Booklet 6 Law On Cooperative - Other Business Laws

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BOOKLET 6
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RFBT 0514 – PHILIPPINE COOPERATIVE CODE OF 2008

(R.A. No. 9520)
RFBT 0515 - QUIZZER – COOPERATIVE CODE OF 2008
RFBT 0516 - LAW ON OTHER BUSINESS TRANSACTIONS
ATTY. MARY ANN R. SAGANA

CRC-ACE The CPA Professional Review School
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PHILIPPINE COOPERATIVE CODE OF 2008

(R.A. No.9520)
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 by patronizing their products
and services, and by accepting a fair share of the risks and benefits of the
undertaking in accordance with universally accepted cooperative principles.
Federation of Cooperatives -Three or more primary cooperatives doing the same

line of business organized from the municipal to the provincial level
registered with the CDA to undertake business activities in support of its
members.
PURPOSES of cooperatives:
(1) To encourage thrift and savings mobilization among the members;
(2) To generate funds and extend credit to the members for productive and
provident purposes;
(3) To encourage among members systematic production and marketing;
(4) To provide goods and services and other requirements to the members;
(5) To develop expertise and skills among its members;
(6) To acquire lands and provide housing benefits for the members;
(7) To insure against losses of the members’
(8) To promote and advance the economic, social and education status of
the members;
(9) To establish, own, lease or operate cooperative banks, cooperative
wholesale and retail complexes, insurance and agricultural/industrial
processing enterprises, and public markets;
(10)To coordinate and facilitate the activities of cooperatives;
(11)To advocate for the cause of the cooperative movements;
(12)To ensure the viability of cooperative through the utilization of new
technologies;
(13)To encourage and promote self-help or self-employment as an engine
for economic growth and poverty alleviation; and
(14)To undertake any and all other activities for the effective and efficient
implementation of the provisions of this Code.
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Cooperative Principles:
1. Voluntary and open membership. Membership in a cooperative is voluntary and
available to all individuals regardless of their social, political, racial or religious
background or beliefs.
2. Democratic member control. Cooperatives are democratic organizations that

are controlled by their members who actively participate in setting their policies and
making decisions. 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.
4. Autonomy and independence. Cooperatives are autonomous, self-help

organizations controlled by their members.
5. Cooperation among cooperatives. Cooperatives serve their members most

effectively and strengthen the cooperative movement by working together through
local, national, regional and international structures.
6. Cooperative education. All cooperatives shall make provision for the education
of their members, officers and employees and of the general public based on the
principles of cooperation.
7. Concern for community. Cooperatives work for the sustainable development of

their communities through policies approved by their members. This is a new
provision.
Types of Cooperatives
1. Credit Cooperative. Promotes and undertakes savings and lending services

among its members. It generates a common pool of funds in order to provide
financial assistance to its members for productive and provident purposes.
2. Consumers Cooperative. The primary purpose is to procure and distribute

commodities to members and non-members.
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3. Producers Cooperative. Undertakes joint production whether agricultural or
industrial. It is formed and operated by its members to undertake the
production and processing of raw materials or goods produced by its members
into finished or processed products for sale by the cooperative to its members
and non-members. Any end product or its derivative arising from the raw
materials produced by its members, sold in the name and for the account of
the cooperative, shall be deemed a product of the cooperative and its
members.
4. Marketing Cooperative. Engages in the supply of production inputs to
members and markets their products.
5. Service Cooperative. Engages in medical and dental care, hospitalization,

transportation, insurance, housing, labor, electric light and power,
communication, professional and other services.
6. Multipurpose Cooperative. Combines two or more of the business activities

of these different types of cooperatives.
No cooperative shall be registered as a multipurpose cooperative

unless it has been in operation for at least two (2) years. • Cooperatives
with a minimum paid-up capital of One Hundred Thousand Pesos
(P100,000.00) or as required in the feasibility study, whichever is higher,
may be allowed to transform into a multipurpose cooperative. Except
agriculture cooperatives and agrarian reform cooperatives
7. Advocacy Cooperative. 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.
8. Agrarian Reform Cooperative. 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.
9. Cooperative Bank. Organized for the primary purpose of providing a wide

range of financial services to cooperatives and their members.
10. Dairy Cooperative. One whose members are engaged in the production of
fresh milk which may be processed and/or marketed as dairy products.
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11. Education Cooperative. 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.
12. Electric Cooperative. Organized for the primary purposed of undertaking

power generations, utilizing renewable energy sources, including hybrid
systems, acquisition and operation of subtransmission or distribution to its
household members.
13. Financial Service Cooperative. One organized for the primary purpose of
engaging in savings and credit services and other financial services.
14. Fishermen Cooperative. Organized by marginalized fishermen in localities

whose products are marketed either as fresh or processed products;
15. Health Services Cooperative. Organized for the primary purpose of providing
medical, dental and other health services.
16. Housing Cooperative. Organized to assist or provide access to housing for

the benefit of its regular members who actively participate in the savings
program for housing. It is co-owned and controlled by its members.
17. Insurance Cooperative. Engaged in the business of insuring life and poverty
of cooperatives and their members.
18. Transport Cooperative. Includes land and sea transportation, limited to small
vessels, as defined or classified under the Philippine maritime laws, organized
under the provisions of this Code;
19. Water Service Cooperative. Organized to own, operate and manage waters
systems for the provision and distribution of potable water for its members and
their households.
20. Workers Cooperative. Organized by workers, including the self-employed,

who are at same time the members and owners of the enterprise. Its principal
purpose is to provide employment and business opportunities to its members
and manage it in accordance with cooperative principles.
Categories of Cooperative.
A. In terms of membership –
1. Primary – Members are natural persons
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2. Secondary – Members are primaries
3. Tertiary – Members are secondary cooperatives
B. In terms of territory, cooperatives shall be categorized according to areas of

operations which may or may not coincide with the political subdivisions of the
country.
Organizing a Primary Cooperative . – Requirements:
1. Fifteen (15) or more NATURAL persons
2. FILIPINO citizen
3. of LEGAL AGE
4. ACTUALLY residing or working in the intended area of operation
5. PROVIDED, a prospective member of a primary cooperative must complete
a pre-membership education seminar (PMES).
Articles of Cooperation
(a) The name of the cooperative which shall include the word cooperative;
(b) The purpose or purposes and scope of business for which the cooperative is
to be registered;
(c) The term of existence of the cooperative;
(d) The area of operation and the postal addresses of its principal office;
(e) The names nationality, and the postal addresses of the registrants;
(f) The common bond of membership;
(g) The list of names of the directors who shall manage the cooperative; and
(h) The amount of its share capital, the names and residences of its
contributors and a statement of whether the cooperative is primary,
secondary or tertiary.
Cooperative BY-LAWS
(a) The qualifications for admission to membership and the payment to be made
or interest to be acquired as a conditions for the exercise of the right of
membership;
(b) The rights and liabilities of membership;
(c) The circumstances under which membership is acquired, maintained and
lost;
(d) The procedure to be followed in cases of termination of membership;
(e) The conditions under which the transfer of a share or interest of the members
shall be permitted
(f) The rules and procedures on the agenda, time, place and manner of calling,
convening, conducting meeting, quorum requirements, voting systems, and
other matters relative to the business affairs of the general assembly, board
of directors, and committees;
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(g) The general conduct of the affairs of the cooperative, including the powers
and duties of the general assembly, the board of directors, committees and
the officers, and their qualifications and disqualifications;
(h) The manner in which the capital, may be raised and the purposes for which it
can be utilized;
(i) The mode of custody and of investment of net surplus;
(j) The accounting and auditing systems;
(k) The manner of loaning and borrowing including the limitations thereof;
(l) The method of distribution of net surplus;
(m) The manner of adopting, amending, repealing, and abrogating bylaws;
(n) A conciliation or mediation mechanism for the amicable settlement of
disputes among members, directors, officers and committee members of the
cooperative; and
(o) Other matters incident to the purposes and activities of the cooperative.
Capital requirement for Cooperatives.

No cooperative, other than a cooperative union, shall be registered
unless the articles of cooperation is accompanied with the bonds of the
accountable officers and a sworn statements of the treasurer elected by the
subscribers showing that at least twenty-five per centum (25%) of the authorized
share capital has been subscribed and at least twenty-five per centum (25%) of
the total subscription has been paid.
The minimum paid-up share capital is PhP15,000, subject to increase by the CDA
upon consultation with the cooperative sector and the NEDA.
The par value of shares of a primary cooperative shall not exceed PhP1,000.
No member of primary cooperative other than cooperative itself shall own or hold
more than 10% of the share capital of the cooperative.
Cooperatives capital sources:

(1) Member’s share capital
(2) Loans and borrowings including deposits;
(3) Revolving capital which consists of the deferred payment of patronage refunds,
or interest on share capital; and
(4) Subsidies, donations, legacies, grants, aids and such other assistance from any
local or foreign institution whether public or private: Provided, That capital
coming from such subsides, donations, legacies, grants, aid and other
assistance shall instead form part of the donated capital or fund of the
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cooperative. Upon dissolution, such donated capital shall be subject to
escheat.
Investment of Capital
A cooperative may invest its capital in any of the following:
(a) In shares or debentured or securities of any other cooperative;
(b) In any reputable bank in the locality, or any cooperative;
(c) In securities issued or guaranteed by the Government;
(d) In real state primarily for the use of the cooperative or its members; or
(e) In any other manner authorized in the bylaws.
BOOKS required to be kept

