Cooperative Code

R.A. 9520

Chapter 1 – General Concepts and Principles

Article 1. Title. – This Act shall be known as the “Philippine Cooperative Code of 2008”.
Article 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 research, audit and support services
relative to cooperatives with government assistance where necessary.
Business operation refers conduct of business activities stated in the objectives of cooperative.

A cooperative may establish a branch provided the following requirements, are present:
 The members of the applicant cooperative desires to avail of the services of the cooperative in the new
branch;
 The principal office must have a minimum paid – up capital
 Each branch must have an available operating capital as provided for in the Business plan, thus:
 The cooperative did not incur net loss for the last three (3) consecutive years and its net worth is
progressive for the last three (3) years from the date of application.

Article 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.
Bond of Membership - a condition where members associate themselves to attain their common goals and
objectives which may either be residential, occupation, associational, and institutional.
Capital - it is a sum total of member’s share capital including revolving capital, subsidiaries, donations,
legacies, grants, aids, land structure, plants, equipment facilities, machines, and other assets of a cooperative.
Share - Capital refers to the money paid or required to be paid by the member for the conduct of the operation
of the cooperative.
Authorized Share Capital
Paid Share Capital
Unpaid Subscription
Registration – refers to the operative act gaining juridical personality to a proposed cooperative as evidenced
by a Certificate of Registration.

Article 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.

Chapter II – Organization and Registration

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.

Articles of Cooperation – it is the document registered before the CDA, including any amendment, if any.
By – laws
Merger – union of two or more existing cooperatives belonging to the same category whereby the surviving
cooperative, relating to identity, absorbs one or more constituent cooperatives. Unlike in Corporation, it requires
that cooperatives shall be in the same category.
Constituent Cooperatives
Consolidation
Subsidiary Cooperative
Preferential Right over Reserved Cooperative Name – The applicant shall have the right over the reserved
name during the approved reservation period including its extension. Otherwise, the reserved name shall be
made available to other applicants. ( Section 6, Guidelines on Cooperative Name Reservation)
Cooperative Names – No cooperative name shall be allowed by the CDA 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.
The proposed cooperative name shall incorporate the word “cooperative” and specifying the type in accordance
with economic activity. The use of “development”, “integrated”, “incorporated”, or other similar connotation
shall not be allowed. ( Section 9, Guidelines on Cooperative Name Reservation)
As can be observed, the above-mentioned rule essentially adopts the requirements set in the use of Corporate
names.

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.
Primary Cooperative – a cooperative, the members of which are natural persons.
Area of Cooperative – it refers to the are where the cooperative members come from as provided foe in their
Articles of Cooperation and By – laws.
Area of Business Operation – refers to the principal place of business of a cooperative where the cooperative
conducts its business as provided for in their Article of Cooperative and By – laws.
Multi – purpose Cooperative – a cooperative which combines 2 or more business/economic activities.
No cooperative shall be registered as a multi – purpose cooperativeunless it has been in operation for at least 2
years. Wit the exception of the agriculture cooperatives and agrarian reform cooperative, only those
cooperatives with a minimum paid – up capital of P100,000.00 or as required in the feasibility study, whichever
is higher may be allowed to transform into a multi – purpose cooperative.
Bond of Membership - refers to the condition where a member associate himself to attain the common goals
and objective which may either be residential, occupational, associated, and institutional. The 25% Rule shall
mean that at least 25% of the Authorized Share Capital shall be subscribed, and at least 25% of the Subscribed
Share Capital shall be paid up by the members. This requirement shall apply to common share capital only. No
member in a primary cooperative shall own more than 10% of the total subscribed share capital of the aforesaid
cooperative. In the case of Secondary and Tertiary Cooperatives, no member shall own more than 10% of the
Total Subscribe Share Capital of the Cooperative Federation/ Union.
Dual membership – a cooperative may include in its by-laws a provision not allowing members of existing
cooperatives of the same type within the same area of operation to be member of the proposed cooperative
unless they resign from the former.
Categories:
 Residential – members working/ and or residing (actually and physically) in the same place.
 Institutional – members consist of employees, workers in a institution.
 Associational – members come from a registered and/ or recognized association, group, club, fraternity,
religious groups, cultural and other similar aggrupation.
 Occupational - members come from same or allied profession or actual occupation.
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.
The above-mentioned provision omitted the procedure in application for registration, thus:
 A written request or petition for the issuance of Certificate of Registration shall be filed by the applicant
cooperative to CDA;

