Cooperatives Primer: Business Laws and Regulations in the Philippines

I. Definition and Nature:

Cooperative Defined:
A cooperative is an autonomous association of persons united voluntarily to meet their common
economic, social, and cultural needs and aspirations through a jointly-owned and
democratically-controlled enterprise.

II. Cooperative Principles:

Voluntary and Open Membership:

Cooperatives are open to all individuals willing to accept the responsibilities of membership
without gender, social, racial, political, or religious discrimination.

Democratic Member Control:

Members actively participate in decision-making, and control is exercised on a one-member,
one-vote basis.

Autonomy and Independence:

Cooperatives are autonomous, self-help organizations controlled by their members.
Education, Training, and Information:

Cooperatives provide education and training for members to contribute effectively to the
development of their cooperatives.
Cooperation Among Cooperatives:

Cooperatives serve their members most effectively and strengthen the cooperative movement
by working together.

III. Types of Cooperatives:

Credit Cooperatives:
Primarily engaged in savings and credit services.

Agricultural Cooperatives:
Comprised of farmers engaged in the production of agricultural products.

Consumer Cooperatives:
Formed by individuals who are the ultimate consumers of goods and services.

Service Cooperatives:
Provides services to its members, such as health, housing, and transportation cooperatives.
IV. Formation and Registration:

Membership and By-Laws:

Members voluntarily come together with a common goal, and the cooperative's by-laws guide its
internal operations.

Registration:
Cooperatives must register with the Cooperative Development Authority (CDA) to acquire legal
status.

V. Rights and Responsibilities of Members:

Equal Voting Rights:

Members typically have equal voting rights, promoting a democratic decision-making process.

Financial Participation:
Members contribute to the capital of the cooperative and share in its economic results.

VI. Financial Matters:

Capitalization:
Cooperatives raise capital through member contributions and retain surplus for the development
of the cooperative.

Surplus Distribution:
Surpluses are often reinvested in the cooperative or distributed among members based on their
transactions with the cooperative.

VII. Dissolution and Liquidation:

Voluntary Dissolution:
Members may voluntarily decide to dissolve the cooperative through a democratic process.

Liquidation:
Assets are liquidated, and liabilities settled in accordance with the cooperative's by-laws.

VIII. Regulatory Compliance:

Cooperative Development Authority (CDA):

The CDA oversees the registration, regulation, and promotion of cooperatives in the Philippines.
Conclusion:
Cooperatives in the Philippines operate under specific principles aimed at fostering democratic
governance, economic empowerment, and community development. Understanding the legal
framework governing cooperatives is essential for those involved in their establishment and
management. Always seek legal advice tailored to specific circumstances and stay informed
about any updates in business laws and regulations.