(a) A copy of this Code and all other laws pertaining to cooperatives
(b) A copy of the regulations of the Authority
(c) A copy of the articles of cooperation and bylaws of the cooperative
(d) A register of members
(e) The books of the minutes of the meetings of the general assembly, board of
directors and committee
(f) Share books, where applicable
(g) Financial statement
Membership
1. Regular members. - Entitled to all the rights and privileges of membership,

including the right to vote and be voted upon.
2. Associate members. - Has no right to vote nor be voted upon and shall be
entitled only to such rights and privileges as the bylaws may provide.
However, an associate member shall be considered a regular member if:
(a) he has been a member for 2 continuous years;
(b) he patronizes the cooperative as its member;
(c) he signifies his intention of becoming a regular member.
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Termination of MEMBERSHIP
1. A member of a cooperative may, for any valid reason, withdraw his
membership from the cooperative by giving a sixty (60) day notice to the
board of directors.
2. The death or insanity of a member in a primary cooperative, and the

insolvency or dissolution of a member in a secondary or tertiary cooperative
-- the next-of-kin may assume the duties and responsibilities of the original
member
3. Membership in the cooperative may be terminated by a vote of the majority of

all the members of the board of directors for any of the following causes:
(a) When a member has not patronized any of the services of the
cooperative for an unreasonable period of time as may be previously
determined by the board of directors;
(b) When a member has continuously failed to comply with his obligations;
(c) When a member has acted in violation of the bylaws and the rules of the
cooperative; and
(d) For any act or omission injurious or prejudicial to the interest or the
welfare of the cooperative.
GENERAL ASSEMBLY- shall be the highest policy-making body of the cooperative

and shall exercise such powers as are stated in this Code, in the articles of
cooperation and in the bylaws of the cooperative.
The general assembly by a ¾ votes of all its members may delegate some
powers to a smaller body of the cooperative to exercise powers as enumerated
under the by-laws of the cooperative.
Quorum . – twenty- five percent (25%) of all the members entitled to vote.
if ELECTRIC COOPERATIVES - FIVE PERCENT (5%) OF ALL THE MEMBERS
ENTITLED TO VOTE.
Meetings
(1) 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
(2) Special meeting of the general assembly may be called at any time by a majority
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vote of the board of directors or as provided for in the bylaws. 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.
(3) In the case of a newly approved cooperative, a special general assembly shall be
called within ninety (90) days from such approval
Voting System . – Each member of a primary cooperative shall have only one (1)
vote.
in case of secondary or tertiary cooperatives the members shall have one (1) basic
vote and up to five (5) incentive votes.
Composition and Term of the Board of Directors.
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 of two (2) years
and shall hold office until their successors are duly elected an qualified, or until duly
removed for caused.
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.
Meeting of the Board and Quorum Requirement.
(1) 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
(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.
Vacancy in the Board of Directors. Any vacancy in the board of directors, other
than by expiration of term, may be filled by the vote of at least a majority of the
remaining directors, if still constituting a quorum; otherwise, the vacancy must
be filled by the general assembly in a regular or special meeting called for the
purpose.
A director so elected to fill a vacancy shall serve only the unexpired term of his
predecessor in office.
An elective officer may be removed by three fourths (3/4) votes of the regular
members present and constituting a quorum, in a regular or special general
assembly meeting called for the purpose.
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Officers of the Cooperative.
1. The board of directors shall elect from among themselves the chairperson and
vice-chairperson
2. Elect or appoint other officers of the cooperative from outside of the board in
accordance with their bylaws.
Committees of Cooperatives.
(1) The bylaws may create an executive committee to be appointed by the board of
directors with such powers and duties as may be delegated to it in the bylaws
or by a majority vote of all the members of the board of directors.
(2) The bylaws shall provide for the creation of an audit, election, mediation and
conciliation, ethics, and such other committees as may be necessary for
the conduct of the affairs of the cooperative. The members of both the audit
and election committee shall be elected by the general assembly and the rest
shall be appointed by the board.
The audit committee shall be directly accountable and responsible to the

general assembly. It shall have the power and duty to continuously monitor the
adequacy and effectiveness of the cooperative's management control system
and audit the performance of the cooperative and its various responsibility
centers.
Compensation.
(1) In the absence of any provisions in the bylaws fixing their compensation, the
directors shall not receive any compensation except for reasonable per diems,
EXCEPT when, in the preceding calendar year, the cooperative reported a net
loss or had a dividend rate less than the official inflation rate for the same
year.
(2) Any compensation other than per diems may be granted to directors by a
majority vote of the members with voting rights at a regular or special general
assembly meeting specifically called for the purpose
No additional compensation other than per diems shall be paid during the first
year of existence of any cooperative.
Dealings of Directors, Officers, or Committee Members. – A contract entered

into by the cooperative with one (1) or more of its directors, officers, and
committee members is voidable, at the option of the cooperative, unless all
the following conditions are present.
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(1) That the presence of such directors in the board meeting wherein
contract was approved was not necessary to constitute a quorum for
such meeting:
(2) That the vote of such director was not necessary for the approval of the
contract:
(3) That the contract is fair and reasonable under the circumstances; and
(4) That in the case of an officer or committee member, the contract with
the officer or committee member has been previously authorized by the
general assembly or by the board of directors.
Where any of the first two conditions set forth in the preceding paragraph is
absent,in the case of a contract with a director, such contract may be ratified by a
three-fourths (3/4) vote of all the members with voting rights present and constituting
a quorum.
POWERS, RIGHTS and CAPACITIES of Cooperatives

a. To the exclusive use of its registered name, to sue and be sued;
b. Of succession;
c. To amend its articles of cooperation;
d. To adopt bylaws not contrary to law, morals or public policy, and to amend
and repeal the same;
e. 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;
f. To enter into division, merger or consolidation;
g. To form subsidiary cooperatives and join federations or unions;
h. To avail of loans, be entitled to credit and to accept and receive grants,
donations and assistance from foreign and domestic sources, subject to the
conditions of said loans, credits, grants, donations or assistance that will not
undermine the autonomy of the cooperative.
i. To avail of preferential rights granted to cooperatives 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;
j. To organize and operate schools
k. To exercise such other powers granted by the Philippines Cooperative Code
or necessary to carry out its purpose or purposes as stated in its Articles of
cooperation.
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REPORTS REQUIRED FOR COOPERATIVES • Submit annual Cooperative Annual

Progress Report (CAPR) with the following attachments:
1. Social Audit Report including its program of activities pursuant to its
socio-civic goals of the cooperative;
2. Performance Audit Report, including copies of the semi-annual
Report on mediation and conciliation
3. Audited Financial Statements;
4. List of Officers and Trainings Undertaken /Completed
NOTE: Cooperative Annual Progress Report (CAPR) including all of the reports shall
be made part of the Annual Report of the cooperative to its members during the
Annual General Assembly Meeting
Tax Treatment of Cooperative. Cooperatives which do not transact any business

with non-members or the general public shall not be subject to any taxes and fees
imposed under the internal revenue laws and other tax laws. Cooperatives
transacting business with both members and non-members shall be subject to
another set of rules, but transactions with members shall remain to be non-taxable.
Annual Audit
a. The financial audit shall be conducted by an external auditor who satisfies all the
following qualifications:
(1) He is independent of the cooperative or any of its subsidiary that he
is auditing; and
(2) He is a member in good standing of the Philippine Institute of
Certified Public Accountants and the CDA.
b. The social audit shall be conducted by an independent social auditor accredited

by the CDA.
c. Performance and social audit reports which contain the findings and
recommendations of the audit shall be submitted to the board of directors.
Merger and Consolidation of Cooperatives.

a. Two (2) or more cooperatives may merge into a single cooperative which shall
either be one of the constituent cooperatives or the consolidated cooperative.
b. No merger or consolidation shall be valid unless approved by a three-fourths

(3/4) vote of all the members with voting rights, present and constituting a quorum of
each of the constituent cooperatives at separate general assembly meetings. The
dissenting members shall have the right to exercise their right to withdraw their
membership
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c. The merger or consolidation shall be effective upon the issuance of the certificate
of merger or consolidation by the CDA.
Effects of Merger and Consolidation.

(1) The constituent cooperatives shall become a single cooperative which, in case of
merger, shall be the surviving cooperative, and, in case of consolidation, shall be the
consolidated cooperative;
(2) The separate existence of the constituent cooperatives shall cease, except that
of the surviving or the consolidated cooperative;
(3) The surviving or the consolidated cooperative shall possess al the assets, rights,
privileges, immunities and franchises of each of the constituent cooperatives;
(4) The surviving or the consolidated cooperative shall possess all the assets, rights,
privileges, immunities and franchises of each of the constituent cooperatives; and
(5) The surviving or the consolidated cooperative shall be responsible for all the
liabilities and obligation of each of the constituent cooperatives in the same manner
as if such surviving or consolidated cooperative had itself incurred such liabilities or
obligations. Any claim, action or proceeding pending by or against any such
constituent cooperatives may be prosecuted by or against the surviving or
consolidated cooperative, as the case may be. Neither the rights of creditors nor any
lien upon the property of any such constituent cooperatives shall be impaired by
such merger or consolidation.
Voluntary Dissolution Where no Creditors are affected by a majority vote of the

board of directors, and by a resolution duly adopted by the affirmative vote of at
least three-fourths (3/4) of all the members with voting rights. A copy of the
resolution authorizing the dissolution shall be certified to the board secretary. The
CDA shall thereupon issue the certificate of dissolution.
Voluntary Dissolution Where Creditors Are Affected

petition for dissolution shall be filed with the CDA. The petition shall be signed by a
majority of its board or directors or other officers managing its affairs, verified by its
chairperson or board secretary or one of its directors and shall set forth all claims
and demands against it and that its dissolution was resolved upon by the affirmative
vote of at least three-fourths (3/4) of all the members with voting rights.
Upon expiry of the five (5) days notice to file objections, the CDA shall proceed to
hear the petition and try any issue raised in the objection filed; and if the objection is
sufficient and the material allegations of the petition are proven, it shall issue an
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order to dissolve the cooperative and direct the disposition of its assets in
accordance with existing rules and regulations. The order of dissolution shall set
forth therein:
(1) The assets and liabilities of the cooperative;
(2) The claim of any creditor;
(3) The number of members; and
(4) The nature and extend of the interests of the members of the
cooperative.
Involuntary Dissolution
A cooperative may be dissolved by order of a competent court after due
hearing on the ground of:
(1) Violation of any law, regulation or provisions of its bylaws; or
(2) Insolvency.
Dissolution by Order of the CDA

The CDA may suspend or revoke after due notice and hearing, the
certificate of registration of a cooperative on any of the following grounds:
(1) Having obtained its registration by fraud;
(2) Existing for an illegal purpose;
(3) Willful violation, despite notice by the CDA, of the provisions of this
Code or its bylaws;
(4) Willful failure to operate on a cooperative basis; and
(5) Failure to meet the required minimum number of members in the
cooperative.
Liquidation of a Cooperative three (3) years after the time it is dissolved

at any time during the said three (3) years, the cooperative is authorized and
empowered to convey all of its properties to trustees for the benefit of its members,
creditors and other persons in interest. From and after any such conveyance, all
interests which the cooperative had in the properties are terminated.
Upon the winding up of the cooperative affairs, any asset distributable to any
creditor, shareholder or member who is unknown or cannot be found shall be given
to the federation or union to which the cooperative is affiliated with.
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QUIZZER
COOPERATIVE LAW
1. It is a cooperative the primary purpose of which is to procure and distribute

commodities to members and non-members.
A. Credit cooperative
B. Consumer cooperative
C. Producers cooperative
D. Procurement cooperative
2. The articles of cooperation and by-laws of the cooperative may be amended

by ___ vote of all members with voting rights.
A. 1/2
B. 1/3
C. 1/4
D. 2/3
3. It is a cooperative the members of which are secondary cooperatives.

