one
which 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;
"(s) Water Service Cooperative is one
organized to own, operate and manage waters systems for the provision and
distribution of potable water for its members and their households;
"(t) Workers Cooperative is one
organized by workers, including the self-employed, who are at same time the
members and owners of the enterprise. Its principal purpose is to provide
employment and business opportunities to its members and manage it in
accordance with cooperative principles; and
"(u) Other types of cooperative as may be
determined by the Authority.
"(2) Categories of Cooperative –
Cooperatives shall be categorized according to membership and territorial
considerations as follows:
"(a) In terms of membership, cooperative
shall be categorized into:
"(i) Primary – The members of which
are natural persons;
"(ii) Secondary – The members of which
are primaries; and
"(iii) Tertiary – The members of which
are secondary cooperatives; and
"(b) In terms of territory, cooperatives
shall be categorized according to areas of operations which may or may not
coincide with the political subdivisions of the country.
"ART. 24. Functions of a Federation of
Cooperatives. – A federation of cooperatives shall undertake the following
functions:
"(a) 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;
"(b) To carry on, encourage, and assist
educational and advisory work relating to its member cooperatives;
"(c) 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;
"(d) To print, publish, and circulate any
newspaper or other publication in the interest of its member cooperatives and
enterprises;
"(e) To coordinate and facilitate the
activities of its member cooperatives;
"(f) 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
"(g) To perform such other functions as may
be necessary to attain its objectives.
"A federation of cooperatives may be
registered by carrying out the formalities for registration of a cooperative.
"Registered cooperatives may organize a
federation according to the type of business activity engaged in by the
cooperatives.
"ART. 25. Cooperative Unions. –
Registered cooperatives and federations at the appropriate levels may organize
or join cooperative unions to represent the interest and welfare of all types
of cooperatives at the provincial, city, regional, and national levels.
Cooperative unions may have the following purposes:
"(a) To represent its member organizations;
"(b) To acquire, analyze, and disseminate,
economic, statistical, and other information relating to its members and to all
types of cooperatives within its area of operation;
"(c) To sponsor studies in the economic,
legal, financial, social and other phases of cooperation, and publish the
results thereof;
"(d) To promote the knowledge of cooperative
principles and practices;
"(e) To develop the cooperative movement in
their respective jurisdictions;
"(f) To advise the appropriate authorities on
all questions relating to cooperatives;
"(g) To raise funds through membership fees,
dues and contributions, donations, and subsidies from local and foreign sources
whether private or government; and
"(h) To do and perform such other
non-business activities as may be necessary to attain the foregoing objectives.
"Cooperative unions may assist the national
and local governments in the latter’s development activities in their
respective jurisdictions."
SEC. 3. Articles 26, 27, 28, 29, 30, 31 and 32 of Chapter III on
Membership of the same Code are hereby renumbered and amended to read, as
follows:
CHAPTER III
MEMBERSHIP
MEMBERSHIP
"ART. 26. Kinds of Membership. – A
cooperative may have two (2) kinds of members, to wit: (1) regular members and
(2) associate members.
"A regular member is one who has complied with
all the membership requirements and entitled to all the rights and privileges
of membership. An associate member is one who has no right to vote nor be voted
upon and shall be entitled only to such rights and privileges as the bylaws may
provide: Provided, That an associate who meets the minimum requirements
of regular membership, continues to patronize the cooperative for two (2)
years, and signifies his/her intention to remain a member shall be considered a
regular member.
"A cooperative organized by minors shall be
considered a laboratory cooperative and must be affiliated with a registered
cooperative. A laboratory cooperative shall be governed by special guidelines
to be promulgated by the Authority.
"ART. 27. Government Officers and Employees.
– (1) Any officer or employee of the Authority shall be disqualified to be
elected or appointed to any position in a cooperative: Provided, That
the disqualification does not extend to a cooperative organized by the officers
or employees of the Authority.
"(2) All elective officials of the Government
shall be ineligible to become officers and directors of cooperatives: Provided,
That the disqualification does not extend to a party list representative being
an officer of a cooperative he or she represents; and
"(3) Any government employee or official may,
in the discharge of is duties as a member in the cooperative, be allowed by the
end of office concerned to use official time for attendance at the general
assembly, board and committee meetings of cooperatives as well as cooperative
seminars, conferences, workshops, technical meetings, and training courses
locally or abroad: Provided, That the operations of the office concerned are
not adversely affected.
"ART. 28. Application. – An applicant
for membership shall be deemed a member after approval of his membership by the
board of directors and shall exercise the rights of member after having made
such payments to the cooperative in respect to membership or acquired interest
in the cooperative as may be prescribed in the bylaws. In case membership is
refused or denied by the board of directors, an appeal may be made to the
general assembly and the latter’s decision shall be final. For this purpose,
the general assembly may opt to create an appeal and grievance committee, the
members of which shall serve for a period of one (1) year and shall decide
appeals on membership application within thirty (30) days upon receipt thereof.
If the committee fails to decide within the prescribed period, the appeal is
deemed approved in favor of the applicant.
"ART. 29. Liability of Members. – A
member shall be liable for the debts of the cooperative to the extent of his
contribution to the share capital of the cooperative.
"ART. 30. Termination of Membership. –
(1) A member of a cooperative may, for any valid reason, withdraw his
membership from the cooperative by giving a sixty (60) day notice to the board
of directors. Subject to the bylaws of the cooperative, the withdrawing member
shall be entitled to a refund of his share capital contribution and all other
interests in the cooperative: Provided, That such fund shall not be made
if upon such payment the value of the assets of the cooperative would be less
than the aggregate amount of its debts and liabilities exclusive of his share
capital 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 tertiary cooperative may be considered valid grounds for termination
of membership: Provided, That in case of death or insanity of an agrarian
reform beneficiary-member of a cooperative, the next-of-kin may assume the
duties and responsibilities of the original member
"(3) Membership in the cooperative may be
terminated by a vote of the majority of all the members of the board of
directors for any of the following causes:
"(a) When a member has not patronized any of
the services of the cooperative for an unreasonable period of time as may be
previously determined by the board of directors;
"(b) When a member has continuously failed to
comply with his obligations;
"(c) When a member has acted in violation of
the bylaws and the rules of the cooperative; and
"(d) For any act or omission injurious or
prejudicial to the interest or the welfare of the cooperative.
"A member whose membership the board of
directors may wish to terminate shall be informed of such intended action in
writing and shall be given an opportunity to be heard before the said board
makes its decision. The decision of the board shall be in writing and shall be
communicated in person or by registered mail to said member and shall be
appealable within thirty (30) days from receipt thereof to the general assembly
whose decision shall be final. The general assembly may create an appeal and
grievance committee whose members shall serve for a period of one (1) year and
shall decide appeals on membership termination. The committee is given thirty
(30) days from receipt thereof to decide on the appeal. Failure to decide
within the prescribed period, the appeal is deemed approved in favor of the
member. Pending a decision by the general assembly, the membership remains in
force.
"ART. 31. Refund of Interests. – All
sums computed in accordance with the bylaws to be due from a cooperative to a
former member shall be paid to him either by the cooperative or by the approved
transferee, as the case may be, in accordance with this Code."
SEC. 4. Articles 33, 34, 35, 36, 37, 38, 39, 40, 42, 42, 43, 44, 45,
46, 47, 48, 49, 50 and 51 of Chapter IV on Administration of the same Code are
hereby renumbered and amended to read, as follows:
CHAPTER IV
ADMINISTRATION
ADMINISTRATION
"ART. 32. Composition of the General
Assembly. – The general assembly shall be composed of such members who are
entitled to vote under the articles of cooperation and bylaws of the
cooperative.
"ART. 32. Powers of the General Assembly.
– The general assembly shall be composed of such members who are entitled to
vote under the articles of cooperation and bylaws of the cooperative.
"ART. 33. Powers of the General Assembly.
– The general assembly shall be the highest policy-making body of the
cooperative and shall exercise such powers as are stated in this Code, in the
articles of cooperation and in the bylaws of the cooperative. The general
assembly shall have the following exclusive powers which cannot be delegate:
"(1) To determine and approve amendments to
the articles of cooperation and bylaws;
"(2) To elect or appoint the members of the
board of directors, and to remove them for cause. However, in the case of the
electric cooperatives registered under this Code, election of the members of
the board shall be held in accordance with its bylaws or election guideline of
such electric cooperative; and
"(3) To approve developmental plans of the
cooperative.
"Subject to such other provisions of this Code
and only for purposes of prompt and intelligent decision-making, the general
assembly may be a three-fourths (3/4) vote of all its members with voting
rights, present and constituting a quorum, delegate some of its powers to a
smaller body of the cooperative. These powers shall be enumerated under the
bylaws of the cooperative.
"ART. 34. Meetings. – (1) A regular
meeting shall be held annually by the general assembly on a date fixed in the
bylaws, or if not so fixed, on any dated within ninety (90) days after the
close of each fiscal year: Provided, That notice of regular meetings
shall be sent in writing, by posting or publication, or through other
electronic means to all members of record.
"(2) Whenever necessary, a special meeting of
the general assembly may be called at any time by a majority vote of the board
of directors or as provided for in the bylaws: Provided, That a notice
in writing shall be sent one (1) week prior to the meeting to all members who
are entitled to vote. However, a special meeting shall be called by the board
of directors after compliance with the required notice within from at least ten
per centum (10%) of the total members who re entitled to vote to
transact specific business covered by the call.
"If the board fails to call a regular or a
special meeting within the given period, the Authority, upon petition of ten per
centum (10%) of all the members of the cooperative who are entitled to
vote, and for good cause shown, shall issue an order to the petitioners
directing them to call a meeting of the general assembly by giving proper
notice as required in this Code or in the bylaws;
"(3) In the case of a newly approved
cooperative, a special general assembly shall be called, as far as practicable,
within ninety (90) days from such approval;
"(4) The Authority may call a special meeting
of the cooperative for the purpose of reporting to the members the result of
any examination or other investigation of the cooperative affairs; and
"(5) Notice of any meeting may be waived,
expressly or impliedly, by any member.
"ART. 35. Quorum. – A quorum shall
consist of at least twenty-five per centum (25%) of all the members entitled to
vote. In the case of cooperative banks, the quorum shall be as provided in
Article 99 of this Code. In the case of electric cooperatives registered under
this Code, a quorum, unless otherwise provided in the bylaws, shall consist of
five per centum (5%) of all the members entitled to vote.
"ART. 36. Voting System. – Each member
of a primary cooperative shall have only one (1) vote. In the case of members
of secondary or tertiary cooperatives, they shall have one (1) basic vote and
as many incentive votes as provided for in the bylaws but not exceed five (5)
votes. The votes cast by the delegates shall be deemed as votes cast by the
members thereof.
"However, the bylaws of a cooperative other
than a primary may provide for voting by proxy. Voting by proxy means allowing
a delegate of a cooperative to represent or vote in behalf of another delegate
of the same cooperative.
"ART. 37. Composition and Term of the Board
of Directors. – Unless otherwise provided in the bylaws, the direction and
management of the affairs of a cooperative shall be vested in a board of
directors which shall be composed of not less that five (5) nor more than
fifteen (15) members elected by the general assembly for a term of two (2) years
and shall hold office until their successors are duly elected an qualified, or
until duly removed for caused.
"ART. 38. Powers of the Board of Directors.
– The board of directors shall be responsible for the strategic planning,
direction-setting and policy-formulation activities of the cooperatives.
"ART. 39. Directors. – (1) Any member
of a cooperative who under the bylaws of the cooperative, has the right to vote
and who possesses all the qualifications and none of the disqualifications
provided in the laws or bylaws shall be eligible for election as director.
"(2) The cooperative may, by resolution of its
board of directors, admit as directors, or committee member one appointed by
any financing institution from which the cooperative received financial
assistance solely to provide technical knowledge not available within its
membership. Such director or committee member not be a member of the
cooperative and shall have no powers, rights, nor responsibilities except to
provided technical assistance as required by the cooperative.
"(3) The members of the board of directors
shall not hold any other position directly involved in the day to day operation
and management of the cooperative.
"(4) Any person engaged in a business similar
to that of the cooperative or who in any way has a conflict of interest with
it, is disqualified from election as a director of said cooperative.
"ART. 40. Meeting of the Board and Quorum
Requirement. – (1) In the case of primary cooperatives, regular meetings of
the board of directors shall be held at least once a month.
"(2) Special meetings of the board of
directors may be held at any time upon the call of the chairperson or a
majority of the members of the board: Provided, That written notices of
the meeting specifying the agenda of the special meeting shall be given to all
members of the board at least one (1) week before the said meeting.
"(3) A majority of the members of the Board
shall constitute a quorum or the conduct of business, unless the bylaws proved
otherwise.
"(4) Directors cannot attend or vote by proxy
at board meetings.
"ART. 41. Vacancy in the Board of Directors.
– Any vacancy in the board of directors, other than by expiration of term, may
be filled by the vote of at least a majority of the remaining directors, if
still constituting a quorum; otherwise, the vacancy must be filled by the
general assembly in a regular or special meeting called for the purpose. A
director so elected to fill a vacancy shall serve only the unexpired term of
his predecessor in office.
"ART. 42. Officers of the Cooperative.
– The board of directors shall elect from among themselves the chairperson and
vice-chairperson, and elect or appoint other officers of the cooperative from
outside of the board in accordance with their bylaws. All officers shall serve
during good behavior and shall not be removed except for cause after due
hearing. Loss of confidence shall not be a valid ground for removal unless
evidenced by acts or omission causing loss of confidence in the honesty and
integrity of such officer. No two (2) or more persons with relationships up to
the third civil degree of consanguinity or affinity nor shall any person
engaged in a business similar to that of the cooperative nor who in any other
manner has interests in conflict with the cooperative shall serve as an
appointive officer.
"ART. 43. Committees of Cooperatives. –
(1) The bylaws may create an executive committee to be appointed by the board
of directors with such powers and duties as may be delegated to it in the
bylaws or by a majority vote of all the members of the board of directors.
"(2) The bylaws shall provide for the creation
of an audit, election, mediation and conciliation, ethics, and such other
committees as may be necessary for the conduct of the affairs of the cooperative.
The members of both the audit and election committee shall be elected by the
general assembly and the rest shall be appointed by the board. The audit
committee shall be directly accountable and responsible to the general
assembly. It shall have the power and duty to continuously monitor the adequacy
and effectiveness of the cooperative’s management control system and audit the
performance of the cooperative and its various responsibility centers.
"Unless otherwise provided in the bylaws, the
board, in case of a vacancy in the committees, may call an election to fill the
vacancy or appoint a person to fill the same subject to the provision that the
person elected or appointed shall serve only for the unexpired portion of the
term.
"ART. 44. Functions, Responsibilities and
Training Requirements of Directors, Officers and Committee Members. – the
functions and responsibilities of directors, officers and committee members, as
well as their training requirements, shall be in accordance with the rules and
regulations issued by the Authority.
"ART. 45. Liability of Directors, Officers
and Committee Members. – Directors, officers and committee members, who are
willfully and knowingly vote for or assent to patently unlawful acts or who are
guilty of gross negligence or bad faith in directing the affairs of the
cooperative or acquire any personal or pecuniary interest in conflict with
their duty as such directors, officers or committee members shall be liable
jointly and severally for all damages or profits resulting therefrom to the
cooperative, members, and other persons.
"When a director, officer or committee member
attempts to acquire or acquires, in violation of his duty, any interest or
equity adverse to the cooperative in respect to any matter which has been
reposed in him in confidence, he shall, as a trustee for the cooperative, be
liable for damages and shall be accountable for double the profits which
otherwise would have accrued to the cooperative.
"ART. 46. Compensation. – (1) In the
absence of any provisions in the bylaws fixing their compensation, the
directors shall not receive any compensation except for reasonable per diems:
Provided however, That the directors and officers shall not be
entitled to any per diem when, in the preceding calendar year, the
cooperative reported a net loss or had a dividend rate less than the official
inflation rate for the same year. Any compensation other than per diems
may be granted to directors by a majority vote of the members with voting
rights at a regular or special general assembly meeting specifically called for
the purpose: Provided, That no additional compensation other than per
diems shall be paid during the first year of existence of any cooperative.
"(2) The compensation of officers of the
cooperative as well as the members of the committee as well as the members of
the committees created pursuant to this Code or its bylaws may be fixed in the
bylaws.
"(3) Unless already fixed in the bylaws, the
compensation of all other employee shall be determined by the board of
directors.
"ART. 47. Dealings of Directors, Officers,
or Committee Members. – A contract entered into by the cooperative with one
(1) or more of its directors, officers, and committee members is voidable, at
the option of the cooperative, unless all the following conditions are present.
"(1) That the presence of such director in the
board meeting wherein contract was approved was not necessary to constitute a
quorum for such meeting;
"(2) That the vote of such director was not
necessary for the approval of the contract;
"(3) That the contract is fair and reasonable
under the circumstances; and
"(4) That in the case of an officer or
committee member, the contract with the officer or committee member has been
previously authorized by the general assembly or by the board of directors.
"Where any of the first two conditions set
forth in the preceding paragraph is absent, in the case of a contract with a
director, such contract may be ratified by a three-fourths (3/4) vote of all
the members with voting rights, present and constituting a quorum in a meeting
called for the purpose: Provided, That full disclosure of the adverse
interest of the directors involved is made at such meeting, and that the contract
is fair and reasonable under the circumstances.
"ART. 48. Disloyalty of a Director. – A
director who, by virtue of his office, acquires for himself an opportunity
which should belong to the cooperative shall be liable for damages and must
account for double the profits that otherwise would have accrued to the
cooperative by refunding the same, unless his act has been ratified by a
three-fourths (3/4) vote of all the members with voting rights, present and
constituting a quorum. This provision shall be applicable, notwithstanding the
fact that the director used his own funds in the venture.
"ART. 49. Illegal Use of Confidential
Information. – (1) A director or officer, or an associate of a director or
officer, who, for his benefit or advantage or that of an associate, makes use
of confidential information that, if generally known, might reasonably be
expected to adversely affect the operation and viability of the cooperative,
shall be held:
"(a) Liable to compensate the cooperative for
the direct losses suffered by the cooperative as a result of the illegal use of
information; and
"(b) Accountable to the cooperative for any
direct benefit or advantage received or yet to be received by him or his
associate, as a result of the transaction.
"(2) The cooperative shall take the necessary
steps to enforce the liabilities described in subsection (a)
"ART. 50. Removal. – All complaints for
the removal of any elected officer shall be filed with the board of directors.
Such officer shall be given the opportunity to be heard. Majority of the board
of directors may place the officer concerned under preventive suspension
pending the resolution of the investigation. Upon finding of a prima facie
evidence of guilt, the board shall present its recommendation for removal to
the general assembly.
"An elective officer may be removed by three
fourths (3/4) votes of the regular members present and constituting a quorum,
in a regular or special general assembly meeting called for the purpose. The
officer concerned shall be given an opportunity to be heard at said assembly.
SEC. 5. Articles 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62 and 63 of
Chapter V on Responsibilities, Rights and Privileges of Cooperatives of the
same Code are hereby renumbered and amended to read, as follows:
CHAPTER V
RESPONSIBILITIES, RIGHTS AND PRIVILEGES OF COOPERATIVE
RESPONSIBILITIES, RIGHTS AND PRIVILEGES OF COOPERATIVE
"ART. 51. Address. – Every cooperative
shall have an official postal address to which all notices and communications
shall be sent. Such address and every change thereof shall be registered with
the Authority.
"ART. 52. Books to be Kept Open. – (1)
Every cooperative shall have the following documents ready and accessible to
its members and representatives of the Authority for inspection during
reasonable office hours at its official address:
"(a) A copy of this Code and all other laws
pertaining to cooperatives;
"(b) A copy of the regulations of the
Authority;
"(c) A copy of the articles of cooperation
and bylaws of the cooperative;
"(d) A register of members;
"(e) The books of the minutes of the meetings
of the general assembly, board of directors and committee;
"(f) Share books, where applicable;
"(g) Financial statement; and
"(h) Such other documents as may be
prescribed by laws or the bylaws.
"(2) The accountant or the bookkeeper of the
cooperative shall be responsible for the maintenance of the cooperative in
accordance with generally accepted accounting practices. He shall also be
responsible for the production of the same at the time of audit or inspection.
"The audit committee shall be responsible for
the continuous and periodic review of the books and records of account to
ensure that these are in accordance with generally accepted accounting
practices. He shall also be responsible for the production of the same at the
time of audit or inspection.
"(3) Each cooperative shall maintain records
of accounts such that the true and correct condition and the results of the
operation of the cooperative may be ascertained therefrom at any time. The financial
statements, audited according to generally accepted auditing standards,
principles and practices, shall be published annually and shall be kept posted
in a conspicuous place in the principal office of the cooperative.
"(4) Subject to the pertinent provisions of
the National Internal Revenue Code and other laws, a cooperative may dispose by
way of burning or other method of complete destruction any document, record or
book pertaining to its financial and nonfinancial operations which are already
more than five (5) years old except those relating to transactions which are
the subject of civil, criminal and administrative proceedings. An inventory of
the audited documents, records and books to be disposed of shall be drawn up
and certified to by the board secretary and the chairman of the audit committee
and presented to the board of directors which may thereupon approve the
disposition of said records.
"ART. 53. Reports. – (1) Every
cooperative shall draw up regular reports of its program of activities,
including those in pursuance of their socio-civic undertakings, showing their
progress and achievements at the end of every fiscal year. The reports shall be
made accessible to its members, and copies thereof shall be furnished to all
its members or record. These reports shall be filed with the Authority within
one hundred twenty (120) days from the end of the calendar year. The form and
contents of the reports shall be as prescribed by the rules of the Authority.
Failure to file the required reports shall subject the accountable officer/s to
fines and penalties as may be prescribed by the Authority, and shall be a
ground for the revocation of authority of the cooperative to operate as such.
The fiscal year of every cooperative shall be the calendar year except as may
be otherwise provided in the bylaws.
"(2) If a cooperative fails to make, publish
and file the reports required herein, or fails to include therein any matter
required by the Code, the Authority shall, within fifteen (15) days from the
expiration of the prescribed period, send such cooperative a written notice,
stating its non-compliance and the commensurate fines and penalties that will
be imposed until such time that the cooperative has complied with the
requirements.
"ART. 54. Register of Members as Prima
Facie Evidence. – Any register or list of members shares kept by any
registered cooperative shall be prima facie evidence of the following
particulars entered therein:
"(1) The date on which the name of any person
was entered in such register or list of member; and
"(2) The date on which any such person ceased
to be a member.
"ART. 55. Probative Value of Certified
Copies of Entries. – (1) A copy of any entry in any book, register or list
regularly kept in the course of business in the possession of a cooperative
shall, if duly certified in accordance with the rules of evidence, be
admissible as evidence of the existence of entry and prima facie evidence of
the matters and transactions therein recorded.
"(2) No person or a cooperative is possession
of the books of such cooperative shall, in any legal proceedings to which the
cooperative is not a party, be compelled to produce any of the books of the
cooperative, the contents of which can be proved and the matters, transactions
and accounts therein recorded, unless by order of a competent court.
"ART. 56. Bonding of Accountable Officers.
– Every director, officer, and employee handling funds, securities or property
on behalf of any cooperative shall be covered by a surety bond to be issued for
a duly registered insurance or bonding company for the faithful performance of
their respective duties and obligations. The board of directors shall determine
the adequacy of such bonds.
"Upon the filing of the application for
registration of a cooperative, the bonds of the accountable officers shall be
required by the Authority. Such bonds shall be renewed manually and the
Authority shall accordingly be informed of such renewal.
"ART. 57. Preference of Claims. – (1)
Notwithstanding the provisions of existing laws, rules and regulations to the
contrary, but subject to the prior claim of the Authority, any debt due to the
cooperative from the member shall constitute a first lien upon any raw
materials, production, inputs, and products produced; or any land, building,
facilities, equipment, goods or services acquired and held, by such member
through the proceeds of the loan or credit granted by the cooperative to him
for as long as the same is not fully paid.
"(2) No property or interest on property which
is subject to a lien under paragraph (1) shall be sold nor conveyed to third
parties without the prior permission of the cooperative. The lien upon the
property or interest shall continue to exit even after the sale or conveyance
thereof until such lien has been duly extinguished.
"(3) Notwithstanding the provisions of any law
to the contrary, any sale or conveyance made in contravention of paragraph (2)
hereof shall be void.
"ART. 58. Instrument for Salary or Wage
Deduction. – (1) A member of a cooperative may, notwithstanding the
provisions of existing laws to the contrary, execute an instrument in favor of
the cooperative authorizing his employer to deduct from his/her salary or
wages, commutation of leave credits and any other monetary benefits payable to
him by the employer and remit such amount as maybe specified in satisfaction of
a debt or other demand due from the member to the cooperative.
"(2) Upon the execution of such instrument and
as may be required by the cooperative contained in a written request, the
employer shall make the deduction in accordance with the agreement and
deduction in accordance with the agreement and remit forthwith the amount so
deducted within ten (10) days after the end of the payroll month to the
cooperative. The employer shall make the deduction for as long as such debt or
other demand remains unpaid by the employee.
"(3) The term "employer" as used in
this article shall include all private firms and the national and local
governments and government-owned or controlled corporations who have under
their employer a member of a cooperative and have agreed to carry out the terms
of the instrument mentioned in paragraphs (1) and (2) of this article.
"(4) The provisions of this article shall
apply to all similar agreements referred to in paragraph (1) and were enforced
prior to the approval of this Code.
"(5) Notwithstanding the provisions of
existing laws to the contrary, the responsibilities of the employer as stated
in paragraphs (1) and (2) of this articles shall be mandatory: Provided, That
in the case of private employer, the actual and reasonable cost deducting and
remitting maybe collected.
"ART. 59. Primary Lien. -
Notwithstanding the provision of any law with the contrary, a cooperative shall
have primary lien upon the capital, deposits or interest of a member for any
debt due to the cooperative from such a member.
"ART. 60. Tax Treatment of Cooperative.
- Duly registered cooperatives under this Code which do not transact any
business with non-members or the general public shall not be subject to any
taxes and fees imposed under the internal revenue laws and other tax laws.
Cooperatives not falling under this article shall be governed by the succeeding
section.
"ART.61. Tax and Other Exemptions.
Cooperatives transacting business with both members and non-members shall not
be subjected to tax on their transactions with members. In relation to this,
the transactions of members with the cooperative shall not be subject to any
taxes and fees, including not limited to final taxes on members’ deposits and
documentary tax. Notwithstanding the provisions of any law or regulation to the
contrary, such cooperatives dealing with nonmembers shall enjoy the following
tax exemptions:
"(1) Cooperatives with accumulated reserves
and undivided net savings of not more than Ten million pesos (P10,000,000.00)
shall be exempt from all national, city, provincial, municipal or barangay
taxes of whatever name and nature. Such cooperatives shall be exempt from
customs duties, advance sales or compensating taxes on their importation of
machineries, equipment and spare parts used by them and which are not available
locally a certified by the department of trade and industry (DTI). All tax free
importations shall not be sold nor the beneficial ownership thereof be
transferred to any person until after five (5) years, otherwise, the
cooperative and the transferee or assignee shall be solidarily liable to pay
twice the amount of the imposed tax and / or duties.
"(2) Cooperatives with accumulated reserves
and divided net savings of more than Ten million pesos (P10,000,000.00) shall
fee the following taxes at the full rate:
"(a) Income Tax - On the amount allocated for
interest on capitals: Provided, That the same tax is not consequently imposed
on interest individually received by members: Provided, further, That
cooperatives regardless of classification, are exempt income tax from the date
of registration with the Authority;
"(b) Value-Added Tax – On transactions with
non-members: Provided, however, That cooperatives duly registered
with the Authority; are exempt from the payment of value-added tax; subject to
Section 109, sub-sections L, M and N of Republic Act No. 9337, the National
Internal Revenue Code, as amended: Provided, That the exempt transaction
under Section 109 (L) shall include sales made by cooperatives duly registered
with the Authority organized and operated by its member to undertake the
production and processing of raw materials or of goods produced by its members
into finished or process products for sale by the cooperative to its members
and non-members: Provided, further, That any processed product or
its derivative arising from the raw materials produced by its members, sold in
then name and for the account of the cooperative: Provided , finally,
That at least twenty-five per centum (25%) of the net income of the
cooperatives is returned to the members in the form of interest and/or
patronage refunds;
"(c) All other taxes unless otherwise
provided herein; and
"(d) Donations to charitable, research and
educational institutions and reinvestment to socioeconomic projects within the
area of operation of the cooperative may be tax deductible.
"(3) All cooperatives, regardless of the
amount of accumulated reserves and undivided net savings shall be exempt from
payment of local taxes and taxes on transactions with banks and insurance
companies: Provided, That all sales or services rendered for non-members
shall be subject to the applicable percentage taxes sales made by producers,
marketing or service cooperatives: Provided further, That nothing
in this article shall preclude the examination of the books of accounts or
other accounting records of the cooperative by duly authorized internal revenue
officers for internal revenue tax purposes only, after previous authorization
by the Authority.
"(4) In areas where there are no available
notaries public, the judge, exercising his ex officio capacity as notary
public, shall render service, free of charge, to any person or group of persons
requiring the administration of oath or the acknowledgment of articles of
cooperation and instruments of loan from cooperatives not exceeding Five
Hundred Thousand Pesos (P500,000.00).
"(5) Any register of deeds shall accept for
registration, free of charge, any instrument relative to a loan made under this
Code which does not exceed Two Hundred Fifty Thousand Pesos (P250,000.00) or
the deeds of title of any property acquired by the cooperative or any paper or
document drawn in connection with any action brought by the cooperative or with
any court judgment rendered in its favor or any instrument relative to a bond
of any accountable officer of a cooperative for the faithful performance of his
duties and obligations.
"(6) Cooperatives shall be exempt from the
payment of all court and sheriff’s fees payable to the Philippine Government
for and in connection with all actions brought under this Code, or where such
actions is brought by the Authority before the court, to enforce the payment of
obligations contracted in favor of the cooperative.
"(7) All cooperatives shall be exempt from
putting up a bond for bringing an appeal against the decision of an inferior
court or for seeking to set aside any third party claim: Provided, That
a certification of the Authority showing that the net assets of the cooperative
are in excess of the amount of the bond required by the court in similar cases
shall be accepted by the court as a sufficient bond.
"(8) Any security issued by cooperatives shall
be exempt from the provisions of the Securities Act provided such security
shall not be speculative.
"ART. 62. Privileges of Cooperatives. –
Cooperatives registered under this Code, notwithstanding the provisions of any
law to the contrary, be also accorded the following privileges:
"(1) Cooperatives shall enjoy the privilege
of depositing their sealed cash boxes or containers, documents or any valuable
papers in the safes of the municipal or city treasurers and other government
offices free of charge, and the custodian of such articles shall issue a
receipt acknowledging the articles received duly witnessed by another person;
"(2) Cooperatives organized among government
employees, notwithstanding any law or regulation to the contrary, shall enjoy
the free use of any available space in their agency, whether owned or rented by
the Government;
"(3) Cooperatives rendering special types of
services and facilities such as cold storage, ice plant, electricity,
transportation, and similar services and facilities shall secure a franchise
therefore, and such cooperatives shall open their membership to all persons
qualified in their areas of operation;
"(4) In areas where appropriate cooperatives
exist, the preferential right to supply government institutions and agencies
rice, corn and other grains, fish and other marine products, meat, eggs, milk,
vegetables, tobacco and other agricultural commodities produced by their
members shall be granted to the cooperatives concerned;
"(5) Preferential treatment in the allocation
of fertilizers, including seeds and other agricultural inputs and implements,
and in rice distribution shall be granted to cooperatives by the appropriate
government agencies;
"(6) Preferential and equitable treatment in
the allocation or control of bottomries of commercial shipping vessels in
connection with the shipment of goods and products of cooperatives;
"(7) Cooperatives and their federations, such
as farm and fishery producers and suppliers, market vendors and such other
cooperatives, which have for their primary purpose the production and/or the
marketing of products from agriculture, fisheries and small entrepreneurial
industries and federations thereof, shall have preferential rights in the
management of public markets and/or lease of public market facilities, stalls
or spaces: Provided, That these rights shall only be utilized
exclusively by cooperatives: Provided, further, That no
cooperative forming a joint venture, partnership or any other similar arrangement
with a non-cooperative entity can utilize these rights;
"(8) Cooperatives engaged in credit services
and/or federations shall be entitled to loans credit lines, rediscounting of
their loan notes, and other eligible papers with the Development Bank of the
Philippines, the Land Bank of the Philippines and other financial institutions
except the Bangko Sentral ng Pilipinas (BSP);
"The Philippine Deposit Insurance Corporation
(PDIC) and other government agencies, government-owned and controlled corporations
and government financial institutions shall provide technical assistance to
registered national federations and unions of cooperatives which have
significant engagement in savings and credit operations in order for these
federations and unions to establish and/or strengthen their own autonomous
cooperative deposit insurance systems;
"(9) A public transport service cooperative
may be entitled to financing support for the acquisition and/or maintenance of
land and sea transport equipment, facilities and parts through the program of
the government financial institutions. It shall have the preferential right to
the management and operation of public terminals and ports whether land or sea
transport where the cooperative operates and on securing a franchise for active
or potential routes for the public transport;
"(10) Cooperatives transacting business with
the Government of the Philippines or any of its political subdivisions or any
of its agencies or instrumentalities, including government-owned and controlled
corporations shall be exempt from prequalification bidding requirements
notwithstanding the provisions of Republic Act No.9184, otherwise known as, the
Government Procurement Act;
"(11) Cooperative shall enjoy the privilege
of being represented by the provincial or city fiscal or the Office of the
Solicitor General, free of charge, except when the adverse party is the
Republic of the Philippines;
"(12) Cooperatives organized by faculty
members and employees of educational institutions shall have the preferential
right in the management of the canteen and other services related to the
operation of the educational institution where they are employed: Provided,
That such services are operated within the premises of the said educational
institution; and
"(13) The appropriate housing agencies and
government financial institutions shall create a special window for financing
housing projects undertaken by cooperatives, with interest rates and terms
equal to, or better than those given for socialized housing projects. This
financing shall be in the form of blanket loans or long-term wholesale loans to
qualified cooperatives, without need for individual processing.
