PRS

Republic of the Philippines COOPERATIVE DEVELOPMENT AUTHORITY

PRE-REGISTRATION SEMINAR

Republic of the Philippines COOPERATIVE DEVELOPMENT AUTHORITY

CDA AND ITS MANDATE (RA 6939 AND 9520)

CDA and its Mandate Cooperative Development Authority (CDA) Republic Act 6939 – March 10, 1990 Promote the viability and growth of cooperatives as instruments of equity, social justice and sustainable economic development. (Phil. Constitution – Sec. 15, Art. XII ) RA 6939, Section 2, – Office of the President

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Powers, Functions and Responsibilities RA 6939, Section 3 • Regulatory • Developmental • Settlement of Disputes (Mediation, Conciliation & Arbitration)

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Regulatory Function ď ˝ Register all cooperatives and their federations and unions, including their division, merger, consolidation, dissolution or liquidation. It shall also register the transfer of all or substantially all of their assets and liabilities and such other matters as may be required by the Authority

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Regulatory Function b. Order the cancellation after due notice and hearing of the cooperative’s certificate of registration for noncompliance with administrative requirements c. Impose and collect reasonable fees and charges in connection with the registration of cooperatives d. Administer all grants and donations coursed through the Government for coop development

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Developmental Function

(a) Formulate, adopt and implement integrated and comprehensive plans and programs on cooperative development consistent with the national policy on cooperatives and the overall socioeconomic development plans of the Government;

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Developmental Function

(b) Develop and conduct management and training programs upon request of cooperatives that will provide members of coops with the entrepreneurial capabilities, managerial expertise, and technical skills required for the efficient operation of their cooperatives

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Developmental Function

(d) Coordinate the efforts of the local government units and the private sector in the promotion, organization, and development of cooperatives;

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Developmental Function

(e) Assist cooperatives in arranging for financial and other forms of assistance under such terms and conditions as are calculated to strengthen their viability and autonomy;

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Settlement of Disputes/ADR Function

• Settlement of inter/intra cooperative disputes through voluntary arbitration where the technical rules applicable to court or judicial proceedings shall be liberally applied in the interest of substantive due process

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Governing Body of CDA The CDA shall be governed by a Board of Administrators consisting of a Chairperson and 6 members appointed by the President 1 Chairperson 2 for Luzon 2 for Visayas 2 for Mindanao 15 extension offices located in different parts of the country Trainer's Training for Coop Development Officers

COOPERATIVE’S GENERAL CONCEPTS AND PRINCIPLES

KOOPERATIBA

Definition of Cooperative Article 3 of RA 9520

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.

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Definition of Cooperative Article 3 of RA 9520

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.

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Definition of Cooperative Article 3 of RA 9520

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.

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Definition of Cooperative Article 3 of RA 9520

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.

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Definition of Cooperative Article 3 of RA 9520

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.

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Definition of Cooperative Article 3 of RA 9520

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.

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Definition of Cooperative Article 3 of RA 9520

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.

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Definition of Cooperative Article 3 of RA 9520

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.

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Common Bond of Membership

Shall refer to the condition where members associate themselves to attain their common goals and objectives which may either be residential, occupational, associational, and institutional.

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Common Bond of Membership

 Residential- members are working

and/or residing in the same place.  Institutional – members consist of employees, workers and/or officers of a particular institution.

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Common Bond of Membership

Associational – members come from a registered and/or recognized association.

Recognized association means legitimate public group of persons certified by any applicable government entity. Occupational – members come from the same or allied profession or occupation. 

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Cooperative Principles VOLUNTARY AND OPEN MEMBERSHIP  DEMOCRATIC MEMBER CONTROL  MEMBER ECONOMIC PARTICIPATION  AUTONOMY AND INDEPENDENCE  EDUCATION, TRAINING AND INFORMATION  COOPERATION AMONG COOPERATIVES  CONCERN FOR COMMUNITY

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Cooperative Principles Voluntary and Open Membership Cooperatives are voluntary organizations, open to all persons who are able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, cultural, political or religious discrimination.

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Cooperative Principles Democratic Member Control Cooperatives are democratic organizations that are controlled by their members who actively participate in setting policies and making decisions.

Men and women serving as elected representatives, directors or officers are accountable to the membership. “one-member, one-vote principle�

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Cooperative Principles Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is the common property of the cooperative.