A. Union
B. Tertiary
C. Primary
D. Federation
4. First statement: Directors of a cooperative cannot attend or vote by proxy at

board meetings.
Second statement: A vacancy in the board of directors in a cooperative,
other than by expiration of term, may be filled by the vote of at least a
majority of the remaining directors, if still constituting a quorum.
A. Both statements are true
B. First statement only is true
C. Second statement only is true
D. None of the statements is true
5. An elected officer of a cooperative may be removed by a vote of all

members with voting rights, present and constituting a quorum in a meeting
called for the purpose.
A. ¾
B. ½
C. ½
D. 2/3
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6. In areas where there are no available notaries public, the judge exercising his
ex officio capacity as notary public, shall render service, free of charge, to
any person or group of persons requiring the administration of oath or the
acknowledgement of articles of cooperation and instruments of loan from
cooperatives not exceeding:
A. P500,000
B. P250,000
C. P200,000
D. P100,000
7. What is the term of the members of the board of directors of a cooperative?

A. 1
B. 2
C. 3
D. 4
8. It is where the direction and management of the affairs of the cooperative

shall be vested.
A. Board of directors
B. General assembly
C. Executive committee
D. Office of the President
9. A cooperative organized by minors shall be considered a ___ cooperative.

A. Minor
B. Youth
C. Young
D. Laboratory
10. A cooperative may register for a term not exceeding how many years?
A. 50
B. 25
C. 20
D. 100
11. The board of directors of a cooperative is composed of:

A. Not less than 5 but not more than 15
B. Not less than 10 but not more than 15
C. Not less than 15 but not more than 20
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D. Not less than 10 but not more than 20
12. What is the required quorum during a meeting of the General Assembly?
A. At least 25%
B. At least 20%
C. At least 50%
D. At least 50% plus 1
13. Every cooperative whose charter expires by its own limitation or whose
existence is terminated by voluntary dissolution or through an appropriate
judicial proceeding shall nevertheless continue to exist for _______years
after the time it is dissolved to wind up its affairs.
A. 3
B. 4
C. 5
D. 6
14. Cooperatives with accumulated reserves and undivided net savings of not
more than shall be exempt from all national, city, provincial, municipal or
barangay taxes of whatever name and nature.
A. P1 million
B. P3 million
C. P5 million
D. P10 million
15. A cooperative may apply for extension of term but such extension cannot be
made earlier than ____years prior to the original or subsequent expiry
date/dates.
A. 2
B. 3
C. 4
D. 5
16. First statement: The General Assemble of the cooperative may decrease the
amount allocated to the reserve fund when it already exceeds the share
capital.
Second Statement: Upon the dissolution of the cooperative, the reserve
fund shall not be distributed among the members.
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17. Upon dissolution of a cooperative, what happens to the capital donated to

said cooperative?
A. It is subject to escheat.
B. It shall be returned to the donor.
C. It shall be divided among the member of the cooperative.
D. It shall be donated to another cooperative with a similar purpose.
18. The following are the requirements of the founders of a primary cooperative,
except
A. 15 or more natural persons
B. Foreigners
C. Of legal age
D. They have a common bond of interest and are actually residing or
working in the intended area of operation.
19. What is the minimum subscribed capital of a cooperative before it be

allowed to be registered with CDA?
A. At least 15% of the authorized share capital
B. At least 25% of the authorized share capital
C. At least 35% of the authorized share capital
D. At least 45% of the authorized share capital
20. It is a cooperative the members of which are primary cooperatives.

A. Union
B. Federation
C. Tertiary cooperative
D. Secondary cooperative
21. A contract entered into by the cooperative with one or more of its directors,
officers and committee members may be ratified by a vote of all members
with voting rights, present and constituting a quorum in a meeting called for
the purpose.
A. ¾
B. ½
C. ½ + 1
D. 2/3
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22. No merger or consolidation shall be valid unless approved by ¾ votes of
each of the constituent cooperatives at a separate general assembly
meetings. The dissenting members shall have the right to exercise their right
______________________.
A. Appraisal right
B. Right to file a derivative suit
C. Right to withdraw their vote
D. Right to withdraw their membership
23. It is a type of cooperative that is one which combines two (2) or more of the
business activities of these different types of cooperatives.
A. Service cooperative
B. Single-line cooperative
C. Multi-purpose cooperative
D. Subsidiary cooperative
24. Which of the following is a delegable power of the General Assembly ?

A. To approve contracts entered into by the cooperative
B. To approve developmental plans of the cooperative
C. To determine and approve amendments to the articles of cooperation
D. To elect or appoint the members of the board of directors and remove
them for cause
25. Unless already fixed in the by-laws, the compensation of all other
employees of the cooperative shall be determined by the:
A. General assembly
B. Executive committee
C. Board of directors
D. Compensation Committee
26. It 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.
A. Income
B. Revenues
C. Net surplus
D. Retained earnings
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27. Unless the by-laws provide otherwise, what constitutes a quorum for the
conduct of business in board meetings of a cooperative?
A. ½
B. 1/3
C. 2/3
D. Majority
28. What is the required vote for voluntary dissolution of a cooperative?

A. At least majority of the board of directors.
B. At least ¾ of all the members with voting rights, present and constituting
a quorum.
C. At least majority of the board of directors with ratification by at least ¾ of
all the members with voting rights, present and constituting a quorum
D. At least majority of the board of directors with ratification by at least 2/3
of all the members with voting rights, present and constituting a quorum.
29. The minimum paid-up share capital of a cooperative shall be 25% of the total
subscription but not less than:
A. 2,000
B. 3,500
C. 10,000
D. 15,000
30. It is the highest policy-making body of the cooperative.

A. Board of directors
B. Board of trustees
C. General assembly
D. Executive committee
31. I. First statement: Loss of confidence shall not be a valid ground for removal
of an officer of
a cooperative.
II. Second statement: No two (2) or more persons with relationships up to
the 3rd civil degree of consanguinity or affinity nor shall any person engaged
in a business similar to that of the cooperative nor who in any other manner
has interests in conflict with the cooperative shall serve as an appointive
officer.
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32. Every cooperative shall conduct its affairs in accordance with Filipino
culture and experience and the universally accepted principles of cooperation
which include the following, except:
A. Unlimited interest in Capital
B. Open and Voluntary Membership
C. Democratic Control
D. Division of Net Surplus
33. A cooperative duly registered shall have:

A. Comprehensive liability
B. Absolute liability
C. Limited liability
D. General liability
34. Who elects the members of the board of directors of a cooperative?

A. Stockholders
B. Shareholders
C. General assembly
D. Executive committee
35. An act of disloyalty of a director of a cooperative may be ratified by a vote of

all members with voting rights, present and constituting a quorum in a
meeting called for the purpose.
A. 3/4
B. ½
C. ½ + 1
D. 2/3
36. All tax-free importations of a qualified cooperative shall not be sold nor the
beneficial ownership thereof be transferred to any person until after years,
otherwise, the cooperative and the transferee or assignee shall be solidarily
liable to pay twice the amount of the imposed tax and/or duties.
A. 5
B. 4
C. 3
D. 2
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37. A cooperative may be dissolved by order of a competent court after due
hearing on the ground/s:
First: Violation of any law, regulation or provisions of its by-laws.
Second: Insolvency
A. First only
B. First and second
C. Second only
D. None of the given
38. No additional compensation other than per diems shall be paid to a director
of a cooperative during of existence of any cooperative.
A. First year
B. First 2 years
C. First 3 years
D. First 5 years
39. Where no creditors are affected, the cooperative may be voluntarily dissolved
by vote of the board of directors and by a resolution duly adopted by the
affirmative vote of at least of all the members with voting rights, present and
constituting a quorum at a meeting to be held upon call of the directors:
A. ¾; ¾
B. 2/3; ¾
C. Majority, 2/3
D. Majority; ¾
40. I. A member shall have the right to examine the records required to be kept
by the cooperative during reasonable hours on business days and he may
demand, in writing, for a copy of excerpts from said records without charge
except the cost of production.
II. The transactions of members with the cooperative shall not be subject to
any taxes and fees.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
41. Cooperatives may derive their capital from any or all of the following sources:
A. Member’s share capital
B. Loans and borrowings including deposits
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C. Revolving capital which consists of the deferred payment of patronage
refunds, or interest on share capital.
D. All of the above
42. I. 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.
II. Where a member of cooperative dies, his heir shall be entitled to the
shares of the decedent: Provided, That the total share holding of the heir
does not exceed ten per centum (10%) of the share capital of the
cooperative
A. Only I is true C. Both are true
B. Only II is true D. Both are false
43. No member shall transfer his shares or interest in the cooperative or any part
thereof unless.
A. He has held such share capital contribution or interest for not less than
one (1) year.
B. The assignment is made to the cooperative or to a member of the
cooperative or to a person who falls within the field of the membership of
the cooperative.
C. The board of directors has approved such assignment.
D. All of the above.
44. I. Contracts executed between private persons and cooperatives prior to

the registration of the cooperative shall remain void between the parties
and upon registration of the cooperative.
II. Any registered cooperative may, by a resolution approved by a vote of
three-fourths (3/4) of all the members with voting rights, present and
constituting a quorum, resolve to divide itself into the two (2) or more
cooperatives.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
45. I. No merger or consolidation shall be valid unless approved by a three-