 Upon receipt of said request or petition, the Registration Division of CDA shall evaluate and determine:
 The period of time the application for registration of the applicant cooperative has been pending with the
CDA; and
 The completeness of documents from the submission of application for registration.
 The 60 day period shall not commence unless and until the documents submitted to the CDA are
complete in form and substance.
 If upon evaluation, the documents are complete in form and substance and the 60 day period has already
lapsed without the fault of the applicant ncooperative, the CDA shall issue Certificate of Registration.

If the 60 day period already lapsed without the fault of the applicant cooperative but the documents on file with
the CDA are not complete in form and in substance, the CDA shall direct the cooperative in writing to
complete/ rectify the documents within 15 days from receipt thereof. Failure to comply with the said directive
shall result to the denial of the application for registration.
In case of denial of approval of registration, an appeal can be filed before the Office of the President within 90
days from receipt of denial by CDA. The failure to act by the Office of the President to act on the appeal within
90 days from filing shall mean the approval of the application.
This procedure shall apply to amendments to the Article of Cooperation and By – laws, except for the period to
be observed which required 30 days.
Jurisdiction – all applications for registration of cooperative and amendment thereto shall be filed before the
CDA Extension Office (EO) having jurisdiction over the principal office of the proposed cooperative.
Secondary or Tertiary cooperative that shall operative with municipal/city, provincial, regional or inter-regional
coverage shall be registered in the CDA EO where its principal office is located. CDA Central Office shall
register tertiary cooperative with national coverage and selected types of cooperatives including amendments
thereto prescribed by law, rules and circular issued by the CDA which are forwarded by the concerned EO.
Primary Cooperative – refers to a cooperative the members of which are natural persons except electric and
water cooperatives.
Secondary Cooperative – refers to a cooperative the members of which are primary cooperatives.
Tertiary Cooperative – refers to a cooperative the members of which are secondaries.
Inter – regional – refers to the cooperative’s are of operation covering two or more adjacent regions.
Area of Business Operation – refers to the principal place of business of cooperative where the cooperative
conducts its business as provided for in their articles of cooperation and by-laws.
Area of Operation – refers to the area where the cooperative members come from as provided for in their
articles of cooperation and by-laws.
Business Transaction – is a business activity or livelihood engaged in by the cooperative where such
cooperative generates savings.
Number of members required for Registration – Fifteen (15) or more natural persons who are Filipino
citizens, having common bond of interest and are residing or working in the intended area of operations are
required for registration.
Capital Requirements – the paid up capitalization requirement for primary cooperative shall not be less than
P15,000 except for multipurpose cooperative which should have at least P100,000.00 or as required by the
feasibility study whichever is higher.
Share
Share Capital - the money paid or required to be paid by the members for the conduct of the operation of the
cooperative.
Preferred Share and Common Share - Should preferred share capital be provided in their by-laws, it shall not
exceed 25% of the total authorized share capital of the cooperative.
Finally, for both the common and preferred share capital, no fractional share shall be issued.
It is recommended that only the common share be offered.

Limitations in the amendment of the Article of Cooperation (AOC) and By – laws

 The amendment requires 2/3 vote of all members with voting rights;
 Both the original and amended AOC and By –laws shall contain all provisions required by law to be set
out in the AOC and By – laws;
 Amendment shall be indicated by underscoring or otherwise appropriately indicating the change or
changes made and a copy of the amended articles or amended by- laws certified under oath by the
cooperative secretary and majority of the directors stating the fact that said amendment or amendments
to the articles of cooperation and/ or by-laws have been approved by the required vote of the members;
 The amendment must be approved by the CDA; and
 Dissenting members may exercise their right to withdraw their membership.