"The Authority, in consultation with the
appropriate government agencies and concerned cooperative sector, shall issue
rules and regulations on all matters concerning housing cooperatives."
SEC. 6. Article 64 of Chapter VI on Insolvency of Cooperatives of the
same Code is hereby renumbered and amended to read, as follows:
CHAPTER VI
INSOLVENCY OF COOPERATIVES
INSOLVENCY OF COOPERATIVES
"ART. 63. Proceeding Upon Insolvency.-
In case a cooperative is unable to fulfill its obligations to creditors due to
insolvency, such cooperative may apply for such remedies as it may deem fit
under the provisions of Act No. 1956, as amended, otherwise known as the
Insolvency Law.
"Nothing in this Article, however, precludes
creditors from seeking protection from said insolvency law."
SEC. 7. Articles 65, 66. 67, 68, 69, 70 and 71 of Chapter VII on
Dissolution of Cooperatives of the same Code are hereby renumbered and amended
to read, as follows:
CHAPTER VII
DISSOLUTION OF COOPERATIVES
DISSOLUTION OF COOPERATIVES
"ART. 64. Voluntary Dissolution Where no
Creditors are Affected. – If the dissolution of a cooperative does not
prejudice the rights of any creditor having a claim against it, the dissolution
may be affected by a majority vote of the board of directors, and by a
resolution duly adopted by the affirmative vote of at least three-fourths (3/4)
of all the members with voting rights, present and constituting a quorum at a
meeting to be held upon call of the directors: Provided, That the notice
of time, place and object of the meeting shall be published for three (3)
consecutive weeks in a newspaper published in the place where the principal
office of said cooperative is located, or if no newspaper is published in such
place, in a newspaper of general circulation in the Philippines: Provided,
further, That the notice of such meeting is sent to each member of
record either by registered mail or by personal delivery at least thirty (30)
days prior to said meeting. A copy of the resolution authorizing the
dissolution shall be certified to by a majority of the board of directors and
countersigned by the board secretary. The Authority shall thereupon issue the certificate
of dissolution.
"ART. 65. Voluntary Dissolution Where
Creditors Are Affected. – Where the dissolution of a cooperative may
prejudice the rights of any creditor, the petition for dissolution shall be
filed with the Authority. The petition shall be signed by a majority of its
board or directors or other officers managing its affairs, verified by its
chairperson or board secretary or one of its directors and shall set forth all
claims and demands against it and that its dissolution was resolved upon by the
affirmative vote of at least three-fourths (3/4) of all the members with voting
rights, present and constituting a quorum at a meeting called for that purpose.
"If the petition is sufficient in form and
substance, the Authority shall issue an order reciting the purpose of the
petition and shall fix a date which shall not be less than thirty (30) nor more
than sixty (60) days after the entry of the order. Before such date, a copy of
the order shall be published at least once a week for three (3) consecutive
weeks in a newspaper of general circulation published in the municipality or
city where the principal office of the cooperative is situated or in the
absence of such local newspaper, in a newspaper of general circulation in the
Philippines, and a copy shall likewise be posted for three (3) consecutive
weeks in three (3) public places in the municipality or city where the
cooperative’s office is located.
"Upon expiry of the five (5) day notice to
file objections, the Authority shall proceed to hear the petition and try any
issue raised in the objection filed; and if the objection is sufficient and the
material allegations of the petition are proven, it shall issue an order to
dissolve the cooperative and direct the disposition of its assets in accordance
with existing rules and regulations. The order of dissolution shall set forth
therein:
"(1) The assets and liabilities of the
cooperative;
"(2) The claim of any creditor;
"(3) The number of members; and
"(4) The nature and extend of the interests
of the members of the cooperative.
"ART. 66. Involuntary Dissolution. – A
cooperative may be dissolved by order of a competent court after due hearing on
the grounds of:
"(1) Violation of any law, regulation or
provisions of its bylaws; or
"(2) Insolvency.
"ART. 67. Dissolution by Order of the
Authority. – The Authority may suspend or revoke, after due notice and
hearing, the certificate of registration of a cooperative on any of the
following grounds:
"(1) Having obtained its registration by
fraud;
"(2) Existing for an illegal purpose;
"(3) Willful violation, despite notice by the
Authority, of the provisions of this Code or its bylaws;
"(4) Willful failure to operate on a
cooperative basis; and
"(5) Failure to meet the required minimum
number of members in the cooperative.
"ART. 68. Dissolution by Failure to
Organize and Operate.- If a cooperative has not commenced business and its
operation within two (2) years after the issuance of its certificate of
registration or has not carried on its business for two (2) consecutive years,
the Authority shall send a formal notice to the said cooperative to show cause
as to its failure to operate. Failure of the cooperative to promptly provide
justifiable cause for its failure to operate shall warrant the Authority to
delete its name from the roster of registered cooperatives and shall be deemed
dissolved.
"ART. 69. Liquidation of a Cooperative.
– Every cooperative whose charter expires by its own limitation or whose
existence is terminated by voluntary dissolution or through an appropriate
judicial proceeding shall nevertheless continue to exist for three (3) years
after the time it is dissolved; not to continue the business for which it was
established but for the purpose of prosecuting and defending suits by or
against it; settlement and closure of its affairs; disposition, conveyance and
distribution of its properties and assets.
"At any time during the said three (3) years,
the cooperative is authorized and empowered to convey all of its properties to
trustees for the benefit of its members, creditors and other persons in
interest. From and after any such conveyance, all interests which the
cooperative had in the properties are terminated.
"Upon the winding up of the cooperative
affairs, any asset distributable to any creditor, shareholder or member who is
unknown or cannot be found shall be given to the federation or union to which
the cooperative is affiliated with.
"A cooperative shall only distribute its
assets or properties upon lawful dissolution and after payment of all its debts
and liabilities, except in the case of decrease of share capital of the
cooperative and as otherwise allowed by this Code.
"ART. 70. Rules and Regulations on
Liquidation. – The Authority shall issue the appropriate implementing
guidelines for the liquidation of cooperatives."
SEC. 8. Articles 72, 73, 74, 75, 76, 77, 78, 79 and 80 of Chapter
VIII on Capital, Property, and Funds of the same Code are hereby renumbered and
amended to read, as follows:
CHAPTER VIII
CAPITAL, PROPERTY, AND FUNDS
CAPITAL, PROPERTY, AND FUNDS
"ART. 71. Capital. - The capitalization
of cooperatives and the accounting procedures shall be governed by the provisions
of this Code and the regulations which shall be issued.
"ART. 72. Capital Sources.-
Cooperatives registered under this Code may derive their capital from any or
all of the following sources:
"(1) Member’s share capital;
"(2) Loans and barrowings including deposits;
"(3) Revolving capital which consists of the
deferred payment of patronage refunds, or interest on share capital; and
"(4) Subsidies, donations, legacies, grants,
aids and such other assistance from any local or foreign institution whether
public or private: Provided, That capital coming from such subsides,
donations, legacies, grants, aids and other assistance shall not be divided
into individual share capital holdings at any time but shall instead form part
of the donated capital or fund of the cooperative.
"Upon dissolution, such donated capital shall
be subject to escheat.
"ART. 73. Limitation on Share Capital
Holdings.- No member of primary cooperative other than cooperative itself
shall own or hold more than ten per centum (10%) of the share capital of
the cooperative.
"Where a member of cooperative dies, his heir
shall be entitled to the shares of the decedent: Provided, That the
total share holding of the heir does not exceed ten per centum (10%) of
the share capital of the cooperative; Provided, further, That the
heir qualify and is admitted as members of the cooperative: Provided finally
, That where the heir fails to qualify as a member or where his total share
holding exceeds ten per centum (10%) of the share capital , the share or
shares excess will revert to the cooperative upon payment to the heir of the
value of such shares.
"ART. 74. Assignment of Share Capital
Contribution or Interest.- Subject to the provisions of this Code, no
member shall transfer his shares or interest in the cooperative or any part
thereof unless.
"(1) He has held such share capital
contribution or interest for not less than one (1) year.
"(2) The assignment is made to the
cooperative or to a member of the cooperative or to a person who falls within
the field of the membership of the cooperative; and
"(3) The board of directors has approved such
assignment.
"ART.75. Capital Build-Up.- Te bylaws
of every cooperative shall be provided for a reasonable and realistic member
capital build-up program to allow the continuing growth of the members’
investment in their cooperative as their economic conditions continue to
improve.
"ART.76. Shares.- The term
"share" refers to a unit of capital in a primary cooperative the par
value of which may be fixed to any figure not more than One thousand pesos
(P1,000.00). The share of capital of a cooperative is the money paid or
required to be paid for the operations of the cooperative. The method for the
issuance of share certificates shall prescribed in its bylaws.
"ART.77. Fines. - The bylaws of a
cooperative may prescribe a fine on unpaid subscribed share capital. Provided,
that such fine is fair and reasonable under the circumstances.
"ART.78. Investment of Capital. - A
cooperative may invest its capital in any of the following:
"(a) In shares or debentures or securities of
any other cooperative;
"(b) In any reputable bank in the locality,
or any cooperative;
"(c) In securities issued or guaranteed by
the Government;
"(d) In real state primarily for the use of
the cooperative or its members; or
"(e) In any other manner authorized in the
bylaws.
"ART. 79. Revolving Capital. – The
general assembly of any cooperative may authorize the board of directors to
raise a revolving capital to strengthen its capital structure by deferring the
payment of patronage refunds and interest on share capital or by the authorized
deduction of a percentage from the proceeds of products sold or services
rendered, or per unit of product or services handled. The board of directors
shall issue revolving capital certificates with serial number, name, amount,
and rate of interest to be paid and shall distinctly set forth the time of
retirement of such certificates and the amounts to be returned."
SEC. 9. Articles 81, 82, 83, 84 and 85 of Chapter IX on Audit,
Inquiry and Members’ Right to Examine of the same Code are hereby renumbered
and amended to read, as follows:
"ART. 80. Annual Audit. – Cooperatives
registered under this Code shall be subject to an annual financial, performance
and social audit. The financial audit shall be conducted by an external auditor
who satisfies all the following qualifications:
"(1) He is independent of the cooperative or
any of its subsidiary that he is auditing; and
"(2) He is a member in good standing of the
Philippine Institute of Certified Public Accountants (PICPA) and is accredited
by both the Board and Accountancy and the Authority.
"The social audit shall be conducted by an
independent social auditor accredited by the Authority.
"Performance and social audit reports which
contain the findings and recommendations of the auditor shall be submitted to
the board of directors.
"The Authority, in consultation with the
cooperative sector, shall promulgate the rules and standards for the social
audit of cooperatives.
"ART. 81. Audit Report. – The auditor
shall submit to the board of directors and to the audit committee the financial
audit report which shall be in accordance with the generally accepted auditing
standards for cooperatives as jointly promulgated by the Philippine Institute
of Certified Public Accountants (PICPA) and the Authority.
"Thereafter, the board of directors shall
present the complete audit report to the general assembly in its next meeting.
"ART. 82. Nonliability for Defamations.
– The auditor is not liable to any person in an action for defamation based on
any act, done, or any statement made by him in good faith in connection with
any matter he is authorized or required to do pursuant to this Code.
"ART. 83. Right to Examine. – A member
shall have the right to examine the records required to be kept by the
cooperative under Article 52 of this Code during reasonable hours on business
days and he may demand, in writing, for a copy of excerpts from said records
without charge except the cost of production.
"Any officer of the cooperative who shall
refuse to allow any member of the cooperative to examine and copy excerpts from
its records shall be liable to such member for damages and shall be guilty of
an offense which shall be punishable under Article 140 of this Code: Provided,
That if such refusal is pursuant to a resolution or order of the board of
directors, the liability under this article shall be imposed upon the directors
who voted for such refusal: Provided, further, That it shall be a
defense to any action under this article that the member demanding to examine
and copy excerpts from the cooperative records has improperly used any information
secured through any prior examination of the records of such cooperative or was
not acting in good faith or for a legitimate purpose in making his demand.
"ART. 84. Safety of Records. – Every
cooperative shall, at its principal office, keep and carefully preserve the
records required by this Code to be prepared and maintained. It shall take all
necessary precaution to prevent its loss, destruction or falsification."
SEC. 10. Articles 86 and 87 of Chapter X on Allocation and
Distribution of Net Surplus of the same Code are hereby renumbered and amended
to read, as follows:
CHAPTER X
ALLOCATION AND DISTRIBUTION OF NET SURPLUS
ALLOCATION AND DISTRIBUTION OF NET SURPLUS
"ART. 85. Net Surplus. –
Notwithstanding the provisions of existing laws, the net surplus of
cooperatives shall be determined in accordance with its bylaws. Every
cooperative shall determine its net surplus at the close of every fiscal year
and at such other times as may be prescribed by the bylaws.
"Any provision of law to the contrary
notwithstanding, the net surplus shall not be construed as profit but as an
excess of payments made by the members for the loans borrowed, or the goods and
services availed by them from the cooperative or the difference of the rightful
amount due to the members for their products sold or services rendered to the
cooperative including other inflows of assets resulting from its other
operating activities and which shall be deemed to have been returned to them if
the same is distributed as prescribed herein.
"ART. 86. Order of Distribution. – The
net surplus of every cooperative shall be distributed as follows:
"(1) An amount for the reserve fund which
shall be at least ten per centum (10%) of net surplus: Provided,
That, in the first five (5) years of operation after registration, this amount
shall not be less than fifty per centum (50%) of the net surplus:
"(a) The reserve fund shall be used for the
stability of the cooperative and to meet net losses in its operations. The
general assembly may decrease the amount allocated to the reserve fund when the
reserve fund already exceeds the share capital.
"Any sum recovered on items previously
charged to the reserve fund shall be credited to such fund.
"(b) The reserve fund shall not be utilized
for investment, other than those allowed in this Code. Such sum of the reserve
fund in excess of the share capital may be used at anytime for any project that
would expand the operations of the cooperative upon the resolution of the
general assembly.
"(c) Upon the dissolution of the cooperative,
the reserve fund shall not be distributed among the members. The general
assembly may resolves:
"(i) To establish a usufructuary trust fund
for the benefit of any federation or union to which the cooperative is
affiliated; and
"(ii) To donate, contribute, or otherwise
dispose of the amount for the benefit of the community where the cooperative
operates. If the members cannot decide upon the disposal of the reserve fund,
the same shall go to the federation or union to which the cooperative is
affiliated.
"(2) An amount for the education and training
fund, shall not be more than ten per centum (10%) of the net surplus.
The bylaws may provide that certain fees or a portion thereof be credited to
such fund. The fund shall provide for the training, development and similar
other cooperative activities geared towards the growth of the cooperative
movement:
"(a) Half of the amounts transferred to the
education and training fund annually under this subsection shall be spent by
the cooperative for education and training purposes; while the other half may
be remitted to a union or federation chosen by the cooperative or of which it
is a member. The said union or federation shall submit to the Authority and to
its contributing cooperatives the following schedules:
"(i) List of cooperatives which have remitted
their respective Cooperative Education and Training Funds (CETF);
"(ii) Business consultancy assistance to
include the nature and cost; and
"(iii) Other training activities undertaken
specifying therein the nature, participants and cost of each activity.
"(b) Upon the dissolution of the cooperative,
the unexpended balance of the education and training fund appertaining to the
cooperative shall be credited to the cooperative education and training fund of
the chosen union or federation.
"(3) An amount for the community development
fund, which shall not be less than three per centum (3%) of the net
surplus. The community development fund shall be used for projects or
activities that will benefit the community where the cooperative operates.
"(4) An optional fund, a land and building,
and any other necessary fund the total of which shall not exceed seven per
centum (7%).
"(5) The remaining net surplus shall be made
available to the members in the form of interest on share capital not to exceed
the normal rate of return our investments and patronage refunds: Provided,
That any amount remaining after the allowable interest and the patronage refund
have been deducted shall be credited to the reserve fund.
"The sum allocated for patronage refunds shall
be made available at the same rate to all patrons of the cooperative in
proportion to their individual patronage: Provided, That:
"(a) In the case of a member patron with
paid-up share capital contribution, his proportionate amount of patronage
refund shall be paid to him unless he agrees to credit the amount to his
account as additional share capital contribution;
"(b) In the case of a member patron with
unpaid share capital contribution, his proportionate amount of patronage refund
shall be credited to his account until his account until his share capital
contribution has been fully paid;
"(c) In the case of a non-member patron, his
proportionate amount of patronage refund shall be set aside in a general fund
for such patrons and shall be allocated to individual non-member patrons only
upon request and presentation of evidence of the amount of his patronage. The
amount so allocated shall be credited to such patron toward payment of the
minimum capital contribution for membership. When a sum equal to this amount
has accumulated at any time within a period specified in the bylaws, such
patron shall be deemed and become a member of the cooperative if he so agrees
or requests and complies with the provisions of the bylaws for admission to
membership; and
"(d) If within any period of time specified
in the bylaws, any subscriber who has not fully paid his subscribed share
capital or any non-member patron who has accumulated the sum necessary for
membership but who does not request nor agree to become a member or fails to
comply with the provisions of the bylaws for admission to membership, the
amount so accumulated or credited to their account together with any part of
the general fund for nonmember patrons shall be credited to the reserve fund or
to the education and training fund of the cooperative, at the option of the
cooperative."
SEC. 11. Articles 88, 89, 90, 91, 92, 93, 94 and 95 of Chapter XI on
the Special Provisions Relating to Agrarian Reform Cooperatives of the same
Code are hereby renumbered retitled and amended to read, as follows:
CHAPTER XI
AGRARIAN REFORM COOPERATIVES
AGRARIAN REFORM COOPERATIVES
"ART. 87. Coverage. – The provisions of
this Chapter shall primarily govern agrarian reform cooperatives: Provided,
That the provisions of the other chapters of this Code shall apply suppletorily
except insofar as this Chapter otherwise provides.
"ART. 88. Definition and Purpose. – An
agrarian reform cooperative is one 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.
"An agrarian reform cooperative as defined
shall be organized for any or all of the following purposes:
"(1) To develop an appropriate system of land
tenure, land development, land consolidation or land management in areas covered
by agrarian reform;
"(2) To coordinate and facilitate the
dissemination of scientific methods of production, and provide assistance in
the storage, transport, and marketing of farm products for agrarian reform
beneficiaries and their immediate family, hereinafter referred to as
"beneficiaries";
"(3) To provide financial facilities to
beneficiaries for provident or productive purposes at reasonable costs;
"(4) To arrange and facilitate the
expeditious transfer of appropriate and suitable technology to beneficiaries
and marginal farmers at the lowest possible cost;
"(5) To provide social security benefits,
health, medical and social insurance benefits and other social and economic
benefits that promote the general welfare of the agrarian reform beneficiaries
and marginal farmers;
"(6) To provide non-formal education,
vocational/technical training, and livelihood programs to beneficiaries and
marginal farmers;
"(7) To act as conduits for external
assistance and services to the beneficiaries and marginal farmers;
"(8) To undertake a comprehensive and
integrated development program in agrarian reform and resettlement areas with
special concern for the development of agro-based, marine-based, and
cottage-based industries;
"(9) To represent the beneficiaries on any or
all matters that affect their interest; and
"(10) To undertake such other economic or
social activities as may be necessary or incidental in the pursuit of the
foregoing purposes.
"ART. 89. Cooperative Estate. –
Landholdings like plantations, estates or haciendas acquired by the State for
the benefit of the workers in accordance with the Comprehensive Agrarian Reform
Program which shall be collectively owned by the worker-beneficiaries under a
cooperative set-up.
"ART. 90. Infrastructure. – In agrarian
reform and resettlement areas, the Government shall grant to agrarian reform
cooperatives preferential treatment in the construction, maintenance and
management of roads, bridges, canals, wharves, ports, reservoirs, irrigation
systems, waterworks systems, and other infrastructures with government funding.
For this purpose, the Government shall provide technical assistance, facilities
and equipment to such agrarian reform cooperatives.
"ART. 91. Lease of Public Lands. – The
Government may lease public lands to any agrarian reform cooperative for a
period not exceeding twenty-five (25%) years, subject to renewal for another
twenty-five (25) years only: Provided, That the application for renewal
shall be made one (1) year before the expiration of the lease: Provided,
further, That such lease shall be for the exclusive use and benefit of
the beneficiaries and marginal farmers subject to the provisions of the
Comprehensive Agrarian Reform Program.
"ART. 92. Preferential Right. – In
agrarian reform areas, an agrarian reform cooperative shall have the
preferential right in the grant of franchise and certificate of public
convenience and necessity for the operation of public utilities and services: Provided,
That it meets the requirements and conditions imposed by the appropriate
government agency granting the franchise or certificate of public convenience
and necessity. If there is an electric service provider in the area, it shall
upon the request of an agrarian reform cooperative, immediately provide
electric services to the agrarian reform areas. If the electric service
provider fails to provide the services requested within a period of one (1)
year, the agrarian reform cooperative concerned may undertake to provide the
electric services in the area through its own resources. All investments made
by the said agrarian reform cooperative for the electrification of the agrarian
reform resettlement areas shall be the subject of sale to the electric service
provider once it takes on the service.
"ART. 93. Privileges. – Subject to such
reasonable terms and conditions as the Department of Agrarian Reform (DAR) and
the Authority may impose, agrarian reform cooperatives may be given the
exclusive right to do any or all of the following economic activities in
agrarian reform and resettlement areas;
"(1) Supply and distribution of consumer,
agricultural, aqua-cultural, and industrial goods, production inputs, and raw
materials and supplies, machinery, equipment, facilities and other services and
requirements of the beneficiaries and marginal farmers at reasonable prices;
"(2) Marketing of the products and services
of the beneficiaries in local and foreign markets;
"(3) Processing of the members’ products into
finished consumer or industrial goods for domestic consumption or for export;
"(4) Provision of essential public services
at cost such as power, irrigation, potable water, passenger and/or cargo
transportation by land or sea, communication services, and public health and
medical care services;
"(5) Management, conservation, and commercial
development of marine, forestry, mineral, water, and other natural resources
subject to compliance with the laws and regulations on environmental and
ecological controls; and
"(6) Provision of financial, technological,
and other services and facilities required by the beneficiaries in their daily
lives and livelihood.
"The Government shall provide the necessary
financial and technical assistance to agrarian reform cooperatives to enable
them to discharge effectively their purposes under this article. The DAR, the
Authority and the BSP shall draw up a joint program for the organization and
financing of the agrarian reform cooperatives subject of this Chapter. The
joint program shall be geared towards the beneficiaries gradual assumption of full
ownership and management control of the agrarian reform cooperatives.
"ART. 94. Organization and Registration.
– Agrarian reform cooperatives may be organized and registered under this Code
only upon prior written verification by the DAR to the effect that the same is
needed and desired by the beneficiaries; results of a study that has been
conducted fairly indicate the economic feasibility of organizing the same and
that it will be economically viable in its operations; and that the same may
now be organized and registered in accordance with requirements of this Code.
"The Authority, in consultation with the
concerned government agencies and cooperative sector, shall issue appropriate
rules and regulations pertaining to the provisions of this Chapter."
SEC. 12. Articles 96, 97 and 98 of Chapter XII on the Special
Provisions on Public Services Cooperatives of the same Code are hereby
transferred to another chapter. Chapter XII as amended shall now read, as
follows:
CHAPTER XII
COOPERATIVE BANKS
COOPERATIVE BANKS
"ART. 95. Governing Law. – The
provisions of this Chapter shall primarily govern cooperative banks registered
under this Code and the other provisions of this Code shall apply to them only
insofar as they are not inconsistent with the provisions contained in this Chapter.
"ART. 96. Supervision. – The
cooperative banks registered under this Code shall be under the supervision of
the BSP. The BSP, upon consultation with the Authority and the concerned
cooperative sector, shall formulate guidelines regarding the operations and the
governance of cooperative banks. These guidelines shall give due recognition to
the unique nature and character of cooperative banks. To this end, cooperative
banks shall provide financial and banking services to its members.
"ART. 97. Organization, Membership and
Establishment of a Cooperative Bank. – (1) Cooperative organizations duly
established and registered under this Code may organize a cooperative bank,
which shall likewise be considered a cooperative registrable under provisions
of this Code subject to the requirements and requisite authorization from the
BSP. Only one cooperative bank may be established in each province: Provided,
That an additional cooperative bank may be established in the same province to
cater to the needs in the same province to cater to the needs of the locality
depending on the economic conditions of the province as may be determined by
the BSP: Provided, further, That the additional cooperative bank
shall be located in the City or municipality other that the city or
municipality where the first cooperative bank is located.
"(2) Membership in a cooperative bank shall
either be regular or associate. Regular membership shall be limited to
cooperative organizations which are holders of common shares of the bank. Associate
members are those subscribing and holding preferred shares of the bank, which
may include but are not limited to the following:
"(a) Individual members of the bank’s
member-primary cooperatives; and
"(b) Samahang Nayon and Municipal Katipunan
ng mga Samahang Nayon (MKSN) which held common shares of cooperative banks
prior to the effectivity of this Act shall apply for conversion to full-pledged
cooperatives in order to maintain their status as regular members of
cooperative banks: Provided, That they shall notify the cooperative bank
concerned their intention to convert within a period of ninety (90) days from
the effectivity of this Act. Samahang Nayon and MKSN are hereby given a period
of one (1) year from the effectivity of this Act to complete their conversion
as cooperatives. Cooperative bank shall exert reasonable efforts to inform
their member Samahang Nayon and MKSN to finally convert or to give the notice
of conversion within the prescribed period. Upon the failure of the Samahang
Nayon and MKSN to finally convert to a full-pledged cooperative within the
maximum period of one (1) year, the cooperative bank concerned may convert the
common shares held by such associations to preferred shares.
"(3) The articles of cooperative and bylaws of
a cooperative bank, or any amendment thereto, shall be registered with the
Authority only when accompanied by a certificate of authority issued by the
BSP, under its official seal.
"ART. 98. Administration of Cooperative
Banks. – To maintain the quality of bank management and accord appropriate
protection to depositors and the public in general, the BSP shall prescribed
the fit and proper qualifications of bank directors and officers for the
purposes of this article, giving due recognition to the unique nature and character
of cooperative banks.
"Notwithstanding the provisions of this Code,
the number, computation and term of the board of directors shall be defined in
the articles of cooperation and bylaws of the cooperative bank.
"ART. 99. Quorum and Voting Rights. –
The quorum requirement for general assembly meetings, whether special or
regular, shall be one half plus one of the number of voting shares of all the
members in good standing. In the meetings of the board of directors, whether
special or regular, the quorum requirement shall be one-half plus one of all
the members of the board of directors. Each director shall only have one vote.
"Notwithstanding the provisions of this Code
to the contrary, the quorum requirement for amendments of articles of
cooperation and bylaws shall be three-fourths (3/4) vote of all the members
with voting rights, present and constituting a quorum. All other voting
requirements shall be as prescribed by the BSP.
"The voting rights of the members shall be
proportionate to the number of their paid-up shares.
"ART. 100. Powers, Functions and Allied
Undertakings of Cooperative Banks. – A cooperative bank shall primarily
provide financial, banking and credit services to cooperative organizations and
their members. However, the BSP may prescribe appropriate guidelines, ceilings
and conditions on borrowing of a cooperative organization from a cooperative
bank.
"The powers and functions of a cooperative
bank shall be subject to such rules and regulations as may be promulgated by
the BSP.
"In addition to the powers granted by this
Code and other existing laws, any cooperative bank may perform any or all of
the banking services offered by other types of banks subject to the prior
approval of the BSP.
"ART. 101. Capital Requirements of
Cooperative Banks. – (1) A cooperative bank shall have a minimum paid-up
capital in such amount as may be required by the BSP.
"The BSP may prescribe rules and regulations
on the types of shares a cooperative bank may issue, including the terms
thereof and rights appurtenant thereto to determine compliance with laws and
regulations governing capital and equity structure of banks: Provided, That
cooperative banks shall issue par value shares only.
"(2) The Barrio Savings Fund (BSF) and Barrio
Guarantee Fund (BGF) collected/deducted by various banks throughout the country
from the loan proceeds of farmer-borrowers who were members of cooperatives and
Samahang Nayon in compliance with Presidential Decree No. 175 and accompanying
letters of instruction, which are still floating and outstanding either as
active or dormant deposit accounts in the books of those banks, shall be
deposited to the cooperative bank located in the province where the depository
banks of BSF and BGF are located, or if there is no cooperative bank in the
province. The BSP, in coordination with the Authority, shall come up with the
implementing guidelines on how to credit the owners of the funds.
"Those funds whose owners could not be located
or identified shall be subject to escheat.
"ART. 102. Privileges and Incentives of
Cooperative Banks. – The cooperative banks registered under this Code shall
be given the same privileges and incentives granted to the rural banks, private
development bank, commercial banks, and all other banks to rediscount notes
with the BSP, the Land Bank of the Philippines, and other government banks
without affecting in any way the provisions of this Code.
"(1) Subject to the approval of the BSP, a
cooperative bank shall publish a statement of its financial statement of its
financial condition, including those of its subsidiaries and affiliates in such
terms understandable to the layman and in such frequency as may be prescribed
by the BSP, in English or Filipino, at least once every quarter in a newspaper
of local circulation in the city or province where the principal office is
located or, if no newspaper is published in the same provinces, then in a
newspaper published in the nearest city or province or in a newspaper of
general circulation. The BSP, however, may allow the posting of the financial
statements of the cooperative bank in conspicuous places it may determine in lieu
of the publication required in the preceding sentence when warranted by the
circumstances.
"However, in cases of foreclosure of mortgages
covering loans granted by a cooperative bank, and the execution of judgments
thereon involving real properties and levied upon by a sheriff, it shall be
exempt from publication requirement where the total amount of the loan,
excluding interest and other charges due and unpaid, does not exceed Two
hundred fifty thousand (P250,000.00) or such amount as the BSP may prescribe,
as may be warranted by the prevailing economic conditions and by the nature and
character of the cooperative banks. It shall be sufficient publication in such
cases if the notice of foreclosure and execution of judgment are posted in
conspicuous areas in the cooperative bank’s premises, the municipal hall, the
municipal public market, the barangay hall, or the barangay public market, if
there be any where the property mortgaged is situated, within a period of sixty
(60) days immediately preceding the public auction or the execution of
judgment. Proof of publication as required herein shall be accomplished by an
affidavit of the sheriff or officer conducting the foreclosure sale or
execution of judgment, and shall be attached to the record of the case.
"(2) A cooperative bank shall be allowed to
foreclosure lands mortgaged to its subject to the provisions of Republic Act
No. 6657, otherwise known as Comprehensive Agrarian Reform Law of 1988.
"ART. 103. Assistance to Cooperative Banks.
– In accordance with existing policies, government agencies, government-owned
or controlled corporations and financial institutions shall provide assistance,
technical or otherwise, to cooperative banks to permit them to grow, develop
and perform their role in countryside development towards a sustainable
national economic development. Whenever a cooperative bank organized under this
Code is in a state of continuing inability or unwillingness to maintain a
period of liquidity, the BSP may designate one of its officials or a person of
recognized competence, preferably with experience in cooperative banking and
finance, as conservator of the said bank pursuant to the appropriate provisions
of existing banking laws.
"ART. 104. Applicability of Banking Laws
and Regulations. – With respect to the provisions and governance of the
cooperative banks, the provisions of the banking laws, rules and regulations
shall prevail, notwithstanding Section 71 of Republic Act No. 8791, otherwise
known as the General Banking Act of 2000.