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Cooperative Principles Autonomy and Independence Cooperatives are autonomous, self-help organizations controlled by their members.

In entering into agreements with government, including other organizations, or raise capital from external sources, they do so that ensure democratic control of members and maintain cooperative autonomy Trainer's Training for Coop Development Officers

Cooperative Principles Education, Training and Information Cooperatives provide education and training for their members, elected & appointed representatives, managers and employees so they can contribute effectively and efficiently to the development of their cooperatives.

Coops also inform the general public, particularly young people and leaders, about the nature and benefits of cooperation.

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Cooperative Principles Cooperation Among Cooperatives Cooperatives serve their members most effectively and strengthen the movement by working together through local, national, regional and international structures.

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Cooperative Principles Concern for Community

Cooperatives work for the sustainable development of their communities and the environment through policies approved by their members.

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Cooperative Powers and Capacities

 To the exclusive use of its registered name, to sue and be sued;  Of succession;  To amend its articles of cooperation in accordance with the provisions of the Cooperative Code;  To adopt by-laws not contrary to law, morals or public policy, and to amend and repeal the same in accordance with this Code;

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Cooperative Powers and Capacities

ď ą 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; Trainer's Training for Coop Development Officers

Cooperative Powers and Capacities

ď ą To enter into division, merger or consolidation, as provided in the Cooperative Code; ď ą To form subsidiary cooperatives and join federations or unions, as provided in this Code; Trainer's Training for Coop Development Officers

Cooperative Powers and Capacities

ď ąTo 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; Trainer's Training for Coop Development Officers

Cooperative Powers and Capacities

ď ąTo 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; Trainer's Training for Coop Development Officers

Cooperative Powers and Capacities

ď ąTo organize and operate schools in accordance with Republic Act No. 9155, Governance of Basic Education Act of 2001 and other pertinent laws; and, ď ąTo exercise such other powers granted by this Code or necessary to carry out its purpose or purposes as stated in its Articles of cooperation.

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Responsibilities of Every Cooperative

ď ą To have an official postal address registered with the CDA where all notices and communications shall be sent.

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Responsibilities of Every Cooperative

ď ą To keep certain, books pertaining to the cooperative and to make the same available and open to its members and representatives of the authority for inspection during reasonable office hours at its official address.

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Responsibilities of Every Cooperative ď ą To keep and maintain records of accounts reflecting the true and correct condition of the results of the operation of the cooperative in accordance with generally accepted accounting principles and to annually publish duly Audited FS. ď ą To prepare and publish annual reports of the affairs of the cooperative at the end of every fiscal year, to furnish copies of the same to all its members of record, and to file a copy thereof with the CDA within 120 days from the end of every fiscal year.

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Responsibilities of Every Cooperative Require all cooperatives to submit their annual financial statements, duly audited by a certified public accountant and general information sheets a. Cooperative Annual Progress Report (CAPR) with the following attachments: • Social Audit Report including its program of activities pursuant to its socio-civic goals of the cooperative; • Management and Governance Report (Performance Audit Report), including copies of the semi-annual Report on mediation and conciliation as received by the Authority pursuant to ADR Law (RA 9285); • Audited Financial Statements; and • List of officers and trainings undertaken/completed

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Responsibilities of Every Cooperative

Bonding of accountable officers; Maintain member’s registry book.

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TYPES AND CATEGORIES OF COOPERATIVES

Types of Cooperatives 

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.  Dairy Cooperative – is one whose members are engaged in the production of fresh milk which maybe processed and/or marketed as dairy products.

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Types of Cooperatives ď ą

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 .

ď ą

Fishermen Cooperative - is one organized by marginalized fishermen in localities whose products are marketed either fresh or processed products.

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Types of Cooperatives 

Credit – 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 for productive and provident purposes.



Consumers – is one the primary purpose of which is to procure and distribute commodities to members and non-members.

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Types of Cooperatives 

Producers – 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.

Marketing – is one which engages in the supply of production inputs to members and markets their products.

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Types of Cooperatives 

Service – is one which engages in medical and dental care, hospitalization, transportation, insurance, housing, labor, electric light and power, communication, professional and other services.



Multipurpose – is one which combines two (2) or more of the business activities of these different types of cooperatives.

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Types of Cooperatives 



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.

Health Services Cooperative - is one organized for the primary purpose of providing medical, dental, and other health services.

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Types of Cooperatives ď ą

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.