Contracts executed prior to Registration

All contracts entered between the private persons and cooperative prior to the
registration of the cooperative shall be valid.
Proposal for Division and Approval of Plan of Division
 The majority of the BOD or at least 10% of members voting with voting rights may propose for
division. The same must be approved by at least majority of the members with voting rights present and
constituting quorum in a general/ representative assembly.
 The BOD shall call a General/ Representative Assembly meeting to action such Plan of Division with
notice to all members of record and creditors at least 30 days prior to the scheduled meeting. The Plan of
Division shall be approved by a vote of ¾ of all members with voting rights present and constituting
quorum in such general/ representative assembly meeting.
Objection – within 15 days from day of position of from the last day of publication, a party may file objection
or opposition before CDA. Within 60 days from receipt, the CDA shall resolve the same.
Consolidation-
Merger –
Constituent Cooperatives – refers to cooperatives, which are parties to the merger/ consolidation.
Surviving Cooperatives – refers to the cooperatives which survives and continue the business of the combined
cooperative in case of merger.
Consolidated Cooperatives – refers to the new cooperative created after the termination of the old cooperative
in case of consolidation.
Third Party – refers to any person natural or juridical, who are which shall be adversely affected in case of
merger or consolidation
Procedure for Merger of Consolidation
 Proposal to merger or consolidate, either by the BOD or at least 10% of the members;
 Approval of the proposal to merge or consolidate – The merger or consolidation approved by the
majority of the member of each of the constituent cooperative with voting rights present and constituting
a quorum in a separate general/ representative assembly meeting called for the purpose.
 Appointment/ election of joint committee to draft Plan of Merger/ Consolidation.
 Presentation and Approval of the Plan of Merger/ Consolidation –
 The plan shall be presented to the constituent cooperatives, separately.
 Required vote to approve the plan of merger or consolidation or any amendment thereto. The affirmative
vote of members representing at least ¾ of all members with voting rights , present and constituting
quorum for each constituent cooperative.
Publication Requirement
 Posting in at least 3 conspicuous places in their respective area of operation or publication in a
newspaper of general circulation once a week for 3 consecutive weeks.
 Publication may also be supplemented by a radio and television announcement or any other means of
communication.
Objection to the Plan of Merger of Consolidation
 A third party may file an objection or opposition to the plan of merger or consolidation within 15 days
after the posting or from the last day of publication.
 The objection or opposition shall be filed before CDA, the latter shall resolve the same within 60 days
from receipt.
 If the objection is meritorious, the CDA may defer or disapprove the merge or consolidation.
Workers cooperative – refers to a cooperative organized by workers, including self – employed who are
owners and members of the enterprise. The term ownership shall mean actual contribution to the share capital of
the cooperative up to the maximum allowed by law and the by – laws. As mandated by law, each regular
member shall mean only have one vote regardless of the number of shares actually held. The principal purpose
of this cooperative is to provide jobs and business opportunities to its members and manage it in accordance
with cooperative principles.
Labor service - refers to a service cooperative engaged in providing service to principal employer.
Member-owner – a member of worker’s cooperative, who works in the cooperative or is deployed as worker in
a company availing the services of the cooperative.
Worker ownership – work and management are carried out jointly, without the limitations of individual work,
nor exclusively under the rules of conventional wage based labor.
Self – employed worker – a person who has his own occupational capacity put to a productive use by applying
his own capital raised by himself or together with other self – employed persons pursuing related occupational
interest. As a member of a worker’s cooperative, he is a worker – owner
Purpose of Workers cooperative
Job Creation
Income Enhancement
Economic Sustainability
Integral Human Development
Social and Cultural Development.
Business operation – a workers cooperative may engage in any legitimate business, such as but not limited to
manufacturing, production, retail and distribution, tourism services, agri – business, telecommunications and
transportation services, construction, financial services, hospital, educational institutions, hotels, restaurants,
business processing, and outsourcing.