"The BSP and the Authority, in consultation
with the concerned cooperative sector, shall issue appropriate rules and
regulations pertaining to the provisions of this Chapter."
SEC. 13. Articles 99, 100, 101, 102, 103, 104, 105, 106, 107, 108 and
109 of Chapter XIII on Special Provisions Relating to Cooperative Banks of the
same Code are hereby transferred to another chapter. Chapter XIII as amended
shall now read, as follows
CHAPTER XIII
INSURANCE COOPERATIVE
INSURANCE COOPERATIVE
"ART. 105. Cooperative Insurance Societies.
– Existing cooperatives may organize themselves into a cooperative insurance
entity for the purpose of engaging in the business of insuring life and
property of cooperatives and their members.
"ART. 106. Types of Insurance Provided.
– Under the cooperative insurance program established and formed by the virtue
of the provisions of this Code, the cooperative insurance societies shall
provide its constituting members different types of insurance coverage
consisting of, but not limited to, life insurance with special group coverage,
loan protection, retirement plans, endowment, motor vehicle coverage, bonding,
crop and livestock protection and equipment insurance.
"ART. 107. Applicability of Insurance Laws.
– The provisions of the Insurance Code and all other laws and regulations
relative to the organization and operation of an insurance company shall apply
to cooperative insurance entities organized under this Code. The requirements
on capitalization, investments and reserves of insurance firms may be liberally
modified upon consultation with the Authority and the cooperative sector, but
in no case may be requirement to be reduced to less than half of those provided
for under the Insurance Code and other related laws.
"ART. 108. Implementing Rules. – The
Insurance Commission and the Authority, in consultation with the concerned
cooperative sector, shall issue the appropriate rules and regulations
implementing the provisions of this Chapter."
SEC. 14. Articles 110, 111, 112, 113 and 114 of Chapter XIV on
Special Provisions relating to Credit Cooperative of this Code are hereby
transferred to another chapter. Chapter XIV as amended shall now read, as
follows:
CHAPTER XIV
PUBLIC SERVICE COOPERATIVES
PUBLIC SERVICE COOPERATIVES
"ART. 109. Definition and Coverage. – A
public service cooperative, within the meaning of this Code, is one organized
to render public services as authorized under a franchise or certificate of
public convenience and necessity duly issued by the appropriate government
agency. Such services may include the following:
"(1) Power generation, transmission, and/or
distribution;
"(2) Ice plants and cold storage services;
"(3) Communication services including
telephone, telegraph, and communications:
"(4) Land and sea transportation cooperatives
for passenger and/or cargo. Transport cooperatives organized under the
provisions of Executive Order No. 898, Series of 1983, shall be governed by
this Chapter.
"(5) Public markets, slaughterhouses and
other similar services; and
"(6) Such other types of public services as
may be engaged in by any cooperative. Such cooperative shall be primarily
governed by this Chapter and the general provisions of this Code insofar as
they may be applicable unless they are inconsistent herewith.
"ART. 110. Registration Requirements. –
Unless otherwise provided in this Code, no public service cooperative shall be
registered unless it satisfies the following requirements.
"(1) Its articles of cooperation and bylaws
provide for the membership of the users and/or producers of the service of such
cooperatives; and
"(2) Such other requirements as may be
imposed by the other pertinent government agencies concerned. In case there are
two (2) or more applicants for the same public service franchise or certificate
of public convenience and necessity, all things being equal, preference shall
be given to a public service cooperative.
"ART. 111. Regulation of Public Service
Cooperatives. – (1) The internal affairs of public service cooperatives
such as the rights and privileges of members, the rules and procedures for
meetings of the general assembly, board of directors and committees; for the
election and qualifications of officers, directors, and committee members;
allocation and distribution of surpluses; and all other matters relating to
their internal affairs shall be governed by this Code.
"(2) All matters relating to the franchise or
certificate of public convenience and necessity of public service cooperatives
such as capitalization and investment requirements, equipment and facilities,
frequencies, rate-fixing and such other matters affecting their public service
operations shall be governed by the proper government agency concerned.
"(3) The Authority and the proper government
agency concerned shall jointly issue the necessary rules and regulations to
implement this Chapter.
"(4) The Authority shall establish a committee
for the monitoring of transportation service cooperatives composed of
representatives from the Authority, the Land Transportation Franchising and
Regulatory Board (LTFRB), the Land Transportation Office (LTO), Office of
Transport Cooperatives (OTC), other concerned government agencies, as may be
necessary, and the National Federation of Transportation Cooperatives. A local
monitoring committee shall likewise be established at the extension offices of
the Authority to facilitate the monitoring of transportation cooperatives.
"ART. 112. Engagement in Allied Business by
Transportation Service Cooperatives. – Subject to pertinent national laws
and local ordinances, primary transportation service cooperatives including
secondary and tertiary federation of cooperatives may engage in a business
related to transportation service, including but not limited to:
"(1) Importation, distribution and, marketing
of petroleum products in accordance with existing laws;
"(2) Operation of gasoline stations and
transportation service centers;
"(3) Importation, distribution and marketing
of spare parts and supplies; and
"(4) Marketing of vehicle/drivers insurance
policies.
"ART. 113. Renewal of Franchise and Vehicle
Registration. – Renewals of franchise and vehicle registration shall be
granted to transportation service cooperatives: Provided, That such
cooperative presents a certificate of good standing issued by the Authority,
OTC, and the local government unit concerned as proof that it has continuously
provided the required public transportation services.
"The Authority, in consultation with the
concerned government agencies and cooperative sector, shall issue appropriate
rules and regulations pertaining to the provisions of this Chapter."
SEC. 15. Articles 115, 116, 117 and 118 of Chapter XV on Special
Provisions relating to Cooperative Insurance Societies of the same Code are
hereby transferred to another chapter. Chapter XV as amended shall now read, as
follows:
CHAPTER XV
CREDIT COOPERATIVES
CREDIT COOPERATIVES
"ART. 114. Coverage. – This Chapter
shall apply to credit cooperatives and other cooperatives, including
multipurpose cooperatives, that provide savings and credit to their members
only. The rest of the provisions of this Code shall apply to them insofar as
the same are not inconsistent with the provisions of this Chapter.
"ART. 115. Definition and Objectives. –
A credit cooperative is a financial organization owned and operated by its
members with the following objectives:
"(1) To encourage savings among its members;
"(2) To create a pool of such savings for
which loans for productive or provident purpose may be granted to its members;
and
"(3) To provide related services to enable
its members to maximize the benefit from such loans.
"ART. 116. Organization and Registration.-
Credit cooperatives shall be organized and registered in accordance with the
general provisions of this Code.
"ART. 117. Organizational Linkage. –
Credit cooperatives may organize chapters or subsidiaries, or join leagues and
federations for the purpose of providing commonly needed essential services
including but not limited to the following:
"(1) Interlending of surplus fund;"(2)
Mutual benefits;"(3) Deposit guarantee;"(4) Bonding;"(5)
Education and training;"(6) Professional and technical
assistance;"(7) Research and development;"(8) Representation; and
"(9) Other services needed to improve their performance.
"Existing support organizations such as
federations of credit cooperatives, credit cooperatives at the provincial,
regional and national levels may continue as such under this Code."
SEC. 16. A new Article is inserted in Chapter XV on Credit
Cooperatives and shall now read, as follows:
"ART. 118. Conversion of Credit
Cooperatives to Financial Service Cooperatives. – Existing credit and
multipurpose cooperatives with savings and credit facilities shall formally
inform the Authority of its intention to continue performing its present
functions. Should the said cooperatives decide to exercise enhanced functions, it
shall notify the Authority and satisfy the requirements for conversion to
financial service cooperative."
SEC. 17. A new Chapter on Financial Service Cooperatives shall be
inserted in this Chapter and shall read, as follows:
CHAPTER XVI
FINANCIAL SERVICE COOPERATIVES
FINANCIAL SERVICE COOPERATIVES
"ART. 119. Definition and Functions of
Financial Services Cooperatives. – A financial service cooperative is a
financial organization owned and operated by its members and authorized to
provide the following service, exclusively to its members:
"(a) The functions of credit cooperatives and
other cooperatives, including multipurpose cooperatives, that provide savings
and credit to their members, and"(b) Other financial services subject to
regulation by the BSP.
"The articles of cooperation and bylaws of any
financial service cooperative, or any amendment thereto, shall be registered
with the Authority only if accompanied by a certificate of authority issued by
the BSP, under its official seal.
"The authority granted this provision may be
revoked by the BSP if any of the grounds for receivership mentioned under
Section 53 and 56 of Republic Act No. 8791 is present or if the financial
service cooperative has willfully violated this Code of any of the related
rules and regulations.
"The BSP shall issue a cease and desist order
to cooperatives exercising the function of a financial service cooperative
without authority from the BSP.
"The BSP may charge equitable rates or fees,
as may be prescribed by the Monetary Board for licensing, examination and other
services which it renders under this Code.
"Upon the favorable certification of the BSP
and the prior approval of the Authority, a cooperative, the main purpose of
which is to perform savings and credit functions, may convert to financial
service cooperative subject to the required qualifications and procedures
provided under this Code and in the implementing rules and regulations.
"ART. 120. Membership and Affiliation.
– A financial service cooperative shall have the two (2) types of members:
"(1) Regular members, who are natural persons;
and
"(2) Associate members, who are natural
persons but who do not immediately qualify under the requirements for
membership set out in the bylaws of the cooperative. All associate members who
are natural persons shall be given two (2) years to become regular members.
Failure to convert within the said period shall mean automatic withdrawal of
their associate membership. They may, however, re-apply as regular members
after two (2) years.
"Minors who are dependents of regular members
can qualify as associate members. When they reach the age of majority and
within two (2) years from acceptances of their associate membership, they have
the option to convert into regular members. As associate members, they may open
accounts, deposit funds and withdraw from their account, subject to the bylaws
and rules of the cooperative, and the rules and regulations of the Authority,
notwithstanding the provisions of existing laws to the contrary.
"ART. 121. Regulation and Supervision.
– The Authority shall exercise lead regulatory powers and supervision over the
operations of the financial service cooperatives, to wit:
"(1) Issue rules and regulations for the safe
and sound conduct of operations of financial service cooperatives;
"(2) Establish standards of operation for
uniform application to all financial service cooperatives;
"(3) Prescribe ratios, ceilings, limitations,
or other forms of regulation on the different types of accounts and practices
of financial service cooperatives which shall, conform to internationally
accepted standards;
"(4) Investigate to determine whether a
financial service cooperative is conducting its business in a safe and sound
manner;
"(5) Conduct regular examination of the books
of accounts, records and other documents of financial service cooperatives;
"(6) Inquire into the solvency and liquidity
of a financial service cooperatives;
"(7) Prescribe appropriate fees for
supervision and examination of financial service cooperatives to among others,
monitor and oversee that existing laws and regulations are complied with;
"(8) Pass upon and review the qualifications
and disqualifications of individuals elected or appointed directors or officers
and disqualify those found unfit;
"(9) Disqualify, suspend or remove any
director or officer who commits or omits an act which render him unfit for the
position;
"(10) Select, designate and deputize
federations, through an approved accreditation criteria, that will supervise
primary financial service cooperatives and issue basic guidelines therefor;
"(11) Require the submission of relevant
reports from the deputized supervisor;
"(12) Provide remedial measures in the
operations of financial service cooperatives that are in a state of continuing
inability or unwillingness to maintain a period of liquidity at the request of
the deputized supervisor or when the deputized supervisor fails to perform its
functions;
"(13) Accredit external auditors in
accordance with standards for audit and financial reporting in cooperation with
the PICPA; and
"(14) Appoint a conservator or a receiver as
may be necessary subject to the rules and regulations to be promulgated by the
Authority in coordination with the BSP, taking into consideration the grounds,
powers and procedures under Sections 29 and 30 of Republic Act No. 7653 as may
be deemed appropriate to financial service cooperatives.
"The Authority shall include in its rules and
regulations, appropriate sanctions and penalties, on the financial service
cooperatives, its members, officers and responsible persons, for any action
that fails to adhere to sound and prudent management practices or are
inconsistent with the provisions of this Code, other applicable laws on
cooperatives, rules, regulations, circulars or orders issued by the Authority,
and require the cooperative to undertake corrective or remedial measures
relative thereto.
"The BSP is authorized to conduct risk-based
supervision and examination of financial service cooperatives as it may deem
necessary.
"ART. 122. Promulgation of Rules and
Regulations. – The BSP, in coordination with the Authority, shall prescribe
the appropriate prudential rules and regulations applicable to the financial
service cooperatives.
"Subject to the regulations of the BSP, the
banking laws, rules and regulations shall have suppletory application to
financial services cooperatives: Provided, however, That the
provisions on access to borrowing or financial assistance to be extended by the
BSP of the Philippine Deposit Insurance Corporation (PIDC) shall not apply to
financial service cooperatives: Provided, further, That the
deposit liabilities of the financial service cooperatives shall not be insured
by the PDIC.
"ART. 123. Financial Service Cooperative
Federations. – Financial service cooperatives may organize themselves into
financial service cooperative may organize themselves into financial service
cooperative federations, and register their federation with the Authority.
These financial service cooperative federations may be deputized by the
Authority as the supervisor of their members, and they shall have the following
functions:
"(a) Develop standards and provide services
for the benefit of its affiliates and their members in accordance with the
rules and regulations of the Authority;
"(b) Define common objectives and coordinate
activities for the financial service cooperative federation;
"(c) Establish and administer funds such as
liquidity fund, loan fund, investment fund, stabilization fund and such other
funds;
"(d) Establish a savings guarantee system for
the protection of their affiliates' member-depositors within three (3) years
from the approval of this Code;
"(e) Exercise on-site and off-site
supervisory power over its members;
"(f) Provide remedial assistance to its
members concerning their operations and management;
"(g) Act as the liquidator and when
applicable, sequester properties to satisfy an obligation secured by a mortgage
when authorized by the Authority; and
"(h) Transmit relevant and required
information regarding the operations and performance of member-cooperatives to
the Authority.
"The Authority and other government agencies,
government-owned or controlled corporations and government financial
institutions shall provide technical and such other assistance that may be
allowed by their charters to financial service cooperative federations for the
establishment and/or strengthening of their respective cooperative savings
guarantee system. The technical assistance to be provided shall include, among
others, training supervision and examination.
"ART. 124. Designation of Existing Unit at
the Cooperative Development Authority to Perform Regulatory and Supervisory
Functions. – Within six (6) months from the approval of this Code, the
Authority shall designate the unit to formulate and implement the necessary
regulations, rules, policies, guidelines and standards applicable solely to
financial service cooperatives and deputized federations in the performance of
their savings, credit and such other related enhanced financial service
operations.
"The Department of Finance, the BSP and other
concerned government agencies shall provide technical and training support for
the effective and efficient implementation of the regulatory and supervisory
functions and responsibilities of the Authority.
"ART. 125. Prohibition. – The terms
credit cooperative, financial service cooperative and financial service
cooperative federation shall be used exclusively by those who are duly
registered under this Code, and no person, group of persons, or organizations
shall use the said terms unless duly registered with the Authority. Violations
of this prohibition shall be punishable in accordance with Article 140 of this
Code."
SEC. 18. A new Chapter on Electric Cooperatives shall be inserted and
shall read, as follows:
CHAPTER XVII
ELECTRIC COOPERATIVE
ELECTRIC COOPERATIVE
"ART. 126. Coverage. – The provisions
of this Code shall apply to all electric cooperatives registered with the
Authority. This shall also cover new distribution utilities that will register
with the Authority.
"Electric cooperatives may undertake power
generation utilizing renewable energy sources, including hybrid systems,
acquisition and operation of subtransmission or distribution as its primary
purposes.
"ART. 127. Registration of Electric
Cooperatives. – The registration of an electric cooperative with the
Authority under this Code shall be submitted for approval to the members
through a referendum, called for the purpose as provided for under Articles 183
and 129 of this Code.
"ART. 128. Voting Requirement for
Registration. – In compliance with the referendum as a voting procedure,
the required number of votes for registration with the Authority shall be
twenty percent (20%) of all members in good standing.
"ART. 129. Documents to be Submitted for
Registration with the Authority. – For purposes of registration, electric
cooperatives shall submit the following documents:
"(a) Copy of the board resolution certifying
to the result of the vote approved through a referendum approving the
registration of the cooperative with the Authority in compliance with Article
128;
"(b) Certified copy of the articles of
incorporation/cooperation and bylaws as required by the Authority;
"(c) Duly audited financial statements for
the past two (2) years;
"(d) List of names of incumbent board of
directors and their addresses certified by the board secretary and attested by
the chairperson;
"(e) Within six (6) months from the
registration, the treasurer shall submit a sworn statement of the authorized
share capital, the subscribed share capital of members and the amount of
paid-up share capital received by the treasurer; and
"(f) Bonds of accountable officers.
"ART. 130. Registration Options of Electric
Cooperatives. – Electric Cooperatives registered with the National
Electrification Administration (NEA) under Presidential Decree No. 269, as
amended which opt not to register with the Authority are allowed to retain the
word ‘cooperative’ in their registered names: Provided, That they shall
not be entitled to the benefits and privileges under this Code.
"ART. 131. Role of the Energy Regulatory
Commission. – All rates and tariffs of electric cooperatives registered
under the Authority shall be subject to the rules on application and approval
of and by the Energy Regulatory Commission for distribution utilities.
"ART. 132. Effects of Registration with the
Authority. – (1) Upon the effectivity of this Code, electric cooperatives
that are duly registered with the Authority, and issued a certificate of
registration, shall no longer be covered by Presidential Decree No. 269, as
amended by Presidential Decree No. 1645: Provided, That electric
cooperatives registered with the Authority shall now be covered by the
provisions of this Code as well as future rules and issuances of the Authority:
Provided, however, That the security of tenure and the collective
bargaining agreement between the cooperative management and the employees shall
be respected, with no diminution of their existing salaries, emoluments, ranks
and other benefits;
"(2) The electric cooperatives registered with
the Authority with existing loans obtained from NEA after June 26, 2001 shall
continue to observe the terms of such loans until full payment or settlement
thereof;
"(3) Except as provided in the immediately
preceding paragraph, the NEA shall no longer exercise regulatory or supervisory
powers on electric cooperatives duly registered with the Authority;
"(4) Electric cooperatives registered with the
Authority are entitled to congressional allocations, grants, subsidiaries and
other financial assistance for rural electrification which can be coursed
through the Department of Energy, the Authority and/or local government units.
The electric cooperatives registered under this Code can avail of the financial
services and technical assistance provided by the government financial
institutions and technical development agencies on terms respecting their
independence as autonomous cooperatives;
"(5) All condoned loans, subsidies, grants and
other assistance shall form part of the donated capital and funds of the
electric cooperatives and as such, it shall not be sold, traded nor be divided
into shareholdings at any time; these donated capital/fund shall be valuated for
the sole purpose of determining the equity participation of the members: Provided,
That in the case of dissolution of the cooperative, said donated capital shall
be subject to escheat; and
"(6) Electric cooperatives registered and
confirmed with the Authority under Republic Act No. 6938 and Republic Act No.
6939 are hereby deemed registered under this Code.
"ART. 133. Share Capital in the Electric
Cooperatives. – The electric cooperative shall issue and distribute share
certificates under the name of their members, taking into consideration their
previous equity contributions, the amortization component through the payments
made, capital build-up and other capital contributions.
"ART. 134. Cancellation of Registration
with the Authority. – The cancellation of the registration of an electric
cooperative shall be granted by the Authority as provided under Articles 64 to
70 of this Code.
"The Authority, in consultation with the
concerned cooperative sector, shall issue appropriate rules and regulations
pertaining to the provisions of this Chapter."
SEC.19. Articles 119, 120 and 121 of Chapter XVI on Miscellaneous
Provisions of the same Code are hereby amended and shall now read, as follows:
CHAPTER XVIII
MISCELLANEOUS PROVISIONS
MISCELLANEOUS PROVISIONS
"ART. 135. Compliance With Other Laws.
– The Labor Code and all other labor laws, the Social Security Act, the Medical
Care Act, and all other social legislations, and all other laws and executive
orders shall apply to cooperatives duly registered under this Code.
"ART. 136. Register of Cooperatives. –
The Authority shall establish a register which shall contain a chronological
entry of the name of every cooperative registered or dissolved under this Code
together with the basic information required for registration or dissolution
and any other information considered useful. The Authority shall publish
annually a list of existing cooperatives, cooperatives under dissolution and
those whose registration are cancelled during the year together with such
information on each of them as may be prescribed in the rules and regulations.
"ART. 137. Settlement of Disputes,
Conciliation, and Mediation Proceedings. – Disputes among members,
officers, directors, and committee members, and intra-cooperative,
inter-cooperative, intra-federation or inter-federation disputes shall, as far
as practicable, be settled amicably in accordance with the conciliation or
mediation mechanisms embodied in the bylaws of cooperatives and in such other
applicable laws.
"The conciliation and mediation committee of
the cooperative shall facilitate the amicable settlement of intra-cooperative
disputes and disputes among members, officers, directors, and committee
members.
"Should such conciliation or mediation
proceeding fail, the matter shall be settled through voluntary arbitration: Provided,
however, That before any party can validly file a complaint with the
Authority for voluntary arbitration, it must first secure a certification from
its conciliation and mediation committee and from its conciliation and
mediation committee and from the cooperative union or federation to which it
belongs that despite all efforts to settle the issues, the same have failed.
"The jurisdiction of the voluntary arbitrators
shall be exclusive and original and their decisions shall be appealable to the
Office of the President. The Authority shall issue and adopt the proper rules
of procedure governing arbitration as the primary and exclusive mode for
dispute resolution in accordance with the Alternative Dispute Resolution Act of
2004.
"For this purpose, the Authority shall
constitute a list of qualified voluntary arbitrators."
SEC. 20. A new article is inserted in Chapter XVIII on the
Miscellaneous Provisions of the same Code and shall read, as follows:
"ART. 138. Joint Congressional Oversight
Committee on Cooperative (JCOCC). – There is hereby created a Joint
Congressional Oversight Committee composed of the Chairman of the Senate
Committee on Cooperatives and the Chairman of the House Committee on
Cooperatives Development, with four (4) members each from both Houses. The said
members shall be duly appointed by the Senate President and the Speaker of the
House of Representatives from the members of the respective committee based on
the proportional representation of the parties or coalition therein.
"The Joint Oversight Committee shall review
and approve the implementing rules and regulations of this Code and monitor its
proper implementation.
"The annual appropriate for the oversight
committee shall be charged to the budget of both Houses of Congress in the
General Appropriations Act (GAA)."
SEC. 21. Article 122 is hereby deleted. Articles 123, 124, 125, 126,
127, 128, 129 and 130 of Chapter XVII on Final Provisions of this Code are
amended to read, as follows:
CHAPTER XIX
FINAL PROVISIONS
FINAL PROVISIONS
"ART. 139. Implementing Rules and
Regulations. – The Authority shall issue rules and regulations to implement
those provisions of this Code which expressly call for the issuance thereof.
This paragraph shall not apply to those cases wherein a specific provision of
this Code expressly designates particular government agencies which shall issue
the regulations called for by any provision of this Code.
"ART. 140. Penal Provisions. – The
following acts or omissions affecting cooperatives are hereby prohibited:
"(1) The use of the word ‘cooperative’ by any
person or of persons or organizations, unless duly registered as a cooperative
under this Code except as provided for under Article 130 hereof. In case of
violation, the individual or individuals concerned, or in the case of an
organization, its officers and directors shall, upon conviction, each suffer
the penalty of imprisonment of not less than two (2) years nor more than five
(5) years and a fine not exceeding Twenty thousand pesos (P20,000.00) or both
at the discretion of the court;
"The Authority may motu proprio, initiate
complaints for violations of this provision.
"(2) Any person who willfully attempts in any
manner to evade or defeat tax in violation of the provisions of Articles 60 and
61 of this Code shall in addition thereof, be punished by a fine of not less
than Thirty thousand pesos (P30,000.00) but not more than One hundred thousand
pesos (P100,000.00) and suffer imprisonment of not less than two (2) years but
not more than four (4) years: Provided, That the conviction or acquittal
obtained under this Article shall not be a bar to the filing of a civil suit
for the collection of taxes;
"(3) Direct or indirect violation or
circumvention of the provisions of Articles 60 and 61 of this Code committee by
any public official or employee of any bureau, office or agency of the
government that deprives, diminishes or in any manner hinders or restricts any
duly registered cooperative from the full enjoyment of the exemption from the
payment of the taxes, fees and charges enumerated therein, shall upon
conviction, suffer a penalty of not less that one (1) year but not more than
five (5) years imprisonment or a fine in the amount of not less than Five
thousand pesos (P5,000.00) or both at the discretion of the court and shall
further be disqualified to hold any other office;
"(4) Direct or indirect interference or
intervention by any public official or employee into the internal affairs of a
cooperative of which he is not a member, such as, but not limited to, the
following:
"(a) Influencing the election or appointment
of officers, directors, committee members and employees through public or
private endorsement or campaign for or against any person or group of persons;
"(b) Requiring prior clearances for any
policy or decision within the cooperative;
"(c) Requesting or demanding for the creation
of positions or organizational units, or recommending any person for
appointment, transfer, or removal from his position; or
"(d) Any other acts inimical or adverse to
the autonomy and independence of cooperatives.
"(5) A director, officer or committee member
who violated the provisions of Article 45 on the Liability of Directors,
Officers and Committee Members, Article 48 on the Disloyalty of a Director, and
Article 49 on the Illegal Use of Confidential Information shall upon conviction
suffer a fine of not less than Five hundred thousand pesos (P500,000.00) nor
more than Five hundred thousand pesos (P500,000.00) or imprisonment of not less
than five (5) years but not more than ten (10) years or both at the court’s
discretion;
"(6) The following are considered offenses
punishable by a penalty of imprisonment of not less than one (1) year nor more
than five (5) years or a fine of not more than Fifty thousand pesos
(P50,000.00) or both at the discretion of the court:
"(a) Omission or refusal to furnish any
information, report or other document that is required under this Code;
"(b) Providing information, reports or other
documents to the Authority that are required under this Code which the person
knows to be false or misleading;
"(c) Omission or refusal to keep a book or
register under this Code or to make the required entry therein;
"(d) Making an entry required under this Code
in a book or register, which the person knows to be false or misleading;
"(e) Hindering an authorized person from
making an inspection, audit, examination or investigation required under this
Code;
"(f) Failure to comply with an order or
written instructions issued or given by the Authority;
"(g) Violation of the provisions regarding
transactions with a restricted party; and
"(h) Abetting, counseling, allowing,
authorizing or commanding another person to commit an offense punishable by
this Code: Provided, That in case the violator is a cooperative or
juridical person, the penalty shall be imposed on its directors and officers.
"(7) Any violation of any provision of this
Code for which no penalty is imposed shall be punished by imprisonment of not
less than six (6) months nor more than one (1) year and a fine of not less than
One thousand pesos (P1,000.00), or both at the discretion of the court.
"In case of violation of any provision of this
Code, the individual or individuals, and in the case of organizations or
government agencies, its officers, and directors shall, upon conviction by a
Court, each suffer a penalty of not less than two (2) years but not more than
five (5) years imprisonment or a fine in the amount of not less than Twenty
thousand pesos (P20,000.00), or both at the discretion of the court. In the case
of a public official or employee, the offender shall upon conviction, suffer
the accessory penalty of temporary absolute disqualification.
"ART. 141. Printing and Distribution. –
(1) The National Printing Office shall publish this Code in the Official
Gazette in full within sixty (60) days from the date of approval thereof.
Copies of this Code shall be given to every department, agency and
instrumentality of the National Government, including regional, provincial
offices and local governments including government-owned and controlled
corporations.
"(2) All duly registered cooperatives and
their federations, unions and associations, and cooperative corporations shall
be given one (1) copy each at cost. Thereafter, every newly registered
cooperative shall be issued at cost a copy of this Code and the regulations
promulgated thereon together with its certificate of registration.
"ART. 142. Interpretation and Construction.
– In case of doubt as to the meaning of any provision of his Code or the regulations
issued in pursuance thereof, the same shall be resolved liberally in favor of
the cooperatives and their members.
"ART. 143. Repealing Clause. – Except
as expressly provided by this Code, Presidential Decree No. 175 and all other
laws, or parts thereof, inconsistent with any provision of this Code shall be
deemed repealed: Provided, That the provisions of Sections 3, 5, and 7
of Presidential Decree No. 1645, Executive Order No. 623, series of 2007.
Revenue Regulation No. 20-2001, and all laws, decrees, executive orders,
implementing rules and regulations, BIR circulars, memorandum orders, letters
of instruction, local government ordinances, or parts thereof inconsistent with
any of the provisions of this Act are hereby repealed, amended or modified accordingly.
"ART.144. Transitory Provisions.- (1)
All cooperatives registered and confirmed with the Authority under Republic Act
No. 6938 and Republic Act No. 6939, are hereby deemed registered under this
code, and a new certificate of registration shall be issued by the authority: Provided,
That such cooperative shall submit to the nearest office of the authority a
copy of their certificate of registration or certificate of confirmation, the
articles of cooperation, their bylaws, and their latest audited financial
statement within one (1) year from the effectivity of this code, otherwise the
shall be deemed cancelled motu proprio.
"(2) Following the issuance of the new
certificate of registration, the registered cooperatives shall secured their
certificate of tax exemption from the nearest office of the Bureau of Internal
Revenue (BIR): Provided, That such exemptions shall be valid of five (5)
years from the date of issue: Provided, further, That all unpaid
assessments of previously registered cooperative shall be the subject of
compromise settlement on terms favorable to such cooperative; and: Provided,
finally, That the BIR and the authority shall be jointly issue the
necessary regulations on this exemption and compromise within ninety (90) days
from the effectivity from this Code.
"(3) Registration of electric cooperatives
with the Authority shall not be considered as a transferred of ownership of its
assets and liabilities nor shall it constitute a change in the nature,
structure, and status of the cooperative. Said registration shall not result in
the revocation of the condoned loans under Republic Act No. 9136, otherwise
known as the Electric Power Industry Reform Act: Provided, That electric
cooperatives with existing loans shall not be subject to the control and
supervisions of its creditors and shall only be limited to the fulfillment of
each civil obligations.
"ART.145. Separabilty Clause. - Should
any part of this code be declared unconstitutional, the validity of remaining
provision hereof shall remain in full and effect.
"ART.146. Effectivity Clause. - This
code shall take effect fifteen (15) days from its publication in a newspaper of
general circulation.
Approved,
(Sgd.) PROSPERO
C. NOGRALES
Speaker of the House of Representatives |
(Sgd.) JUAN
PONCE ENRILE
President of the Senate |
(Sgd.) MARILYN
B. BARUA-YAP
Secretary General House of Represenatives |
(Sgd.) EMMA
LIRIO-REYES
Secretary of Senate |
(Sgd.) GLORIA MACAPAGAL-ARROYO
President of the Philippines
President of the Philippines
The Lawphil Project - Arellano Law Foundation
RULES AND REGULATION IMPLEMENTING
CERTAIN PROVISIONS
OF THE PHILIPPINE COOPERATIVE CODE OF 2008
(REPUBLIC ACT NO. 9520)
Pursuant to the provision of Art. 139 of Republic Act No. 952 otherwise
known as the Philippine Cooperative Code of 2008, the Cooperative Development
Authority hereby issues the following rules and regulations implementing
certain provisions of the said Code.OF THE PHILIPPINE COOPERATIVE CODE OF 2008
(REPUBLIC ACT NO. 9520)
TITLES AND DEFINITIONS
Section 1. Title. These Rules shall be known as the "Rules
and Regulations Implementing Certain Provisions of the Philippine Cooperative
Code of 2008."Section 2. Definition of Terms. For the purpose of these Rules and regulations, the following terms are defined as follows:
(1) Alternative Dispute Resolution - shall
refer to any process or procedure used to resolve a dispute or controversy,
other than by adjudication of a presiding Judge of Court or an officer of a
government agency, in which a neutral third party participates to assist in the
resolution of issue, which includes arbitration, mediation, conciliation, early
neutral evaluation, mini trial, or any combination thereof.
(2) Arbitrator - shall refer to the person
appointed to render an Award/Decision, alone or with others, in a dispute that
is the subject of an Arbitration Agreement.
(3) Area of Business Operation - shall refer
to the principal place of business of a cooperative where the cooperative
conducts its business as provided for in their Articles of Cooperative and
By-laws.
(4) Area of Operation - shall refer to the
area where the cooperative members come from as provided for in their Articles
of Cooperation and By-laws.
(5) Articles of Cooperation - shall refer to
the Articles of Cooperation registered under the Code, with includes a
registered amendment thereto, if applicable.
(6) Associate Member - shall refer to member
of a cooperative who has no right to vote or be voted upon and shall be
entitled only to such rights and privileges as the By-laws may provide.