ď ą

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.

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Types of Cooperatives ď ą

Water Service Cooperative - is one organized to own, operate and manage water systems for the provision and distribution of potable water for its members and their households.

ď ą

Workers Cooperative - is one organized by workers, including the self-employed, who are at the same time 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.

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Types of Cooperatives 

Financial Service Cooperative – engages in savings and credit services and other financial services.



Insurance Cooperative – is one engaged in the business of insuring life and property of cooperatives and their members.

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Types of Cooperatives 



Cooperative Bank – is one organized for the primary purpose of providing a wide range of financial services to cooperatives and their members.

Electric Cooperative – undertakes power generation, utilizing renewable energy sources, including hybrid systems, acquisition and operation of sub-transmission or distribution to its members.

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Types of Cooperatives

ď ą

Other types – the requirements for the organization, membership, capitalization shall be determined and prescribed by the Authority in separate guidelines.

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Types of Cooperatives Cooperatives shall be categorized according to membership and territorial considerations as follows:

a. In terms of membership b. In terms of territory, cooperatives shall be categorized according to areas of operation.

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Categories of Cooperatives 

Primary Cooperative –shall refer to a cooperative the members of which are natural persons except electric cooperative, water service cooperative and other cooperatives which the implementing rules and regulations of RA9520 or the Authority may allow.



Secondary Cooperative – shall refer to a cooperative the members of which are primary cooperatives.

Tertiary Cooperative – shall refer to a cooperative the members of which are secondary cooperatives.



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Categories of Cooperatives

For this purpose, tertiary cooperatives with national coverage shall refer to a cooperative whose area of operation covers three or more regions in Luzon, Visayas and Mindanao.

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Distinct features of Cooperatives Against Other Organizations

FEATURES Government/ Legal basis Primary purpose/ motivation

CORPORATIONS/ PARTNERSHIPS

ASSOCIATIONS/ NGOs

COOPERATIVES

Corporation Code & Partnership Law

RA9904/HLURB, SEC, Corp. Code

RA 9520 RA 6939

Profit driven

To donate funds or support a cause

Service above profit

Basic requisite for membership/ ownership

Capacity to invest or buy shares of stocks

Common social interest, cause or advocacy

Common need, uses the services of the coop and willingness to assume responsibilities

Customer/clientele

General public & private entities

Members or focused groups

Member-owners other entities

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CORPORATIONS/ PARTNERSHIPS

ASSOCIATIONS/ NGOs

Governance or voting rights

Number of share holdings

Equal voting rights

“One member, one vote” No proxy voting

Components of management

Board of Directors & Hired Management

Shared or appointed

Members, Board of Directors & Hired Management

Business Mgt Principles

Business Mgt Principles

Coop Principles & Business Mgt Principles

-

Equitable and conforms to gov’t regulations

Shares of Stock

-

Share contribution & Patronage based on Net Surplus

-

-

Continuous coop education program

FEATURES

Principles governing operations Rate of Interest of Share Capital (ROI) Basis for distribution of savings/profit Educational Program

Unlimited

COOPERATIVES

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Organizational Structure and Administration

Organizational Structure of Coop General Assembly Board of Directors

Election Committee

Mediation & Conciliation

Audit Committee

Treasurer

Ethics Committee

Secretary Education & Training Gender Awareness & Devt.

(GAD) Committee

General Manager Mngt Staff

Mngt Staff

Mngt Staff

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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.

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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 the 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 delegated: 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.

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Mode of General Assembly

Full membership Assembly –shall refer to a duly assembled membership 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.

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.

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Mode of General Assembly

Full membership Assembly –shall refer to a duly assembled membership 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.

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.

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Meetings

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.

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Meetings 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 are entitled to vote to transact specific business covered by the call.

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Meetings 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; 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 Notice of any meeting may be waived, expressly or impliedly, by any member.

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Quorum

A quorum shall consist of at least twenty-five per centum (25%) of all the members entitled to vote.

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Kinds of Membership A cooperative may have two (2) kinds of members, to wit: • •

Regular member- one who has complied with all the membership requirements and entitled to all the rights and privileges of membership. and 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.

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DUTIES AND RESPONSIBILITIES OF MEMBERS 1.

2.

3.

4.

5.

6.