Job Contracting/ Sub Contracting workers service cooperative and Multi-purpose cooperative with Job
Contracting/ Sub – Contracting operation.
Job Contracting/ Sub- Contracting Workers Service Cooperative – refers to a duly registered cooperative
the members of which are natural persons and the business activity is providing job contracting/ sub-contracting
services to clients.
Multi – Purpose Cooperative with Job Contracting/ Sub – Contracting
Operation – refers to the cooperative duly registered with the CDA as multi-purpose where one of the line of
business in its operation is providing job contracting/ sub-contracting services to clients.
Capital Requirement – minimum of P1,000,000.
Common Bond of Membership – residential, associational, or occupational.
Prohibition against Labor – only contracting
Labor – only contracting – refers to an arrangement where the cooperative recruits, supplies or places workers
to perform a job, work or service for a client. In labor only contracting, the cooperative has no substantial
capital and the right to control of its member-workers
Cooperative among Professional – refers to a primary cooperative organized by a persons duly registered and
licensed by appropriate government agency and as such belonging to the same group for the sole purpose of
practicing their profession.
 Members required for registration in this type of cooperative, shall be 15 or more natural person who are
Filipino citizens, having a common bind of membership residing or working in the intended area of
operation.
 Lawyers and accountants are prohibited from organizing cooperative in the exercise of their profession.
 The cooperative may provide in its by – laws prohibition on its members to join other cooperatives of
the same type.
Transport Cooperative – one which includes land and sea transportation, limited to small vessels.
- The members should at least be 15 or more natural persons, having a common bond of membership and are
residing or working in the intended area of operation.
Agriculture Cooperative – primary cooperative which or whose members are involve/ engage in raising/
culture of plants, animals, fungi and other living organisms for productive and economic purpose and in related
activities that lead to the reduction of cos and/ or value addition of outputs.
 The members should at least be 15 or more natural persons, having a common bond of membership and
are residing or working in the intended area of operation.
 Paid – up capitalization for primary cooperative shall not be less than P15,000.00
Agriculture Cooperative Activities
 Raising, culture of plants, animals;
 Facilitating the procurement of farm inputs/ implements for the members;
 Processing and marketing of the member’s products/ produce; and
 Any other activities that lead to the reduction of cost and/or value of addition of outputs.
Small – scale Mining Cooperative – refers to a cooperative composed of Filipino citizens, duly registered with
the CDA, to engage in small-scale mining activities.
 The members should at least be 15 or more natural persons, having a common bond of membership and
are residing or working in the intended area of operation.
 Paid – up capitalization for primary cooperative shall not be less than P15,000.00, except for multi-
purpose cooperative which should have at least P100,000.00 or as required by the appropriate
government agency.
 The cooperative may provide in its by – laws prohibition on its members to join other cooperatives of
the same type.
Small-scale Miners – refers to Filipino citizens who, individually or in the company of other Filipino citizens,
voluntary form or cooperative duly licensed by the DENR to engage, under the terms and conditions of a
contract, in the extraction or removal of minerals or ore-bearing materials from the ground.
Categories of Cooperatives – Cooperatives shall be categorized according to membership and territorial
considerations as follows:
 In terms of membership, cooperative shall be categorized into:
i. Primary – the member of which are natural persons;
ii. Secondary – the members of which are primaries; and
iii. Tertiary – the members of which are secondary cooperative;
 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.
Federation of cooperatives – refers to a cooperative the members of which are primary cooperatives doing the
same line of business.
Cooperative Union – refers to a cooperative the members of which are registered cooperatives and/or
federations organized purposely to represent the interest and welfare of all types of cooperatives at the
provincial, city, regional, and national levels.
Area of coverage – federation/ union may be organized at the municipal/ city, district, provincial, regional, or
national levels, whose members must be doing the same line of business activity.
Business activity – can engage in any cooperative enterprise authorized under Article 6 of RA 9520 that
complements, augments, supplements, or supplements but does not conflict, compete with, nor supplant the
business or economic activities of its members.
Bonding requirement – accountable officer/s of the proposed federation shall be covered by sufficient Surety
bond.
Chapter III Membership
Regular Member – one who has complied with all the membership requirements and entitled to all the rights
and privileges of membership.
Associate member – a member of 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.
Laboratory Cooperative – a cooperative duly recognized by the CDA formed and managed primarily by
minors, and is affiliated with another registered cooperative which is called the Guardian Cooperative.
 A cooperative may assist in the organization of a laboratory cooperative of fifteen (15) or more
individuals who are minors, who may be students or out school minor, Filipino citizens, and are actually
studying or residing within the nearest are of operation of the intended guardian cooperative.
 A laboratory cooperative may choose a guardian cooperative of its choice.
Purpose of Laboratory Cooperatives
 To serve as a training ground for its members to prepare them for membership in regular cooperatives.
 To teach the values of thrift and saving mobilization among its members.
 To install cooperative values, principles, financial discipline, business skills, and leadership skills among
its members.
 To promote and advocate Filipino social and cultural values, financial education, ecological awareness,
and sustainable development.
Name of Laboratory Cooperative
 It shall include in its name the word “ Laboratory Cooperative of ( Name of Guardian Cooperative).
Issuance of Certificate of Recognition
 This serves as a conclusive evidence that the Laboratory Cooperative is duly recognized by the CDA as
affiliate of the Guardian Cooperative and which shall remain valid unless such recognition has been
earlier revoked or cancelled.
 However, the issuance of Certificate of Recognition does not result to acquisition of juridical personality
by the laboratory cooperative.
Duties and Responsibilities of the Guardian Cooperative
 Formulate the programs, plans and activities appropriate for the education and training of the members
of the Laboratory Cooperative;
 Supervise the conduct of Officers and General Assembly meetings of the Laboratory Cooperative;
 Represent the laboratory cooperative in its dealings and transactions with third partner;
 Formulate, adopt, and implement internal control policies and procedures of laboratory cooperative
which shall be embodied in manual of operation for the Laboratory Cooperative;
 Prepare, keep, and maintain the list of members;
 Submit an annual report on the activities and economic operations of the Laboratory Cooperative;
 Maintain separate subsidiary ledgers, passbooks of members, and other accountable forms; and
 Adopt and implement a systematic procedure in the collection of savings deposits.
Termination of Membership
 Upon reaching the age of majority; and
 Such other causes as may be provided for in the by – laws of the Guardian Cooperative and in the
Manual of Operations for the Laboratory Cooperatives.
Option of Member who reaches the Age of Majority
Any member who reaches the age of Majority has the option to join the Guardian Cooperative by signifying
his/her intention to become a member upon compliance with all the requirements for membership.
N.B.: A guardian cooperative may supervise more than 1 laboratory
cooperative. In addition, the dissolution of the Guardian Cooperative shall result
in the revocation of the Certificate of Recognition of Laboratory Cooperative.
Government Officers and Employees
It is prohibited to appoint elective officials as officers of the cooperatives which include:
 Members of the Board of Directors;
 Members of the different committee created by the general assembly;
 General Manager or the Chief Executive Officer;
 Secretary;
 Treasurer; and
 Members holding other positions as may be provided for the by-laws of the
 cooperative.
N.B.: The ineligibility shall commence upon the assumption of office.
Application
Liability of Members
Termination of Membership
Right to Withdraw – a member of a cooperative may, for valid reason, withdraw his membership from the
cooperative by giving a 60 day notice to the board of directors.
Death or Insanity of a Member in a Primary Cooperative – these are valid grounds for termination of
membership.
Exception – 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.
Grounds for Termination of Membership by a Vote of the Majority of All the Members of the Board of
Directors.
 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;
 When a member has continuously failed to comply with his obligations;
 When a member has acted in violation of the by-laws and the rules of the cooperative; and
 For any act or omission injurious or prejudicial to the interest or the welfare of the cooperative.