(7) Authority - shall refer to the
Cooperative Development Authority (CDA).
(8) Authorized Share Capital - shall refer
to the capitalization of the cooperative as prescribed in the Articles of
Cooperation
(9) Award/Decision - shall refer to any
partial or final decision by an Arbitrator in resolving the issue in a
controversy.
(10) Board of Liquidators/Trustees - shall
refer to the body appointed by the Board of Directors or elected by the General
Assembly that shall cause the liquidation of the cooperative in case of
voluntary dissolution or appointed by the Authority/Court in case of
involuntary dissolution of a cooperative.
(11) Bond of Membership - shall refer to the
conditions where members associate themselves to attain their common goals and
objectives which may either be residential, occupational, associational, and
institutional.
(12) By-Laws - shall refer to the By-laws
registered under the Code which includes any registered amendments thereto.
(13) Capital - shall refer to the sum total
of member's share capital including deposits, revolving capital, subsidies,
donations, legacies, grants, aids, land structures, plants, equipment
facilities, machines and other assets of a cooperative.
(14) Certificate of Merger - shall refer to
the document issued by the Authority evidencing registration of merger.
(15) Code - shall refer to the Republic Acts
No. 9520, otherwise known as the Philippine Cooperative Code of 2008.
(16) Conciliation - shall refer to the
process whereby a neutral third party takes a vigorous and active role in
assisting disputants to formulate between and among them an acceptable solution
in order to reach an amicable settlement.
(17) Conservator - shall refer to any person
appointed by the Authority empowered to take charge of the assets, liabilities,
and the management of the cooperative, after finding that the cooperative is in
the state of continuing illiquidity or unwillingness to maintain a condition of
liquidity which is deemed adequate to protect the interest of members and
creditors of the cooperative.
(18) Consolidation - shall refer to a union
of two or more existing cooperatives belonging to the same category to a form a
new cooperative called the consolidated cooperative.
(19) Constituent Cooperatives - shall refer
to two or more existing cooperatives which are parties to a merger or
consolidation.
(20) Credit Cooperative - shall refer to one
that promotes and undertakes savings and lending services among its members. It
generates a common pool of funds in order to provide financial assistance and
other related financial services to its members for productive and provident
purposes.
(21) Cumulative Interest - shall refer to
the interest due to a member that must be added to in future interest if it is
not paid when due.
(22) Delay in the submission of reports - shall
refer to the failure of the cooperatives to submit a report on time.
(23) Dispute - shall refer to intra/inter
cooperative controversy or grievance from any violation or disagreement over
any provisions, including any violations of the rights and conditions of
membership provided in the cooperative By-laws and/or in the Cooperative Code,
which may be the subject of a formal or informal request for
conciliation/mediation or arbitration assistance sought by either one or both
parties.
(24) Dissenting Member - shall refer to a
member present during the meeting and who actually voted against the proposed
activity/project of a cooperative.
(25) Division - shall refer to the act of
spiting a single cooperative into two or more cooperatives, wherein the original
cooperative shall be dissolved and the resulting cooperatives shall acquire
separate and distinct juridical personalities.
(26) Donated Capital - shall refer to the
subsidies, grants, donations and aids received by the cooperative from any
person, whether natural or juridical, local or foreign both government and
private.
(27) Escheat - shall refer to the right of
the State to succeed to property either real or personal, when no heir or
rightful claimant can be found through an appropriate legal proceeding.
(28) Equity - shall refer to the excess of
cooperative assets over liabilities.
(29) Financial Statements - shall refer to
the means i.e. Statement of Financial Condition (Balance Sheet), Statement of
Operation (Statement of Net Surplus) and Statement of Cash Flows, by which the
financial information accumulated and processed in financial accounting, is
periodically communicated to those who use it.
(30) Financial Service Cooperative (FSC) -
shall refer to one organized for the primary purpose of engaging in saving and
credit services and other financial services regulated by the Bangko Sentral ng
Pilipinas (BSP).
(31) General Assembly - shall refer to the
full membership of the cooperative duly assembled for the purpose of exercising
all the rights and performing all the obligations pertaining to cooperatives,
as provided by this Code, its Cooperation and By-laws.
(32) Guardian Cooperative - shall refer to
duly registered cooperative to which a laboratory cooperative is affiliated
with.
(33) Internal Control - shall refer to all
the system and procedures adopted to safeguard the cooperative's assets, check
the accuracy and reliability of its accounting data, promote operational
efficiency and encourage adherence to prescribed managerial policies.
(34) Involuntary Dissolution - shall refer
to the termination of the juridical personality of the cooperative through an
appropriate judicial proceeding or by Order of the Authority.
(35) Laboratory Cooperative - shall refer to
a cooperative duly recognized by the Authority, formed and managed principally
by minors and is affiliated with another registered cooperative which is called
the guardian cooperative.
(36) Liquidation - shall refer to the
process of settlement and closure of the cooperative affairs, disposition,
conveyance and distribution of its assets.
(37) Mediation - shall refer to the process
in which a mediator, selected by the disputing parties, facilities a
communication and negotiation, and assists the parties in reaching a voluntary
agreement regarding a dispute.
(38) Merger - shall refer to a union of two
or more existing cooperatives belonging to the same category whereby the
surviving cooperative, retaining its identity, absorbs one or more constituent
cooperatives/s.
(39) Minor - shall refer to an individual
below eighteen (18) years of age but at least seven (7) years old.
(40) Multipurpose Cooperative - shall refer
to a cooperative, which combines two (2) or more of the business activities of
the different types of cooperatives as enumerated under Art. 23 of the Code.
(41) Net worth - shall refer to equity
inclusive of member's equity, donations, grants and reserve funds less
un-booked allowance for probable losses on loans, investment and other assets
and other capital adjustments as may be required by the CDA.
(42) Numerous and Dispersed Membership -
shall refer to a cooperative whose membership are in large number and
geographically scattered/distributed by reason of geographical location, work
shift or other similar conditions making it impossible and difficult to conduct
their general assembly meeting.
(43) Paid-up Share Capital - shall refer to
the portion of the subscribed share capital, which has been paid by the members
of the cooperative.
(44) Parent Cooperative - shall refer to a
cooperative, which initiates the organizational of another cooperative called a
subsidiary cooperative and provides technical, managerial, and financial
assistance thereto.
(45) Patronage Refund - shall refer to the
amount returned to individual members who patronize the goods and services of
the cooperative in proportion to their individual patronage.
(46) Plan of Merger or Consolidation - shall
refer to a written document containing the proposed merger or consolidation of
cooperatives duly approved by the General Assembly of each of the constituent
cooperatives at separate General/Representative Assembly Meetings.
(47) Primary Cooperative - shall refer to a
cooperative, the members of which are natural persons.
(48) Receiver - shall refer to any person of
recognized competence appointed by the Authority empowered to take charge of
all the assets and liabilities of the cooperative administer the same for the
benefit of its creditors and exercise such other powers as provided under the
Revised Rules of Court.
(49) Registration - shall refer to the
operative act gaining juridical personality to a proposed cooperative as
evidenced by a Certificate of Registration.
(50) Representative Assembly - shall refer
to the full membership of the body of representatives elected by each of the
sectors, chapters or districts of the cooperative duly assembled for the
purpose of exercising such powers lawfully delegated unto them by the general
assembly in accordance with its By-laws.
(51) Reports - shall refer to any documents
or statement required from cooperatives to be submitted to the Authority on a
regular basis.
(52) Representative/Delegate - shall refer
to a member duly elected during the sector, chapter or district meetings who
shall represent his/her sector, chapter or district to the representative
assembly meeting.
(53) Revolving Capital - shall refer to the
amount available out of the deferred payment of the patronage refund and
interest on share capital of the members or by authorized deduction of a
percentage from the product sold or per unit of product handled by the
cooperative. The Board of Director shall issue revolving capital certificates
with serial number, name, amount, and rate of interest to be paid and shall distinctly
set forth the time of retirement of such certificates and the amounts to be
returned.
(54) Risk Asset - shall refer to the total
assets minus cash on hand, evidences of indebtedness, loans to the extent
covered by hold-outs or assignments of deposits, lands owned used for
operations, buildings and land improvements net of depreciation, furniture and
fixtures and equipment net of depreciation, real estate mortgage loan and other
non-risk items as the Authority may, from time to time, authorized to be
deducted from total assets.
(55) Sanctions - shall refer to the
penalties provided for in the cooperative bylaws, these rules, and other
administrative issuances, the Code and other related laws
(56) Secondary Cooperative - shall refer to
a cooperative the members of which are primaries.
(57) Sector, Chapter or District - shall
refer to a division of a cooperative, which may be by reason of geographical
location, scope of operation, cluster, work shift or such other similar
sub-groupings.
(58) Settlement - shall refer to any
compromise or arrangements between the disputants to settle the matters in
dispute and thus dispose of controversy. The term may be used in the sense of
"payment" or "adjustment" depending upon the circumstances under
which, and the connection in which, use of the term is made.
(59) Sequential Election of
Representative/Delegate - shall refer to the election of the
representatives during the meetings held, one after the other, in different
days and/or at various venues, by several sectors, chapters or districts of a
cooperative for the purpose of electing their respective
Representatives/Delegates to the representative assembly meeting.
(60) Share Capital - shall refer to the
money paid or required to be paid by the members for the conduct of the
operations of the cooperative.
(61) Simultaneous Election of
Representatives/Delegates - shall refer to the election of the
representatives during the meetings held, on the same day and at various
venues, by several sectors, chapters, or districts of a cooperative for the
purpose of electing their respective Representatives/Delegates to the
representative assembly meeting.
(62) Submission Agreement - shall refer to the
written agreement signed by the disputing parties to submit the dispute to
voluntary arbitration.
(63) Subsidiary Cooperative - shall refer to
any organization all or minority of whose membership or shareholders come from
a cooperative called a parent cooperative, organized for any other purpose
different from that of, and receives technical, managerial, and financial
assistance from the said parent cooperative.
(64) Tertiary Cooperative - shall refer to a
cooperative, the members of which are secondary cooperative.
(65) Total Average Share Month - shall refer
to the sum total of the average share month, which is determined by adding the
monthly ending balances of the member's share capital and dividing the sum by
twelve (12) months.1avvphi1
(66) Unpaid Subscription - shall refer to
the subscribed share capital, which is not yet fully paid by a member.
(67) Voluntary Arbitration - shall refer to
a dispute resolution process wherein any intra/inter cooperative dispute is
settled by a voluntary arbitrator/s chosen by the disputing parties from a list
of qualified and accredited arbitrators, who shall decide on the merits of the
case by rendering an award.
(68) Voluntary Arbitrator/Arbitrators -
shall refer to any authorized employee of the Authority or an accredited
private individual chosen by the parties to hear, decide, and render an award
in a dispute.
(69) Voluntary Dissolution - shall refer to
the termination of the juridical personality of the cooperative at its own
initiative or instance after complying with the requirements set forth in the
Code and these rules.
RULE 1
REPRESENTTATIVE ASSEMBLY
Section 1. Legal Basis. The Legal basis for this rule is Art.
5 (2), (10) of the Code, quoted as follows:REPRESENTTATIVE ASSEMBLY
"(2) General Assembly shall mean the full membership of the cooperative duly assembled for the purpose of exercising all rights and performing all the obligations pertaining to cooperatives, as provided by this Code, its articles of cooperation and by-laws. Provided; that for cooperatives with numerous and dispersed membership, the district of the cooperative and in accordance with the rules and regulations of the Cooperative Development Authority."
"(10) Representative Assembly shall refer to the full membership of the body of representative elected by each of the sector, chapter, or district of the cooperative duly assembled for the purpose of exercising such powers lawfully delegated unto them by the general assembly in accordance with its by-laws"
Section 2. Applicability - This rule shall apply to cooperatives, which by reason of having numerous and dispersed membership, the conduct of the general assembly meetings becomes extremely difficult; Provided, That the adoption of representative assembly shall be stipulated in the cooperative By-laws, which shall specify the following matters:
a. The basis for dividing the cooperative into sector, chapter, or district;
b. The minimum number of regular members to compose each sector, chapter, or district;
c. The quorum required in the sector, chapter, or district assembly meeting;
d. The number of Representative/s or Delegate/s to be elected to represent the total number of the regular members in the sector, chapter, or district;
e. The term of office of the Representative or Delegate;
f. The qualification and disqualification of the Representative or Delegate;
g. The powers, function and responsibilities of the Representative or Delegate;
h. The election of the sector, chapter, or district Representative or Delegate;
i. Vacancy in the sector, chapter, or district Representative or Delegate;
j. The resignation or removal as well as the appeal of the sector, chapter, or district Representative or Delegate
k. The sector, chapter, or district assembly meetings;
l. The quorum required in the representative assembly meeting;
m. The powers of the Representative Assembly;
n. The conduct of the representative meeting;
o. The eligibility of the Representative/Delegate to be elected as Officers of the cooperative; and
p. Other matters relevant to the conduct or representative assembly meeting.
Section 3. Division of Cooperative into Sector, Chapter, or District. The Number of the members of the cooperative, which shall be at least One Thousand (1,000) and the geographical location, scope of operation cluster, work shift, or other similar conditions shall be the basis in dividing the cooperative into sector, chapter, or district.
Section 4. Composition of the Regular Members of Each Sector, Chapter, or District. The Bylaws shall provide for the number of the regular members to compose each sector, chapter, or district, which shall not be less than one hundred (100) members.
Section 5. Quorum Requirement for Sector, Chapter, or District. At least twenty-five per centum (25%) of the members entitled to vote in each sector, chapter, or district shall constitute a quorum.
Section 6. Number of Sector, Chapter, or District Representative. The number of sector, chapter, or district Representative or Delegate to be elected shall be provided in the By-laws but in no case, shall be less than ten percent (10%) of the total number of the regular members entitled to vote of the sector, chapter, or district.
Section 7. Term of Office of the Sector, Chapter, or District Representatives. The term of office of the Representative or Delegate shall be provided in the By-laws but not exceed two (2) years, which shall commence on the first regular representative assembly meeting.
Section 8. Qualifications and Disqualifications of the Representative or Delegate. The sector, chapter, or district representative or delegate shall possess all the qualifications and none of the disqualifications as provided in the cooperative By-laws.
Section 9. Powers, Functions, and Responsibilities of the Representative or Delegate. The Representative or Delegate shall have the following powers, functions, and responsibilities:
(1) To represent the sector, chapter, or district
in the Representative Assembly Meeting;
(2) To decided for and in behalf of the sector, chapter,
or district he/she represents in the Representative Assembly Meeting; and
(3) To inform his/her sector, chapter, or district
of what transpired during the Representative Assembly Meeting.
Section 10. Election of Sector, Chapter, or District Representative
or Delegate. Each sector, chapter, or district during the General Assembly
meeting approving the adoption of the Representative Assembly shall elect its
Local election Committee that will conduct the election of sector, chapter, or
district Representative/Delegate to be held no later than sixty (60) days
before the schedule date of the regular representative assembly meeting as
provided for in the By-laws.The Board of Directors shall direct sector, chapter, or district Local Election Committee to conduct the sector, chapter, or district assembly meeting to elect its Representative/s or Delegate/s, which may be held either simultaneously or sequentially.
In case the sector, chapter, or district failed to elect its Representative/s or Delegate/s, the right to send its Representative/s or Delegate/s on that particular representative or assembly meeting shall be deemed and waived.
Section 11. Vacancy in the Sector, Chapter, or District Representative or Delegate. Any vacancy shall be filled up in accordance with the provisions of the cooperative By-laws. The Delegate or Representative elected/appointed to fill a vacancy shall serve only the unexpired term of his/her predecessor.
Section 12. Resignation and Removal of Sector, Chapter, or District Representative or Delegate. The sector, chapter, or district Representative or Delegate may resign, for valid reason, as Representative or Delegate of his sector, chapter, or district. Upon the receipt of the notice, the Board of Directors shall act on the resignation letter within sixty (60) days otherwise, the resignation shall be deemed approved. Any sector, chapter, or district Representative/Delegate may be removed by a vote of three-fourths (3/4) of all the members with voting rights present and constituting a quorum at a sector, chapter, or district meeting called for the purpose on the following grounds:
1. Failure to attend the immediate preceding
representative assembly meeting for unjustifiable reason;
2. Non-performance of any functions and
responsibilities stated in the By-laws;
3. Any violation of the provisions of the Code, the
By-laws of the cooperative and other issuances of the Authority; and
4. Any acts or omissions inimical or prejudicial to
the interest of the cooperative.
During the same meeting, the sector, chapter, or district shall fill the
vacancy. In case the removed Representative or Delegate is an incumbent Officer
of the Cooperative, his/her position shall be declared vacant and shall be
filled up in accordance with the Rule of Succession as provided for in the
By-laws of the Cooperative. Unless otherwise provided for in their By-laws,
such successor shall not necessarily assume the position of his/her
predecessor. However, in the case of the membership in the committee, the
vacated membership shall be filled up by the Board of Directors of the
Cooperative from among the Representatives/Delegates.Section 13. Sector, Chapter, or District Assembly Meeting. The sector, chapter, or district meetings of the cooperative adopting this scheme shall be as follows:
a. Regular
b. Special
The regular meeting shall be conducted to elect the sector, chapter, or
district Representatives or Delegates and for such other purposes as maybe
provided in the Bylaws.The special meeting shall be conducted to report what has transpired during the representative assembly meeting and for such other purposes as maybe provided in the By-laws.
In either case, the conduct of the meeting shall be called and presided by the Lead Representative of Delegate. Such Lead Representative or Delegate shall be Representative or Delegate who obtained the highest number of votes during the last sector, chapter, or district election.
Section 14. Quorum Requirements for Representative Assembly. At least twenty-five per centum (25%) of all Representatives/Delegates shall constitute a quorum for the representative assembly meeting.
Section 15. Power of the Representative Assembly. The Representative Assembly shall exercise the powers as provided for in the By-laws.
Section 16. Conduct of Representative Assembly Meeting. Representative Assembly Meeting shall be conducted in accordance with the provision of the cooperative By-laws. In the absence thereof, the following shall be observed:
1. The representative assembly meeting shall be
held in accordance with the order of business addressing the agenda prepared by
the Board of Directors;
2. The chairperson or in his/her absence, the Vice
Chairperson or any member of the Board of Directors shall preside over the
meeting;
3. The Election Committee shall supervise the
election of the Board of Directors and committee members of the cooperative;
and
4. Each Representative or Delegate shall be
entitled to one (1) vote. The Votes of the sector, chapter, or district
Representatives or Delegates shall be considered the votes of all the members
of the sector, chapter, or district they represent.
The decision of the Representative Assembly shall be considered a valid
cooperative act.Section 17. Eligibility of the Representative or Delegate to be elected as Officers of the Cooperative. The Officers of the cooperative shall come from the Representative/s or Delegate/s of the sector, chapter, or district. These Officer shall be elected during the Representative Assembly Meeting for a term fixed in the By-laws but not exceeding a term of two (2) years and shall hold office until their successor are duly elected and qualified, or until duly removed for cause.
The term of office of the Officer of the Cooperative at the time of adoption of the Representative Assembly shall expire on the first representative assembly meeting.
RULE 2
SUBSIDIARY COOPERATIVE
Section 1. Legal Basis. The legal basis for this Rule is Art.
5 (16) of the Code, quoted as follows;SUBSIDIARY COOPERATIVE
"Art. 5 (16) Subsidiary Cooperative refers to any organization all or majority of whose membership or shareholders come from a cooperative, organized for any other purpose different from that of, and receives technical, managerial and financial assistance from, a cooperative, in accordance with the rules and regulations of the Authority."
Section 2. General Requirements. A parent cooperative may organize a subsidiary cooperative provided that:
1. It has been in operation for at least two (2)
years and has incurred no losses for the two (2) preceding years of operation.
2. It has a net worth of at least Ten Million Pesos
(Php 10,000,000.00) as shown in its latest Audited Financial Statements.
3. All or majority of the Members of the Parent
Cooperative are willing to become members of the Subsidiary Cooperative.
4. The business of the Subsidiary Cooperative shall
be different from that of the Parent Cooperative.
5. The creation of a Subsidiary Cooperative and the
technical, managerial and financial assistance to be provided shall be approved
by at least three-fourths (3/4) vote of members of Parents Cooperative with
voting rights present and constituting a quorum in a regular special general
assembly/representative assembly meeting called for the purpose.
Section 3. Documentary Requirements for Registration of Subsidiary
Cooperatives. In addition to the requirements for registration of a new
cooperative, an applicant Subsidiary Cooperative shall submit a resolution from
the Parent Cooperative approving the creation of such Subsidiary Cooperative
and accepting the responsibilities therewith.Section 4. Conditions. The following conditions shall be considered in the registration and operation of Subsidiary Cooperative:
1. Only assistance in the form of technical,
managerial and financial assistance shall be provided by the Parent Cooperative
to its Subsidiary Cooperative;
2. Directors or Officers of the Parent Cooperative
cannot be elected or appointed as Officers of the Subsidiary Cooperative. However,
the Parent Cooperative through its General Assembly may appoint its
Representative to act as Ex-Officio member of the Board of Directors of the
Subsidiary Cooperative;
3. The Management Staff of the Parent Cooperative
cannot be at the time the Management Staff of the Subsidiary Cooperative;
4. Transfer of shares of members and other related
interests from Parent Cooperative to Subsidiary Cooperative and vice versa are
prohibited; and
5. In case of dissolution of the Parent
Cooperative, the Subsidiary Cooperative cannot be a recipient of any grant,
donations or other interests from the Parent Cooperative and vice versa.
Section 5. Name of Subsidiary Cooperative. The subsidiary
Cooperative shall include in its name the word "Subsidiary Cooperative of (Name
of Parent Cooperative)".Section 6. Assistance for Parent Cooperative. The financial assistance to be provided shall not exceed ten (10%) of the net worth of the Parent Cooperative. The technical and managerial assistance shall depend upon the needs of the Subsidiary Cooperative and capacity of the Parent Cooperative, which shall be taken up in the book at actual cost.
The terms and conditions of the financial assistance provided by the Parent Cooperative to the Subsidiary Cooperative shall be governed by a Memorandum of Agreement entered into by both parties.
Section 7. Effect of Dissolution of Parent or Subsidiary Cooperative. The dissolution of either cooperative shall not affect the existence of the other.
RULE 3
MULTI-PURPOSE COOPERATIVE
Section 1. Legal Basis. The legal basis for this Rule is
Article 10 of the Code quoted as follows:MULTI-PURPOSE COOPERATIVE
"Art. 10. Organizing a Primary Cooperative. - Any newly organized primary cooperative may be registered as multi-purpose cooperative only after compliance with the minimum requirements for multi-purpose cooperatives to be set by the Authority. A single-purpose cooperative may transform into a multi-purpose or may create subsidiaries only after at least two (2) years of operation."
Section 2. Coverage. This Rule shall cover (a) all types of newly organized primary cooperative with combined two (2) or more business activities of different types of cooperative as provided for in Art. 23 of the Code, (b) a single-purpose cooperative desiring to transform itself into a multi-purpose cooperative after at least two (2) years of operation.
Section 3. Minimum Capitalization Requirements. Only those cooperative with a minimum paid-up capital of One Hundred Thousand Pesos (P100,00.00) or as required in the feasibility study whichever is higher shall qualified to register as a multi-purpose cooperative or can transform into a multi-purpose cooperative.
Section 4. Requirements for registration. The following documents shall be submitted to the Authority:
(1) For a newly organized Multi-Purpose
Cooperative:
1. Name Verification Slip;
2. Articles of Cooperative and By-Laws;
3. Treasurer's Affidavit;
4. Surety Bond of Accountable Officers;
5. Certificates of Pre-Membership Education
Seminar (PMES);
6. Economic Survey;
7. Undertaking to Change Name in the event that
another cooperative has acquired prior right to the use of the proposed name;
8. Favorable Endorsement from Other government
Agencies, if applicable;
9. Detailed Feasibility Study indicating viability
of the proposed business activity;
10. Undertaking to comply with the auditing and
accounting standards prescribed by the Authority; and
11. Registration fee.
(2) For existing cooperatives desiring to be
transformed into a Multi-Purpose Cooperative:
1. Name Verification Slip, in case of change of
name;
2. Amended Articles of Cooperative and By-Laws;
3. A Resolution certified by the cooperative's
Secretary and by the majority of the Board of Directors stating the fact that
said amendments have been duly approved by at least two-thirds (2/3) vote of
all the members with voting rights;
4. Surety Bond of Accountable Officers;
5. Audited Financial Statement showing profitable
operations for the past two (2) years;
6. Undertaking to Change Name in the event that
another cooperative has acquired a prior right to the use of the proposed name;
7. Favorable Endorsement from Other Government
Agencies, if applicable;
8. Detailed Feasibility Study indicating viability
of the proposed business activities;
9. Certificate that the cooperative has complied
with the auditing and accounting standards prescribed by the Authority;
10. Proof of business track records of the
cooperative; and
11. Amendment Fee.
Section 5. Book of Accounts. The new and existing cooperatives
transformed into a Multi-Purpose Cooperative are required to maintain separate
Book of Accounts for each business activity.
RULE 4
DIVISION OF COOPERATIVES
Section 1. Legal Basis. The legal basis for this Rule is Art.
20 of the Code, quoted as follows:DIVISION OF COOPERATIVES
"Art. 20. Division of Cooperatives. - Any registered cooperative, may by a resolution approved by a vote of three-fourths (3/4) of all the members with voting rights, present and constituting a quorum, resolve to divide itself into two (2) or more cooperatives. The procedure for such division shall be prescribed in the regulations of the Authority. The new cooperatives shall become legally established upon registration with the Authority: Provided, That all the requirements set forth in this Code have been complied with by the new cooperatives: Provided, further, That no division of cooperative in fraud of creditors shall be valid."
Section 2. Procedures. The following procedures shall be observed in the division of cooperatives:
1. Approval of Proposal to Divide;
2. Formulation of Plan of Division;
3. Presentation and Approval of the Plan of
Division to the General Assembly;
4. Posting and Publication of the Notice of
Division;
5. Written Notification to Creditors;
6. Filing with the Authority of the Required
Documents for the Registration of Division; and
7. Issuance of the Certificate of Registration.
Section 3. Proposal of Division. The majority members of the
Board of Directors or at least ten percent (10%) of members with voting rights
may propose for division, which must be approved by at least majority of the
members of the cooperative with voting rights present and constituting a quorum
in a general/representative assembly meeting called for the purpose. Upon
approval of the proposal to divide, a committee to formulate the Plan of
Division shall be constituted by the General/Representative Assembly.Section 4. Preference of Members. Upon approval by the General/Representative Assembly in the meeting called for the purpose, members of the original cooperative shall be allowed within two (2) weeks to choose the new cooperative they prefer to join. The management of the original cooperative shall then transfer the member's share and all other interests to his/her chosen cooperative.
Section 5. Presentation and Approval of the Plan of Division. The Board of Directors shall call a General/Representative Assembly meeting to action such Plan of Division with notice to all members of record and Creditors at least thirty (30) days prior to the scheduled meeting. The Plan of Division shall be approved by a vote of three-fourths (3/4) of all members with voting rights, present and constituting a quorum in such general/representative assembly meeting.
Section 6. Right of a Dissenting Member. A dissenting member shall be entitled to a refund of his/her share capital and all other interests under Art. 30 of the Code.
Section 7. Contents of the Plan of Division. The Plan of Division must include the following:
1. The rationale or justification for the division
of the cooperative;
2. A Financial Statement duly certified by an
independent Certified Public Accountant including a schedule of assets, liabilities
and share capital of the cooperative intending to divide;
3. A proposed revaluation of assets, determination
of liabilities, statutory reserves, undivided net surplus and members' share
capital;
4. List of all the receivables of the cooperative;
5. List of all the Creditors and their respective
claims against the cooperative;
6. Procedure for the division of assets, allocation
and settlement of the obligations and the collection of receivables of the
cooperative;
7. Feasibility study ensuring the viability and
sustainability of both cooperatives;
8. List of members showing their share capital
contributions certified by the Secretary and attested by the Board Chairperson
of the cooperative;
9. The proposed name, address and area of operation
of the new cooperatives; and
10. Benefit package for Management Staff to be
affected by the plan.
Section 8. Publication. Within seven (7) days after the date
of approval of the division of the cooperative, the Secretary of the
cooperative, duly noted by the Chairperson, shall publish such plan of division
once a week for three (3) consecutive weeks in a newspaper of general
circulation within its area of operation. Said publication may also be
supplemented by radio and television announcements.Alternatively, the announcement of the division may also be done by posting in at least three (3) conspicuous public places for three (3) consecutive weeks within its area of operation.
Likewise, letters/notices duly signed by the Chairperson announcing such division shall be sent by the Secretary of the cooperative through registered mails to their creditors.
Section 9. Objection by a Third Party. Within fifteen (15) days from the day of posting or from the last day of publication, a party may file an objection or opposition to the Plan of Division before the Authority, copy furnished the cooperative concerned, which shall be decided within sixty (60) days from receipt of the objection or opposition. If the objection or opposition is meritorious, in order not to prejudice the interest of the third party, the Authority shall cause the deferment or disapproval of the registration of the new cooperatives.
After the lapse of the period to file an objection/opposition and no objection/opposition has been filed or after all objections/oppositions have been resolved, the cooperative can file its application for registration.
Section 10. Additional Requirements for Registration. In addition to the regular requirements for registration of cooperatives, the following documents shall be filed with the Authority:
1. The resolution of division as approved by the
General/Representative Assembly duly certified by the Secretary and duly noted
by the Chairperson;
2. The Plan of Division including all its
attachments;
3. The Minutes of the General/Representative
Assembly Meeting approving the Plan of Division;
4. The Financial Statements of each of the new
cooperatives duly certified by the respective Treasurers and Chairpersons;
5. Proof of Notice of Publication and/or posting of
the announcement of such division;
6. Proof of Notice to the Creditors;
7. Written Agreement to Settle Obligation; and
8. Original Certificate of Registration.
Section 11. Issuance of Certificate. Once the registration
requirements are found to be completed and in order, the Authority shall issue
the Certificates of Registration to the new cooperatives. The Certificate of
Registration of the original cooperative shall be surrendered to the Authority
for cancellation.Section 12. Effect of Registration. Cooperatives formed and organized under this Rule shall acquire juridical personality from the date the Authority issues a Certificates of Registration under the Authority's official seal.
RULE 5
GUIDELINES GOVERNING THE PROCEDURE FOR
MERGER OR CONSOLIDATION
Section 1. Legal Basis. The legal bases for this Rule are
Articles 21 and 22 of the Code, quoted as follows:GUIDELINES GOVERNING THE PROCEDURE FOR
MERGER OR CONSOLIDATION
"Art. 21. Merger and Consolidation of Cooperatives. -
Two (2) or more cooperatives may merge into a single cooperative, which shall be either one of the constituent cooperatives or the consolidated cooperatives.
No merger or consolidation shall be valid unless approved by three-fourths (3/4) vote of all members with voting rights, present and constituting a quorum of each of the constituent cooperatives at separate general assembly meetings. The dissenting members shall have the right to exercise their right to withdraw their membership pursuant to Article 30.
(3) 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 the cooperatives shall have the following effects:
(1) 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.
(2) The separate existence of the constituent
cooperatives shall cease, except that of the surviving or the consolidated
cooperative.
(3) The surviving or the consolidated cooperative
shall possess all rights, privileges, immunities and powers and shall be
subject to all the duties and liabilities of a cooperative organized under this
Code;
(4) The surviving or the consolidated cooperative
shall possess all the assets, rights, privileges, immunities and franchises of
each of the constituent cooperatives; and
(5) The surviving or the consolidated cooperative
shall be responsible for all the liabilities and obligations of each of the
constituent cooperatives in the same manner as if the surviving or consolidated
cooperative had itself incurred such liabilities or obligations. Any claim,
action, or proceeding pending by or against any such constituent cooperatives
may be prosecuted by or against the surviving or consolidated cooperative, as
the case may be. Neither the rights of creditors nor any lien upon the property
of any of such constituent shall be impaired by such merger or
consolidation."
Section 2. Parties to the Merger or Consolidation. Only
cooperatives belonging to the same category can be parties to Merger or Consolidation.
A primary cooperative can only merge or consolidate with a primary cooperative,
a secondary with a secondary cooperative, and a tertiary with a tertiary
cooperative.Section 3. Procedures. The following are the procedures to the Merger or Consolidation of cooperatives:
1. Approval of the proposal to merge or consolidate
by the General/Representative Assembly of each constituent cooperatives;
2. Formulation of Plan of Merger or Consolidation
by the representatives of the constituent cooperatives;
3. Presentation to and Approval of the Plan of
Merger or Consolidation by the General/Representative Assembly of each
constituent cooperatives;
4. Formulation of the Amendment/New Articles of
Cooperation and By-laws;
5. Posting/Publication of Merger or Consolidation;
6. Written Notification to Creditors through
registered mail with return card and other applicable electronic means;
7. Filing with the Authority the required documents
for the registration of merger or consolidation; and
8. Issuance of Certificate of Registration of
Merger/Consolidation by the Authority.