Pay the installment on share capital subscription as it falls due and to participate on the capital build-up and savings program of the cooperative; Patronize regularly its business; Participate in its parliamentary affairs; Attend the membership meeting, regular or special; Obey the rules and regulations provided by R.A. 9520, by-laws, the decisions of the general assembly and the Board of Directors, and the policies and decisions that maybe promulgated by the Cooperative Development Authority (CDA); and Promote the aims and purposes of the cooperative, the success of its business, the welfare of its members and the cooperative movement as a whole.

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RIGHTS OF MEMBERS 1. Participate in the deliberation during membership meetings; 2. Vote on all matters brought before such meetings 3. Seek any elective position, subject to the provisions of the by-laws 4. Avail himself of the services of the cooperative without any discrimination whatsoever, upon compliance with the conditions and requirements thereof; 5. Inspect and examine the books of accounts, the book of minutes of meetings, the share register, and other records of the cooperative during office hours and to exercise other rights and privileges of membership.

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MEMORANDUM CIRCULAR 2011-04

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Board of Directors 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 than five (5) nor more than fifteen (15) members elected by the general assembly for a term fixed in the by-laws but not exceeding a term of two (2) years and shall hold office until their successors are duly elected and qualified, or until duly removed for cause.

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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.

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.

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Meetings and Quorum

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.

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Committees of Cooperatives.

The bylaws shall provide for the creation of an audit, election, mediation and conciliation, ethics, GAD and such other committees (credit if applicable) 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.

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Audit Committee An Audit Committee shall be composed of three (3) to five (5) members to be elected during a General Assembly meeting and shall hold office for a term of one (1) year or until their successors shall have been elected and qualified. Within ten (10) days after their election, they shall elect from among themselves a Chairperson, Vice-Chairperson and a Secretary. No member of the committee shall hold any other position within the Cooperative during his/her term of office.

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Audit Committee The Audit Committee shall: 1. Provide internal audit service; 2. Maintain a complete record of its examination and inventory; 3. Submit an audit report quarterly or as may be required by the Board and the General Assembly.

The Audit Committee shall be directly accountable and responsible to the General Assembly.

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Election Committee An Election Committee shall be composed of three (3) to five (5) members to be elected during a General Assembly meeting and shall hold office for a term of one (1) year or until their successors shall have been elected and qualified. Within ten (10) days after their election they shall elect from among themselves a Chairperson, Vice-Chairperson and a Secretary. No member of the committee shall hold any other position within the Cooperative during his/her term of office.

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Election Committee shall The Election Committee shall: a. Formulate election rules and guidelines and recommend to the General/Representative Assembly for approval; b. Recommend necessary amendments to the election rules and guidelines, in coordination with the Board of Directors, for the General/Representatives Assembly's approval;

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Election Committee

c.

Implement election rules and guidelines duly approved by the General/Representative Assembly;

d. Supervise the conduct, manner and proceedings of election and other election- related activities and act on the changes thereto;

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Election Committee

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.

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Education and Training Committee • An Education and Training Committee shall be composed of three (3) to five members to be appointed by the Board of Directors and shall serve for a term of one (1) year, without prejudice to their reappointment.

Within ten (10) days after their appointment, they shall elect from among themselves a Vice-Chairperson and a Secretary. The Vice-Chairperson of the Board of Directors shall act as the Chairperson of the Committee.

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The Education and Training Committee The committee shall be responsible for the planning and implementation of the information, educational and human resource development programs of the Cooperative for its members, officers and the communities within its area of operation.

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The Education and Training Committee Functions and Responsibilities. The Education and Training Committee shall: a. Keep members, officers, staff well-informed regarding Cooperative’s goals/objectives, policies & procedures, services, etc.; b. Plan and implement educational program for coop members, officers and staff; c. Develop promotional and training materials for the Cooperative; and d. Conduct/Coordinate training activities.

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Mediation and Conciliation Committee Mediation and Conciliation Committee shall be composed of three (3) to five (5) members to be appointed by the Board of Directors. Within ten (10) days after their appointment, they shall elect from among themselves a Chairperson, Vice-Chairperson and a Secretary who shall serve for a term of one (1) year or until their successors shall have been appointed and qualified and without prejudice to their reappointment.

No member of the Committee shall hold any other position in the Cooperative during his/her term of office.

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Ethics Committee Ethics Committee shall be composed of three (3) members to be appointed by the Board of Directors.