Chapter IV Administration
General Assembly – refers 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
Cooperative Code, AOC and by-laws.
Powers of General Assembly –
a. To determine and approve amendments to the articles of cooperation and by-laws;
b. To elect or appoint the members of the board of directors, and to remove them for cause; and
c. To approve developmental plans of the cooperative.
N.B. The general assembly may by a ¾ 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.
Regular Meeting – held annually on a date fixed in the by-laws, or if not so fixed, on any date within 90 days
after the close of each fiscal year.
Special Meeting – it may be called at any time by a majority vote of the board of director or as provided in the
by-laws. A notice shall be sent one (1) week prior to the meeting to all members entitled to vote. Members
constituting 10% of all the members may request the board to call a meeting, provided a one (1) month notice
was sent.
Quorum – the quorum shall at least 25% of all the members entitled to vote.
Exception:
Cooperative Banks – ½ plus 1 of the number of voting shares of all the members in good standing.
Electric Cooperatives – 5% of all the members entitled to vote.
Voting system in Cooperative
Primary Cooperative – 1 member shall be equivalent to 1 vote.
Secondary and Tertiary – Members shall have 1 basic vote and may be granted with an incentive vote not
exceeding 5 votes.
Composition of the BOD – not less than 5 nor more than 15 members elected by the General Assembly.
Term of office – 2 years
Powers of the BOD
a. Strategic Planning
b. Direction - setting
c. Policy – formulation
Requirements for election as Director
 Member of a cooperative who under the by-laws of the cooperative has the right to vote.
 Any member who possess all the qualifications and none of the disqualifications provided in the laws or
the by-laws
Regular Meetings of the BOD
In case of the primary cooperative, the regular meetings of the BOD shall be held at least once a month.
Special Meetings of the BOD
It may be called at any time upon the call of the chairperson or a majority of the members of the board.
Quorum of the BOD
Majority of the members of the board shall constitute a quorum.
Exception:
Unless otherwise provided by the by-laws.
N.B. Unlike in RCC, where Directors are allowed to vote and attend meeting via proxy. This is prohibited on
meetings of BOD in cooperative.
Vacancy in the BOD
General Rule: Unless the vacancy occurs by reason of expiration of term, the BOD may fill the vacancy by a
majority of the remaining directors. The director elected to fill the vacancy shall only serve the unexpired term
of his predecessor in office.
Exception: if there is no quorum, the vacancy must be filled by the general assembly in a regular or special
meeting.
Officers of the Cooperative
It shall include the BOD, members of the different committees by the General Assembly, General Manager or
Chief Executive Officer, Secretary, Treasurer, and members holding other positions as may be provided for in
the by-laws.
The prohibition with relationship up to third civil degree of consanguinity or affinity shall not apply to elected
officers. It shall only apply to officer appointed by the BOD.
Committees of Cooperatives
a. Executive Committee – created in the by laws to be appointed by the BOD with powers and duties as may be
delegated to it in the by-laws or by a majority vote of all the members of the BOD.
b. Audit Committee – elected by the general assembly, thus it shall be directly
responsible and accountable to the general assembly.
c. Election Committee – elected by the general assembly.
d. Mediation and Conciliation Committee – appointed by the BOD.
e. Ethics Committee – appointed by the BOD.
N.B. Other committees may be necessary for the conduct of the affairs of the cooperative.
Certificate if Compliance – a certificate issued to all cooperative after complying with the rules of CDA.