fourths (3/4) vote of all the members with voting rights, present and
constituting a quorum of each of the constituent cooperatives at separate
24
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general assembly meetings. The dissenting members shall have the right
to exercise their right to withdraw their membership.
II. The merger or consolidation shall be effective upon the issuance of the
certificate of merger or consolidation by the CDA.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
46. A person who has complied with all the membership requirements and
entitled to all the rights and privileges of membership.
A. Regular member
B. Irregular member
C. Principal member
D. Associate member
47. A person 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 and shall be
considered a regular member if he continues to patronize the cooperative
for two (2) years and signifies his intention to remain a member.
A. Associate member
B. Regular member
C. Irregular member
D. Principal member
48. I. A quorum shall consist of at least twenty-live per centum (25%) of all the
members
entitled to vote.
II. In the case of electric cooperatives registered under the Philippine
Cooperative Code, a quorum, unless otherwise provided in the bylaws,
shall consist of five per centum (5%) of all the members entitled to vote.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
49. I. Any vacancy in the board of directors of a cooperative, other than by

expiration of term, may be filled up by the vote of at least a majority of the
remaining directors, if still constituting a quorum; otherwise, the vacancy
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must be filled by the general assembly in a regular or special meeting
called for the purpose.
II. A director so elected to fill a vacancy in the board of directors of a
cooperative shall serve only the unexpired term of his predecessor in
office.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
50. Upon the winding up of the cooperative affairs, any asset distributable to
any creditor, shareholder or member who is unknown or cannot be found
shall be given to the:
A. Government
B. Trustee
C. Federation or union to which the cooperative is affiliated with
D. Any federation or union
51. A cooperative may be dissolved if it has not commenced business and its
operation within______ years after the issuance of its certificate of
registration.
A. 2
B. 3
C. 4
D. 5
52. Cooperatives which provide any type of service to its members, including but
not limited to, transport, information and communication, insurance,
housing, electric, health services, education, banking, and savings and
credit.
A. Service cooperative
B. Subsidiary cooperative
C. Single line or purpose cooperative
D. Social audit
53. I. Fifteen (15) or more juridical or 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.
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II. A single-purpose cooperative may transform into a multipurpose or
may create subsidiaries only after at least three (3) years of operations
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
54. This 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.
A. Sole proprietorship
B. Partnership
C. Cooperative
D. Corporation
55. Shall mean the full membership of the cooperative duly assembled for the
purpose of exercising all the rights and performing all the obligations
pertaining to cooperatives.
A. General assembly
B. Shareholder’s meeting
C. Member meeting
D. Partners assembly
56. Shall refer to anybody in a cooperative entrusted with specific functions and
responsibilities under the by-laws or resolution of the general assembly or the
board of directors.
A. Assembly
B. Consult
C. Committee
D. Technical working group
57. Refers to the government agency in charge of the registration and regulation
of cooperatives.
A. Cooperative Development Authority(CDA)
B. Securities and Exchange Commission(SEC)
C. Department of Trade and Industry(DTI)
D. Civil Service Commission(SEC)
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58. This is a procedure wherein the cooperative assesses its social impact and
ethical performance vis-à-vis its stated mission, vision, goals and code of
social responsibility for cooperatives to be established by the CDA in
consultation with the cooperative sector. It enables the cooperative to develop
a process whereby it can account for its social performance and evaluate its
impact in the community and be accountable for its decisions and actions to
its regular members.
A. Performance audit
B. Regular audit
C. Annual audit
D. Social audit
59. I. A cooperative duly registered shall have limited liability.

II. A cooperative shall exist for a period not exceeding fifty (50) years from
the date of registration unless sooner dissolve or unless said period is
extended.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
60. I. A cooperative formed and organized acquired juridical personality from

the date the CDA issues a certificate of registration under its official seal.
II. All applications for registration of cooperatives shall be finally disposed of
by the CDA 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.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
61. A duly registered cooperative shall have the following powers and
capacities, except:
A. Of succession
B. 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 reasonable
and necessarily require
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C. To join federations or unions
D. None of the above
62. The kinds of membership in a cooperative are:

A. Regular and special
B. Ordinary and extra-ordinary
C. Regular and associate
D. Class A and Class B
63. It is a cooperative engaged in the supply of production inputs to members

and markets their products.
A. Advertising
B. Producers
C. Marketing
D. Suppliers
64. Shall include cooperative undertaking activities which are related to its main
line of business or purpose.
A. Social audit
B. Subsidiary cooperative
C. Service cooperative
D. Single line or purpose cooperative
65. I. The amendments to the Articles of Cooperation shall take effect upon its
approval by the CDA or within thirty (30) days from the date of filing thereof if
not acted upon by the CDA for a cause not attributable to the cooperative.
II. Any provision or matter stated in the articles of cooperation and by laws
may be amended by two-thirds (2/3) vote of all the members with
voting rights, without prejudice to the right of the dissenting members to
exercise their right to withdraw their membership.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
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LAW ON OTHER BUSINESS TRANSACTIONS
I. Philippine Deposit Insurance Corporation Law
CONCEPT OF INSURED DEPOSITS

Insured deposit means the amount due to any bona fide depositor for legitimate
deposits in an insured bank net of any obligation of the depositor to the insured bank
as of the date of closure, but not to exceed 500,000 or its equivalent in foreign
currency.
Whenever an insured bank shall have been closed by the Monetary Board, payment
of the insured deposits on such closed bank shall be made by the PDIC as soon as
possible either:
(1) by cash; or
(2) by making available to each depositor a transferred deposit in another
insured bank in an amount equal to insured deposit of such depositor
Note: ‘Transfer Deposit’ means a deposit in an insured bank made available to a

depositor by the PDIC as payment of insured deposit of such depositor in a closed
bank and assumed by another insured bank
DEPOSIT ACCOUNT NOT ENTITLED TO PAYMENT

(1) Investment products such as bonds and securities, trust accounts, and other
similar instruments;
(2) Unfunded, fictitious or fraudulent deposit accounts or transactions;
(3) Deposits accounts or transactions constituting, and/or emanating from,
unsafe and unsound banking practice/s, as determined by the PDIC, in
consultation with the BSP, after due notice and hearing, and publication of a
cease and desist order issued by the PDIC against such deposit accounts or
transactions; and
(4) Deposits that are determined to be the proceeds of an unlawful activity
Notice and publication requirement

(1) The PDIC shall give notice to the depositors of the closed bank of the insured
deposits due them by whatever means deemed appropriate by the Board of
Directors.
(2) The PDIC shall publish the notice once a week for at least three (3) consecutive
weeks in a newspaper of general circulation or, when appropriate, in a newspaper
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circulated in the community or communities where the closed bank or its branches
are located
CALCULATION OF LIABILITY - Per depositor, per capacity rule

In determining the amount due to any depositor, there shall be added together all
deposits in the bank maintained in the same right and capacity for his benefits either
in his own name or in the name of others
RULE:
1. A joint account regardless of whether the conjunction 'and,' 'or,' 'and/or' is used,
shall be insured separately from any individually-owned deposit account
2. If the account is held by two or more natural persons or two or more juridical
persons
General rule: The maximum insured deposit shall be divided into as many equal
shares as there are individuals juridical persons
Exception: Unless a different sharing is stipulated in the document of deposit
3. If the account is held by a juridical person or entity jointly with one or more natural
persons
The maximum insured deposits shall be presumed to belong entirely to such juridical
person or entity
NOTE: The aggregate of the interest of each co-owner over several joint accounts,
whether owned by the same or different combinations of individuals, juridical
persons or entities, shall likewise be subject to the maximum insured deposit of
P500,000.00
Who are NOT required to file claims?

Depositors with valid deposit accounts with balances of Php100,000 and
below are not required to file claims provided they have no obligations with the
closed bank and have complete and updated addresses in the bank records or
have updated these through the Mailing Address Update Form (MAUF) issued
by the PDIC
Who are required to file claims?

1. Depositors with valid deposit accounts with balances of more than
Php100,000.
2. Depositors who have outstanding obligations with the closed bank
regardless of amount of deposits.
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3. Depositors with account balances of less than Php100,000 who have no
updated addresses in the bank records or who have not updated their
addresses through the Mailing Address Update Form (MAUF) issued by
the PDIC.
4. Depositors who maintain their accounts under the name of business
entities, regardless of type of account and account balance.
5. Depositors with accounts not eligible for early payment, regardless of type
of account and account balance per advice of PDIC
II. Secrecy of Bank Deposits

PROHIBITED ACTS
(1) No person, government official, bureau or office may examine, inquire into or
look into such deposits;
(2) No official or employee of any banking institution may disclose to any
unauthorized person any information concerning said deposits.
PENALTY: imprisonment of up to five (5) years and/or fine of twenty thousand

pesos (Php20,000)
DEPOSITS COVERED - All peso-denominated deposits of whatever nature with

banks or banking institutions in the Philippines are hereby considered as of an
absolutely confidential nature and may not be examined.
Includes investments in bonds issued by the Philippine Government, its
political subdivisions and its instrumentalities, regardless of the currency of
denomination.
EXCEPTIONS
1. Upon written permission of the depositor;
2. In cases of impeachment;
3. Upon order of a competent court in cases of:
(a) Bribery;
(b) Dereliction of duty of public officials; or
4. Where the money deposited or invested is the subject matter of the
litigation.
5. Upon order of a competent court in cases of unexplained wealth under
the Anti Graft and Corrupt Practices Act
6. When inquiry is conducted under the authority of the Commissioner of
Internal Revenue into the bank accounts of the following:
(a) A decedent in order to determine his gross estate
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(b) Any taxpayer who has filed an application for compromise of his tax
liability, which application shall include a written waiver of his privilege
7. Upon order of a competent court in cases under the Anti-Money Laundering

Act, when there is probable cause that the deposits or investments involved
are in any way related to an unlawful activity or a money laundering offense,
except that no court order required if:

(a) Funds or property involved consists of investments; or
(b) Said investments are related to:
(i) Kidnapping for ransom
(ii) Unlawful activities under Comprehensive Drugs Act of 2002
(iii) Hijacking
(iv) Destructive arson and murder, including those perpetrated by
terrorists against non-combatants and similar targets.
8. BSP inquiry or examination in the course of its periodic or special
examination of the bank
9. Disclosure of certain information about bank deposits which have been
dormant for at least 10 years, to the Treasurer of the Philippine in a sworn
statement, a copy of which is posted in the bank premises.
10. The PDIC and/or the BSP can inquire into or examine deposit accounts and
all information related thereto in case there is a finding of unsafe and
unsound banking practice
III. ANTI MONEY LAUNDERING ACT