Within ten (10) days after their appointment, they shall elect from among themselves a Chairperson, ViceChairperson and a Secretary who shall serve for a term of one (1) year or until their successors shall have been appointed and qualified and without prejudice to their reappointment. No member of the Committee shall hold any other position in the Cooperative during his/her term of office.

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Ethics Committee The Ethics Committee shall: a. Formulate, develop, implement and monitor the Code of Governance and Ethical Standards (CGES) to be observed by the members, officers and employees of the cooperative subject to the approval of the Board of Directors and ratification by the General/Representative Assembly; b. Conduct initial investigation or inquiry, upon receipt of a complaint involving violations of the Code of Governance and Ethical Standards; Trainer's Training for Coop Development Officers

Ethics Committee c. Submit report on its recommendation together with the appropriate sanctions, to the Board of Directors for its proper action, or to the remaining members of the Board of Directors, if the violation is committed by any member of the Board of Directors. Provided, that if the remaining members of the Board of Directors fail to act on the report within a period of thirty (30) days, or the violation is committed by the majority of the Board of Directors, the Audit committee shall act on the same

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Gender and Development (GAD) Committee.

A Gender and Development (GAD) Committee shall be composed of three ( 3) members to be appointed by the Board of Directors provided that at least one member shall come from the Board. The Committee shall elect from among themselves a Chairperson. The Committee members shall hold office until replaced by the Board.

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Gender and Development (GAD)

Functions and Responsibilities. The Gender and Development (GAD) Committee shall: a. Conduct gender analysis; b. Develop and recommend Gender and Development (GAD) and Gender Equality (GE )policies and programs/activities/ projects to the Board; c. Monitor and assess progress in the implementation of Gender and Development (GAD) programs/activities/ projects towards achieving Gender Equality (GE ); d. Submit report to the Board; e. Provide directional guidance.

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SOURCES OF FUNDS

Capital Sources of Funds Capital Sources.- Cooperatives may derive their capital from any or all of the following sources: • Member’s share capital; • Loans and borrowings including deposits; • Revolving capital which consists of the deferred payment of patronage refunds, or interest on share capital; • Retains; • Membership Fee;

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Capital Sources of Funds • 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.

Upon dissolution, such donated capital shall be subject to escheat.

Trainer's Training for Coop Development Officers

Capital Sources of Funds

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.

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Capital Sources of Funds ART.75. Capital Build-Up. The 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.

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Manner of Distribution of Net Surplus in the Cooperative

ALLOCATION AND DISTRIBUTION OF NET SURPLUS

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 by-laws.

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.

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ALLOCATION AND DISTRIBUTION OF NET SURPLUS

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:

Trainer's Training for Coop Development Officers

ALLOCATION AND DISTRIBUTION OF NET SURPLUS "(2) Not more than Ten percent (10%) for Education and Training Fund (ETF). 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.

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ALLOCATION AND DISTRIBUTION OF NET SURPLUS 3. Not less than three percent (3%) for Community Development Fund (CDF). The Community Development Fund shall be used for projects or activities that will benefit the community where the cooperative operates.

4. Not more than seven per centum (7%) for Optional Fund, the Optional Fund shall be used for a land and building, and any other necessary fund.

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ALLOCATION AND DISTRIBUTION OF NET SURPLUS

5. The remaining net surplus shall be made available to the members in the form of Interest on Share Capital (ISC)not to exceed the normal rate of return of 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.

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CAPITALIZATION AND ACCOUNTING PROCEDURES OF COOPERATIVES

Sec. 9. Interest on Share Capital (ISC) - 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 ISC = X (Net Surplus less Statutory Reserves) Total Average Share Month Where: X shall be a percentage to be determined by the Board of Directors allocated for interest on share capital.

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CAPITALIZATION AND ACCOUNTING PROCEDURES OF COOPERATIVES

• 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 Bylaws, must be made on such date as may be determined by the Board of Directors. The General/Representative Assembly, however, upon the recommendation of the Board of Directors, may defer the payment of such interest including Patronage Refund to raise Revolving Capital.

Trainer's Training for Coop Development Officers

CAPITALIZATION AND ACCOUNTING PROCEDURES OF COOPERATIVES

• 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

Trainer's Training for Coop Development Officers

CAPITALIZATION AND ACCOUNTING PROCEDURES OF COOPERATIVES

Patronage Refund. The principle of Patronage Refund is a principle of equity wherein an equal right of members to participate in the organization and to equitably share in the benefits accruing is established.