Joint and several liability for damages of Directors, Officers and Committee members
  Those who willfully and knowingly vote for or assent to patently unlawful acts;
 Those who are guilty of gross negligence or bad faith in directing the affairs of the cooperative;
 Those who are guilty of bad faith in directing the affairs of the cooperative; and
 Those who acquire any personal or pecuniary interest in conflict with their duty.
N.B. 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, as trustee for the cooperative, be liable for damages and shall be accountable for double the profits
which otherwise would have accrued to the cooperative.

Compensation - includes all forms of remuneration. It refers to any remuneration given for services rendered,
like salary which is a compensation paid regularly, as by, month. It does not imply an immediate payment, or
direct return, nor the payment of cash or its equivalent. It refers to any remuneration, by whatever name or it is
designated.
Per diem – refers to allowance given as a reimbursement for extra expenses incurred by one in the performance
of his duties.
Honorarium – a gesture of appreciation for the service of one with expertise of professional standing in
recognition of his broad and superior knowledge in specific fields. It is given to official/ employee not as a
matter of obligation but in appreciation for services which admits of no compensation in money.

Grant of compensation to directors

As a rule, the compensation for directors shall be fixed in the by-laws. If the by-laws do not provide for
compensation of the directors, the directors are not entitled to any compensation except for reasonable per diem.
If the members voted by majority vote at a regular or special general assembly meeting, granting compensation
the directors may receive the same.

Suspension of the grant of per diem

 When the cooperative incurred net loss in the preceding year, or
 When the dividend rate of the cooperative fell below the official national inflation rate during the
preceding year.
Resumption of the grant of per diem to directors and officers shall not be compounded. No recovery of per diem
during the period of suspension shall be allowed.