Section 4. Contents of Plan of Merger or Consolidation. The
Plan of Merger or Consolidation shall include the following:
1. Statement of Purpose of such Merger or
Consolidation;
2. The Registered Names, Addresses and
Registration/Confirmation Numbers, Contact Details and Respective Areas of
Operation of the Constituent Cooperatives;
3. The Proposed Amendments to the Surviving
Cooperative's Articles of Cooperation and By-laws, in case of Merger and with
respect to Consolidation, the Proposed Articles of Cooperation and By-laws;
4. List of Members of each Constituent Cooperatives
showing their Share Capital Contribution duly certified by the respective Board
Secretaries and attested by the respective Board Chairpersons;
5. The Name, Address and Area of Operation of the
Surviving Cooperative, in case of Merger, the Proposed Name, Address and Area
of Operation, in case of Consolidation;
6. Feasibility Study indicating the Viability and Sustainability
of the Merging/Consolidating Cooperatives;
7. The Audited Financial Statements as of the
immediate preceding year including the schedule of assets, liabilities and
capital of the merging or consolidating cooperatives; and
8. Package Benefits of the Management Staff to be
affected by the Plan.
Section 5. Proposal of Merger or Consolidation. The Proposal
to Merge or Consolidate may be made by the Board of Directors or by at least
ten percent (10%) of the members with voting rights. It shall be approved by at
least majority of the members of each of the constituent cooperatives with
voting rights, present and constituting a quorum in separate
general/representative assembly meetings called for the purpose.During the same meeting, the General/Representative Assembly shall appoint or elect the representatives to the joint committee to draft the Plan of Merger or Consolidation.
Section 6. Approval of the Plan of Merger or Consolidation. The Plan of Merger or Consolidation jointly prepared by representatives from the constituent cooperatives shall be submitted for approval to the members of each constituent cooperative at separate general/representative assembly meetings duly called for the purpose. Notice of such meeting shall be given to all members of the respective cooperative, served either personally, or by registered mail with return card or electronic means within the period as indicated in their By-laws.
The affirmative vote of members representing at least three-fourths (3/4) of all members with voting rights, present and constituting a quorum of each of the constituent cooperatives at separate general/representative assembly meetings shall be necessary for the approval of the Plan of Merger or Consolidation, or amendments thereto, if any.
Section 7. The Articles of Cooperation and By-Laws. In case of Merger, the Amended Articles of Cooperation and By-Laws, if applicable, shall be attested by the Incumbent Directors of the Surviving Cooperative while in Consolidation, the Articles and By-Laws shall be signed by the Cooperating Directors.
Section 8. Posting/Publication. Announcement of the Merger or Consolidation may be done by posting in at least three (3) conspicuous places in their respective areas of operation; or publication in a newspaper of general circulation once a week for three (3) consecutive weeks. Said publication may also be supplemented by radio and television announcements or any other electronic means of communication.
Section 9. Notice to Creditors and Investors. The Officers of the Merging or Consolidating Cooperatives shall also send letters by registered mail with return card to the Creditors and investors of their respective cooperatives announcing such Merger or Consolidation.
Section 10. Objection/s by a Third Party. Within fifteen (15) days after the date of posting or from the last day of publication, a third party may file an objection or opposition to the Plan of Merger or Consolidation before the Authority which shall be decided within sixty (60) days from receipt of the objection or opposition. Finding the objection or opposition meritorious, in order not to prejudice the interest of the third party, the Authority will cause the deferment or disapproval of the registration of the Merger or Consolidation.
After the lapse of the period to file an objection/opposition and no objection/opposition has been filed or after all objections/oppositions have been resolved, the cooperative can file its application for registration.
Section 11. Additional Requirements for Registration. The Officers of the merged or consolidated cooperatives shall file with the Authority the following additional requirements for registration:
A. For Merger
1. The Original Certificate of Registration of the
absorbed cooperative;
2. The General/Representative Assembly resolutions
of both constituent cooperatives approving the Plan of Merger duly certified by
the Secretaries and attested by the respective Chairpersons;
3. The excerpts from the minutes of the
general/representative assembly meeting stating among others the approval of
the Merger;
4. Certification of the Secretaries duly attested
by the Chairpersons of the constituent cooperatives that there was a quorum and
the required number of votes for the approval was met;
5. The approved Plan of Merger and all its
attachments as required under Section 4 of this Rule;
6. The proposed amendment to the Articles of
Cooperation and By-laws of the Surviving Cooperative, if necessary;
7. Surety Bond of Accountable Officers;
8. Proof of Publication/Posting of the Announcement
of Merger;
9. Proof of Notice to Creditors;
10. Written Agreement to settle Obligations
11. The original Certificate of Registration of the
Surviving Cooperative;
12. Favorable endorsement from the concerned
government agency if necessary/applicable; and
13. Registration fee in accordance with the
Schedule of Fees prescribed by the Authority.
B. For Consolidation
1. The Original Certificate of Registration of both
constituent cooperatives;
2. The General/Representative Assembly resolutions
approving the consolidation of the cooperative duly certified by the
Secretaries and attested by the Chairpersons of the Consolidating Cooperatives;
3. The excerpts from the minutes of the
General/Representative Assembly meetings of the Consolidating Cooperatives with
their respective attendance sheets duly certified by the Secretary and
Chairperson or Presiding Officer;
4. Certification of the Secretaries duly attested
by the Chairpersons of the Constituent Cooperatives that there was a quorum and
the required number of votes for the approval was met;
5. The approved Plan of Consolidation and all its
attachments as required under Section 4 of this Rule;
6. The Economic Survey;
7. The proposed Articles of Cooperation and By-laws
of the Consolidated Cooperative;
8. Surety Bond of Accountable Officers;
9. Proof of Publication/Posting of the announcement
of consolidation;
10. Proof of Notice to Creditors;
11. Written Agreement to settle Obligations;
12. The original Certificates of Registration of
the Consolidating Cooperatives;
13. Undertaking to Change Name in the event that
another cooperative has acquired prior right to the use of the proposed name;
and
14. Registration fee in accordance with the
Schedule of Fees prescribed by the Authority.
Section 12. Issuance of Certificate. Once the registration
requirements are complied with, the Authority shall issue the Certificate of
Merger, or new Certificate of Registration in case of consolidation. The
Certificate of Registration of the original cooperatives shall be surrendered
to the Authority.
RULE 6
GUIDELINES FOR LABORATORY COOPERATIVES
Section 1. Legal Basis. The legal basis for this Rule is the
third paragraph of Art. 26 of the Code, quoted as follows:GUIDELINES FOR LABORATORY COOPERATIVES
"Art. 26. Kinds of Membership. - A cooperative organized by minors shall be considered a laboratory cooperative and must be affiliated with a registered cooperative. A laboratory cooperative shall be governed by special guidelines to be promulgated by the Authority."
Section 2. Organization of Laboratory Cooperative. Fifteen (15) or more minors who are Filipino citizens, actually residing in the community or enrolled in an educational institution within or near the area of operation of the Guardian Cooperative or out of school minor actually residing in the community, may organize a Laboratory Cooperative composed of minors, which shall be seven (7) years old but below eighteen (18) years of age.
Section 3. Purposes of Laboratory Cooperatives. A Laboratory Cooperative shall be organized for any or all of the following purposes:
1. To serve as a training ground for its members to
prepare them for membership in regular cooperatives;
2. To teach the value of thrift and saving
mobilization among its members;
3. To instill cooperative values, principles,
financial discipline and leadership skills among its members;
4. To promote and advance Filipino social and
cultural values, ecological awareness and sustainable development.
Section 4. Contents of the Articles of Cooperation. The
Articles of Cooperation of a Laboratory Cooperative signed by each of the
organizers shall provide the following:
1. The name of the cooperative which shall include
the words "Laboratory Cooperative";
2. The purpose or purposes for which it is
organized;
3. The term of existence;
4. The area of operations and the postal address of
the principal office of the laboratory cooperative;
5. The area of operations and the postal address of
the principal office of the guardian cooperative;
6. The names, nationality, birthdates, and postal
addresses of the cooperators;
7. The names, and postal addresses of members of
the board of directors of its guardian cooperative; and
8. The amount of its share capital, the names, and
addresses of its members.
Section 5. Contents of the By-Laws. The By-laws of a
Laboratory Cooperative shall provide for the following:
1. The qualifications for admission to membership
and the payment to be made or interest to be acquired as a condition to the
exercise of the right of membership;
2. The rights and liabilities of membership;
3. The circumstances under which membership is
acquired, maintained and lost;
4. The procedures to be followed in cases of
termination of membership;
5. The conditions under which the transfer of a
share or interest of the members shall be permitted;
6. The rules and procedures on the agenda, time,
place and manner of calling, convening, conducting meetings, quorum
requirements, voting systems, and other matters relative to the business
affairs of the general assembly, board of directors, and committees;
7. The general conduct of the affairs of the
cooperative, including the powers and duties of the General Assembly, the board
of directors, committees and, officers, and their qualifications and
disqualifications;
8. The manner in which the capital may be raised
and the purposes for which it can be utilized;
9. The accounting and auditing systems;
10. The method of distribution of net surplus;
11. The manner of adopting and amending by-laws;
12. Other matters incident to the purposes and
activities of the cooperative.
Section 6. Capitalization Requirements. The Laboratory
Cooperative shall include in its Bylaws a program on continuous Capital
Build-Up.Section 7. Affiliation. A Laboratory Cooperative must be affiliated with a duly registered cooperative, to be known as the Guardian Cooperative, before the authority shall issue a Certificate of Recognition.
A Laboratory Cooperative primarily composed of students from a particular school shall be affiliated with the school's cooperative, if any. If the Laboratory Cooperative is composed primarily of out-of-school minors, it shall be affiliated with a cooperative of its choice within or nearest its area of operation.
In the absence of a duly registered cooperative in the area or refusal of a duly registered cooperative to accept the affiliation of a Laboratory Cooperative, the said Laboratory Cooperative may request assistance from the nearest CDA Office in identifying a possible Guardian Cooperative.
Section 8. Responsibility of the Guardian Cooperative. The Guardian Cooperative shall supervise, monitor, and act for and in behalf of the Laboratory Cooperative in their dealings, transactions with third parties when capacity to contract is required.
It shall be responsible for the cooperative education and training of all officers and members of the laboratory cooperative.
Submission of reports to the Authority on the activities and economic operations of the Laboratory Cooperative shall likewise be the responsibility of the Guardian Cooperative.
Section 9. Liability of the Guardian Cooperative. - The Guardian Cooperative exercising parental authority may be liable for any violations in the cooperative's operation.
Section 10. Requirements for Recognition of Laboratory Cooperative. A Laboratory Cooperative seeking recognition as such shall submit, through the Guardian Cooperative, the following requirements to the Authority for the issuance of a Certificate of Recognition:
1. Articles of Cooperation and By-laws; and
2. Resolution of the Board of Directors of the
Guardian Cooperative accepting its responsibility and liability as Guardian of
the Laboratory Cooperative.
Section 11. Issuance of Certificate of Recognition. A
Certificate of Recognition shall be issued by the Authority under its official
seal upon compliance with all the requirements set forth by this rule. The
Certificate shall be conclusive evidence that the Laboratory Cooperative
therein mentioned is duly recognized unless such recognition has been earlier
revoked.The issuance of the Certificate of Recognition does not bestow upon a Laboratory Cooperative with a juridical personality.
Section 12. Termination of Membership. The following shall be conditions for termination of membership in a Laboratory Cooperative:
1. Upon reaching the age of majority (18 years of
age);
2. Those provided under Art. 30 of the Code; and
3. Such other conditions as may be provided for in
the By-laws.
Section 13. Refund of Share Capital. Upon termination of
membership, the former member shall be entitled to a refund of his share
capital contribution and all other interests in the Laboratory Cooperative in
accordance with Art. 31 of the Code.Section 14. Option of Member Who Reaches the Age of Majority. Any member reaching the age of majority may opt to join the Guardian Cooperative upon compliance of all the requirements for membership.
Section 15. Limitation. A Guardian Cooperative shall supervise only one (1) laboratory cooperative.
RULE 7
FUNCTIONS, RESPONSIBILITIES AND TRAINING REQUIREMENTS OF DIRECTORS, OFFICERS AND COMMITTEE MEMBERS
Section 1. Legal Basis. The legal basis for this Rule is Art.
44 of the Code, quoted as follows:FUNCTIONS, RESPONSIBILITIES AND TRAINING REQUIREMENTS OF DIRECTORS, OFFICERS AND COMMITTEE MEMBERS
"Art. 44. Functions, Responsibilities, and Training Requirements of Directors, Officers, and Committee Members. The functions and responsibilities of the directors, officers and committee members, as well as their training requirements shall be in accordance with the rules and regulations issued by the Authority."
Section 2. Officers of the Cooperative. The Officers of the cooperative shall include the Members of the Board of Directors, Members of the Different Committees created by the General Assembly, General Manager or Chief Executive Officer, Secretary, Treasurer and Members holding other positions as maybe provided for in their By-laws. As such they are entrusted with the power of exercising authority within the scope of their defined functions which is permanent in nature and include the exercise of control and discretion in the performance of their duly.
Section 3. Committees of Cooperatives. The By-laws shall provide for the creation of the following committees:
1. Audit Committee;
2. Election Committee;
3. Mediation and Conciliation Committee;
4. Ethics Committee; and
5. Other Committees as may be necessary for the
conduct of the affairs of the cooperative.
The members of Audit Election Committees shall be elected by the General
Assembly while the Board of Directors shall appoint the rest.Section 4. Functions and Responsibilities of the Officers of the Cooperative.
4.1 Board of Directors.
4.1.1 The Board of Directors shall have the following functions and responsibilities:
a. Provide general policy direction;
b. Formulate the strategic development plan;
c. Determine and prescribe the organizational and
operational structure;
d. Review the Annual Plan and Budget and recommend
for the approval of the General/Representative Assembly;
e. Establish policies and procedures for the
effective operation and ensure proper implementation of such;
f. Evaluate the capability and qualification and
recommended to the General/Representative Assembly the engagement of the
services of an External Auditor;
g. Appoint the members of the
Mediation/Conciliation and Ethics Committees and other Officers as specified in
the Code and cooperative By-laws;
h. Decide election related cases involving the
Election Committee or its members;
i. Act on the recommendation of the Ethics
Committee on cases involving violations of Code of Governance and Ethical
Standards; and
j. Perform such other functions as may be
prescribed in the By-laws or authorized by the General/Representative Assembly.
4.1.2 The Chairperson shall:
a. Set the agenda foe board meetings in
coordination with the other members of the Board of Directors;
b. Preside over all meetings of the Board of
Directors and of the General/Representative assembly;
c. Sign contracts, agreements, certificates and
other documents on behalf of the cooperative as authorized by the Board of
Directors or by the General/Representative Assembly;
d. Issue Certificate of Non-Affiliation with any
Federation or Union; and
e. Perform such other functions as may be
authorized by the Board of Directors or by the General/Representative Assembly.
4.1.3 The Vice Chairperson shall:
a. Perform all duties and functions of the
Chairperson in the absence of the latter;
b. To act as ex-officio Chairperson of the
Education and Training Committee; and
c. Perform such other duties as may be delegated to
him/her by the Board of Directors.
4.2 Treasurer. The Treasurer shall:
a. Ensure that all cash collections are deposited
in accordance with the policies set by the Board of Directors;
b. Have custody of all funds, securities, and
documentation's relating to all assets, liabilities, income and expenditures;
c. Monitor and review the financial management
operations of the cooperative, subject to such limitations and control as may
be prescribed by the Board of Directors;
d. Maintain full and complete records of cash
transactions;
e. Maintain a Petty Cash Fund and Daily Cash
Position Report; and Perform such other functions as may be prescribed in the
By-laws or authorized by the General/Representative Assembly.
4.3 Secretary. The Secretary shall:
a. Keep an updated and complete registry of all
members;
b. Record, prepare and maintain records of all
minutes of meetings of the Board of Directors and the General/Representative
Assembly;
c. Ensure that necessary Board of Directors actions
and decisions are transmitted to the management for compliance and
implementation;
d. Issue and certify the list of members who are in
good standing entitled to vote as determined by the Board of Directors;
e. Prepare and issue Share Certificates;
f. Serve notice of all meetings called and certify
the presence of quorum of all meetings of the Board of Directors and the
General/Representative Assembly;
g. Keep copy Treasure's reports and other reports;
h. Keep and maintain the Share and Transfer Book;
i. Serve as custodian of the cooperative seal; and
Perform such other functions as may be prescribed in the By-laws or
authorized by the General/ Representative Assembly.4.4 Election Committee. The Election Committee shall:
a. Formulate election rules and guidelines and
recommended to the General/Representative Assembly for approval;
b. Implement election rules and guidelines duly
approved by the General/Representative Assembly;
c. Recommended necessary amendments to the election
rules and guidelines, in consultation with the Board of Directors, for the
General/Representatives Assembly's approval;
d. Supervise the conduct, manner and procedure of
election and other election related activities and act on the changes thereto;
e. Canvass and certify the results of the election;
f. Proclaim the winning candidates;
g. Decide election and other election related cases
except those involving the Election Committee or its members; and
h. Perform such other functions as prescribed in
the By-laws or authorized by the General/Representative Assembly.
4.5 Audit Committee. The committee shall:
a. Monitor the adequacy and effectiveness of the
cooperative's management and control system;
b. Audit the performance of the cooperative and its
various responsibility centers;
c. Review continuously and periodically the books
of account and other financial records to ensure that these are in accordance
with the cooperative principles and generally accepted accounting procedures;
d. Submit reports on the result of the internal
audit and recommend necessary changes on policies and other related matters on
operation to the Board of Directors and General/Representative Assembly;
e. Perform such other functions as may be
prescribed in the By-laws or authorized by the General/Representative Assembly.
4.6 Mediation and Conciliation Committee. The committee shall:
a. Formulate and develop the Conciliation-Mediation
Program and ensure that it is properly implemented;
b. Monitor Conciliation-Mediation program and
processes;
c. Submit semi-annual reports of cooperative cases
to the Authority within fifteen (15) days after the end of every semester;
d. Accept and file Evaluation Reports;
e. Submit recommendations for improvement to the
Board of Directors;
f. Recommend to the Board of Directors any member
of the cooperative for Conciliation-Mediation Trainings as Cooperative
Conciliator-Mediator;
g. Issue the Certificate of Non-Settlement (CNS);
h. Perform such other functions as may be
prescribed in the By-laws or authorized by the General/Representative Assembly.
4.7 Ethics Committee. The committee shall:
a. Develop Code of Governance and Ethical Standards
to be observed by the members, officers and employees of the cooperative
subject to the approval of the Board of Directors and ratification of the
General/Representative Assembly;
b. Disseminate, promote and implement the approved
Code of Governance and Ethical standards;
c. Monitor compliance with the Code of Governance
and Ethical Standards and recommend to the Board of Directors measures to
address the gap, if any;
d. Conduct initial investigation or inquiry upon
receipt of a complaint involving Code of Governance and Ethical Standards and
submit report to the Board of Directors together with the appropriate
sanctions.
e. Recommend ethical rules and policy to the Board
of Directors;
f. Perform such other functions as may be
prescribed in the By-laws or authorized by the General/Representative Assembly.
4.8 Other Committees. Other Committees that may be created shall assist in
the formulation of policies and rules and in the implementation of the service
of the cooperative. Their powers, functions, and responsibilities shall be
defined in the By-laws.4.9 General Manager. The General Manager shall:
a. Oversee the overall day to day business
operations of the cooperative by providing general direction, supervision,
management and administrative control over all the operating departments
subject to such limitations as may be set forth by the Board of Directors or
the General/Representative Assembly;
b. Formulate and recommend in coordination with the
operating departments under his/her supervision, the Cooperative's Annual and
Medium Term Development Plan, programs and projects, for approval of the Board
of Directors and ratification of the General/Representative Assembly;
c. Implement the duly approved plans and programs
of the Cooperative and any other directive or instruction of the Board of
Directors.
d. Provide and submit to the Board of Directors
monthly reports on the status of the Cooperative's operation vis-à-vis its
targets and recommend appropriate policy or operational changes, if necessary;
e. Represent the Cooperative in any agreement,
contract, business dealing, and in any other official business transaction as
may be authorized by the Board of Directors;
f. Ensure compliance with all administrative and
other requirements of regulatory bodies; and
g. Perform such other functions as may be prescribed
in the By-laws or authorized by the General/Representative Assembly.
Section 5. Training Requirements for the Officers of the
Cooperative. Officers of the cooperative shall be required to undergo
necessary training conducted by cooperatives, Federations and/or other trainers
or training institutions duly accredited by the Authority. The training program
should contain the minimum requirements in the module/curriculum as prescribed
by the Authority. The initial courses or any equivalent substitute thereof must
be undertaken.A. Board of Directors
1. Basic Cooperative Course primarily on:
a. Articles of Cooperative and By-laws;
b. Cooperative Vision;
c. Cooperative Mission;
d. Cooperative Strategic Plan;
e. Fundamentals of Cooperative;
f. Policies and Programs of Cooperatives;
g. Cooperative Code of 2008 (RA 9520);
h. Implementing Rules and Regulations of RA 9520;
2. Cooperative Management and Governance.
3. Policy Development.
4. Financial Management.
5. Conflict Management.
6. Parliamentary Procedure
7. Leadership and Values Re-orientation
8. Strategic Planning
9. Orientation on Labor and Other Related Laws
B. Secretary
1. Basic Cooperative Course
2. Records Management for Non Financial Transaction
3. Parliamentary Procedure
4. Basic Computer Program
C. Treasurer
1. Basic Cooperative Course
2. Records Management (Financial Transaction)
3. Basic Accounting for Non-Accountants
4. Cooperative Standards
5. Investment and Banking Procedures
6. Financial Management
D. Audit Committee
1. Basic Cooperative Course
2. Audit Management
3. Records Management
4. Basic Accounting for Non-Accountant
5. Cooperative Standards
6. Internal Control including Inventory System
7. Basic Computer Program
E. Election Committee
1. Basic Cooperative Course
2. Records Management
3. Rules Formulation
4. Leadership and Value Re-orientation
5. Basic Computer Program
F. Ethics Committee
1. Basic Cooperative Course
2. Leadership and Values Re-orientation
3. Conflict Management
4. Records Management
5. Basic Computer Program
G. Mediation/Conciliation Committee
1. Basic Cooperative Course
2. Leadership and Values Re-orientation
3. Conflict Management
4. Records Management
5. Effective Communication
6. Basic Computer Program
H. General Manager / Chief Executive Officer
1. Basic Cooperative Course
2. Cooperative Management and Governance
3. Cooperative Standards
4. Human Resource Management
5. Effective Communication Skills
6. Entrepreneurial and Business Management Course
7. Labor and other related Laws
8. Leadership and Values Re-orientation
9. Computer Literacy Course
10. Strategic Planning and Management
Section 6. Compliance. The training is required for all
cooperative officers. In cases where the incumbent has not undergone the
required training program, he/she shall undergo such training within twelve
(12) months from the effectivity of this Rule. Non-compliance with the required
trainings shall be considered grounds for disqualification for future election
or appointment until such time that he/she has complied with all the trainings
required for the position.Section 7. Duration of Trainings Attended. All trainings attended by cooperative officers shall be considered valid compliance with the intent of this Rule for a period of five (5) years from date of issuance of the Certificate of Training. After which, they shall be required to undergo re-training of the same.
Section 8. Transitory Period. All cooperatives are hereby given two (2) years from effectivity of this Rule to comply with the Training Requirements as provided above.
RULE 8
REPORTS REQUIRED FOR COOPERATIVE
Section 1. Legal Basis. The legal basis for this rule is Art.
53 of this Code, quoted as follows:REPORTS REQUIRED FOR COOPERATIVE
"Art. 53. Report.
(1) Every cooperative shall draw up regular reports
of its program of activities, including those in pursuance of their socio-civic
undertakings, showing their progress and achievements at the end of every
fiscal year. The reports shall be made accessible to its members of record.
These reports shall be filed with the Authority within one hundred twenty (120)
days from the end of the calendar year. The form and contents of the reports
shall be prescribed by the rules of Authority. Failure to file the required
reports shall subject the accountable officer/s to fines and penalties as may
be prescribed by the Authority, and shall be a ground for the revocation of
authority of the cooperative to operate as such. The fiscal year of every
cooperative shall be the calendar year, except as may be otherwise provided in
the by-laws.
(2) If a cooperative fails to make, publish and
file the reports required herein, or fails to include therein any matter
required by this Code, the Authority within fifteen (15) days from the
expiration of the prescribed period, send such cooperative a written notice
stating its non-compliance and the commensurate fines and penalties that will
be imposed until such time that the cooperative has complied with the
requirement."
Section 2. Required Regular Reports. The following reports
shall submitted to the Authority:
1. Cooperative Annual Performance Report (CAPR);
2. Social Audit Report including its program of
activities in pursuance of its socio-civic undertakings showing its
achievements and end of every fiscal year;
3. Performance Report;
4. Audited Financial Statements duly stamped
"Received " by the BIR; and
5. List of Officers and Trainings Undertaken
/Completed.
Section 3. Additional Reports for Federations and Unions. Federations
and Unions shall submit to the Authority the following additional reports:
1. List of cooperatives which have remitted their
respective Cooperative Education and Training Funds (CETF);
2. Business consultancy assistance to include the
nature and cost; and
3. Other training activities undertaken specifying
therein the nature, participants, and cost of each activity.
Section 4. Filling. All registered cooperatives shall file
with the Authority a copy of the required reports either through personal,
registered mail courier, or electronic means, within one hundred twenty
(120)days from the end of every year calendar year.Section 5. Preparation of the Required Reports. The reports shall be typewritten or printed in a form prescribed by the Authority. The Chairperson and the General Manager shall certify to the truthfulness of the statement contained in the reports.
Section 6. Preparation of the Submit Reports on Time. Failure to submit reports on time shall be considered as Delay or Default. However, if the failure to submit reports on time is due to fortuitous events; such as fire and other natural calamities and public disorders including strike or lock-out or a national emergency which affects the operation of the cooperative, the failure shall not be considered a delay. Provided, That the Authority shall be officially notified of the occurrence of such fortuitous events.
Delay or default shall commence on the day following the last day required for the submission of reports. However, should the last day of filing falls on a non-working day in the locality where the reporting cooperative is situated. Delay or Default shall start to run\on the day following the next working day.
For the purpose of establishing Delay or Default, the date of acknowledgement by the Authority appearing on the copies of such reports filed or submitted or mailing postmarked on the envelope/the date of registry or special delivery receipt, or the date the electronic mail was sent as the case may be shall be considered as the date of filing.
Section 7. Sanction For Delayed Submission. Failure to file the required reports on time shall subject the Accountable Officer to pay a fine of Php 100.00 per day of delay.
Within thirty (30) calendar days upon receipt of Statement of Accounts, the Accountable Officer may request for Reconsideration of such fine on the grounds of fortuitous event and court litigation/order, which the Authority shall act upon within sixty (60) calendar days otherwise the sanctions, shall be deemed lifted. The decision of the Authority shall become final and executory.
Other than the imposition of monetary penalties, the Authority may dissolve/revoke, after due process, the authority of the cooperative to operate as such.
RULE 9
GUIDELINES FOR THE LIQUIDATION OF COOPERATIVES
Section 1. Legal Basis. The legal bases for the Rule are Art.
69,70 and par. 2, Art. 72 (4) of the code, quoted as follows:GUIDELINES FOR THE LIQUIDATION OF COOPERATIVES
"Art. 69. Liquidation of a Cooperative. - Every cooperative whose charter expires by its own limitation or whose existence is terminated by voluntary dissolution or through an appropriate judicial proceeding shall nevertheless continue to exist for three (3) years after the time it is dissolved, not to continue the business for which was established but for the purpose of prosecuting and defending suits by or against it; settlement6 and closure of its affairs, disposition, conveyance and distribution of its properties and asset.
At any time during the said three (3) years, the cooperative is authorized and empowered to convey all its properties to trustees for the benefit of its members, creditors and other persons in interest. From and after any such conveyance, all interests which the cooperative had in the properties are terminated.
Upon the winding up the cooperative affairs, any6 asset distributable to any creditor, shareholder or member(s) who is unknown or cannot be found shall be given to the federation or union to which the cooperative is affiliated with.
A cooperative shall only distribute its assets or properties upon unlawful dissolution and after payment of all its debts and liabilities, except in the case of decrease of share capital of the cooperative and as otherwise allowed by this Code."
"Art. 70. Rules and Regulations on Liquidation. - The Authority shall issue the appropriate implementing guidelines for the liquidation of cooperatives."
"Art. 72. Capital Sources.-xxx
(b) Subsidies, donations, legacies, grants, aids and such other assistance from any local or foreign institution whether public or private: Provided, That capital coming from such subsidies, donations, legacies, grants, aids and other assistance shall not be divided into individual share capital holding at any time but shall instead from part of the donated capital or fund of the cooperative.
Upon dissolution, such donated capital shall be subject to escheat."
Section 2. Coverage of Liquidation. These Guidelines shall cover the following:
1. Cooperatives whose charter expires by its own
limitation.
2. Cooperatives whose existence is terminated by
voluntary dissolution.
3. Cooperatives whose existence is terminated by
appropriate judicial proceedings.
Section 3. Mode of Liquidation. The manner of liquidation or
winding up may be provided for in the cooperative By-laws and this would
prevail unless it is inconsistent with law. In this jurisdiction, the
cooperative may avail of the following modes of liquidation:(1) Liquidation by cooperative itself through a Board of Liquidators. The members of cooperative entitled to vote shall elect from among themselves their Board Liquidators; and/or
By conveying all the cooperative assets to Trustee or Trustees who will take charge of liquidation.
Section 4. Procedure of Liquidation. The following procedure shall be observed in liquidation:
1. Constitution of the Board of
Liquidators/Trustees.
2. Inventory of Assets and Liabilities of the
Cooperative.
3. Payments of Creditors in accordance with the
Provisions of the New Civil Code on the Preference and Concurrence of Credits.
4. Transfer of the Statutory Funds to the intended
beneficiaries.
5. Distribution of the remaining assets.
6. Submission of the Board of Liquidators/Trustees
of the Liquidation's Final Report.
7. Cancellation of the Certificates of Registration
and delisting of the name of the cooperative in the Cooperative Registry.
Section 5. Board of Liquidators/Trustees.Within sixty (60) days from receipt of the Order of Dissolution from the Authority or competent Court, the board of Directors shall select/constitute the Board of Liquidators/Trustees. In the event the Board of Directors fails or refuses to constitute the Board of Liquidators/Trustees, at least twenty five percent (25%) of the members entitled to vote shall convene and select/appoint the Liquidators/Trustees. In case the Board of Directors and the General/Representative Assembly fail to select the Board of Liquidators/Trustees, the Authority shall appoint the same.
The Board of Liquidators/Trustees shall not be less than three (3) but not more than five (5) members. They shall take their oath of office before the Authority prior to assumption of their functions and responsibilities.
The Board of Liquidators/Trustees shall post an adequate bond as may be fixed by the Authority during the period of liquidation, to be paid out of the funds of the cooperative.
The Board of Liquidators/Trustees shall be allowed to receive a reasonable honorarium to be paid out from the funds of the cooperative which shall be equal to but not less than the honorarium being received by the Board of Directors of the cooperative before its dissolution.
Section 6. Functions, Powers and Obligations of the Board of Liquidators/Trustees. The Board of Liquidators/Trustees shall:
1. Make an inventory of all assets and to be
determine all liabilities including Share Capital holdings;
2. Preserve the existing assets of the cooperative;
3. Convert all assets of the cooperative into cash;
4. Pay the outstanding obligations including any
and all valid claims against the cooperative;
5. Distribute remaining assets pursuant to the
provision of the Code and this Rules; and
6. Make final report on the liquidation and submit
the same to the Authority.
Section 7. Power to Sue and Be Sued. In the discharge of the
above-mentioned functions, the Board of Liquidators/Trustees may sue and be
sued under the name of the cooperative in order to protects and defend its
rights and interests.Section 8. Payment of Creditors. Payment of creditors shall be in accordance with the contract upon which it is based and the provision of the New Civil Code on the Preference and Concurrence of Credits.
Section 9. Statutory Funds. All the statutory funds established by the cooperative shall be disposed of in accordance with the provision for Art. 86 of the Code.
Section 10. Treatment of Donated Capital. All studies, donations, legacies, grants, aids and such other assistance from any local or foreign institutions whether public or private shall be subjected to escheat.