Trainer's Training for Coop Development Officers

CAPITALIZATION AND ACCOUNTING PROCEDURES OF COOPERATIVES

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 prescribed Implementing Rules and Regulations . Provided that: 1. 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; and 2. in no case shall the rate of patronage refund be more than twice the rate of interest on share capital.

Trainer's Training for Coop Development Officers

CAPITALIZATION AND ACCOUNTING PROCEDURES OF COOPERATIVES

Formula in Computing the Patronage Refund (PR): Rate of PR = X (Net Surplus less Statutory Reserves) Interest on Loans

Where: X shall be a percentage to be determined by the Board of Directors allocated for interest on Patronage Refund

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Sample Computation Statement of Operation December 31, 2014 Income: Interest on Loan 100,000 Membership fee 5,000 Other Income 3,000 Total 108,000 Less Expenses: Salaries and wages 12,000 Organizational expenses 20,000 Taxes and Licenses 1,000 bond of Account Officers 1,000 Total 34,000 Net Surplus 74,000 Trainer's Training for Coop Development Officers

Sample Computation Net Surplus Less : Statutory Reserves (SR): 50% General Reserve Fund 10% Education & Trng. Fund

74,000 37,000 7,400

7% Optional fund 5,180.00 3% Community Development Fund Total SR For distribution on Interest on Share Capital and Patronage Refund

2,220.00 51,800 22,200

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Sample Computation Assuming that the following percentages were determined by the Board of Directors : Assuming 70% of 22,200 is for ISC Assuming 30% of 22,200 is for PR

15,540.00 6,660.00

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Sample Computation Computation of Interest on Share Capital Rate of Interest on share capital (ISC) = % (Net Surplus - Statutory Reserves Total Average share Month (TASM)

70% (74,000.00-51,800) 150,000 15,540.00 150,000 Rate of ISC =10% Note: see ISC&PR Excel file

Trainer's Training for Coop Development Officers

Sample Computation Computation of Patronage Refund Rate of Interest on share capital (ISC) = % (Net Surplus - Statutory Reserves Interest on Loans

30% (74,000.00-51,800) 100,000 6,660.00 100,000 Rate of PR =6.7%

Trainer's Training for Coop Development Officers

REGISTRATION

Organization and Registration Organization of Primary Cooperative : 1. 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; and 2. Prospective member of a primary cooperative must have completed a Pre-Membership Education Seminar (PMES).

3. 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.

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Organization and Registration 4. Capital Requirements - All primary cooperatives shall be organized with share capital. The authorized share capital of a cooperative shall be provided for in its Articles of Cooperation. At least twenty five percent (25%) of the authorized share capital shall be subscribed by the members and at least twenty five percent (25%) of the subscribed share capital shall be paid by the members prior to registration.

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Organization and Registration

5. The paid up capitalization requirement for primary cooperatives shall not be less than Fifteen Thousand Pesos (P15,000.00) except for multipurpose cooperative which should have at least One Hundred Thousand (P100,000.00) or as required by the feasibility study whichever is higher.

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Organization and Registration

In the case of Transport Cooperatives, capital requirements shall be in accordance with Rule V Section 5 of IRR, RA9520.

Trainer's Training for Coop Development Officers

Organization and Registration TYPE OF TRANSPORTATION SERVICE COOPERATIVE

MINIMUM CAPITALIZATION

MINIMUM NO. OF UNITS

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

Ship

P 10,000,000.00

1

Ferry Boat

P 5,000,000.00

1

Motorized Banca

P 100,000.00

1

A. LAND

B. WATER

Trainer's Training for Coop Development Officers

Organization and Registration Other Specific Requirements for each type of cooperative Type of Coop Additional Requirements Agrarian Reform Beneficiaries a. Mother CLOA in case of plantation based ARBs; and Cooperative b. Written verification from Department of Agrarian Reform (DAR) to the effect that the cooperative organization is needed and desired by the beneficiaries, economically viable, at least majority of the members are agrarian reform beneficiaries.

Housing Cooperatives Copy of the Pre-Feasibility Study of the housing projects undertaking certified as reviewed by National Housing Authority (NHA).