Dealings of Directors, Officers, or Committee members

General Rule: Contract entered into by a cooperative with 1 or more of its directors, officers,
and committee members is voidable at the option of the cooperative.
Dealings of Directors, Officers, or Committee members are valid if the following are present:
 The presence of such director in the board meeting wherein the contract was approved was not necessary
to constitute a quorum for such meeting;
 That the vote of such director was not necessary for the approval of the contract;
 That the contract is fair and reasonable under the circumstances; and
 That in case of an officer or committee member, the contract with the officer or committee members has
been previously authorized by the general assembly or by the BOD.
N.B. 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 ¾ vote of all the members with voting rights present
and constituting 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.

The above-mentioned rule is akin to Section 31 of the RCC

Disloyalty of Director
A director who, acquires for himself an opportunity, by virtue of his office, which should belong to the
cooperative shall be liable for damages and must account for the double the profits that otherwise would have
accrued to the cooperative by refunding the same. The said action may be ratified by all ¾ vote of all members
with voting rights.

Illegal Use of Confidential Information by a Director, or Officer, or an Associate of a Director or Officer

 He shall be liable to compensate the cooperative for the direct losses suffered by the cooperative as a
result of the illegal use of information; and
 He shall be 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.
Removal of Elected officer
All complaints for the removal of any elected officer shall be filed with the BOD. Majority of the BOD may
place the officer concerned under preventive suspension pending the resolution of the investigation. If prima
facie evidence exists, the Board shall refer its recommendation for removal before the General Assembly. The
regular members may remove the elected officer via ¾ votes of those present and constituting quorum in a
general assembly.

Chapter V Administration
Address and Signage
Cooperatives shall put up and maintain a signage at the entrance of the principal offices and all branch or
satellite offices. The signage shall be visible, legible and shall contain at least the following:
 Name of the Cooperative;
 Address, whether it is:
 Principal office;
 Branch office;
 Satellite office;
 Registration Number of the Cooperative
 Tax Identification Number;
 The words “ Principal, Satellite and/ or Branch Office”, if applicable; and
 The phrase “Registered with Cooperative Development Authority- ___ Extension Office”.
Addition Information for Branches and Satellites:
 Certificate of Authority No. for branch; and
 Letter of Authority No. for satellite.
Inspection
CDA can conduct inspection to ensure that cooperatives comply with the regulatory requirements imposed by
the cooperative laws, rules and regulations, related laws, and other administrative issuances.
Notice of Inspection
It shall be sent to the cooperative concerned through its BOD or the General Managers at least 2 weeks prior to
the conduct of the inspection. The notice shall contain the following:
 The name/s of the duly authorized inspector/s;
 The date of the inspections; and
 Documents and records needed during the inspection.
Authority of the Inspector/s
During the conduct of the inspections, the Inspector/s shall have the following powers and authorities:
a. Require the presentation and/ or submission of reports or documents or records necessary to ascertain the
facts relative to the condition of the cooperative and other matters which are the subject of the inspection;
b. Inquire into financial information of the cooperative and other cooperative activities to determine whether
they are in accordance with cooperative laws, rules and regulations, and with the general policies set by the
general assembly and the Board of Directors.
c. Conduct interview and other inquiries on matters that need clarifications;
d. Conduct an Exit/ Clarificatory Conference; and
e. To do other acts that may be deemed necessary in the conduct of inspection.
During the inspection, the inspection team shall observe the principle of independence and confidentiality on
the conduct of inspection. Further, the inspection shall be conducted by only the authorized personnel of CDA
or a team thereof. The inspection shall be undertaken at least once a year.
After the inspection, the inspector/s shall conduct Exit Conference to discuss all the findings and observations
with the Board of Directors and other officers of the cooperative. It shall include the good practices of the
cooperative.
In case the Chairman, other members of the Board or the key officers did not attend during the conference, their
absence shall constitute waiver of participation.
After the exit conference, the Inspector/s shall furnish the cooperative a copy of the Inspection Report. It shall
be signed by the inspector and confirmed by the Chairman and/ or General Manager or representative of the
cooperative, with written authority to sign and in their behalf.
Prohibited Acts or Omissions of Officer or Employee
 Omission or refusal to furnish any information, report or other document required under RA 9520;
 Providing information, reports, or other documents to the CDA which the persons responsible know to
be false or misleading;
 Omission or refusal to keep a book or registry required under RA 9520 or to make the required entry
therein;
 Making an entry required under RA 9520 in a book or registry which the persons responsible know to be
misleading;
 Hindering an authorized inspector from making an inspection or refusal of the cooperative to be
inspected;
 Failure to comply with an order or written instruction issued or given by the CDA;
 Violation of the provisions regarding the transactions with a restricted party; and
 Abetting, counselling, 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.
The cooperative may request for reconsideration within 10 days, if the inspection yields for negative findings.
The request shall be filed before the appropriate CDA – Extension Office (EO).
Required Reports
 For primary cooperatives
Cooperative Annual Progress Report (CAPR) with the following attachments:
 Social Audit Report, including its programs of activities, pursuant to the socio – civic goals of the
cooperative;
 Performance Audit Report, including copies of the semi-annual Report on mediation and conciliation as
received by the CDA pursuant to EO 97;
 Audited Financial Statements; and
 List of Officers and Trainings Undertaken/ Completed.
 For secondary and tertiary cooperatives ( Federations and Unions)
Cooperative Annual Progress Report ( CAPR) with the following attachments:
1. Social Audit Report including its programs of activities pursuant to the
socio-civic goals of the cooperative;
2. Performance Audit Report, including copies of the semi-annual Report on
mediation and conciliation as received by CDA pursuant to EO 97;
3. Audited Financial Statements;
4. List of Officers and Trainings undertaken/ completed;
5. List of affiliates and cooperatives which have remitted their respective Cooperative Education and Training
Funds (CETF)
6. Business consultancy assistance to include the nature and cost, including the use of CETF; and
7. Other training activities undertaken specifying therein the nature,participants, and cost of each activity.
Effect of Partial Compliance of required reports
It shall be considered as non-compliance, the cooperative shall be in delay until such time that the filing of the
required reports have been fully complied with. Delay shall commence on the day following the last day
prescribed for the filing reports.
Notice of Delay
The CDA shall notify the cooperatives of their non-compliance within 15 days from the lapse of the period to
file the required reports, stating:
 That the cooperative has incurred delay;
 The commensurate fines and penalties that will be imposed as a result of its failure to file the required
reports; and
 The demand to pay the fines and penalties.