Section 11. Distribution of Assets. Subject to the preceding sections and upon written authority from the Authority, any assets remaining after the payments of the cooperative's obligations to its creditors shall be distributed to the members in payments of their respective share capital. If the remaining assets is not sufficient to pay the full share capital contribution of the members, the distribution shall be done in proportion to their capital.
Section 12. Undistributed Assets. After the winding up of the affairs of the cooperative, the assets distributable to creditor or member whose whereas about is unknown or cannot be found shall be given to the federation/union to which the cooperative is affiliated with, for cooperative development, at the option of the Board of Liquidators/Trustees. In case of non-affiliation, the undistributed assets shall be given to the community where the cooperative operated.
Section 13. Periods Allowed for the Winding Up of the Affairs of the Cooperative. The dissolved cooperative shall continue to exist for three (3) years from the issuance of the Order of Dissolution. The purpose of which is not to continue the business for which it was established but for purpose of prosecuting and defending suits filed or against the cooperative, settlement and closure of its affairs, distribution of its assets.
Nevertheless, at any time during the said three (3) year period, the cooperative is authorized and empowered to convey all its properties to Trustees for the benefits of its members, creditors and other persons in interest, after which, all interest which the cooperative had in properties are terminated.
Section 14. Submission of the Board of Liquidators/Trustees' Financial Report. The Cooperative Board of Liquidators/Trustees shall submit a final report to the members of the liquidated cooperative and to the Authority, Federation, or Union to which the cooperative is affiliated with.
Upon receipt of the Final Report of the Board of Liquidators/Trustees and finding that said final report is complete and in order, the Authority shall release the Liquidators/Trustees from their duties and functions. Thereafter shall effect the cancellation of the Certificate of Registration of the subject cooperative and delisting of the name of the cooperative in the Cooperative Registry.
For failure to submit the Final Report the Board of Liquidators/Trustees shall not be released from their duties and functions, hence no clearance shall be issued by the Authority.
Section 15. Summary Proceedings. For cooperative with assets of not more that One Hundred Thousand Pesos (P100,000.00) as shown in the Audited Financial Statements and with no known creditors, the Authority may choose to initiate summary proceedings.
The following documents shall be required to be submitted by the Board of Directors to the Authority:
1. Schedule of Assets;
2. Proposal of Distribution of Assets to its
members;
3. List of intended beneficiaries of the Statutory
Funds;
4. Affidavit of No Creditors; and
5. Audited Financial Statement;
After due evaluation by the Authority, the same shall issues a written
authority to the Board of Directors to distributed the assets of the
cooperative. After which, the Board of Directors shall submit a final report.Section 16. Suppletory Laws. The provisions of Chapter Two (2) and Three (3) of title 19 on the Concurrence and Preference of Credit under the New Civil Code and the provisions of Rule 104 of the Revised Rules of Court on the Voluntary Dissolution of Corporations shall be used as suppletory rules.
Section 17. Exception. The Authority, at its own discretion, may outrightly cancel the Certificate of Registration of a cooperation of a cooperative which has been proven to have no assets, or in case the cooperative can no longer be located despite the best to locate it. Such facts shall be stated in the Order of Cancellation.
RULE 10
CAPITALIZATION AND ACCOUNTING PROCEDURES OF COOPERATIVES
Section 1. Legal Basis. The legal basis for this Rule is Art.
71 of the Code, quoted as follows:CAPITALIZATION AND ACCOUNTING PROCEDURES OF COOPERATIVES
"Art. 71. Capital. - The Capitalization of cooperatives and the accounting procedures shall be governed by the provisions of this Code and the regulations which shall be issued."
Section 2. Capital Sources. Capitalization of a duly registered cooperative may be derived from any or all of the following sources;
1. Members' Share Capital;
2. Loans and Borrowing Including Deposits;
3. Revolving Capital which consist of the deferred
payment of patronage refunds, or interest on share capital; and
4. Subsidies, donations, legacies, grants, aids and
such other assistance from any local or foreign institution whether public or
private; Provided, That capital coming from such subsidies, donations,
legacies, grants, aids and other assistance shall not be divided into
individual share capital holdings at any time but shall instead form part of
the donated capital or fund of the cooperative.
Section 3. Share Capital. The Share Capital of a cooperative,
the per value of which may be fixed at any figure not more than One Thousand
Pesos (P1,000.00), may consist of common share capital and preferred share
capital if the latter is provided for under the cooperative's Articles of
Cooperation and By-laws. The share capital contribution of the members shall be
considered as equity. Provided, that it shall not be withdrawn and should not
be used in offsetting obligations whether past due or current while the
membership subsists.
(a) Common Share Capital shall be issued only to
regular members. Its holders shall be entitled to vote and be voted under
the principle of one-man, one vote principle, and shall receive interest, the
rate which should not exceeded the normal rate on investment.
(b) Preferred Share Capital may be issued to regular
and associate members. However, associate Members shall not be eligible to
vote nor be voted on account of such shareholdings but shall be entitled to,
among others the following:
1. Preference in the payment of interest as
provided for in the Bylaws of the cooperative; and
2. In case of liquidation, priority in the
distribution on Preferred Share Capital shall be prescribed in the By-laws of
the cooperative.
Section 4. Preferred Shares. Issuance and limitation on
Preferred Share Capital shall be prescribed in the By-laws of the cooperative.Section 5. Capital Build-Up. The By-laws of every cooperative shall provide for a reasonable and realistic member capital build-up program to allow the continuing growth of the members' investment in their cooperative as their own economic conditions continue to improve.
Section 6. Limitation on Share Capital Holdings. No member of a primary cooperative other that a cooperative itself shall own or hold mere than ten percent (10%) of the share capital of the cooperative. In the case of Secondary and Tertiary Cooperatives, members should own not more that ten percent (10%) of the share capital of the cooperative.
Section 7. Fines on Unpaid Subscribed Share capital. The By-laws of a cooperative shall prescribe a fine on unpaid subscribed share capital. Provided, that such fine is fair and reasonable under the circumstances as determined by the Board of Directors.
Section 8. Assignment of Share Capital Contribution or Interest. Subject to the provision of R.A. 9520, no member shall transfer his/her shares or interest in the cooperative or any part thereof unless:
1. He/She has held such share capital contribution
or interest for not less than one (1) year;
2. The assignment is made to the cooperative or to
a person who falls within the field of membership of the cooperative; and
3. The Board of Directors has approved such
assignment.
Section 9. Interest on Share Capital. Interest on Share
Capital shall not exceed the Rate of Return on Investment.Unless otherwise provided for in the By-laws of the cooperative, share capital shall earn interest; the Rate of Interest shall be computed as follows:
Rate of Interest
|
=
|
X (Net Surplus less
Statutory Reserves)
Total Average Share Month
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No allocation of interest on share capital shall be made without the approval of the Board of Directors which may increase or decrease any or both.
Payment of interest, unless otherwise provided for in the By-laws, must be made on such date as may be determined by the Board of Directors. The General/Representative Assembly ',owever, upon the recommendation of the Board of Directors, may defer the payment of such interest including Patronage Refund to raise Revolving Capital.
No cumulative interest shall be allowed for any kind or class of share issued by the cooperative.
Share Capital shall receive a strictly limited Rate of Interest.
Section 10. Withdrawal of Share Capital. A member of a cooperative may, for any valid reason, withdraw his/her membership from the cooperative by giving a sixty (60) days notice to the Board of Directors. Subject to the By-laws of the cooperative, the withdrawing member shall be entitled to a refund of his/her share capital contribution and all other interests in the cooperative. Provided, That such refund shall not be made if upon such payment the value of the assets of the cooperative would be less than the aggregate amount of its debts and liabilities exclusive of his/her share capital contribution.
Section 11. Patronage Refund. The principle of Patronage Refund is a principle of a equity wherein an equal right of members to participate in the organization and to equitably share in the benefits accruing is established. Under the principle, the Net Surplus shall not be construed as profit, but as excess payments made by them from the cooperative and which shall be deemed to have been returned to them if the same is distributed as prescribed by the Code and by this Rule. Provided, however, That the amount allocated for patronage refund shall not be less than thirty percent (30%) of the net surplus after deducting the statutory reserves based on the principle of equity. Provided, further, that in no case shall the rate of patronage refund be more than twice the rate of interest on share capital.
Section 12. Accounting Procedure. The accounting system to be installed/maintained in the cooperative shall be in accordance with the generally accepted accounting principles and practices, taking into consideration cooperative principles and practices. The cooperative shall use the Standard Chart of Accounts and its accompanying Accounting Manual prescribed by the Authority.
RULE 11
SOCIAL AUDIT OF COOPERATIVE
Section 1. Legal Basis. The legal basis for this Rule is Art.
80, paragraph 4, 5 and 6 of the Code, quoted as follows:SOCIAL AUDIT OF COOPERATIVE
"Art. 80. Annual Audit. - Cooperatives registered under this Code shall be subject to an annual financial, performance and social audit."
"The social audit shall be conducted by an independent social auditor accredited by the Authority."
"The Authority in consultation with the cooperative sector, shall promulgated the rules and standards for the social audit of cooperatives."
Section 2. Coverage. All registered cooperatives regardless of types and categories shall be subject to social audit.
Section 3. Social Audit. It is a procedure where the cooperative assesses its social impact and ethical performance vis-à-vis its stated mission, vision, goals and code of social responsibility. It is a process to assess the cooperative's contribution for the upliftment of the status not only to its members' economic needs but also social needs and the community where it operates. The cooperative's actual performance and accomplishment are compared to its vision, goals, and social responsibility as it relates to the impact not only to the community but to its regular members as the immediate beneficiary of the decisions and actions it promulgated, passed and implemented. Social Audit will serve as control mechanism to account for its social performance and evaluate its impact in the community taking into account the community development fund which shall be used for projects or activities that will benefit the community where the cooperative operates.
Section 4. Objectives/Uses of Social Audit. Social Audit validates the support of the cooperative to the seventh cooperative principles on the "Concern Community" and determines whether the cooperative work for the community's sustainable development through policies approved by their members. The audit focuses not only to the economic side of the cooperative but also the social aspect of the organization and appraises the cooperative performance as valuebased organization usually participative, user and community oriented and non-profit but service organization and how its social responsibility for its members and the community as a whole was fulfilled. Social Auditing is the systematic review of the attitudes, values, behavior, and degree of interaction of people within the cooperative as well as the policies, programs and activities being implemented by the cooperative.
Section 5. Components and Social Audit Indicators. The Social Audit of the cooperative shall consists of but not limited to the following major components/categories with its objectives:
1. Membership. To determine the effectiveness of the cooperative in meeting the needs of its members vis-à-vis the socio-economic upliftment and empowerment of the members.
2. Assets building. To determine the cooperatives' performance in building up its economic capacity to respond to its social responsibility and development income generating undertakings for its members.
3. Community Involvement and Solidarity. To determine the degree of community, social, environmental involvement and solidarity of the cooperative. In relation to this, all cooperatives are encourage to promote environmental awareness and instill environmental protection and conservation to their members and the community where they operate, and as far as practicable to conduct tree-planting activities in the community where they operate or its immediate environs.
4. Information accessing and dissemination. To determine the capability of the cooperative to access, process and disseminate information from/to its members and community. It looks into the function of the organization as an empowering and responsive mechanism.
5. Gender, Youth, Elderly, Children, and Persons with Disability. To determine how the cooperative has contributed in the social capital development for the welfare of the youth, the elderly, children, and persons with disability and the promotion of the gender fair culture and practices.
6. Leadership and Organizational Management. To highlight the attributes of the leaders/officers of the cooperative and efficiency in managing the affairs of the organization as it relates with its members and with government.
Section 6. Social Audit Manual. The Authority shall develop a Social Audit Manual that will be used for the purpose.
Section 7. Applicability. All registered cooperatives shall submit to the Authority the Annual social Audit Report as conducted by an Independent Social Auditor accredited by the Authority.
Section 8. Sanctions. The failure of the cooperatives to the Authority of the required Social Audit Report conducted by the Accredited Independent Social Auditor shall mean non-compliance with the required reports and will be meted with corresponding penalties in accordance with R.A. 9520.
Section 9. Transitory Period. All cooperative are hereby given two (2) years from effectivity of this Rule to comply with the Social Audit Requirements as provided above.
RULE 12
FINANCIAL SERVICE COOPERATIVE (FSC)
Section 1. Legal Basis. The legal basis for this Rule is Art.
121 (1) and (14) of the Code, quoted as follows:FINANCIAL SERVICE COOPERATIVE (FSC)
"Art. 121. Regulation and Supervision. - The Authority shall exercise lead regularity powers and supervision over the operations of the financial service cooperatives, to wit:
(1) Issue rules and regulations for the safe and sound operations of financial service cooperatives. xxx
(14) Appoint a conservator or a receiver as may be necessary subject to the rules and regulations to be promulgated by the Authority in coordination with the BSP, taking into consideration the grounds, powers and procedures under Sections 29 and 30 of Republic Act. No. 7653 as may be deemed appropriate to financial service cooperatives.
The Authority shall include in its rules and regulation appropriate sanctions and penalties, on the financial service cooperatives, its members, and officers and responsible, its members, officers and responsible persons, for any action that fails to adhere to sound and prudent management practices or are inconsistent with the provisions of this Code xxx."
Section 2. Functions of FSC. A FSC is a financial organization owned and operated by its members and authorized to provide the following services, exclusively to its members: (a) the functions of credit cooperatives and other cooperatives, including multipurpose cooperatives, that provide savings and credit to their members; and (b) other financial services subject to regulation by the BSP.
Section 3. Coverage. (1) All Financial Service Cooperative organized for the primary purpose of engaging in savings and credit services and other financial services, and (2) Existing cooperatives with savings and credit facilities which has formally notified the Authority of their intention to exercise enhanced functions and satisfied the requirements of CDA for conversion to Financial Service Cooperative.
Section 4. Registration. The Articles of Cooperation and By-laws of any FSC, or any amendment thereto, shall be registered with the Authority only if accompanied by a Certificate of Authority issued by the BSP, under its official seal. Existing cooperative engaged in credit and multi purpose activities, after it has notified the Authority of its decision to exercise enhanced functions and satisfied the requirements for the conversion to Financial Service Cooperative, shall register its amended Articles of Cooperation and By-laws to the Authority upon approval of the Authority and favorable certification of the BSP.
Section 5. Revocation of Authority. The authority granted, may be revoked by the BSP if any of the grounds for receivership mentioned under Section 30 of Republic Act. No. 7653, otherwise known as The New Central Bank Act and sections 53 and 56 of Republic Act No. 8791, otherwise known as An Act Providing for the Regulation of the Organization and Operations of Banks, Quasi-Banks, Trust Entities and for Other Purposes are present or if the FSC has willfully violated the Code or any of the related rules and regulations.
Section 6. Minimum Capitalization Requirements. Only those cooperatives with minimum Paid-up capital of at least Ten Million pesos (Php 10,000,000.00) shall qualify to register as FSC without prejudice to additional capital requirements that maybe prescribed by the BSP for a particular financial service regulated by the BSP that will be offered by the FSC.
Section 7. Documentary Requirements. In addition to the documents required by the authority for registration of new cooperative/amendments, the following shall be likewise submitted:
1. Certificate of Authority from BSP;
2. Resolution of the Board stating that:
2.1 The function or one of the functions of the
cooperative shall be savings, credit and other financial services;
2.2 The amount of paid-up capital allocated for
such purposes shall be at least Ten Million Pesos (Php 10,000,000.00);
3. Undertaking to accomplish within a year from the
issuance of Certificate of Registration to establish the business site equipped
with facilities, forms, stationeries, and vault and provide required special
training/seminar for officers of the cooperative;
4. Audited Financial Statement of the immediately
preceding year in case of existing cooperative;
5. Other papers, which may be required by
Authority.
Section 8. Reportorial Requirements. The FSC shall submit the
regular reports as provided under Section 2 of Rule 8 of this Rule.Section 9. Membership and Affiliation. A FSC shall have two (2) types of members: (1) Regular members, who are natural persons; and (2) Associate members who are natural persons but who do not immediately qualify under the requirements for membership set out in the By-laws of the cooperative. All associate members who are natural persons shall be given two (2) years to become regular members. Failure to convert within said period shall mean automatic withdrawal of their associate membership. They may, however, re-apply as regular members after two (2) years. Minors who are dependents of regular members can qualify as associate members. When they reach the age of majority and within two (2) years from acceptance of their associate membership, they have the option to convert into regular members. As associate members, they may open accounts, deposit funds, and withdraw from their account, subject to the By-laws and rules of the cooperative, and the rules and regulations of the Authority, notwithstanding the provisions of existing laws to the contrary.
Section 10. Officers. The officers of the FSC shall be composed of the Members of the Board of Directors, Committee Members, General Manager or Chief Executive Officer, Secretary, Treasurer and Members holding other positions as may be provided for in their By-laws.
Section 11. Bonding of Accountable Officers. Every Director, Officer, and Employees handling funds, securities, or property on behalf of the FSC shall be covered by a surety bond to be issued by a duly registered insurance or bonding company for the faithful performance of their respective duties and obligations. The Board of Directors shall determine the adequacy of such bonds.
Section 12. Compensation. In the absence of any provision in the By-laws fixing their compensation, the Directors, shall not receive any compensation except for reasonable per diems: Provided, however, That the Directors and Officers shall not be entitled to any per diem when, in the preceding calendar year, the cooperative reported a net loss or had dividend rate less than the official inflation rate for the year. Any compensation other than per diems may be granted to Directors by a majority vote of the members with voting rights at a regular or special general assembly meeting specifically called for the purpose: Provided further, That no additional compensation other than per diems shall be paid during the first year of existence of the FSC. Provided finally, That the immediately preceding proviso shall not apply to cooperatives which converted into Financial Service Cooperative. The compensation of Officers as well as the Members of the Committee created pursuant to the Code or its By-laws maybe fixed in By-laws.
Section 13. Removal of Officers. All complaints for the removal of any elected Officer shall be filed with the Board of Directors. Such Officer shall be given the opportunity to be heard. Majority of the Board of Directors may place the Officer concerned under preventive suspension pending the resolution of the investigation which period shall be specified in the By-laws or policies of the cooperative duly approved by the General/Representative Assembly. Upon finding of a prima facie evidence of guilt, the Board of Directors shall present its recommendation for removal to the General/Representative Assembly.
An Elective Officer may be removed by three-fourths (3/4) vote of the regular members present and constituting a quorum in a regular or special general assembly meeting called for the purpose. The Officer concerned shall be given an opportunity to be heard at said assembly.
Section 14. Net worth. The Net Worth of the FSC shall, at all times, not be less than an amount equal to eight percent (8%) of its risk assets. The net worth positions should be sufficient to meet competitive pressure and adverse economic conditions as they arise. It should enhance the safety of the members' share and keep pace with growth in FSC assets.
Section 15. Deposit and Borrowing Operations. Savings and Time Deposits with FSC may be opened with a minimum amount to be determined by the Board of Directors. Only members and its affiliate laboratory cooperative may open savings and/or time deposit accounts. The FSC, through the Board of Directors as authorized by the General Assembly, may borrow from any source at the best terms or conditions available and in such amount that may be needed.
Section 16. Reserve Requirements against Deposit Liabilities. FSC shall maintain a Liquidity Reserve Fund that will be restricted in nature equivalent to at least two percent (2%) of their savings and time deposit liabilities.
Section 17. Loans. The Board of Directors shall be responsible for setting loan policies and lending procedures. It shall comply with the provisions of R.A. 3765, otherwise known as the "Truth in Lending Act" and shall make the true and effective cost of borrowing, an integral part of every loan contract.
Section 18. Investment Program. A sound investment program shall be the sole responsibility and accountability of the Board of Directors. The scope of the program will depend largely on the FSC size and the extent of its surplus funds. Investment policies should be in writing and should address the safety, liquidity and yield, diversification, delegation of authority, and valuation/assessment of securities. The FSC shall not invest in any single entity more than 20% of its net worth.
Section 19. Internal Control. The FSC shall adopt a proper plan of organization, accounting control, accounting system, administrative control, internal control standards, accounting records procedures and other measures to safeguard the FSC's assets, check the accuracy and reliability of accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies.
Section 20. Performance Standards. A policy of transparency and openness must be always maintained whereby the Books of Accounts, General/Representative Assembly, Board Resolutions and Committee Reports are properly kept and made accessible to members, and the regular financial statements are periodically prepared and made known to the members, to the Authority and to other parties interested in the FSC's operations.
Section 21. Standard Chart of Accounts. All FSCs shall adopt the Standard Chart of Accounts and its accompanying Accounting Manual for Credit and Other Types of Cooperatives with Credit Service issued by the Authority.
Section 22. Manual of Rules and Regulations. The Authority shall develop a Manual that will cover: (1) the Rules and Regulations for the safe and sound conduct of operations of Financial Service Cooperatives; (2) Rules and Regulations for the appointment of a Conservator or a Receiver as may be necessary in coordination with the BSP, taking into consideration the grounds, powers and procedures under Section 29 and 30 of Republic Act No. 7653 as may deemed appropriate to Financial Service Cooperatives; and (3) the appropriate sanctions and penalties on the Financial Service Cooperatives, its Members, Officers and Responsible Persons, for any action that fails to adhere to sound and prudent management practices or are inconsistent with the provisions of the Code, other applicable laws on cooperatives, rules, regulations, circulars or orders issued by the Authority, and require the cooperative to undertake corrective or remedial measures relative thereto.
The appropriate prudential Rules and Regulations applicable to the Financial Service Cooperatives will be developed by the BSP, in coordination with the Authority.
Section 23. Prohibition. The terms 'Credit Cooperatives', 'Financial Service Cooperative', and 'Financial Service Cooperative Federation' shall be used exclusively by those who are duly registered under the Code, and no person, group of persons, or organization shall use the said terms unless duly registered with the Authority. Violations of this prohibition shall be punishable in accordance with Art. 140 of the Code.
RULE 13
VOLUNTARY ARBITRATION
Section 1. Legal Basis. The legal basis for this Rule is Art.
137 of the Code quoted as follows:VOLUNTARY ARBITRATION
"Art. 137. Settlement of Disputes, Conciliation, and Mediation Proceedings. - Disputes among members, officers, directors, and committee members, and intra-cooperative, inter-cooperative, intra-federation or intra-federation disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or mediation mechanism embodied in the bylaws of cooperatives and in such other applicable laws.
The conciliation and mediation committee of the cooperative shall facilitate the amicable settlement of intra-cooperative disputes and disputes among members, officers, directors, and committee members.
Should such conciliation and mediation proceedings fail, the matter shall be settled through voluntary arbitration: Provided, however, That before any party can validly file a complaint with the Authority for voluntary arbitration, it must first secure a certification from its conciliation and mediation committee and from the cooperative union or federation to which it belongs that despite all efforts to settle the issues, the same have failed.
The jurisdiction of the voluntary arbitration shall be exclusive and original and their decisions shall be appealable to the Office of the President. The Authority shall issue and adopt the proper rules of procedure governing arbitration as the primary and exclusive mode for dispute resolution in accordance with the Alternative Dispute Resolution Act of 2004.
For this purpose, the Authority shall constitute a list of Qualified Voluntary Arbitrators."
Section 2. Exclusive and Original Jurisdiction of the Voluntary Arbitrator/Arbitrator. The Voluntary Arbitrator/Arbitrator mutually chosen by the parties shall have exclusive and original jurisdiction over the dispute, and their decision shall be appealable to the Office of the President of the Republic of the Philippines.
Section 3. Powers/Authority of the Voluntary Arbitrator/s. The Voluntary Arbitrator/s shall have the following powers/authority:
a. To hold hearings and to receive evidence
necessary to resolve the issue/s subject of the dispute.
b. To require any person to attend hearing/s as
witness or to cause production of documents when the relevancy and the
materiality thereof are vital to the resolution of the case.
c. To administer oath.
d. To cite contempt any person disturbing the
proceeding and/or who willfully defy lawful orders of the Voluntary
Arbitrator/Arbitrators.
e. To issue a Writ of Execution, if necessary.
f. To exercise such other powers and functions as
may be necessary to resolve the dispute.
Section 4. Nature of Proceedings. Voluntary Arbitration is an
administrative proceeding. The technical rules applicable to court or judicial
proceedings may not apply strictly. However, the requirements of due process
must be observed at all times. The hearing may proceed even in the absence of
any party, provided the parties were duly notified and their failure to appear
in such scheduled meeting is unjustified as determined by the Voluntary
Arbitrator/s handling the proceedings.Section 5. Coverage. All intra/inter cooperative disputes not resolved amicably in accordance with the Conciliation/Mediation Mechanisms embodied in the By-laws of a cooperative shall be governed by this Rule.
Section 6. Commencement of Action. Any party of a dispute not resolved through Conciliation/Mediation Proceeding in the primary and union/federation level can commence an action for Voluntary Arbitration by filing a Verified Complaint with the Authority.
In the case of a primary cooperative affiliated with any federation/union, the complaint shall be accompanied by a Certificate of Non-Settlement issued by the said federation/union to which the primary cooperative is affiliated with.
In the case of a primary cooperative not affiliated with any federation or union, the complaint shall be accompanied by a Certificate of Non-Settlement issued by the Conciliation/Mediation Committee of such primary cooperative together with a Certificate of Non-Affiliation with any Federation/Union signed by the Chairperson of the Board of Directors of the same cooperative.
Section 7. Venue of Action. All complaints shall be filed with CDA-Extension Office having administrative jurisdiction over the cooperatives. However, for complaints involving cooperatives registered with the Central Office such complaint shall be filed with the latter.
Section 8. Contents of the Complaint. The complaint shall contain:
1. The Names and Addresses of the Complainant/s and
Respondent/s;
2. A Brief Description of the Complaint and the
Documentary Evidences, if any; and
3. The Relief Prayed For.
Section 9. Parties to the Dispute. The Party who filed the
complaint shall be called the "Complainant/s" and the Party
complained of shall be called the "Respondent/s".Section 10. Procedures. Upon receipt of the Complaint, the Authority shall issue a Notice/Summons to the Respondent/s to file Answer/Comment. Upon receipt of the Answer/Comment, a Preliminary Conference shall be scheduled.
Section 11. Preliminary Conference. A Notice shall be sent to all parties concerned, indicating the time and date of the conference. The Notice shall be served on Counsel, or on the party who has no Counsel. It shall be the duty of the parties or their Counsel to appear at the Preliminary Conference. The non-appearance of a party may be excused only if a valid cause is shown therefore or if a Representative shall appear in his/her behalf fully authorized in writing. The unjustified failure of the Complaint to appear in the Preliminary Conference shall be cause for dismissal of the complaint. A similar failure on the part of the Respondent at the first instance, a second Notice/Summons shall be issued. Non-compliance with the second Notice/Summons by the Respondent/s shall be cause for the dismissal of the complaint. However, a Certificate of Non-Resolution may be issued upon request of the Complainant.
Whenever the Respondent's whereabouts are unknown or cannot be ascertained by diligent inquiry, the notice may be effected by publication in a newspaper of general circulation at the expense of the complainant, otherwise the complaint shall be dismissed. However, a Certificate of Non-Resolution may be issued to the Complainant.
Should the parties appear in the Preliminary Conference, the parties shall be required to sign a Submission Agreement.
Section 12. Contents of the Submission Agreement. The Agreement shall contain, among other things, the following matters:
1. The agreement to submit to Voluntary
Arbitration;
2. The specific issue/s or dispute/s to be
submitted for resolution;
3. The name of the Voluntary Arbitrator/s chosen by
the parties;
4. The manner of paying the cost of arbitration
proceedings including the Arbitrator's fee;
5. The name of the public official whom the parties
may designate to execute the final decision or award, if necessary; and
6. The Agreement to perform or abide by the
Decision/Award.
Section 13. Arbitration Proceedings. All parties to the
dispute shall attend the arbitration proceedings. The attendance of any third
party or the exclusion of any witness in the proceeding shall be determined by
the Voluntary Arbitrator/s. Hearings may be adjourned for a valid cause or upon
agreement of the parties. Unless the parties agree otherwise, it is mandatory
for the Voluntary Arbitrator/s to render a Decision or Award within thirty (30)
calendar days from the date the parties agreed to submit the case for
resolution.Section 14. Decision/Award. The final disposition of the issue/s submitted to Voluntary Arbitration is the Decision/Award.
The Decision or Award must be stated in clear, concise and definite terms. It shall include the facts and the law and/or contract upon which the Decision/Award is based and shall be signed by the Voluntary Arbitrator/s. A copy of this Decision/Award shall be furnished the Authority.
Section 15. Extent of Decision/Award. The Voluntary Arbitrator/s shall have the power to decide only the matters which have been submitted for arbitration.
Section 16. Enforcement/Execution of Decision/Award. The parties shall comply voluntarily and faithfully the Decision/Award. In instances of non-compliance, a Motion to Enforce or Execute may be filed with the Voluntary Arbitrator/s who may issue a Writ Execution requiring either the sheriff of the Authority, if any, or the regular courts or any public official whom the parties may designate in the submission agreement to execute the final decision or award.
Section 17. Appeal to the Office of the President of the Republic of the Philippines. The Decision/Award rendered shall be appealable to the Office of the President of the Republic of the Philippines. The Appeal is taken by filing a Notice of Appeal within fifteen (15) days after receipt of the copy of the Decision/Award appealed from. If no appeal is filed within the time as provided herein, such Decision/Award becomes final and executory.
Section 18. Stenographic Notes/Transcript. The Voluntary Arbitrator/Arbitrator shall arrange the taking of stenographic notes/transcript of the testimony when one or more parties request such a record, and such party or parties thereof assume payment of the cost.
Section 19. Cost of Arbitration and Arbitrator's Fee. Unless agreed otherwise, the parties shall equally share the cost of the proceedings including the Arbitrator's Fee.
Section 20. Accreditation of Voluntary Arbitrator/s. The Authority shall issue guidelines concerning the accreditation and de-listing of Voluntary Arbitrator/s as well as the list of qualified Voluntary Arbitrator/s.
COMMON PROVISIONS
Section 1. Requirements. A copy of these Rules shall be among
the documents required to be kept ready and accessible for inspection and
examination by the members of the cooperative and the Authority in accordance
with Art. 52 of the Code.Section 2. Interpretation. Unless otherwise stated in these Rules, in case of doubt as to the meaning of any provision of these Rules, the same shall be resolved and interpreted liberally in favor of the cooperatives and their members.
Section 3. Suppletory Rule. Bureau of Local Government Finance Memorandum Circular No. ____ and Bangko Sentral ng Pilipinas Circular No. 682, S-2010 shall from part of these Rules. Special Rules, Circulars, Orders and other issuances by appropriate government agencies in pursuance of the provisions of the Code and these Rules, and not inconsistent thereto, shall have suppletoy application to these Rules.
Section 4. Mandate. The Authority is mandated to implement and enforce these Rules and Regulations.
Section 5. Applicability. The provisions of this Rule shall apply to Rules 1 to 13.
Section 6. Separability. If any provision of these Rules and Regulations is declared null and void or unconstitutional, the other provisions not affected thereby shall continue to be in force and effect.
Section 7. Amendment. These Rules and Regulations shall be subject to automatic review three (3) years after the effectivity thereof. Any amendment thereto, shall be subject to the review and approval of the JCOCC.
Section 8. Effectivity. These Rules and Regulations shall take effect fifteen (15) days after publication in the Official Gazette or in a newspaper or general circulation.
RECOMMENDING APPROVAL:
FOR THE BOARD OF ADMINISTRATORS
COOPERATIVE DEVELOPMENT AUTHORITY
COOPERATIVE DEVELOPMENT AUTHORITY
LECIRA V. JUAREZ
Chairman
This Implementing Rules and Regulations (Part I) was approved by the Joint
Congressional Oversight Committee on Cooperatives during its meeting on
February 16, 2010 at the Senate of the Philippines, Pasay City pursuant to
Article 138 of RA 9520.Chairman
For Joint Congressional Oversight
Committee on Cooperatives
For the Senate of the
Philippines:
Sen. JUAN MIGUEL F. ZUBIRI Chair, Senate Panel |
For the House of the
Representatives:
Rep. ERNESTO C. PABLO Chair, House Panel |
The Lawphil Project - Arellano Law Foundation
RULES AND REGULATIONS IMPLEMENTING
THE SPECIAL PROVISIONS OF THE PHILIPPINE COOPERATIVE CODE OF 2008
(REPUBLIC ACT NO. 9520)
THE SPECIAL PROVISIONS OF THE PHILIPPINE COOPERATIVE CODE OF 2008
(REPUBLIC ACT NO. 9520)
TITLE AND DEFINITIONS
Section 1. Title. These Rules shall be known as the
"Rules and Regulations Implementing the Special Provisions of the
Philippine Cooperative Code of 2008."Section 2. Definition of Terms. For the purpose of these Rules and Regulations, the following terms are defined as follows:
1. Accreditation - shall refer to the act of
the OTC Board of Directors recognize the Transportation Service Cooperatives
and which shall take place after registration with the CDA as evidenced by a
Certificate of Accreditation.