Transport Cooperatives

Certification of Cooperative Education and Transport Operation Seminar (CETOS) by Office of Transport Cooperatives (OTC)

Trainer's Training for Coop Development Officers

Organization and Registration Other Specific Requirements for each type of cooperative Type of Coop

Additional Requirements

Water Service Cooperative

a. Proof of Land ownership b. Well Drilling Data

Professional Service Cooperative

a. Undertaking to comply with the regulatory requirements prescribed by other regulatory agency; b. Favorable endorsement from the Governing Board of the respective profession; c. Tax Identification numbers of all cooperators; and d. Photocopy of valid individual Professional License of all members.

Labor Service Cooperative

a. Undertaking to comply with the regulatory requirements prescribed by other regulatory agency; b. Cooperators/Members’ Profile and c. Tax Identification numbers of all cooperators;

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Organization and Registration Other Specific Requirements for each type of cooperative Type of Coop Health Service Cooperative

Additional Requirements a. Undertaking to comply with the regulatory requirements prescribed by other regulatory agency; b. Favorable endorsement/written certification from Concerned health related professional regulatory Board attesting to the fact that the concerned health related profession is not prohibited from forming a cooperative for the purpose of engaging in the subject undertaking; c. Tax Identification numbers of all cooperators; and d. Detailed Feasibility Study (expressly mentioning whether the undertaking is primary, secondary or tertiary level hospital, diagnostic center, spa, and wellness center, home for the aged, lying in, drop-off center, etc. and specifying the financial, technical including architectural, plans, etc.)

Trainer's Training for Coop Development Officers

Documentary Requirements for Registration (Primary Cooperatives)

1.

2.

3.

4.

5.

6.

7.

8.

Cooperative Name Reservation Notice (CNRN); One copy Economic Survey Articles of Cooperation and the approved By-laws; Treasurer's Affidavit (notarized); Surety Bonds of accountable officers; Certificate of Pre-Registration Seminar (PRS); Favorable endorsement/written verification/authority/pre-feasibility study, if applicable; and Registration fee.

Trainer's Training for Coop Development Officers

To get a copy of all the documentary requirements: Go to www.cda.gov.ph Click: Resources Click: Downloads Click: Pro-forma Registration Documents Choose the type of Coop (kind of business to be undertaken, ex: Credit Cooperative)

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General Guidelines Cooperative Name and Prohibition 1. The word "Cooperative" “Kooperatiba” or “Cooperativa” shall be included in the name of the cooperative, which name shall likewise specify the type of cooperative in accordance with Article 23 of RA 9520.

2. No cooperative name shall be allowed by the Authority if the proposed name is identical or deceptively or confusingly similar to that of any existing cooperative, contrary to public policy, moral and existing laws.

3. The use of the words “development” and “integrated” in the cooperative name shall be discouraged.

Trainer's Training for Coop Development Officers

General Guidelines Cooperative Name and Prohibition.

4.

The use of “Incorporated”, “corporation”, “company”, “incorporation”, partnership, or other similar connotation and abbreviation shall not be allowed. In addition, the use of the word “federation” and “union” in the name of the proposed primary cooperative is likewise prohibited except if it is part of the registered name of association or institution where the members of the proposed cooperative come from.

5.

Name shall not be written in all capital letters except if it is an acronym. Acronym shall be written after the full name of cooperative.

Trainer's Training for Coop Development Officers

General Guidelines Submission of Documents.

1. The documents required for registration shall be submitted in 4 copies in all original print-out and signatures printed in an 8.5” x 13” or 8.5” x 14” and may be written in English or in Filipino or other local dialect with appropriate English translation. As far as practicable, the text should use bookman old style 12. In case of confusion in the interpretation of the provisions, the English translation shall prevail.

2. The Articles of Cooperation shall be signed by all the cooperators on each and every page; and 3. The By-Laws shall be signed by all the members on the adoption page.

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General Guidelines Common and Preferred Share.

1. The share capital of a cooperative may consist of common share capital and preferred share capital if the latter is provided for under the cooperatives’ articles of cooperation and by laws. Should the cooperative wish to have common and preferred shares, statements to that effect should appear in the Articles of Cooperation specifying the amount of shares to be offered for common shares and for preferred share.

However, it is recommended that only the common share be offered.

Trainer's Training for Coop Development Officers

General Guidelines 2. Should preferred share capital be offered, the rights and privileges of holders of preferred shares shall be provided for in the By-laws of the cooperative.

3. Preferred share capital shall not exceed Twenty Five (25%) percent or one-fourth (1/4) of the total authorized share capital of the cooperative.