Fines and Penalties

Failure to file the required regular reports on time shall be subject the
Accountable Officers to a fine of P100 per day of delay. Accountable Officers refer to the officer/ individuals
duly authorized by the cooperative to prepare, certify/approve the reports and in whose had the delay/failure has
occurred.
The following officers are accountable for the following reports:

Bonding requirements of Accountable Officers/ Employees of the Cooperative

In order to meet any contingency that may arise in the operation of the cooperative, accountable officers/ employee of
cooperatives shall submit a surety bond for the faithful performance of their functions. 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.
The Board of Directors shall determine the adequacy of such bonds.
Certificate of Compliance – refers to the certificate in lieu of Certificate of Good Standing, issued to all types of
cooperatives after compliance with the rules of CDA.
This may only be issued to operative cooperative. In MC 2011-16, Certificate of Good Standing was changed into
Certificate of Compliance.
Operating Cooperative - refers to cooperative that has been performing cooperative activities with business operation
whether realizing gains or losses in the conduct of business. Newly registered cooperatives can be
waivedoperation for not more than 1 year from date of its registration.
Cooperative Activities – refers to the membership, governance, and institutional undertaking of the cooperative.
Business Operation – refers to the economic undertaking of providing product and services to members in accord
with the cooperative registered objectives.

Grounds for non issuance of Certificate of Good Standing

Notwithstanding with the provisions of this guidelines, any of the following conditions shall warrant the non-issuance of
the CGS:
 Non- submission of statutory reports for 2 or more consecutive years;
 Delayed in the submission of the statutory reports for more than 6 monthsfor at least 2 consecutive years;
 Non – compliance with CDA guidelines (violation of laws, guidelines, circularsand their by-laws); and
 The existence of the question on legitimacy of leadership.
Period of Filing
Cooperatives shall secure a Certificate of Good Standing (CGS) to CDA on or before April 30 of the current year.
Validity of Certificate of Good Standing
It shall be valid and effective until April 30 of the succeeding year. However, Certificate of Good Standing issued for
Special Purpose