2. Agrarian Reform Area - shall refer to the
area subject to the coverage of Comprehensive Agrarian Reform Program
(CARP)/Comprehensive Agrarian Reform Program Extension with Reform (CARPER).
3. Agrarian Reform Beneficiaries (ARBs) -
shall refer to the qualified beneficiaries of Comprehensive Agrarian Reform
Program (CARP) as defined under Section 22, Chapter VII of R.A. 6657.
4. Agrarian Reform Community (ARC) - shall
refer to a community composed and managed by ARBs who are willing to be
organized and to undertake the integrated development of an area and/or their
organizations or cooperatives as defined under RA 9700, otherwise known as the
Comprehensive Agrarian Reform Program Extension with Reform (CARPER) Act.
5. Agrarian Reform Cooperative - shall refer
to one organized by marginal farmers majority of which are Agrarian Reform
Beneficiaries duly registered with the Authority for the purpose of developing
an appropriate system of land tenure, land development, land consolidation or
land management in areas covered by agrarian reform and for other purposes as
provided by law. The same shall also refer to Agrarian Reform Beneficiaries
Cooperative (ARB Coop) as defined in DAR Administrative Order No. 05, Series of
2009.
6. Authority - shall refer to Cooperative
Development Authority (CDA).
7. BFAD - shall refer to Bureau of Food and
Drugs.
8. Blanket Loan/Wholesale Loan - shall refer
to a housing loan contracted/obtained by a housing cooperative intended to
identify member-beneficiaries for land acquisition, land improvement, house
construction, home improvement, or renovation and other similar purposes.
9. BSP - shall refer to Bangko Sentral
Pilipinas.
10. CGS - shall refer to the Certificate of
Good Standing issued by the Authority to all types of cooperatives.
Transportation Service Cooperative shall also secure another CGS from OTC or
LGU, whichever is applicable.
11. CLOA - shall refer to the Certificate of
Land Ownership Award.
12. Commission - shall refer to the
Insurance Commission.
13. Cooperative Education and Transport
Operation Seminar (CETOS) - shall refer to seminars conducted by CDA and/or
OTC for the purpose of providing continuing education on cooperative and
transport operation to enhance the knowledge and capability of the officers as
well as the members of the Transportation Service Cooperative.
14. Cooperative Housing Program - shall
refer to an alternative housing approach, in partnership with
government/non-government agencies involved in a housing program, undertaken by
a financially and organizationally stable cooperative to address the housing
problems of its members primarily the low-income earners through its own
cooperative efforts in planning and direct production of affordable, decent and
adequate housing units.
15. CPCN/Franchise/Permit - shall refer to
the Certificate of Public Convenience and Necessity issued by the appropriate
government agencies which authorizes the grantee thereof to render the
appropriate public service.
16. Dairy Cooperative - shall refer to one
whose members are engaged in the production of fresh milk which may be
processed and/or marketed as dairy products.
17. Distribution of Electricity - shall
refer to the conveyance of electric power by a distribution utility through its
distribution system pursuant to the provisions of the EPIRA Law.
18. Distribution of Utility - shall refer to
any Electric Cooperative, private corporation, government-owned utility, or
existing local government unit which has an exclusive franchise to operate a
distribution system in accordance with the EPIRA Law.
19. DAR - shall refer to the Department of
Agrarian Reform.
20. DOH - shall refer to Department of
Health.
21. DOTC - shall refer to Department of
Transportation and Communications.
22. Electric Cooperative - shall refer to
one organized for the primary purpose of undertaking power generation,
utilizing renewable energy sources, including hybrid system, acquisition and
operation of subtransmission or distribution to its household members.
23. Extension Offices - shall refer to the
offices of the Authority covering one geo-political region each as their area
of jurisdiction.
24. EPIRA - shall refer to the Electric
Power Industry Reform Act of 2001.
25. GSIS - shall refer to the Government
Service Insurance System.
26. High Rise/Condominium Housing - shall
refer to the construction of at least five (5) storey residential building in
high density urban and rural areas to provide housing to low income earners.
27. HDMF - shall refer to the Home
Development Mutual Fund or Pag-IBIG Fund.
28. HLURB - shall refer to the Housing and
Land Use Regulatory Board.
29. Housing Beneficiaries - shall refer to
regular members in good standing of the Housing Cooperative who actively in the
By-laws and duly approved internal policies of the cooperative.
30. Housing Cooperative - shall refer to one
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.
31. Insurance Cooperative - shall refer to
one engaged in the business of insuring life and property of cooperatives and
their members. It shall also refer to Cooperative Insurance Societies (CIS).
32. Insurance Like Activity - shall refer to
any activity involving regular collection of premiums, fees, contributions, or
charges prior to the occurrence of contingent event and the payment of
guaranteed benefits upon the occurrence of such event.
33. LBP - shall refer to the Land Bank of
the Philippines.
34. LGU - shall refer to Local Government
Unit.
35. LTFRB - shall refer to the Land
Transportation Franchising and Regulatory Board.
36. LTO - shall refer to the Land
Transportation Office.
37. LWUA - shall refer to the Local Water
Utilities Administration, created under PD 198, as amended.
38. MARINA - shall refer to Maritime
Industry Authority.
39. Marginal Farmers - shall refer to
farmers who are tilling an area of not more than three (3) hectares.
40. Medium Rise Housing - shall refer to the
construction of a maximum of four (4) storey residential building in high
density urban and rural areas to provide housing to low income earners.
41. Member in Good Standing - shall refer to
one who is a regular member and has complied with all the requisites for
membership. One who possesses all the qualifications and none of the
disqualifications provided in the Cooperative By-laws as ascertained by the
Board of Directors and has the right to vote and be voted upon.
42. Micro-Insurance - shall refer to an
activity providing specific insurance, insurance-like, and other similar
products and services that meet the needs of the low-income sector for risk
protection and relief against distress, misfortune and other contingent events.
This shall include all forms of insurance, insurance-like and other similar
activities, as may be defined by concerned regulatory bodies with features such
as: premiums, contributions, fees or charges collected/deducted prior to the occurrence
of a contingent event and guaranteed benefits provided upon occurrence of a
contingent event.
43. Micro-Insurance Product - shall refer to
a financial product or service that meets the risk protection needs of the poor
where the amount of premiums, contributions, fees or charges computed on a
daily basis does not exceed five percent (5%) of the current daily minimum wage
rate for non-agricultural workers in Metro Manila, as approved by the National
Wages Productivity Board (NWPB)/Regional Tripartite Wages Productivity Board
(RTWPB) and the maximum sum of guaranteed benefits is not more than 500 times
the daily minimum wage rate for non-agricultural workers in Metro Manila.
44. NDA - shall refer to National Dairy
Authority.
45. Next of Kin - shall, for purposes of
succession, refer to an natural person who is an heir of an agrarian reform
beneficiary and who is qualified to be a member of the cooperative as ARB under
its By-laws and as determined by DAR.
46. NHA - shall refer to the National
Housing Authority.
47. NWRB - shall refer to the National Water
Resources Board, created under PD 424.
48. OTC - shall refer to the Office of
Transportation Cooperatives.
49. PCG - shall refer to the Philippine
Coast Guard.
50. Referendum - shall refer to a mechanism
of securing the approval of the general membership of an Electric Cooperative
on issues affecting its registration, operation, and management.
51. Regular Insurance Product - shall refer
to all other insurance policies not covered by Micro-Insurance Product.
52. Renewable Energy Resources - shall refer
to energy resources that do no have an upper limit on the total quality to be
used. Such resources are renewable on a regular basis and the renewable rate is
rapid enough to consider availability over an infinite time. These include
among others, biomass, solar, wind, hydro and ocean energy.
53. RTWPB - shall refer to the Regional
Tripartite Wages Productivity Board.
54. SSS - shall refer to the Social Security
System.
55. Socialized Housing - shall refer to the
housing program and project undertaken by the government and private sector for
the underprivileged and homeless which may also be undertaken by a Housing
Cooperative. This includes sites and services development, long-term financing
and liberalized terms on interest payments.
56. Sub-transmission Assets - shall refer to
the facilities related to the power delivery service below the transmission
voltages and based on the functional assignment of assets, including, but not
limited to stepdown transformers used solely by load customers, associated
switchyard/substation, control and protective equipment, reactive compensation
equipment to improve customer power factor, overhead lines, and the land where
such facilities/equipment are located. These include NPC assets linking
transmission system and the distribution system which are neither classified as
generation nor transmission.
57. Supply of Electricity - shall refer to
the sale of electricity by a party other than a generator or a distributor in
the franchise area of a distribution utility using the wires of the
distribution utility concerned.
58. Technical Plan - shall refer to all
technical documents required in planning a housing project namely, the bar
chart and construction schedule, systematic development plan, the architectural
and detailed engineering and housing design, contract documents, technical and
material specification.
59. Transmission of Electricity - shall
refer to the conveyance of electricity through the high voltage system.
60. Transportation Service Cooperative -
shall refer to one which engages in land and sea transportation, limited to
small vessels, as defined or classified under the Philippine Maritime laws,
organized under the provision of the Code.
61. Urban Areas - shall refer to all cities
regardless of their population density and to municipalities with a population
density of at least 500 persons per square kilometer.
62. Urbanizable Areas - shall refer to the
sites and lands within display marked and great potential of becoming urban
areas within the period of five (5) years.
63. Water Tariff - shall refer to the water
rate charged to customers/members for water consumption as determined by the
cooperative and approved by the NWRB.
64. Water Permit - shall refer to the
authority to appropriate and use water.
65. Water Right - shall refer to the
privilege granted by the government to appropriate and use water.
66. Water Service Cooperative - shall refer
to a duly registered cooperative organized to own, operate, and manage water
supply systems for the provision and distribution of potable water for its
members/consumers.
67. Water Supply - shall refer to the supply
of potable water as provided by the cooperative for domestic, industrial, commercial,
and other uses.
68. Worker Beneficiaries - shall refer to a
natural person who renders service for a value as an employee or laborer in an
agricultural enterprise or farm within an ARC, regardless of whether his
compensation is paid on a daily, weekly, monthly or "pakyaw" basis.
RULE I - HOUSING COOPERATIVES
Pursuant to the provisions of Art. 62(13) (par.2) under Chapter V of
Republic Act No. 9520, otherwise known as the Philippine Cooperative Code of
2008, the Cooperative Development Authority in consultation with NHA, HDMF,
SSS, LBP, and concerned cooperative sector hereby promulgates the following
rules and Regulations for the proper guidance and compliance of Housing
Cooperatives.Section 1. Coverage. This Rule shall cover all cooperatives duly registered with the Authority under R.A. 9520 organized to assist or provide access to housing for the benefit of its regular members.
Section 2. Organization. Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having a common bond of interest and actually residing or working in the intended area of operation, may organize a housing cooperative.
Section 3. Purpose and Objectives. A Housing Cooperative shall be organized for any or all of the following purposes:
(1) To facilitate access and/or provide affordable
housing units to its members;
(2) To create a resource mobilization program to
ensure financial stability for the cooperative;
(3) To foster and strengthen the principles of
cooperativism by promoting a comprehensive and integrated community development
program which are planned and managed by the cooperative members thereby
ensuring a sustained and self-reliant cooperative community.
(4) To develop collaborative efforts and
partnership with other cooperatives, CDA, NHA, GSIS, HDMF, SSS, LBP, DBP, HLURB
and other government agencies, financial institutions and entities thereby
assuring availability of resources and lower cost of housing development.
(5) To expand the cooperatives business operations
by stabilizing the available resources for the continuing production of housing
units for its members.
(6) To undertake such other economic or social
activities as may be necessary or incidental in the pursuit of the foregoing
purposes.
Section 4. Housing Programs and activities. Housing
Cooperatives may engage in the following activities:
a. Socialized Housing;
b. Medium Rise Public and Private Housing;
c. High Rise/Condominium Housing;
d. Student/Faculty Dormitory Housing;
e. Production and Distribution of Housing
Materials;
f. Estate Management; and
g. Other similar activities.
Section 5. Registration Jurisdiction. Housing Cooperatives
shall file their application for registration with the CDA Extension Office,
which shall have jurisdiction over the said cooperatives.Section 6. Capitalization. For purposes of registration with the Authority, a housing cooperative shall have a minimum paid-up capitalization of Fifteen Thousand Pesos (P 15, 000.00).
Section 7. Requirements for Registration. The following shall be complied with upon filing of application:
A. New Applicant
(1) Name Verification Slip;
(2) Articles of Cooperation and by-Laws;
(3) Sworn Statement of the treasurer elected by
the subscribers showing that at least ` twenty-five per centum (25%) of the
authorized share capital has been subscribed and at least twenty-five per
centum (25%) of the total subscription has been paid: Provided, That in no case
shall the paid-up share capital be less than Fifteen Thousand Pesos
(15,000.00);
(4) Surely Bond of Accountable Officers handling
funds, properties and securities;
(5) Pre-Membership Education Seminar (PMES);
(6) Economic Survey;
(7) Pre-Feasibility Study of the housing projects
undertaking as reviewed by NHA;
(8) Undertaking to Change Name in the event that
another cooperative has acquired prior right to the use of the proposed name;
and
(9) Registration Fee.
B. Existing Cooperative
(1) Amended Articles of Cooperation and By-laws;
(2) A Resolution certified by the Board Secretary
and by the majority of the Board of Directors stating that the said amendments
have been duly approved by at least two-thirds (2/3) vote of the members with
voting rights;
(3) Audited Financial Statements showing
profitable operations for the past two (2) years;
(4) Pre-feasibility study of the housing projects
undertaking as reviewed by NHA;
(5) Proof of business track record of the
cooperative; and
(6) Amendment Fee.
Section 8. Financing and Technical Assistance. The Authority,
in coordination with appropriate government agencies and financial
institutions, shall assist the housing cooperative in availing technical and
financial assistance for its housing projects.For this purpose, a special window for the financing of the housing projects shall be created by the appropriate housing agencies and government financial institutions. The financing shall be in the form of blanket loans or wholesale loans to qualified housing cooperatives, with interest rates and terms equal to, or better than those given for socialized housing projects without need for individual processing.
Section 9. Documentary Requirements in Availing for Technical and/or Financial Assistance. The cooperative in availing technical and/or financial assistance shall file its application with the appropriate government financial institutions.
For this purpose, the applicant cooperative shall comply with the documentary requirements as maybe required by such appropriate government financial institution.
Section 10. Conditions for the Proposed Housing Project. The proposed housing project of the cooperative shall have the following features as certified by the NHA:
1. Availability of Land Suitable for Housing.
The land proposed for housing is classified as a safe and buildable area and
not affected by any government infrastructure project, agricultural or
industrial reserve.
2. Land Ownership. The land is owned by the
cooperative or there is an on-going negotiation between the landowner and
cooperative through a Contract to Sell or Reservation Agreement between the
landowner and the cooperative and that the land is free from any liens and
encumbrances.
3. Target Beneficiaries. The proposed
housing project should have at least 30 initial target member-beneficiaries.
Section 11. Membership. Membership in Housing Cooperatives
shall be open to all natural persons who meet the qualifications for membership
prescribed in the cooperative By-laws.Section 12. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Housing Cooperative such as:
a. Exercise of rights and privileges of members;
b. Formulation of rules and procedures and the
conduct of meetings of General Assembly, Board of Directors and Committees.
c. Manner of election and qualifications of
Officers, Directors and Committee Members;
d. Allocation and distribution of surplus; and
e. Other matters relating to the internal affairs
of Housing Cooperatives.
All matters relating to the technical aspects of the housing program and
such other similar matters affecting the Housing Cooperatives shall be
regulated by the NHA or HLURB as the case maybe.Section 13. Joint Monitoring and Evaluation Committee. The Joint Monitoring and Evaluation Committee shall be composed of CDA, as the lead agency, NHA, HLURB, HDMF, SSS, GSIS, LBP, DBP, concerned cooperative sector and other appropriate government agencies and financial institutions.
The Committee shall have the following functions:
1. To formulate joint standards for the proper
implementation, monitoring, organization, management, and development of
cooperative housing project all matters relating to the organizations,
management, and development of the cooperative housing projects.
2. To recommend changes to this IRR from time to
time if the need arises.
3. To assist in settling inter/intra cooperative
disputes.
4. To submit annual accomplishment report to the
Authority.
Section 14. Settlement of Disputes. Intra/inter cooperative
disputes shall, as far as impracticable, be settled amicably through the
conciliation and mediation mechanism embodied in the By-laws of the
cooperative, which shall be in accordance with the CDA Guidelines for the
Implementation of Conciliation-Mediation for Cooperative Disputes, and in
applicable laws.Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration or in court of competent jurisdiction.
However, in cases where the dispute/s fall within the jurisdiction of the NHA or HLURB, the same shall be referred to the said agency and it shall be resolved in accordance with the NHA or HLURB regulations.
RULE II - AGRARIAN REFORM
COOPERATIVES
Pursuant to the provisions of Art. 93 (6) and Art. 94 (par. 2) under Chapter
XI of Republic Act. No. 9520, otherwise known as the Philippine Cooperative
Code of 2008, the Authority in consultation with the DAR, BSP, LBP, and the
concerned cooperative sector hereby promulgates the following rules and
regulations for proper guidance and compliance of Agrarian Reform Cooperatives.Section 1. Coverage. This Rule shall cover all Agrarian Reform Cooperatives duly registered with the Authority under R.A. No. 9520.
Section 2. Organization. At least fifteen (15) marginal farmers majority of which are Agrarian Reform Beneficiaries in an agrarian reform areas may organized an Agrarian Reform Cooperative.
Section 3. Purposes and Objectives. Agrarian Reform Cooperatives shall be organized for any or all of the following purposes:
(1) To develop an appropriate system of land
tenure, land development, land consolidation or land management in areas
covered by agrarian reform;
(2) To coordinate and facilitate the dissemination
of scientific methods of production and provide assistance in the processing,
storage, transport, and marketing of farm products for Agrarian Reform
Beneficiaries and their immediate families, hereinafter referred to as
"beneficiaries";
(3) To provide financial facilities to
beneficiaries for provident or production purposes at reasonable costs;
(4) To arrange and facilitate the expeditious
transfer of appropriate and suitable technology to beneficiaries and marginal
farmers at the lowest possible costs;
(5) To provide social security benefits, health,
medical and social insurance benefits and other social and economic benefits
that promote the general welfare of the agrarian reform beneficiaries and
marginal farmers;
(6) To provide a non-formal education, vocational/technical
training and livelihood program to beneficiaries and marginal farmers;
(7) To act as channels for external assistance and
services to the beneficiaries and marginal farmers;
(8) To undertake a comprehensive and integrated
development program in agrarian reform and resettlement areas with special
concern for the development of agro-based, marine-based, and cottage-based
industries;
(9) To represent the beneficiaries on any or all
matters that affect their interest; and
(10) To undertake such other economic or social
activities as may be necessary or incidental in the pursuit of the foregoing
purposes.1avvphi
Section 4. Registration Jurisdiction. Agrarian Reform
Cooperatives shall file their duly accomplished application for registration
with the CDA Extension Office, which shall have jurisdiction over the said
cooperatives.Section 5. Registration Requirements. The following shall be complied with upon filing of application:
(1) Name Verification Slip;
(2) Articles of Cooperation and By-Laws;
(3) Sworn Statement of the Treasurer elected by the
subscribers showing that at least twenty-five per centum (25%) of the
authorized share capital has been subscribed and at least twenty-five per
centum (25%) of the total subscription has been paid: Provided, That in no case
shall the paid-up share capital be less than Fifteen Thousand Pesos
(P15,000.00);
(4) Surety Bond of Accountable Officers;
(5) Pre-Membership Education Seminar (PMES);
(6) Economic Survey;
(7) Undertaking to Change Name in the event that another
cooperative has acquired prior right to the use of the proposed name;
(8) Mother CLOA in case of plantation based ARBs;
(9) Written verification from the DAR to the effect
that the cooperative organization is needed and desired by the beneficiaries;
results of a study that has bee conducted fairly indicate the economic
feasibility of organizing the same and that will be economically viable in the
operations; that at least majority of the members are Agrarian Reform
Beneficiaries, and the same may now be organized and registered in accordance
with the requirements of the Philippine Cooperative Code of 2008; and
(10) Registration fee.
Section 6. Cooperative Name. All cooperatives organized for
any or all of the purposes/objectives enumerated under Section 3 of this Rule
shall always bear the word "Agrarian Reform" whether engaged in the
operation of public utilities and services and/or other business
activities/services.Existing ARB Coops shall amend their cooperative name to conform to this Section.
Section 7. Amendments of Articles of Cooperation and By-laws. Agrarian Reform Cooperative intending to engage in the operation of public utilities and services shall amend its Articles of Cooperation and By-Laws to legally provide for such services. IT shall also comply with the other requirements imposed by the Authority and the appropriate government agencies for cooperatives engaged in public utilities and services.
Section 8. Capitalization. For purposes of registration with the Authority, Agrarian Reform Cooperatives shall have a minimum paid up capitalization of Fifteen Thousand Pesos (P15,000.00).
However, to engage in the operation of public utilities and services, the minimum capitalization shall be in accordance with the Rules and Regulations prescribed by the Authority for Multi-Purpose cooperatives under Rule 3 of the Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008 (Republic Act No. 9520) and by the concerned government agency.
In case the ARB Coop engages in Transport Service, it shall comply with the other requirements prescribed in Section 5, Rule 5 of these Rules and Regulation.
Section 9. Membership Termination and Valuation and/or Transfer of Share Capital. Agrarian Reform Cooperative, other than plantation-based Agrarian Reform Cooperative shall be governed by Articles 30,31 and 74 of RA 9520 and the By-laws of the Cooperative.
However, plantation-based Agrarian Reform Cooperative which is covered by collective Certificate of Land Ownership Award (CLOA), shall be governed by the joint DAR-CDA Administrative Order No. 09, Series of 2008 entitled "Revised Rules and Regulations on ARB Membership Status and Valuation and/or Transfer of Paid-Up Share Capital in Agrarian Reform Plantation-Based Cooperatives dated September 4, 2008" including any amendments thereto or subsequent issuances.
Section 10. Privileges. Subject to reasonable terms and conditions that may be imposed by the DAR and the Authority, an Agrarian Reform Cooperatives duly registered with the Authority may be given exclusive right to do any or all of the following economic activities in agrarian reform and resettlement areas:
(1) Supply and distribution of consumer,
agricultural, aqua-cultural, and industrial good, production inputs, and raw
material and supplies, machinery, equipment, facilities and other services and
other services and requirements of the beneficiaries and marginal farmers at
reasonable prices;
(2) Marketing of the products and services of the
beneficiaries in local and foreign markets;
(3) Provision of essential public services at cost
such as power, irrigation, potable water, passenger and/or cargo transportation
by land or sea, communication services, and public health and medical care
services;
(4) Management, conservation, and commercial
development of marine, forestry, mineral, water and other natural resources
subject to compliance with the laws and regulations on environmental and
ecological controls; and
(5) Provision of financial, technological, and
other services and facilities requires by the beneficiaries in their daily
lives and livelihood. Such terms and conditions shall be jointly formulated by
the DAR and the Authority.
Section 11. Preferential Right/Treatment. In an agrarian
reform and resettlement areas, a duly registered Agrarian Reform Cooperatives
shall have preferential right/treatment form the government in the following
matters:
(1) In the construction, maintenance and management
of roads, bridges, canals, wharves, ports, reservoirs, irrigation systems,
waterworks systems, and other infrastructures with government funding
The technical assistance, facilities and equipments
to such agrarian reform cooperatives shall be provided by the Government.
(2) In the grant of Franchise and Certificate of
Public Convenience and Necessity for the operation of public utilities and
services: Provided, that it meets the requirements and conditions imposed by
the appropriate government agency granting the Franchise or Certificate of
Public Convenience and Necessity,
In case of electric service provider in the area, it shall, upon the request
of an Agrarian Reform Cooperative, immediately provide electric services to the
agrarian reform areas. If the electric service provided fails to provide the
services requested within a period of one (1) year, the Agrarian Reform
Cooperative may undertake to provide the electric services in the area through its
own resources. All investments made by the said Agrarian Reform Cooperative for
the electrification of the agrarian reform resettlement areas shall be subject
to the electric services provider once it takes on the service.Section 12. Lease of Public Lands. Agrarian Reform Cooperative may lease public lands for a period not exceeding twenty five (25) years, subject to renewal for another twenty five (25) years only, provided the application for renewal shall be made one (1) year before the expiration of the lease and such lease shall be for the exclusive use and benefit of the beneficiaries and marginal farmers subject to the provisions of the CARP, as amended..
Section 13. Cooperative Estates. Landholdings like plantations, estates, or haciendas acquired by the State in accordance with the CARP, as amended, for the benefit of the workers shall be collectively owned through a Mother CLOA by the worker beneficiaries under a cooperative set-up.
Section 14. Assistance. The Government shall provide the necessary financial and technical assistance to Agrarian Reform Cooperatives to enable them to discharge the purposes and objectives under Section 3 of this Rule which shall be in accordance with a joint program for the organization and financing of the Agrarian Reform Cooperatives. The joint program shall be geared towards the gradual assumption of full ownership and management control of the cooperative estate by the Agrarian Reform Cooperatives.
Section 15. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Agrarian Reform Cooperative such as:
a. Exercise of rights and privileges of members;
b. Formulation of rules and procedures and the
conduct of meetings of General Assemble, Board of Directors and Committees;
c. Manner of election and qualifications of
Officers, Directors, and Committee Members;
d. Allocation and distribution of surplus; and
e. Other matters relating to the internal affairs
of Agrarian Reform Cooperatives.
All matters relating to land acquisition, development of an appropriate
system of land tenure, land development, land consolidation, or land management
in areas covered by agrarian reform and such other similar matters affecting
the Agrarian Reform Cooperatives shall be regulated by the DAR.All matters relating to land valuation and assessment shall be regulated by the LBP.
Section 16. Financing Program. Any Financing Program to be availed of by ARB Coops shall be in accordance with the joint program to be developed by the DAR, the BSP, and the Authority.
Section 17. Settlement of Disputes. Intra/inter cooperative disputes shall other than land disputes, as far as practicable, be settled amicably through the conciliation and mediation mechanism embodied in the By-laws of the cooperative, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation- Mediation for Cooperative Disputes and in applicable laws.
Should such conciliation - mediation proceedings fail, the matter may be settled through voluntary arbitration or in court of competent jurisdiction.
However, in cases where the dispute/s fall within the jurisdiction of the DAR, the same shall be referred to the said agency and it shall be resolved in accordance with the DAR regulation.
RULE III- INSURANCE COOPERATIVES
Pursuant to the provisions of Art. 108 under Chapter XIII of Republic Act.
No. 9520, otherwise known as the Philippine Cooperative Code of 2008, the
Commission and the Authority in consultation with the concerned cooperative
sector hereby promulgate the following rules and regulations for the proper
guidance and compliance of the Insurance Cooperatives.Section 1. Coverage. This Rules shall cover all Insurance Cooperatives duly registered under R.A. 9520 organized for the purpose of engaging in the business of insuring life and property of cooperatives and their members.
Section 2. Organization. Fifteen (15) or more duly registered cooperatives may organize as Insurance Cooperative.
Section 3. Purposes and Objectives. An Insurance Cooperative shall provide its constituting members different types of insurance coverage consisting of, but not limited to, life insurance with special group coverage, loan protection, retirement plans, endowment with health and accident coverage, fire insurance, motor vehicle coverage, bonding, crop, livestock protection and equipment insurance.
It may also provide "micro-insurance products" and regular insurance to cooperatives and its members.
Section 4. Membership. Membership in Insurance Cooperative shall be open to all duly registered cooperatives of all types and categories
Section 5. Registration Jurisdiction. Any applicant cooperative proposing to engage into the business of insuring life and property of cooperatives and their members shall file their duly accomplished application for registration with the CDA Central Office Registration Division.
Section 6. Capitalization. An Insurance Cooperative registered with the Authority pursuant to this Rule shall secure a Certificate of Authority from the Commission within two (2) years from the date of its registration. Failure to secure the same shall be a ground for the revocation/cancellation of the certificate of Registration.
Said Certificate of Authority shall be valid until the 30th day of June of the year following its issuance.
Section 8. Suspension or Revocation of Certificate of Authority. The Commission may, after due notice and hearing, suspend or revoke the Certificate of Authority issued to an Insurance cooperative for violation of any existing laws, rules or regulations, or any provisions of the Insurance Code.
Section 9. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Insurance Cooperative such as:
a. Exercise of rights and privileges of members;
b. Formulation of rules and procedures and the
conduct of meetings of the General Assembly, Board of Directors and Committees;
c. Manner of election and qualifications of
Officers, Directors, and Committee Members;
d. Allocation and distribution of net surplus; and
e. Other matters relating to the internal affairs
of Insurance Cooperatives.
All matters relating to the organization and operations concerning insurance
business of such Insurance Cooperative shall be regulated by the Commission as
provided for in the Insurance Code and other related laws.Section 10. Joint Committee. In order to fully implement the provisions of this Rule, a Joint Committee, to be composed of two (2) representatives each from the Authority and the Commission and a representative from the Insurance Cooperatives shall be formed. The representative from the Authority shall Chair of the Committee.
The Joint Committee shall be constituted within thirty (30) days upon effectivity of these Rules and Regulations.
Section 11. Functions of the Joint Committee. The Joint Committee shall have the following functions:
1. To oversee the implementation of this Rule;
2. To ensure compliance with the administrative and
other requirements of the Authority and the Commission;
3. To make recommendation on the amendment of this
Rule as maybe necessary; and
4. Such other function as the need arises.
Section 12. Limitation. Cooperatives intending to engage in
insurance, insurance like, and other similar activities shall register with the
Authority and secure a Certificate of Authority from the Commission.However, CIS are not allowed to serve the insurance needs of other cooperatives that are not member-owners of the CIS. A CIS serving the insurance needs of non-member cooperatives and the general public shall be required to get a commercial insurance license from the Insurance Commission.
Primary Cooperatives which are not registered and licensed to operate as Insurance Cooperative, are prohibited to engage in insurance, insurance like and other similar activities with their members. However, those already engaging in such shall be given two (2) years transition period to undertake any of the following options:
To organize an insurance cooperative with other primary cooperatives that have the same insurance-like business activity;
(2) To join an existing Insurance Cooperative;
(3) To partner with licensed micro-insurance
providers; and
(4) To buy a micro-Insurance product through a
licensed agent or broker.
All existing Insurance Cooperative with members which are non-cooperative
and/or cooperative oriented societies and organizations are hereby given five
(5) year period to terminate and remove such entities from their member
registry. Failure to comply within the given period shall constitute a
violation of this Rule and shall be dealt with accordance with the provision of
RA 9520 and other applicable laws.Section 13. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through conciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation of Cooperative Disputes, and applicable laws. Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration by the Authority or in court of competent jurisdiction.
However, in cases where the dispute/s fall within the jurisdiction of the Commission, the same shall be referred to the said agency and it shall be resolved in accordance with the Commission regulation.
RULE IV-WATER SERVICE COOPERATIVES
Pursuant to the provisions of Art. 111 (3) under Chapter XIV of Republic
Act. No. 9520, otherwise known as the Philippine Cooperative Code of 2008, the
Authority in consultation with the NWRB, the LWUA, and concerned cooperative
hereby promulgates the following rules and regulations for the proper guidance
and compliance of the Water Service Cooperative.Section 1. Coverage. This Rule shall apply to all cooperative duly registered with the Authority under R.A. 9520 whose main purpose or one of its purposes is to own, operate, and manage water supply systems for the provision and distribution of potable water to its members and other customers.
Section 2. Organization. Fifteen (15) or more natural person who are Filipino citizens, of legal age, having a common bond of interest and actually residing or working in the intended area of operation, may organize a Water Service Cooperative.
Section 3. Membership in Water Service Cooperative. Membership in Water Service Cooperative is composed of two kinds:
a. Regular Member - refers to a natural
person (member-consumer) with water service connection with the right to voted
upon and entitled to all the rights and privileges of membership under the
Code.
b. Associate Member - refers to a natural
person other than a regular member of the household. It shall also refer to
member- institution or entity availing of the services of Water service
Cooperative, such as, but not limited to: corporation, industrial and
commercial establishment, joint venture, other cooperative, place worship,
local government building or facility, etc, as maybe represented by the head of
such establishment or entity, but is not entitled to vote and be voted upon.
However, shall be entitled to the preferential rights and privileges as
indicated in the Cooperative By-laws and under the Code.