Money laundering - is a crime whereby the proceeds of an unlawful activity are
transacted, thereby making them appear to have originated from legitimate sources.
WHEN IS MONEY LAUNDERING COMMITTED

(1) Any person knowing that any monetary instrument or property represents,
involves, or relates to the proceeds of any unlawful activity, transacts or
attempts to transact said monetary instrument or property.
(2) Any person knowing that any monetary instrument or property involves the
proceeds of any unlawful activity, performs or fails to perform any act as a
result of which he facilitates the offense of money laundering
(3) Any person knowing that any monetary instrument or property is required
under this Act to be disclosed and filed with the Anti-Money Laundering
Council fails to do so.
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NOTE:
The AMLC is composed of:
1. Governor of the Bangko Sentral ng Pilipinas (BSP) as Chairman,
2. Commissioner of the Insurance Commission (IC) and the Chairperson of
the Securities and Exchange Commission (SEC) as members.
SECRETARIAT: AMLC is assisted by a Secretariat headed by an executive director

to be appointed for a term of 5 years. The executive director must be a lawyer and at
least 35 years old.
*COVERED TRANSACTION - transaction in cash or other equivalent monetary

instrument involving a total amount in excess of Five hundred thousand pesos
(P500,000.00) within one (1) banking day.
*SUSPICIOUS TRANSACTION - transactions with covered institutions, regardless

of the amounts involved, where any of the following circumstances exist:
(1) there is no underlying legal or trade obligation, purpose or economic
justification;
(2) the client is not properly identified;
(3) the amount involved is not commensurate with the business or financial
capacity of the client;
(4) taking into account all known circumstances, it may be perceived that the
client’s transaction is structured in order to avoid being the subject of
reporting requirements under the Act;
(5) any circumstance relating to the transaction which is observed to deviate
from the profile of the client and/or the client’s past transactions with the
covered institution;
(6) the transaction is in any way related to an unlawful activity or offense under
this Act that is about to be, is being or has been committed.
*COVERED PERSONS, NATURAL OR JURIDICAL, REQUIRED TO REPORT TO

AMLC
1) Under Bangko Sentral ng Pilipinas

a. Banks
b. Non-banks
c. Quasi-banks
d. Trust entities
e. Nonstock savings and loan associations
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f. Foreign exchange dealers
g. Electronic money issuers
h. Pawnshops
i. Money changers
j. Remittance and transfer companies
k. All other persons and their subsidiaries and affiliated supervised or
regulated by the BSP.
2) Under Insurance Commission

a. Insurance companies
b. Pre-need companies
c. Insurance agents
d. Insurance brokers
e. Professional reinsurers
f. Holding companies
g. Holding company system
h. Mutual benefit associations
i. All other persons and their subsidiaries and affiliated supervised or
regulated by the Insurance Commission
3) Under Securities and Exchange Commission

a. Securities dealers, brokers, salesmen, investment houses, and other
similar persons managing securities or rendering services such as
investment agents.
b. Mutual funds or open-end companies, close-end investment, investment
companies or issuers and other similar
c. Other entities administering or otherwise dealing in commodities, or
financial derivatives based thereon, valuable objects, cash substitutes
and other similar instruments or properties supervised and regulated by
the SEC.
4) Other Designated Non-Financial Business and Professionals

1. Jewelry dealers, dealers in precious metals, and dealers in precious
stones for transactions in excess of P1M.
2. Land Registration Authority and all of its Register of Deeds on all real
estate transaction with price exceeding P 500,000.
3. Company service providers to 3rd parties
a) Acting as a formation agent of juridical persons
b) Acting as (or arranging for another person to act as) a director
or corporate secretary of a company, a partner of a partnership,
or similar position in relation to other juridical persons
35
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c) Providing a registered office; business address or
accommodation, correspondence or administrative address for
a company, a partnership or any other legal person or
arrangement; and
d) Acting as (or arranging for another person to act as) a nominee
shareholder for another person.
5). Casinos, including internet-based casinos and ship-based casinos

A single casino cash transaction involving an amount in excess of Five Million
Pesos (P5,000,000.00) or its equivalent in any other currency.
*Persons excluded to report covered transactions or suspicious transactions

to AMLC
a) Lawyers if acting as independent legal professionals in relation to
information concerning their clients or where disclosure of information
would compromise client confidences or the attorney-client relationship.
b) Certified public accountants if acting as independent legal professionals
in relation to information concerning their clients or where disclosure of
information would compromise client confidences or the CPA-client
relationship.
*Preventive Measures
a. Customer Due Diligence - Covered persons shall establish and record
the true identity of their clients based on official documents, as defined
under Rule 3 of RIRR of AMLA.
b. Customer Identification
Face-to-Face Contact – Covered persons shall conduct face-to-face
contact at the commencement of the relationship, or as reasonably
practicable so as not to interrupt the normal conduct of business.
Minimum Customer Information and Identification Documents
1) Name of customer
2) Date and place of birth
3) Name of beneficial owner, if applicable
4) Name of beneficiary (in case of insurance contracts or
remittance transactions
5) Present address
6) Permanent addresses
7) Contact number or information
8) Nationality
9) Specimen signatures or biometrics of the customer
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10) Nature of work and name of employer or nature of self-
employment business, if applicable
11) Source of funds or property, and
12) Tax Identification Number (TIN), Social Security System, (SSS)
number of Government Service Insurance System (GSIS)
number, of applicable.
*Prohibited Accounts
a) Anonymous Accounts and Accounts under Fictitious Names -
Covered persons shall maintain customers’ account only the true and full
name of the account owner or holder. Anonymous accounts, accounts
under fictitious names, and all other accounts shall be absolutely
prohibited.
b) Numbered Accounts - Number accounts, except non-checking

numbered accounts, shall not be allowed. Covered and Suspicious
transactions reports involving non-checking number accounts shall
contain the true name of the account.
*Record Keeping - Covered persons shall maintain and safely store for five (5)
years from the dates of transactions all records of customer identification and
transaction documents of their customers or five (5) years from the date the account
is closed.
*Transaction Reporting - Covered persons shall report to the AMLC all covered
transactions and suspicious transactions within five (5) working days, unless the
AMLC prescribes a different period not exceeding fifteen (15) working days, from the
occurrence thereof.
*Freeze Order - Upon verified ex parte petition by the AMLC and after
determination that probable cause exists that any monetary instrument or property is
in any way related to an unlawful activity, the Court of Appeals may issue a freeze
order, which shall be effective immediately, directing the concerned covered persons
and government agency to desist from allowing any transaction, withdrawal,
transfer, removal, conversion, concealment, or other disposition of the subject
monetary instrument or property.
a. Freezing of Related Accounts and Materiality-Linked Accounts –

Considering the intricate and diverse web of interlocking accounts that
a person may create in different covered persons, and the high
probability that these accounts are utilized to divert, move, conceal,
and disguise the monetary instrument or property subject of the freeze
37
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order, the AMLC may include in its petition the freezing of related and
materially-linked accounts.
b. Period to Resolve Petition – The Court of Appeals shall resolve the

petition to freeze within twenty-four (24) hours from filing thereof.
c. Effectivity of Freeze Order - The freeze order shall be effective