4. The paid up and subscription of the common share capital contribution should strictly adhere to the twenty-five percent (25%) requirement based on the authorized capital share.

5. No member shall own more than Ten (10%) percent of the subscribed share capital of the cooperative.

Trainer's Training for Coop Development Officers

General Guidelines Bonding Requirements of Accountable Officers / Employees of the Cooperative - accountable officers/employees of cooperatives shall submit a surety bond for the faithful performance of their functions in accordance with Articles 14(5) and (56) of the Code and the following persons shall be bonded: Chairperson Treasurer and Cashier Manager Warehouseman; Loan/deposit Collectors; Signatories of checks and other financial instruments; and Such other persons as may be authorized by the cooperative to act as a custodian of funds merchandise, inventories, securities and other assets of the cooperative.

Trainer's Training for Coop Development Officers

General Guidelines Bonding Requirements of Accountable Officers / Employees of the Cooperative

The board of directors shall determine the adequacy of such bonds. For this purpose, the Board of Directors shall be guided based on the initial networth of the cooperative which shall include the paid-up capital, the membership fees and the other assets of the cooperative at the time of registration.

Trainer's Training for Coop Development Officers

General Guidelines Submission of Documents.

Jurisdiction All applications for registration of cooperative and amendment thereto shall be filed and registered with the CDA Extension Office (EO) having jurisdiction over the principal office of the proposed cooperative.

In case of secondary or tertiary cooperative that shall operate with municipal/city, provincial, regional or inter-regional coverage shall be registered in the CDA Extension Office where its principal office is located.

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General Guidelines Submission of Documents.

The CDA Central Office shall register tertiary cooperatives with national coverage and selected types of cooperatives including amendments thereto prescribed by law, rules and circular issued by the Authority which are forwarded by concerned Extension Office together with the validation report.

For this purpose, tertiary cooperatives with national coverage shall refer to a cooperative whose area of operation covers three or more regions in Luzon, Visayas and Mindanao.

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General Guidelines Registration Fee The registration fee to be paid by the proposed cooperatives shall be one tenth (1/10) of one (1%) percent of the paid-up share capital or the amounts prescribed in the CDA schedule of fees, whichever is higher.

Payment of the registration fee shall be collected on or before the issuance of the Certificate of Registration.

Legal and Research Fee (LRF) An Additional LRF fee in an amount equivalent to one percent (1%) of the fee imposed but in no case lower than ten pesos (P10.00) shall be collected on every fee for all applications and amendment, petitions and complaints imposed by the Authority in the exercise and discharge of its regulatory functions.

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General Guidelines Validation Requirement The CDA Extension Office concerned shall ensure that proposed cooperatives applying for registration must have complied first with the basic requirements for the organization and registration of the proposed cooperative by conducting the requisite validation procedure prescribed below.

1. Objective. The Authority recognizes the importance of verification/validation as an essential pre-registration function to ensure that the proposed cooperative applying for registration with the Authority has met the minimum requirement of the law.

Trainer's Training for Coop Development Officers

General Guidelines Validation Requirement 2. Rationale. While proposed cooperatives comply with the documentary requirements, it has been observed that others are not complianct with the cooperative conceptual definition on common bond of interest, voluntariness, and willingness to undertake the business in accord with the generally accepted cooperative principles.

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General Guidelines Validation Requirement 3. Scope. All types and categories of cooperatives shall be subjected to verification/validation before registration. On-site validation of the proposed cooperative’s principal office address and gathering of relevant information including but not limited to its adherence to the cooperative principles, concept and values carried out by the cooperators/officers necessary in the submission of complete validation report.

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General Guidelines Required Period for Approval of Registration.

An application for registration shall be finally disposed by the Authority within the period of Sixty (60) days from the filing of complete documentary requirements. Otherwise, the application is deemed approved unless the cause of the delay is attributable to the applicant.

In the case of denial by the Authority, appeal of such denial may be sent to the Office of the President within ninety (90) days from receipt of the notice of denial.

The failure of the Office of the President to act on the appeal within ninety (90) days from the filing thereof shall mean the approval of said application.

Trainer's Training for Coop Development Officers

CONTACT NUMBER • Telephone No. - 373-6895 332-0019 • Website - www.cda.gov.ph • Email address - ncr@cda.gov.ph

Trainer's Training for Coop Development Officers

Trainer's Training for Coop Development Officers