Section 4. Requirements for Registration. The following shall
be complied with upon filing of application:
(1) Name Verification Slip;
(2) Articles of Cooperation and By-laws;
(3) Sworn statement of the treasurer elected by the
subscribers showing that at least twenty-five per centum (25%) of the
authorized share capital be less than Fifteen Thousand Pesos (P15,000.00);
(4) Surely Bond of Accountable Officers handling
funds properties and securities;
(5) Certificate of Pre-Membership Education Seminar
(PMES);
(6) Economic Survey;
(7) Undertaking to Change Name in the event that
another cooperative has acquired prior right to the use of the proposed name;
(8) Land Ownership (any of the following:
Certificate of Title Declaration. Lease Agreement, Deed of Donation, Deed of
Sale, etc.)
(9) Well Drilling Data (in case of existing
groundwater source ) including Physical & Chemical Analysis of water; and
(10) Registration fee.
Section 5. Registration Jurisdiction. Water Service
Cooperatives shall file their application with the CDA Extension Office, which
shall have jurisdiction over the said cooperatives.Section 6. Capitalization. For purposes of registration with the Authority, a Water Service Cooperative shall have a minimum paid-up capitalization of Fifteen Thousand Pesos (P15,000.00).
Section 7. Service Area. The cooperative shall only provide services within the area specified in the CPC. In case of expansion, the cooperative shall apply for an extension of service area with the NWRB.
Section 8. Water Permit. Every Water Service Cooperative shall secure a water permit from the NWRB in accordance with the provisions of the Water Code of the Philippines.
Section 9. Requirements for Filing Water Permit Applications. All applications shall be filed in the prescribed form, sworn to by the applicants and supported by the following documents:
1. For domestic purpose
1. Duly accomplished Water Permit Application and
Notices;
2. Land Ownership (any of the following:
Certificate of Title, Tax Declaration, Lease Agreement, Deed of Donation, Deed
of Sale, etc;
3. Certificate of Conformance from the LWUA;
4. Vicinity map/Location Plan with scale :
1:10,000 or scale 1:500 showing the exact location of the point of diversion;
5. Subdivision Plan (if applicable);
6. Well drilling Data (in case of existing ground
water source): and
7. Clearance from DOH, if reuse of wastewater for
human consumption.
2. For Municipal Use
1. Proof of land ownership of, legal title to, or
right to use, the property on which the water source is situated;
2. Certificate of Registration with the Authority;
3. Certificate of Conformance from LWUA;
4. Vicinity map/Location Plan with scale :
1:10,000 or scale 1:500 showing the exact location of the point of diversion;
5. Submission Plan (if applicable);
6. Well Drilling Data (in case of existing
groundwater source authenticated by the well driller) including Physical and
Chemical, Analysis water;
7. Environmental Compliance Certificate (for
projects considered as Environmentally Critical Projects Areas) or Certificate
of Non-Coverage from the Department of Environment and Natural Resources-
Regional Office; and
8. Such other documents that may be required by
the NWRB.
Section 10. Requirements for the Issuance of CPC and Tariff
Approval. The following documents are required to be submitted for an
Application for a CPC and Approval of Tariff:
1. Certificate of Registration from the Authority;
2. Articles of Cooperation and By-Laws;
3. Special Power of Attorney authorizing the
signatory to sign and file the application;
4. Favorable Endorsement from LWUA;
5. Approved water permits and/or MOA with water
service provider, in case of bulk water supply;
6. Official receipt of annual water charge(s);
7. Clearance that applicant has no unpaid fees and
charges from NWRB;
8. Plan of water distribution system;
9. Plan elevation and cross-sectional views of
tank/reservoir;
10. Plan elevation and cross-sectional views of
pump house, machinery and equipment;
11. Certificate of Potability;
12. Latest Audited Financial Statements for the
last two years, if applicable;
13. Actual Balance sheet showing Balance Sheet
items for water operations for the last 2 years, if not available, submit the
following:
a. Accounts receivable -Water Supply
b. Materials Inventory
c. Property and Equipment in Service, at cost
d. Accumulated Depreciation
e. Customers Deposits
14. Itemized list of assets entitled to return as
of the end of the last historical year. This should support the Property and
Equipment in Service referred to in item 10 above;
15. Actual Income Statement showing Income
Statement items for water operations for the last 2 years, if applicable;
16. Business plan for the next 5 years;
17. Projected Financial Statement for five years
with the following:
a. Income Statement
b. Balance Sheet
c. Assumptions
18. Itemized list of new investments for the next 5
years;
19. Proposed schedule of water rates; and
20. Levels of Service agreed with consumers
commensurate with proposed rates.
Section 11. Regulatory Power. The Authority shall have the
power to regulate the internal affairs of Water Service Cooperative, such as:
a. Exercise of rights and privileges of members;
b. Formulation of rules and procedures and the
conduct of meetings of the General Assembly, Board of Directors and Committees;
c. Manner of election and qualifications of
Officers, Directors, and Committee Members;
d. Allocation and Distribution of surplus; and
e. Other matters relating to the internal affairs
of Water Service Cooperatives.
All matters relating to the Certificate of Public Convenience such as
capitalizationand investment requirements, equipment and facilities, water tariff, and such other matters affecting their water service operations shall be governed by the NWRB.
Section 12. ROLE OF LWUA. The LWUA shall have the following roles relating to Water Service Cooperative:
1. To provide technical assistance such as capacity
building;
2. To assist in the determination of water
potability; and
3. Such other assistance as maybe requested by the
cooperatives.
Section 13. Preferential Rights. Whenever two or more public
service entities have competing interests with respect to the granting and
renewal of CPC and one is an Water Service Cooperative duly registered with the
Authority under R.A. 9520, the NWRB shall accord preference to the latter over
any type of public service entity.Section 14. Responsibility of Water Service Cooperative. Every Water Service Cooperative shall operate, maintain, and provide safe and adequate potable water service. In all cases where practicable, the concerned Water Service Cooperative shall give notice to its member-consumers in advance of any contemplated interruption of water supply and the probable duration thereof in the area(s) affected. In addition, the Water Service Cooperative's responsibilities shall include:
1. Service Standards
a. Service Coverage
b. Water Quality
c. Reliability of Supply
2. Operational Performance
a. Operational Efficiency
b. Financial Viability
3. Customer Service
a. Service Request and Complaints
b. Standard Response Time
4. Operating Policies and Procedures on Billing and
Collection
5. Protection of Member-Consumers
In relation to this Section, the cooperative shall develop its own Customer
Service Code consistent with its By-laws and in compliance with the NWRB
Economic Regulatory Guidelines.Section 15. Reporting Requirements. All Water Service Cooperatives shall submit reports to the Authority as required under Rule 8 of the Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008 (RA 9250). Other reports required by the NWRB, the DOH and other government agencies shall likewise be submitted to the concerned agency.
Section 16. Sanctions and Penalties. All Water Service Cooperative shall be subjected to corresponding Sanctions and Penalties as maybe imposed by the Authority and the NWRB for violation or non-compliance with administrative and statutory requirements.
Section 17. Requirements for Renewal of CPC. The CPC shall be valid for five (5) years and renewable prior to its expiry date. The following requirements to be submitted:
1. Board Resolution authorizing the signatory to
sign and file the application;
2. Certificate of Good Standing issued by the
Authority;
3. Approved Water Permits;
4. Official receipts of Annual Water change;
5. Official receipt of Supervision and Regulation
Fee;
6. Clearance that applicant has no unpaid fees and
charges from the NWRB;
7. Plan of Water Distribution System;
8. Plan elevation and cross-sectional views of
tank/reservoir;
9. Plan elevation and cross-sectional views of pump
house, machinery and equipment;
10. Certificate of Potability;
11. Annual Reports for the last five years;
12. Latest Audited Financial Statement for the last
five years;
13. Actual Balance Sheet showing Balance Sheet
items for water operations for the last 5 years, if not available, submit the
following:
a. Account Receivable - Water Supply
b. Materials Inventory
c. Property and Equipment in Service, at cost
d. Accumulated Depreciation
e. Customers' Deposits
14. Itemized list of assets entitled to return as
of the end of the last historical year. This should support the Property and
Equipment in Service referred to in item 13 (c) above;
15. Actual Income Statement showing Income
Statement items for water operations for the last 5 years;
16. Business plan for the next 5 years;
17. Projected Financial Statement for five years
with the following:
a. Income Statement
b. Balance Sheet
c. Assumptions
18. Itemized list of new investments for the next 5
years;
19. Proposed Schedule of Water Tariff; and
20. Levels of Service agreed with consumers
commensurate with proposed rates.
Section 18. Securing of Water Permit and/or CPC. Water Service
Cooperative including Multi-Purpose Cooperative with water service operation is
required to secure water permit from the NWRB.For Water Service Cooperative operating without water permit and/or CPC, the Authority shall report the matter to the NWRB for appropriate action. The NWRB shall notify the Authority of whatever action taken on the matter. Henceforth, failure of the cooperative to legalize its operation within two (2) years from the date of referral to the NWRB, the same shall be considered a valid ground for the revocation of its Certificate of Registration, after due process.
Section 19. Action on the Application for CPC. Upon submission of the complete requirements for the issuance of CPC, the NWRB shall approve or reject the same within six (6) months from date of receipt thereof.
Section 20. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through conciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation-Mediation of Cooperative Disputes, and applicable laws.
Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration or in court of competent jurisdiction.
However, in cases where the issue/s fall within the jurisdiction of the NWRB, the same shall be referred to the said agency and it shall be resolved in accordance with the NWRB regulation.
RULE V - TRANSPORTATION SREVICE
COOPERATIVES
Pursuant to the provisions of Art. 113 (par. 2) under Chapter XIV of
Republic Act. No. 9520, otherwise known as the Philippine Cooperative Code of
2008, the Authority in consultation with the DOTC, LTO, LTFRB, MARINA, OTC and
the concerned cooperative sector, hereby promulgates the following rules and
regulations for the proper guidance and compliance of Transportation Service
Cooperatives.Section 1. Coverage. This Rule shall cover all Transportation Service Cooperatives duly registered with the Authority under RA 9520 which are organized to render public services such as land and sea/water transportation services, limited to small vessels, for the safe conveyance of passengers and/or cargo. Transportation Service Cooperative organized under the provisions of Executive Order No. 898, Series of 1983, shall be governed by Chapter XIV of RA 9520, and by this Rule.
Section 2. Allied Businesses by Transportation Service Cooperative. Subject to pertinent national laws and local ordinances, primary Transportation Service Cooperatives including secondary and tertiary federation of cooperatives, may engage in a business related to transportation service, including but not limited to:
(1) Importation, distribution and marketing of
petroleum products in accordance with existing laws;
(2) Operation of gasoline stations and
transportation service centers;
(3) Importation, distribution and marketing of
spare parts and supplies; and
(4) Marketing of vehicle/drivers insurance
policies.
Section 3. Multi-purpose Cooperatives intending to engage in
Transportation Service. Multi-purpose cooperatives intending to engage in
regular passenger and/or cargo services as an additional activity shall comply
with the foregoing requirements:
1. Amended Article of Cooperation and By-Laws;
2. CETOS;
3. Franchise and vehicle units requirement, as
provided in this Rule and other requirements as may be prescribed by
appropriate regulatory agencies; and
4. Amendment Fee.
Section 4. Registration Jurisdiction. Transportation Service
Cooperative shall file its duly accomplished registration documents with the
CDA-Extension Office where its principal office is located, which shall have
jurisdiction over the said cooperative.Section 5. Capitalization. For purposes of registration with CDA, Transportation Service Cooperatives shall have a minimum paid up capitalization of Fifteen Thousand Pesos (P15,000.00).
However, to operate as such, the minimum capitalization and number of cooperatively owned units shall be in accordance with the rules and regulations prescribed by the concerned government agency as shown below:
TYPE
OF TRANSPORTATION SERVICE
COOPERATIVE |
MINIMUM
CAPITALIZATION |
MINIMUM
NO.
OF UNITS |
|
A.
LAND
|
|||
Tricycle
|
P
15,000.00
|
5
|
|
Jeepney
|
P
30,000.00
|
5
|
|
Taxi
|
P
30,000.00
|
5
|
|
AUV/FX/Van
|
P
30,000.00
|
5
|
|
Mini
Bus/Bus P
|
50,
000.00
|
2
|
|
Trucks
for Hire
|
P
50, 000.00
|
2
|
|
B.
WATER
|
|||
Ship
|
P
10,000,000.00
|
1
|
|
Ferry
Boat
|
P
5,000,000.00
|
1
|
|
Motorized
Banca
|
P
100,000.00
|
1
|
(1) Name Verification Slip;
(2) Articles of Cooperation and By-laws;
(3) Sworn Statement of the treasurer elected by the
subscribers showing that at least twenty-five per centum (25%) of the
authorized share capital has been subscribed and least twenty-five per centum
(25%) of the total subscription has been paid: Provided, That in no case shall
the paid-up share capital be less than Fifteen Thousand Pesos (P15,000.00);
(4) Pre-Membership Education seminar (PMES);
(5) Cooperative Education and Transport Operation
Seminar (CETOS);
(6) Surety Bond Of Accountable Officers handling
funds, properties and sureties;
(7) Economic Survey;
(8) Undertaking to Change Name in the event that
another cooperative has acquired prior right to the use of the proposed name;
(9) Undertaking to comply with the auditing and
accounting standards prescribed by the Authority;
(10) Other requirements as may be required by law;
and
(11) Registration Fee.
Section 7. Regulatory Power. The Authority shall have the
power to regulate the internal affairs of Transportation Service Cooperative,
such as:
a. Exercise of rights and privileges of members;
b. Formulation of rules and procedures and the
conduct of meetings of the General Assembly, Board of Directors and Committees;
c. Manner of election and qualifications of
Officers, Directors, and Committee Members;
d. Allocation and distribution of surplus; and
e. Other matters relating to their internal affairs
of Transportation Service Cooperatives.
All matters relating to the Franchise or Certificate of Public Convenience
and Necessity of Transportation Service Cooperatives such as capitalization and
investment requirements, equipment and facilities, frequencies, rate-fixing,
registration, dropping and substitution of units, and such other matters
affecting their transportation service operations shall be governed by the
following government agency:
(a) For land transportation - LTFRB/LTO/OTC
(b) For water transportation - MARINA/PCG
(c) For tricycle - LGU/LTO/OTC
In case there are two (2) or more applicants for the same public service
Franchise or Certificate of Public Convenience and Necessity, all things being
equal, preference shall be given to a Transportation Service Cooperative by the
concerned government agency.Section 8. Monitoring Committee. The Authority shall establish a committee for the monitoring of Transportation Service Cooperative composed of representative from the Authority, who shall be Ex-Officio Chairperson thereof, the LTO, LTFRB, OTC, LGU, and other concerned government agencies as may be necessary, and the National Federation of Transportation Cooperatives. Said Committee shall be organized within thirty (30) days from the effectivity of this Rule and establish its own internal rules as to its operation, conduct of meeting, and other matters necessary to exercise such functions.
The Authority shall likewise create a Local Monitoring Committee in its extension offices to facilitate the monitoring of these Transportation Service Cooperatives. Said Committee shall likewise be organized within ninety (90) days from the receipt of the rules and functions formulated by the National Committee convene every quarter to discharge its functions and appoint a Secretary from among its members.
The permanent Secretariat shall come from the Authority.
The Committee shall have the following functions:
(1) To oversee the implementation of this Rule;
(2) To recommend changes on this Rule from time to
time if a need arises;
(3) To assist as far as practicable the cooperative
in settling inter and intra cooperative disputes;
(4) To submit quarterly accomplishment report
including recommendation/resolution to be adopted in the settlement of the
aforesaid disputes to the CDA Board of Administrators through the Executive
Director and to the OTC Board of Directors through its Executive Director copy
furnished all agencies involved.
Section 9. Continuing Education and Training. The concerned
government agencies shall coordinate to support registered cooperatives by
extending seminars for the purpose of continuing education on cooperative and
other related trainings in order to enhance the knowledge and capability of the
officers as well as members of the cooperative. The concerned agencies involved
in the Transportation Service Cooperative shall form a trainer's team which
shall formulated educational program/module to be used in the training seminar.Section 10. Renewal of Franchise and Vehicle Registration. Renewals of franchise and vehicle registration shall be granted to Transportation Service Cooperatives provided such cooperative presents a Certificate of Good Standing from the Authority and the OTC. In the case of Tricycle Transportation Service Cooperative, a Certificate of Operation from the Local Government Unit concerned shall be required as proof that it has continuously provided the required public transportation services.
Section 11. Settlement of Disputes. Intra/Inter cooperative dispute shall be settled as far as practicable through conciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation-Mediation of Cooperative Disputes, and applicable laws.
Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration or in court of competent jurisdiction.
However, in cases where the issue/s fall within the jurisdiction of the DOTC, LTFRB, LTO, MARINA, and OTC the same shall be referred to the said agencies and shall be resolved in accordance with their regulations.
RULE VI - ELECTRIC COOPERATIVES
Pursuant to the provisions of Art. 134 (par.2) under Chapter XVII of
Republic Act No. 9520, otherwise known as the Philippine Cooperative Code of
2008, the Authority in consultation with the concerned cooperative sector
hereby promulgates the following rules and regulations for the proper guidance
and compliance of Electric Cooperatives.Section 1. Purposes and Objectives. Electric Cooperatives shall be organized to undertake power generation utilizing new and renewable energy sources, including hybrid systems, acquisition, and operation of sub-transmission and/or distribution and supply of electricity as its primary purposes. However, it shall not be precluded to venture into any other purpose that other laws, rules, regulations, and their own By-laws may allow as long as it is related to the primary purpose and objective of the cooperative. It shall also continue to undertake the implementation of the Rural Electrification Program in their respective areas of coverage in consonance with the terms and conditions appurtenant to their Certificates of Franchise; provided the right of the Electric Cooperatives to exercise the power of eminent domain in furtherance of the rural electrification program, shall not be diminished, instead it shall be in full force and effect, subject to the requirements of the Constitution and existing relevant laws.
Section 2. Coverage. This Rule shall apply to all Electric Cooperatives registered with the Authority under R.A. 9520 that may undertake power generation utilizing renewable energy sources, including hybrid systems, acquisition and operation of sub transmission or distribution as its primary purposes. This Rule shall also cover new distribution utilities that will register with the Authority.
Section 3. Cooperative Principles and Practices. Electric Cooperatives registered with the Authority shall conduct their affairs in accordance with Filipino culture, good values and experience and the universally-accepted principles of cooperation which include, but are not limited to, the following:
1. Voluntary and Open Membership - Electric
Cooperatives are voluntary organizations, open to all persons able to use their
services and willing to accept the responsibilities of membership, without
gender, social, racial, political or religious discrimination;
2. Democratic Member Control - Electric
Cooperatives are democratic organizations that are controlled by their members
who actively participate in setting their policies and making decisions. Men
and women serving as elected representatives, directors, or officers are
accountable to the membership. In primary cooperatives, members have equal
voting rights of one-member, one-vote. Cooperatives at other levels are
organized in the same democratic manner;
3. Member Economic Participation - Members
of the Electric Cooperatives contribute equitably to, and democratically control,
the capital of their cooperative. At least part of that capital is the common
property of the cooperative. They shall receive limited compensation or limited
interest, if any, on capital subscribed and paid as a condition of membership.
Members allocate surpluses for any or all of the following purposes: developing
the cooperative by setting-up reserves, part of which should at least be
indivisible; benefiting members in proportion to their patronage of the
cooperative's business; and supporting other activities approved by the
membership;
4. Autonomy and Independence - Electric
Cooperatives are autonomous, self-help organizations controlled by their
members. If they enter into agreements with other organizations, including
government, or raise capital from external sources, they shall do so on terms
that ensure democratic control of their members and maintain their cooperative
autonomy;
5. Education, Training and Information -
Electric Cooperatives shall provide education, training and information for their
members, elected and appointed representatives, managers, and employees so that
they can contribute effectively and efficiently to the development of their
cooperatives;
6. Cooperation Among Cooperatives - Electric
Cooperatives serve their members most effectively and strengthen the
cooperative movement by working together through local, national, regional and
international structures; and
7. Concern for Community - Electric
Cooperatives work for the sustainable development of their communities through
policies approved by their members.
Section 4. Membership in the Electric Cooperatives. Membership
in Electric Cooperatives registered with the Authority shall have the following
types:
a. Regular Member - refers to a natural
person (member-consumer) with electrical service connection who has the right
to vote and be voted upon and entitled to all the rights and privileges of
membership under the Code.
b. Associate Member - refers to a
member-institution or entity availing of the services of electric cooperative,
such as, but not limited to: corporation, industrial and commercial
establishment, joint venture, other cooperative, place of worship, local
government building or facility, etc, as represented by its head of such
establishment or entity, but is not entitled to vote and be voted upon.
However, shall be entitled to the preferential rights and privileges as
indicated in the by-laws and under the Code.
Section 5. Registration Requirements. The following are the
requirements for the registration of electric cooperatives which shall be
submitted in four (4) copies to the Authority:A. Registration Documents:
a.1 For existing electric cooperative not
registered with the Authority:
1. certificate true copy of the board resolution
certifying the result of the vote approved through a referendum approving the
registration of the cooperative with the Authority in compliance with Article
128;
2. Certified copy of Articles of Cooperation and
By-Laws;
3. Duly audited financial statement for the past
two (2) immediately preceding years;
4. List of names of incumbent Board of Directors
and their addresses certified by the Board Secretary and attested to by the
Chairperson;
5. Sworn Statement of the Treasurer of the
authorized share capital, the subscribed share capital of the members, and the
amount of paid-up share capital of members and the amount of paid-up share
capital received by the Treasurer, to be submitted within six (6) months from
the registration; and
6. Surety Bond of Accountable Officers handling
funds, properties and sureties;
a.2 For new electric cooperatives:
1. Name Verification Slip;
2. Certified true copy of the Grant Franchise;
3. Articles of Cooperation and By-laws;
4. Sworn Statement of the treasurers elected by
the subscribers showing that at least twenty-five per centum (25%) of the
authorized share capital has been subscribed and at least twenty-five per
centum (25%) of the total subscription has been paid: Provided, That in no case
shall the paid-up share capital be less than Fifteen Thousand Pesos
(P15,000.00);
5. Surely Bond Accountable Officers handling
funds, properties and sureties;
6. Certificate of Pre-Membership Education seminar
(PMES);
7. Economic Survey;
8. Undertaking to Change Name in the event that
another cooperative has acquired prior right to the use of the proposed name;
9. Detailed feasibility study indicating viability
of the proposed business activity; and
10. Undertaking to comply with the auditing and
accounting standards prescribed by the Authority.
a.3. Electric Cooperative Deemed Registered under
Art. 144 of the Code:
1. Certificate of Registration and/or Certificate
of Confirmation;
2. Articles of Cooperation and By-laws; and
3. Latest audited financial statement.
The said documents shall be submitted to the nearest office of the Authority
of to the CDA Central Office, at the option of the Cooperative. Upon submission
of the abovementioned documents, the Authority shall issue the new certificate
of registration to the Cooperative.B. Registration fee as prescribed by the Authority.
Section 6. Jurisdiction Upon Registration. Electric Cooperative intending to register with the Authority shall file their application with the CDA Extension Office, which shall have jurisdiction over the said cooperatives upon approval of their registration. However, if an electric cooperative opted to register with the CDA Central Office as provided for in the preceding Section, and such registration has been processed and approved by the CDA Central Office, such registration shall be forwarded to the CDA Extension Office where the cooperative is located and the same Extension Office shall assume jurisdiction over the said cooperative.
Section 7. Registration Options. Electric Cooperatives registered with the National Electrification Administration (NEA) under Presidential Decree No. 269, as amended, which opt not to register with the Authority, are allowed to retain the world "cooperative" in their registered names, but they shall not be entitled to the benefits and privileges provided under R.A. 9520.
Section 8. Registration of Electric Cooperatives. The registration on an Electric Cooperative with the Authority under Article 127 of the Code shall be submitted for approval to the members through a referendum, as a voting procedure, specially called for such purpose.
The required number of votes for registration with the Authority shall be twenty percent (20%) of all members in good standing within the area of coverage. No proxy voting shall be allowed.
Unless otherwise provided in the By-laws of the cooperative, the term member in good standing shall be as defined in the Code of in this Rule.
Section 9. Procedure in the Conduct of Referendum for registration with the Authority. In compliance with Art. 128 of RA 9520 hereunder are the procedures in conducting the same:
A. BOD Initiated Referendum. The Board of Directors shall undertake the following:
1. Issue Notice referendum indicating the
following:
a. Date of Referendum;
b. Mode of Conduct of the Referendum which may
either be:
b.1 survey Form; and
b.2 Assembly Meeting in the respective districts
which maybe simultaneous sequential.
2. Posting/Publication of Notice of referendum
shall be done not later than 30 days prior to the scheduled conduct of
referendum.
3. Identification of members in good standing based
on the qualification and disqualification provisions in the By-laws.
4. Provision of Referendum Questionnaire Form to
qualified members to vote whether to register or not to register with the
Authority.
5. Collection of Questionnaire forms and canvassing
of Votes by the cooperative's Election Committee.
6. Reporting of the results of the canvassing, i.e.
favor or not favor.
7. Certification by the Election Committee as to
the result of the referendum duly noted by the majority of the Board of
Directors.
B. Member-Consumer Initiated referendum. In case the Board of
Directors shall refuse to conduct a referendum, the Member-Consumers may
initiate a referendum through a petition duly signed by at least three hundred
(300) members of each district of the cooperation who are entitled to vote by
filling the same to the Board of Directors. The Board of Directors shall act
within thirty (30) days from receipt thereof whether to grant or deny said
petition. Failure of the Board of Directors to act within the given period or
the denial of the petition, the petitioners may conduct motu proprio the said
referendum through the procedures above prescribed. The result of the
referendum shall be certified by a committee designated during the conduct of a
referendum to supervise the same.The general membership through their proponents for referendum shall submit all the documentary requirements for resignation to the concerned CDA Extension Office, which may register the applicant Electric Cooperative upon finding that all the documents for registration are complete and in order.
Section 10. Amendments of Existing Articles of Cooperation and By-laws. Any provision or any part thereof in the existing Articles of Cooperation and By-laws of the cooperative, which are found to be inconsistent or contrary to the provisions of the Code and of this Rule shall be amended accordingly. Such amendments shall conform to the provision of Art. 18 of the Code. Said application for amendments shall be filed with the concerned CDA Extension Office or the CDA Central Office, at the option of the Cooperative, in four (4) copies for registration.
Section 11. Capitalization. An electric cooperative shall not be registered with the Authority unless it complies with the financial requirements of minimum paid up capitalization of Five Million Pesos (P5,000,000.00).
Section 12. Share Capital in the Electric Cooperatives. Electric Cooperatives shall issue and distribute share certificates under the name of each of their members. Said share certificates shall take into consideration, among others, the previous equity contributions, and the amortization component, through the payments made, capital build-up and other capital contributions. The interest on share capital shall be paid to the members in accordance with the provision of Sec. 9, Rule 10 of the Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008 (RA 9520).
Section 13. Quorum Requirement. Unless otherwise provided in the By-laws of the Electric Cooperative, quorum shall be five per centum (5%) of all the members entitled to vote.
Section 14. Term of Office. Unless otherwise provided in the By-laws of the Electric Cooperative, the term of office of the members of the Board shall not exceed two (2) years, however, they shall be eligible for re-election.
Section 15. rates and Tariffs. All electricity rates and tariffs of electric cooperatives registered under the Authority shall be subject to the rules on application and approval of and by the Energy Regulatory Commission.
Section 16. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through conciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation of Cooperative Disputes, and applicable laws.
Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration or in court of competent jurisdiction.
However, in cases where the issue/s fall within the jurisdiction of the Energy Regulatory Commission, the same shall be referred to the said agency and shall be resolve in accordance with this regulation.
RULE VII-DAIRY COOPERATIVES
Pursuant to the provisions of Republic Act. No. 9520, otherwise known as the
Philippine Cooperative Code of 2008, the Cooperative development Authority and
National Dairy Authority hereby promulgated the following rules and regulations
for the guidance and compliance of the Dairy Cooperatives.Section 1. Coverage. This Rule shall cover all dairy Cooperatives duly registered under R.A. 9520 organized for the purpose of engaging in the procurement, processing and marketing of milk and dairy products.
Section 2. Organization. Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having a common bond interest and actually residing or working in the intended area of operation, may organize a dairy cooperative.
Section 3. Purposes and Objectives. A Dairy Cooperative shall be organized for any or all of the following purpose:
1. To standardize the quality, uniformly of grade
of milk, and other dairy products;
2. To assist its members a guaranteed market
outlet, to bargain for the best price terms possible in the market place,
including over-order premiums in milk marketing orders, and to market the milk
efficiently, i.e., balancing plant needs, diverting milk surpluses, and
assembling producer milk and to have the highest quality producer milk possible
in the market; and
3. To effectively represent their constituting
members in the legislative, regulatory and public relations arenas.
Section 4. Membership. Membership in Dairy Cooperative shall
be open to all dairy farmers.Section 5. Registration Jurisdiction. Any applicant Dairy Cooperative shall file its duly accomplished application for registration with the VDA Extension Office, which shall have jurisdiction over the said cooperative.
Section 6. Registration Requirements. The following shall be compiled with upon filing of application:
1. Name Verification;
2. Articles of Cooperation and By-laws;
3. Sworn Statement of the treasurer elected by the
subscribers showing that the least twenty-five per centum (25%) of the
authorized share capital has been subscribed and at least twenty-five per
centum (25%) of the total subscription has been paid: Provided, That in no case
shall the paid-up share capital be less than Fifteen Thousand Pesos
(P15,000.00);
4. Pre-membership Education Seminar (PMES);
5. Surety Bond Accountable Offices handling funds,
properties and sureties;
6. Economic Survey;
7. Undertaking to Change Name in the event that
another cooperative acquired prior right to the use of the proposed name;
8. Undertaking to comply with the auditing and
accounting standards prescribed by the Authority;
9. Other requirements as may be required by law; and
10. Registration fee.
Section 7. Capitalization. A Dairy Cooperative shall have a
minimum paid-up capitalization of at least Fifteen Thousand Pesos (P15,000.00).Section 8. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Dairy Cooperative, such as:
a. Exercise of rights and privileges of members;
b. Formulation of Rules and procedures and the
conduct of meetings of the General Assembly, Board of Directors and Committees;
c. Manner of election and qualifications of Officers,
Directors, and Committee Members;
d. Allocation and distribution of net surplus; and
e. Other matters relating to the internal affairs
of Dairy Cooperatives.
All matters relating to the technical and operations concerning dairy
business of such Dairy Cooperative shall be regulated by NDA, DOH-BFAD and
other concerned government agency.Section 9. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through conciliation-mediation mechanism embodied in the cooperative by-laws and in applicable laws.
Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration by the Authority or adjudication by the Commission or in a Court of competent jurisdiction.
However, in cases where the issue/s fall within the jurisdiction of the NDA, DOH-BFAD the same shall be referred to the said agencies and shall be resolved in accordance with their regulations.
COMMON PROVISIONS
Section 1. Requirements. A copy of these Rules shall be among
the documents required to be kept ready and accessible for inspection and
examination by the members of the cooperative and the Authority in accordance
with Art. 52 of the Code.Section 2. Interpretation. Unless otherwise stated in these Rules, In case of doubt as to the meaning of any provision of these Rules, the same shall be resolved and interpreted liberally in favor of the cooperatives and their members.
Section 3. Suppletory Rule. Special Rules, Circulars, Orders and other issuances by the appropriate government agencies in pursuance of the provisions of the Code and these Rules, and not inconsistent thereto, shall have suppletory application to these Rules.
Section 4. Mandate. The Authority is mandated to implement and enforce these Rules and Regulations.
Section 5. Separability. If any provision of these Rules and Regulations is declared null and void or unconstitutional, the other provisions not affected thereby shall continue to be in force and effect.
Section 6. Amendment. These Rules and Regulations shall be subject to automatic review three (3) years after the effectivity thereof. Any amendment thereto, shall be subject to the review and approval of the JCOCC.
Section 7. Effectivity. These Rules and Regulations shall take effect fifteen (15) days after publication in the Official Gazette or in a newspaper of general circulation.
RECOMMENDING APPROVAL:
THE BOARD OF ADMINISTRATORS
COOPERATIVE DEVELOPEMNT AUTHORITY
LECIRA V. JUAREZ
Chairman
This Implementing Rules and Regulations (Part I) was approved by the Joint
Congressional Oversight Committee on Cooperatives during its meeting on
February 16, 2010 at the Senate of the Philippines, Pasay City pursuant to
Article 138 of RA 9520.Chairman
Members of the Joint Congressional
Oversight Committee on Cooperatives.
For the Senate of the
Philippines:
Sen. JUAN MIGUEL F. ZUBIRI Chair, Senate Panel |
For the House of the
Representatives:
Rep. ERNESTO C. PABLO Chair, House Panel |