immediately and shall not exceed six (6) months depending upon the
circumstances of the case. On motion of the AMLC filed before the
expiration of the original period of the freeze order, the court may, for
good cause shown, extend its effectivity. Upon the timely filing of such
motion and pending resolution by the Court of Appeals, the freeze
order shall remain effective.
*Bank Inquiry with Court Order - Notwithstanding the provisions of Republic Act
140S, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791,
and other laws, the AMLC may inquire into or examine any particular deposit or
investment account, including related accounts, with any banking institution or non-
bank financial institution, upon order by the Court of Appeals based on an ex parte
application in cases of violation of the AM LA when it has been established that
probable cause exists that the deposits or investments involved, including related
accounts, are in any way related to an unlawful activity or a money laundering
offense.
a) Period to Resolve Application - The Court of Appeals shall resolve
the application within twenty-four (24) hours from filing thereof.
b) Inquiry Into or Examination of Related Accounts - A court order ex
parte must be obtained before the AMLC can inquire into the related
accounts. The procedure for the ex parte application for an order of
inquiry into the principal account shall be the same for that of the related
accounts.
c) Compliance with Article III, Sections 2 and 3 of the Constitution -
The authority to inquire into or examine the main account and the related
accounts shall comply with the requirements of Article III, Sections 2 and
3 of the 1987 Constitution.
*Bank Inquiry without Court Order – The AMLC shall issue a resolution
authorizing the AMLC Secretariat to inquire into or examine any particular deposit or
investment account, including related accounts, with any banking institution or non-
bank financial institution and their subsidiaries and affiliates when it has been
established that probable cause exists that the deposits or investments, involved,
including related accounts, are in any way related to any of the following unlawful
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activities. (Predicate crimes that may authorized AMLC to inquire bank
accounts even without Court Order from Court of Appeals).
*Asset Forfeiture
a. Civil forfeiture – Upon determination that probable cause exists that any
monetary instrument or property is in any way related to an unlawful
activity or a money laundering offense, the AMLC shall file with the
regional trial court, through the Office of the Solicitor General, a verified
petition for civil forfeiture.
b. No Prior Criminal Charge, Pendency of or Conviction Necessary - No
prior criminal charge, pendency of or conviction for an unlawful activity or
money laundering offense is necessary for the commencement or the
resolution of petition for civil forfeiture.
c. Asset Forfeiture in Money Laundering Cases – Where there is
conviction for money laundering, the court shall issue a judgment of
forfeiture in favor of the Government of the Philippines with respect to the
monetary instrument or property found to be proceeds of an unlawful
activity.
*Powers of AMLC
(1) to require and receive covered or suspicious transaction reports from covered
institutions;
(2) to issue orders addressed to the appropriate Supervising Authority or the
covered institution to determine the true identity of the owner of any monetary
instrument or property subject of a covered transaction or suspicious transaction
report or request for assistance from a foreign State, or believed by the Council, on
the basis of substantial evidence, to be, in whole or in part, wherever located,
representing, involving, or related to, directly or indirectly, in any manner or by any
means, the proceeds of an unlawful activity.
(3) to institute civil forfeiture proceedings and all other remedial proceedings through
the Office of the Solicitor General;
(4) to cause the filing of complaints with the Department of Justice or the
Ombudsman for the prosecution of money laundering offenses;
(5) to investigate suspicious transactions and covered transactions deemed
suspicious after an investigation by AMLC, money laundering activities, and other
violations of the Act;
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(6) to apply before the Court of Appeals, ex parte, for the freezing of any monetary
instrument or property alleged to be laundered, proceeds from, or instrumentalities
used in or intended for use in any unlawful activity as defined in Section 3(i) hereof;
(7) to implement such measures as may be necessary and justified under the Act to
counteract money laundering;
(8) to receive and take action in respect of, any request from foreign states for
assistance in their own anti-money laundering operations provided in the Act;
(9) to develop educational programs on the pernicious effects of money laundering,
the methods and techniques used in money laundering, the viable means of
preventing money laundering and the effective ways of prosecuting and punishing
offenders;
(10) to enlist the assistance of any branch, department, bureau, office, agency or
instrumentality of the government, including government-owned and -controlled
corporations, in undertaking any and all anti-money laundering operations, which
may include the use of its personnel, facilities and resources for the more resolute
prevention, detection and investigation of money laundering offenses and
prosecution of offenders;
(11) to impose administrative sanctions for the violation of laws, rules, regulations
and orders and resolutions issued pursuant thereto; and
(12) to require the Land Registration Authority and all its Registry of Deeds to submit
to the AMLC, reports on all real estate transactions involving an amount in excess of
Five hundred thousand pesos (P500,000.00) within fifteen (15) days from the date of
registration of the transaction, in a form to be prescribed by the AMLC. The AMLC
may also require the Land Registration Authority and all its Registry of Deeds to
submit copies of relevant documents of all real estate transactions.
IV. DATA PRIVACY ACT
*Terminologies:
a. DATA SUBJECT - An individual whose peronal information is processed
b. PERSONAL INFORMATION PROCESSOR - One who process data for a
Personal Information Controller
c. PERSONAL DATA CONTROLLER - The individual, corporation, or body who
decides what to do with data
d. PROCESSING - Any operation or any setoff operations performed upon
personal data
e. PERSONAL INFORMATION - Any information whether recorded in a material
form or not, from which, the identify of an individual is
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apparent or can be reasonably and directly ascertained
by the entity holding the information, or when put together
with other information would directly and certainly
identify an individual.
f. SENSITVE PERSONAL INFORMATION -
i. Information about an individual’s race, ethnic origin, marital status.
Age color, and religious, philosophical or political affiliation
ii. Information about an individual’s health, education, generic or sexual
life of a person, or any proceeding for any offense, the disposal of
such proceedings, or the sentence of any court in such proceedings
iii. Issued by government agencies peculiar to an individual which
includes, but not limited to, social security members, previous or
current health records, licenses or its denials, suspension or
revocation, and tax returns
iv. Specifically established by an executive order or an act of Congress
to be kept classified
Personal information Sensitive information

The processing of personal information is The processing of sensitive personal
allowed unless explicitly prohibited by information is prohibited unless certain
law, where one of several conditions are criteria are met.
met.
*THE EIGHT (8) RIGHTS OF DATA SUBJECT

1. Right to be informed
2. Right to object
3. Right to correction or rectification
4. Right to block or remove
5. Right to data portability
6. Right to indemnification
7. Right to file a complaint
8. Right to access
Data retention
Personal information must be retained only for as long as necessary for the
fulfillment of the purposes for which the data was obtained or for the business
purposes, or as provided by law.
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Data retention and reuse
Personal information must be kept in a Personal information collected for other
form which permits identification of data purposes may be processed for
subjects for no longer than is necessary historical, statistical or scientific
for the purposes for which the data were purposes, and in case laid down in law
collected and processed. may be stored for longer periods.
* Criminal offenses
Unauthorized Processing of Unauthorized Processing of
personal Information Sensitive Personal Information
• Imprisonment from 1 to 3 years • Imprisonment from 3 to 6 years
• Fine from ₱500,000.00 to • Fine from ₱5,000,000.00 to
₱2,000,000.00 ₱4,000,000.00
Improper Disposal of Improper Disposal of

Personal Information Sensitive Personal Information
• Imprisonment from 6 months to • Imprisonment from 1 to 3 years
2 years • Fine from ₱100,000.00 to
• Fine from ₱100,000.00 to ₱1,000,000.00
₱500,000.00
Extent of Liability
• Restitution will be according to the Civil Code
• Penalty imposed upon responsible officers who participated in, or who by
their gross negligence, allowed the commission of the crime.
• Aliens may be deported
• Juridical persons may have licenses revoked
• Public officers shall have perpetual or temporary absolute disqualification
from office.
*Freedom of Information Act

1. Information about An officer or employee of a government institution that relates
to the position or function of the individual who is or was performing service
under contract for a government institution that relates to the services
performed.
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2. Personal information processed for journalistic, artistic, literally or research
purpose
3. Information necessary in order to carry out of functions of public authority, law

enforcement and regulatory agencies of their constitutionally and statutorily
mandated functions.
4. Information necessary for banks and other financial institutions under the
jurisdiction of the independent, central monetary authority to comply with the Anti
– Money Laundering Act.
V. ELECTRONIC COMMERCE ACT

Republic Act No. 8792
* Definition of Terms.
a. "Addressee" refers to a person who is intended by the originator to receive the

electronic data message or electronic document, but does not include a person
acting as an intermediary with respect to that electronic data message or electronic
document.
b. "Commercial Activities" shall be given a wide interpretation so as to cover

matters arising from all relationships of a commercial nature, whether contractual or
not. The term shall likewise refer to acts, events, transactions, or dealings occurring
between or among parties including, but not limited to, factoring, investments,
leasing, consulting, insurance, and all other services, as well as the manufacture,
processing, purchase, sale, supply, distribution or transacting in any manner, of
tangible and intangible property of all kinds such as commodities, goods,
merchandise, financial and banking products, patents, participations, shares of
stock, software, books, works of art and other intellectual property.
c. "Electronic data message" refers to information generated, sent, received or

stored by electronic, optical or similar means, but not limited to, electronic data
interchange (EDI), electronic mail, telegram, telex or telecopy. Throughout these
Rules, the term "electronic data message" shall be equivalent to and be used
interchangeably with "electronic document."
d. "Electronic signature" refers to any distinctive mark, characteristic and/or sound

in electronic form, representing the identity of a person and attached to or logically
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associated with the electronic data message or electronic document or any
methodology or procedures employed or adopted by a person and executed or
adopted by such person with the intention of authenticating or approving an
electronic data message or electronic document.
e. "Electronic document" refers to information or the representation of information,

data, figures, symbols or other modes of written expression, described or however
represented, by which a right is established or an obligation extinguished, or by
which a fact may be proved and affirmed, which is received, recorded, transmitted,
stored, processed, retrieved or produced electronically. Throughout these Rules, the
term "electronic document" shall be equivalent to and be used interchangeably with
"electronic data message."
f. "Electronic key" refers to a secret code, which secures and defends sensitive
information that crosses over public channels into a form decipherable only by itself
or with a matching electronic key. This term shall include, but not be limited to, keys
produced by single key cryptosystems, public key cryptosystems or any other similar
method or process, which may hereafter, be developed.
g. "Intermediary" refers to a person who in behalf of another person and with

respect to a particular electronic data message or electronic document sends,
receives and/or stores or provides other services in respect of that electronic data
message or electronic document.
h. "Originator" refers to a person by whom, or on whose behalf, the electronic data

message or electronic document purports to have been created, generated and/or
sent. The term does not include a person acting as an intermediary with respect to
that electronic data message or
i. "Service provider" refers to a provider of -
1. On-line services or network access, or the operator of facilities therefore,

including entities offering the transmission, routing, or providing of
connections for on-line communications, digital or otherwise, between or
among points specified by a user, of electronic data message or
electronic documents of the user's choosing; or
2. The necessary technical means by which electronic data message or

electronic documents of an originator may be stored and made
accessible to a designated or undesignated third party.
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* Legal Recognition of Electronic Data Messages and Electronic Documents
An information shall not be denied validity or enforceability solely on the ground that
it is in the form of an electronic data message or electronic document, purporting to
give rise to such legal effect. Electronic data messages or electronic documents
shall have the legal effect, validity or enforceability as any other document or legal
writing.
a. A requirement under law that information is in writing is satisfied if the

information is in the form of an electronic data message or electronic
document.
b. A requirement under law for a person to provide information in writing to

another person is satisfied by the provision of the information in an
electronic data message or electronic document.
c. A requirement under law for a person to provide information to another

person in a specified non-electronic form is satisfied by the provision of
the information in an electronic data message or electronic document if
the information is provided in the same or substantially the same form.
*Communication of Electronic Data Messages and Electronic Documents
Formation and Validity of Electronic Contracts. - Except as otherwise agreed by the

parties, an offer, the acceptance of an offer and such other elements required under
existing laws for the formation and perfection of contracts may be expressed in,
demonstrated and proved by means of electronic data message or electronic
documents and no contract shall be denied validity or enforceability on the sole
ground that it is in the form of an electronic data message or electronic document, or
that any or all of the elements required under existing laws for the formation of the
contracts is expressed, demonstrated and proved by means of electronic
documents.
Recognition by Parties of Electronic Data Message. - As between the originator and

the addressee of an electronic data message or electronic document, a declaration
of will or other statement shall not be denied legal effect, validity or enforceability
solely on the ground that it is in the form of an electronic data message or electronic
document.
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*Electronic Commerce law is applicable to the Transport Documents In Carriage of
Goods:
1. furnishing the marks, number, quantity or weight of goods;
a. stating or declaring the nature or value of goods;
b. issuing a receipt for goods;
c. confirming that goods have been loaded;
2. notifying a person of terms and conditions of the contract;

a. giving instructions to a carrier;
3. claiming delivery of goods;
a. authorizing release of goods;
b. giving notices of loss of, or damage to goods;
4. giving any other notice or statement in connection with the performance of the
contract;
5. undertaking to deliver goods to a named person or a person authorized to claim
delivery;
6. granting, acquiring, renouncing, surrendering, transferring or negotiating rights in
goods;
7. acquiring or transferring rights and obligations under the contract.
*Government Use of Data Messages, Electronic Documents and Electronic

Signatures
The government, shall:
a) accept the creation, filing or retention of such documents in the form of electronic
data messages or electronic documents;
b) issue permits, licenses, or approval in the form of electronic data messages or

electronic documents;
c) require and/or accept payments, and issue receipts acknowledging such

payments, through systems using electronic data messages or electronic
documents; or
d) transact the government business and/or perform governmental functions using

electronic data messages or electronic documents, and for the purpose, are
authorized to adopt and promulgate, after appropriate public hearing and with due
publication in newspapers of general circulation, the appropriate rules, regulations,
or guidelines, to, among others, specify -
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(1) the manner and format in which such electronic data messages or
electronic documents shall be filed, created, retained or issued;
(2) where and when such electronic data messages or electronic documents
have to be signed, the use of a electronic signature, the type of electronic
signature required;
(3) the format of an electronic data message or electronic document and the
manner the electronic signature shall be affixed to the electronic data
message or electronic document;
(4) the control processes and procedures as appropriate to ensure adequate

integrity, security and confidentiality of electronic data messages or
electronic documents or records or payments;
(5) other attributes required of electronic data messages or electronic

documents or payments; and
(6) the full or limited use of the documents and papers for compliance with
the government
*Penal Provisions
Hacking. - Hacking or cracking which refers to unauthorized access into or

interference in a computer system/server or information and communication system;
or any access in order to corrupt, alter, steal, or destroy using a computer or other
similar information and communication devices, without the knowledge and consent
of the owner of the computer or information and communications system, including
the introduction of computer viruses and the like, resulting in the corruption,
destruction, alteration, theft or loss of electronic data messages or electronic
document shall be punished by a minimum fine of one hundred thousand pesos
(P100,000.00) and a maximum commensurate to the damage incurred and a
mandatory imprisonment of six (6) months to three (3) years.
Piracy. - Piracy or the unauthorized copying, reproduction, dissemination,

distribution, importation, use, removal, alteration, substitution, modification, storage,
uploading, downloading, communication, making available to the public, or
broadcasting of protected material, electronic signature or copyrighted works
including legally protected sound recordings or phonograms or information material
on protected works, through the use of telecommunication networks, such as, but
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not limited to, the internet, in a manner that infringes intellectual property rights shall
be punished by a minimum fine of one hundred thousand pesos (P100,000.00) and
a maximum commensurate to the damage incurred and a mandatory imprisonment
of six (6) month to three (3) years.
VI. EASE OF DOING BUSINESS AND EFFICIENT DELIVERY OF

GOVERNMENT SERVICES
REPUBLIC ACT NO. 11032, May 28, 2018
Be it enacted by the Senate and House of Representatives of the

Philippines in Congress assembled;
COVERAGE: All government offices and agencies including local

government units (LGUs), government-owned or controlled
corporations and other government instrumentalities,
whether located in the Philippines or abroad, that provide
services covering business and non-business related
transactions.
DEFINITION OF TERMS:
1. Business One Stop Shop (BOSS) - a single common site or location,
or a single online website or portal designated for the Business Permit
and Licensing System (BPLS) of an LGU to receive and process
applications, receive payments, and issue approved licenses,
clearances, permits, or authorizations
2. Business-related transactions - a set of regulatory requirements that

a business entity must comply with to engage, operate or continue to
operate a business, such as, but not limited to, collection or
preparation of a number of documents, submission to national and
local government authorities, approval of application submitted., and
receipt of a formal certificate or certificates, permits, licenses which
include primary and secondary, clearances and such similar
authorization or documents which confer eligibility to operate or
continue to operate as a legitimate business
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3. Complex transactions - applications or requests submitted by
applicants or requesting parties of a government office which
necessitate evaluation in the resolution of complicated issues by an
officer or employee of said government office, such transactions to be
determined by the office concerned
4. FIXER - any individual whether or not officially involved in the

operation of a government office or agency who has access to people
working therein, and whether or not in collusion with them, facilitates
speedy completion of transactions for pecuniary gain or any other
advantage or consideration
5. Highly technical application - an application which requires the use

of technical knowledge, specialized skills and/or training in the
processing and/or evaluation thereof
6. RED TAPE - any regulation, rule, or administrative procedure or

system that is ineffective or detrimental in achieving its intended
objectives and, as a result, produces slow, suboptimal. and
undesirable social outcomes
7. Simple transactions - applications or requests submitted by

applicants or requesting parties of a government office or agency
which only require ministerial actions on the part of the public officer or
employee, or that which present only inconsequential issues for the
resolution by an officer or employee of said government office
CITIZEN'S CHARTER - All government agencies shall set up their

respective most current, and updated service standards to be known as the
Citizen's Charter in the form of information billboards, that detail;
1. A comprehensive and uniform checklist of requirements for each type
of application or request;
2. The procedure to obtain a particular service;
3. The person/s responsible for each step:
4. The maximum time to conclude the process;
5. The document/s to be presented by the applicant or requesting party,
if necessary;
6. The amount of fees, if necessary; and
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7. The procedure for filing complaints.
ZERO-CONTRACT POLICY.- Except during the preliminary assessment of

the request and evaluation of sufficiency of submitted
requirements, no government officer or employee shall
have any contact, in any manner, unless strictly
necessary with any applicant or requesting party
concerning an application or request.
Automatic Approval or Automatic Extension of License, Clearance,

Permit, Certification or Authorization:
If a government, office or agency fails to approve or disapprove an
original application or request for issuance of license, clearance,
permit, certification or authorization within the prescribed processing
time, said application or request shall be deemed approved.
VII. INTELLECTUAL PROPERTY LAW
i.
PATENTABLE INVENTIONS. ‑ Any technical solution of a problem in any field of
human activity which is NEW, INVOLVES AN INVENTIVE STEP and
is INDUSTRIALLY APPLICABLE. It may be, or may relate to, a
product, or process, or an improvement of an existing product or
process.
TERM OF PATENT. ‑ Twenty (20) years from the filing date of the application.
ANNUAL FEES. ‑ To maintain the patent application or patent, an annual fee shall
be paid upon the expiration of four (4) years from the date the
application was published, and on each subsequent anniversary
of such date. Payment may be made within three (3) months
before the due date. The obligation to pay the annual fees shall
terminate should the application be withdrawn, refused, or
cancelled.
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RIGHT TO A PATENT
General Rule: The right to patent belongs to the inventor, his heirs, or
assigns. When two (2) or more persons have jointly made an invention, the
right to a patent shall belong to them jointly.
Exception: Inventions created pursuant to a commission

(1) The employer has the right to the patent if the invention is the result of
the performance of the employee’s regularly assigned duties
(2) In case of inventions created pursuant to a commission, the person
who commissions the work shall own the patent
GROUNDS FOR CANCELLATION OF A PATENT

(a) the invention is not new or patentable;
(b) the patent does not disclose the invention in a manner sufficiently clear
and complete for it to be carried out by any person skilled in the art; or
(c) That the patent is contrary to public order or morality.
NON-PATENTABLE INVENTIONS
(1) Discoveries, scientific theories and mathematical methods, and in the
case of drugs and medicines, the mere discovery of a new form or new
property of a known substance which does not result in the enhancement of
the known efficacy of that substance, or the mere discovery of any new
property or new use for a known substance, or the mere use of a known
process unless such known process results in a new product that employs at
least one new reactant.
Salts, esters, ethers, polymorphs, metabolites, pure form, particle size,

isomers, mixtures of isomers, complexes, combinations, and other
derivatives of a known substance shall be considered to be the same
substance, unless they differ significantly in properties with regard to
efficacy;
(2) Schemes, rules and methods of performing mental acts, playing games
or doing business, and programs for computers;
(3) Methods for treatment of the human or animal body by surgery or therapy
and diagnostic methods practiced on the human or animal body. This
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provision shall not apply to products and composition for use in any of these
methods;
(4) Plant varieties or animal breeds or essentially biological process for the
production of plants or animals. This provision shall not apply to
microorganisms and non-biological and microbiological processes;
(5) Aesthetic creations;
(6) Anything which is contrary to public order or morality.
ii. MARK - any visible sign capable of distinguishing the goods

(TRADEMARK) or services (SERVICE MARK) of an enterprise and shall
include a stamped or marked container of goods
DURATION. ‑ A certificate of registration shall remain in force for ten (10)

years: Provided, That the registrant shall file a declaration of actual
use and evidence to that effect, or shall show valid reasons based on
the existence of obstacles to such use within one (1) year from the
fifth anniversary of the date of the registration of the mark. Otherwise,
the mark shall be removed from the Register by the Office.
RENEWAL. ‑ A certificate of registration may be renewed for periods of ten

(10) years at its expiration upon payment of the prescribed fee and
upon filing of a request.
FUNCTIONS OF A TRADEMARK
(1) To point out distinctly the origin or ownership of the goods and to which it
is affixed;
(2) To secure him, who has been instrumental in bringing into the market a
superior article of merchandise, the fruit of his industry and skill;
(3) To assure the public that they are producing the genuine article;
(4) To prevent fraud and imposition; and
(5) To protect the manufacturer against substitution and sale of an inferior
and different article as its product
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NON-REGISTRABLE MARKS
(1) Consists of immoral, deceptive or scandalous matter, or matter which
may disparage or falsely suggest a connection with persons, living or
dead, institutions, beliefs, or national symbols, or bring them into
contempt or disrepute;
(2) Consists of flags, coat of arms or other insignia of the Philippines or any
foreign country;
(3) Consists of a name, portrait or signature identifying a particular living

individual except by his written consent, or of a deceased President of
the Philippines, during the life of his widow, except by written consent of
the widow;
(4) Is identical with a registered mark of another or a mark with an earlier

filing or priority date, in respect of:
(a) The same goods or services, or
(b) Closely related goods or services, or
(c) If it nearly resembles such a mark as to be likely to deceive or
cause confusion;
5) Is identical with, or confusingly similar to, or constitutes a translation of

a well-known mark, whether or not registered in the Philippines, and
used for identical or similar goods or services;
(6) Is identical with, or confusingly similar to, or constitutes a translation of a

well-known mark which is registered in the Philippines, and used for
goods or services which are not similar;
(7) Likely to mislead the public, particularly as to the nature, quality,

characteristics or geographical origin of the goods or services;
(8) Consists exclusively of signs that are generic for the goods or services
that they seek to identify;
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(9) Consists exclusively of signs or of indications that have become
customary or usual to designate the goods or services in everyday
language or in a bona fide and established trade practice;
(10) Consists exclusively of signs or of indications that may serve in trade to

designate the kind, quality, quantity, intended purpose, value,
geographical origin, time or production of the goods or rendering of the
services, or other characteristics of the goods or services;
(11) Consists of shapes that may be necessitated by technical factors or by

the nature of the goods themselves or factors that affect their intrinsic
value;
(12) Consists of color alone, unless defined by a given form;

UNFAIR COMPETITION
A person who has identified in the mind of the public the goods he
manufactures or deals in, his business or services from those of others,
whether or not a registered mark is employed, has a property right in the
goodwill of the said goods, business or services so identified, which will be
protected in the same manner as other property rights.
iii. COPYRIGHT - an incorporeal right granted by statute to the author or

creator of original literary and artistic works whereby he is
invested for a limited period of time with the right carry out,
authorize and prevent the reproduction, distribution,
transformation, rental, public performance and other forms of
communication of his work to the public
COPYRIGHTABLE WORKS
Literary and artistic works, hereinafter referred to as "works", are original
intellectual creations in
the literary and artistic domain protected from the moment of their creation
and shall include in particular:
(a) Books, pamphlets, articles and other writings;
(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations prepared for oral
delivery, whether or not reduced in writing or other material form;
(d) Letters;
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(e) Dramatic or dramatic-musical compositions; choreographic works or
entertainment in dumb shows;
(f) Musical compositions, with or without words;
(g) Works of drawing, painting, architecture, sculpture, engraving,
lithography or other works of art; models or designs for works of art;
(h) Original ornamental designs or models for articles of manufacture,
whether or not registrable as an industrial design, and other works of
applied art;
(i) Illustrations, maps, plans, sketches, charts and three dimensional
works relative to geography, topography, architecture or science;
(j) Drawings or plastic works of a scientific or technical character;
(k) Photographic works including works produced by a process
analogous to photography; lantern slides;
(l) Audiovisual works and cinematographic works and works produced
by a process analogous to cinematography or any process for
making audio-visual recordings;
(m) Pictorial illustrations and advertisements;
(n) Computer programs; and
(o) Other literary, scholarly, scientific and artistic works
COPYRIGHT OR ECONOMIC RIGHTS - consist of the exclusive right to

carry out, authorize or prevent the following acts:
1. Reproduction of the work or substantial portion of the work;

2. Dramatization, translation, adaptation, abridgment, arrangement or
other transformation of the work;
3. The first public distribution of the original and each copy of the work
by sale or other forms of transfer of ownership;
4. Rental of the original or a copy of an audio-visual or cinematographic
work, a work embodied in a sound recording, a computer program, a
compilation of data and other materials or a musical work in graphic
form, irrespective of the ownership of the original or the copy which is
the subject of the rental;
5. Public display of the original or a copy of the work;
6. Public performance of the work; and
7. Other communication to the public of the work.
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SCOPE OF MORAL RIGHTS DURATION
1. 1. To require that the authorship of During the lifetime of the
the works be attributed to him, in author and in perpetuity after
particular, the right that his name, his death
as far as practicable, be indicated
in a prominent way on the copies,
and in connection with the public
use of his work
2. To make any alterations of his Coterminous with the
work prior to, or to withhold it from economic rights, the moral
publication rights shall not be
assignable or subject to
license
3. To object to any distortion, Coterminous with the
mutilation or other modification of, economic rights, the moral
or other derogatory action in rights shall not be
relation to, his work which would assignable or subject to
be prejudicial to his honor or license
reputation
4. To restrain the use of his name Coterminous with the
with respect to any work not of his economic rights, the moral
own creation or in a distorted rights shall not be
version of his work. assignable or subject to
license
FAIR USE OF A COPYRIGHTED WORK. –the fair use of a copyrighted

work for criticism, comment, news reporting, teaching
including limited number of copies for classroom use,
scholarship, research, and similar purposes is not an
infringement of copyright. Decompilation, which is understood
here to be the reproduction of the code and translation of the
forms of a computer program to achieve the interoperability of
an independently created computer program with other
programs may also constitute fair use under the criteria
established by this section, to the extent that such
decompilation is done for the purpose of obtaining the
information necessary to achieve such interoperability.
56
__________________________________________________________________
FACTORS TO CONSIDER:
a. The purpose and character of the use, including whether such use is
of a commercial nature or is for non-profit educational purposes;
b. he nature of the copyrighted work;
c. The amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
d. The effect of the use upon the potential market for or value of the
copyrighted work.
VIII. BOUNCING CHECKS LAW

(B.P. Blg. 22 April 3, 1979)
The law penalizes two distinct acts: (Checks without sufficient funds)
1. Making or drawing and issuing any check to apply on account or for
value, knowing at the time of issue that the drawer does not have
sufficient funds in or credit with the drawee bank.
2. Having sufficient funds in or credit with the drawee bank shall fail to
keep sufficient funds or to maintain a credit to cover the full amount
of the check if presented within a period of 90 days from the date
appearing thereon, for which reason it is dishonored by the drawee
bank.
CREDIT CONSTRUED – an arrangement or understanding with the bank for

the payment of a check.
Evidence of knowledge of insufficient funds

It’s presumed that the issuer knew that about the insufficiency of
funds if, after 5 days from notice of dishonor, he fails to pay or make
arrangement for the payment of the check.
IMPORTANT: It must be proved that the accused was actually notified that
the check was dishonored, and that he or she failed, within 5 banking days
from receipt of the notice, to pay the holder of the check the amount due
thereon or to make arrangement for its payment.
The elements of the offense are as follows:
1. Drawing and issuance of any check to apply on account or for value;
57
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2. Knowledge by the maker, drawer, or issuer that at the time of issue
he did not have sufficient funds in or credit with the drawee bank for
the payment of such check in full upon presentment; and
3. Said check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit, or would have been dishonored for
the same reason had not the drawer, without any valid reason,
ordered the bank to stop payment.
PENALTY: Imprisonment of thirty (30) days to one (1) year and/or fine of
twice the amount appearing on the check not to exceed two
hundred thousand pesos (Php200,000)
/mrs
58

Booklet 6 Law On Cooperative - Other Business Laws

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CRC-ACE The Professional CPA Review School

RFBT 0514 – PHILIPPINE COOPERATIVE CODE OF 2008

ATTY. MARY ANN R. SAGANA

PHILIPPINE COOPERATIVE CODE OF 2008

COOPERATIVE - is an autonomous and duly registered association of persons with

Federation of Cooperatives -Three or more primary cooperatives doing the same

2. Democratic member control. Cooperatives are democratic organizations that

3. Member economic participation. Members contribute equitably to, and

4. Autonomy and independence. Cooperatives are autonomous, self-help

5. Cooperation among cooperatives. Cooperatives serve their members most

7. Concern for community. Cooperatives work for the sustainable development of

1. Credit Cooperative. Promotes and undertakes savings and lending services

2. Consumers Cooperative. The primary purpose is to procure and distribute

5. Service Cooperative. Engages in medical and dental care, hospitalization,

6. Multipurpose Cooperative. Combines two or more of the business activities

No cooperative shall be registered as a multipurpose cooperative

7. Advocacy Cooperative. A primary cooperative which promotes and

8. Agrarian Reform Cooperative. Organized by marginal farmers majority of

9. Cooperative Bank. Organized for the primary purpose of providing a wide

12. Electric Cooperative. Organized for the primary purposed of undertaking

14. Fishermen Cooperative. Organized by marginalized fishermen in localities

16. Housing Cooperative. Organized to assist or provide access to housing for

20. Workers Cooperative. Organized by workers, including the self-employed,

B. In terms of territory, cooperatives shall be categorized according to areas of

Capital requirement for Cooperatives.

Cooperatives capital sources:

BOOKS required to be kept

1. Regular members. - Entitled to all the rights and privileges of membership,

2. The death or insanity of a member in a primary cooperative, and the

3. Membership in the cooperative may be terminated by a vote of the majority of

GENERAL ASSEMBLY- shall be the highest policy-making body of the cooperative

The audit committee shall be directly accountable and responsible to the

Dealings of Directors, Officers, or Committee Members. – A contract entered

POWERS, RIGHTS and CAPACITIES of Cooperatives

REPORTS REQUIRED FOR COOPERATIVES • Submit annual Cooperative Annual

Tax Treatment of Cooperative. Cooperatives which do not transact any business

b. The social audit shall be conducted by an independent social auditor accredited

Merger and Consolidation of Cooperatives.

b. No merger or consolidation shall be valid unless approved by a three-fourths

Effects of Merger and Consolidation.

Voluntary Dissolution Where no Creditors are affected by a majority vote of the

Voluntary Dissolution Where Creditors Are Affected

Dissolution by Order of the CDA

Liquidation of a Cooperative three (3) years after the time it is dissolved

1. It is a cooperative the primary purpose of which is to procure and distribute

2. The articles of cooperation and by-laws of the cooperative may be amended

3. It is a cooperative the members of which are secondary cooperatives.

4. First statement: Directors of a cooperative cannot attend or vote by proxy at

5. An elected officer of a cooperative may be removed by a vote of all

7. What is the term of the members of the board of directors of a cooperative?

8. It is where the direction and management of the affairs of the cooperative

9. A cooperative organized by minors shall be considered a ___ cooperative.

11. The board of directors of a cooperative is composed of:

17. Upon dissolution of a cooperative, what happens to the capital donated to

19. What is the minimum subscribed capital of a cooperative before it be

20. It is a cooperative the members of which are primary cooperatives.

24. Which of the following is a delegable power of the General Assembly ?

28. What is the required vote for voluntary dissolution of a cooperative?

30. It is the highest policy-making body of the cooperative.

33. A cooperative duly registered shall have:

34. Who elects the members of the board of directors of a cooperative?

35. An act of disloyalty of a director of a cooperative may be ratified by a vote of

44. I. Contracts executed between private persons and cooperatives prior to