REGULATIONS FOR THE APPLICATION OF LAW NO.

127
OF JANUARY 27, 1964

TITLE I
OF COOPERATIVES

CHAPTER I
OF THE GENERAL PROVISIONS

Article 1.- They will be understood as universal bases of cooperativism for the purposes of article
1, letter h, Law No. 127, dated January 27, 1964, the following:

a) Voluntary entry and retirement;

b) Equal rights of partners;

c) Right of each member to vote, elect and be elected through one vote per person;
Federations may establish in their statutes a system by which more than one vote is
granted per cooperative or district based on the number of its active members in each unit
and/or the volume of operations with the parent unit.

d) Limited interest on the capital contributed by each partner, never greater than 5% percent
annually. Cooperatives may pay a higher interest on fixed-term deposits or demand
deposits. Only contribution certificates paid in full will accrue interest, with the exception of
savings and credit cooperatives, which will pay the corresponding interest from the first
day of the month following the month in which money is received from the partners, either
as a deposit or as a capital contribution. Any type of cooperative can decide whether or
not to pay interest on its capital by agreement of an ordinary meeting of members.

e) Refund of net surpluses in proportion to the volume of operations or the work contributed
to the cooperative by each member.

f) Political, religious and racial neutrality. No cooperative may deny an applicant entry due to
his or her political affiliation, religion or color, and this Decree prohibits the use of the
assets and facilities of the cooperatives for political or religious acts of any kind, as well as
the exhibition of posters, portraits, advertisements, emblems and symbols of a political or
religious nature, or that may be humiliating to any racial group.

g) Constant education paid for mainly by the cooperative members themselves, who will be
called upon to guide and conduct it in accordance with their objectives and ideals.

h) Integration between cooperatives. It is the obligation of every cooperative to create the

environment of collaboration necessary for cooperatives to develop uniquely. Competition
is considered contrary to the spirit of the cooperative movement.

Article 2- For the purposes of Article 1, letter “j” of Law No. January 127, 1964, limited liability
will be understood to mean that the members of a cooperative recognized under the
aforementioned law will not be liable for the acts and actions of their Cooperative beyond their
capital contributions; exception made when a member guarantees or values, solely and

Regulations for the Application of Law No. 127 of January 27, 1964 1
 jointly, with his assets the obligations of the cooperative towards third parties, or when the
cooperative grants him credits guaranteed with assets, in which case the liability is extended
to the assets given as guarantee, proceeding then according to common law.

Article 3- When a cooperative wishes to develop activities other than those for which it is
legally authorized, it must:

a) Prepare a technical feasibility study of new activities other than those to prove that these
do not endanger the stability of the cooperative.

b) Send to the Institute of Cooperative Development and Credit (IDECOOP), said study along
with a proposed amendment to the Statute of the Cooperative that would facilitate the new
activities, and a copy of the minutes of the meeting of the Board of Directors where it was
agreed to propose amendments to the Statute .

c) Request authorization from the Cooperative Development and Credit Institute (IDECOOP),
for the proposed amendments and for new activities.

d) Once said Authorization has been received from the Cooperative Development and Credit
Institute (IDECOOP), call an Assembly to amend the Statutes as provided in the Statutes
themselves for those cases.

Article 4.- Cooperatives that wish to enter into new activities in addition to those they carry
out, if they are authorized to do so since their official recognition, may do so, limiting
themselves only to notifying the Cooperative Development and Credit Institute (IDECOOP) in
advance of their plan. of operations and their start date.

Article 5. - Cooperatives must establish and maintain an adequate accounting system by

departments that allows interested parties to evaluate the efficiency of each activity
separately.

CHAPTER II
OF THE CONSTITUTION AND INCORPORATION

Article 6.- To establish a cooperative, proceed as follows:

a) The leaders responsible for promotion and prior education will convene in writing all
interested parties and participants in pre-constituent meetings and assemblies for a
General Assembly.

b) The Assembly will be constituted with a number of attendees of no less than fifteen (15)
members.

c) The Assembly will provisionally appoint a President and a Minutes Secretary.

d) The President will summarize the activities prior to the formation of the cooperative and
explain the process necessary for its official recognition, as well as the fundamental
objectives of the cooperative.

e) If the group has a volunteer advisor or promoter, he or she will provide the pertinent

Regulations for the Application of Law No. 127 of January 27, 1964 2
 technical explanations, but will not assume direction of the Assembly under any
circumstances.

f) The Secretary will read a draft Statute prepared by the cooperative's management group,
which will be discussed and approved by the Assembly.

g) The Assembly will choose the members of the governing bodies as provided in the
approved Statutes.

h) Once the administration and control bodies have been elected, they will meet separately
and select the corresponding positions from among them and will inform the Assembly, still
in office, of the result of the internal election of said bodies.

i) All those present will sign the Constitutive Act of which five (5) copies certified by the
Secretary will be sent to the Executive Branch through the Cooperative Development and
Credit Institute (IDECOOP), along with the following documents:

1) Application for incorporation signed by the Secretary.

2) Payroll of the associates specifying full name, address, marital status, occupation,
nationality, subscribed and paid capital, identity card number and series.

3) Technical study that determines the viability of the cooperative.

4) Four copies of the Statutes approved and signed by no less than fifteen (15) of the
associates, names and addresses of the elected directors, with their corresponding
positions.

5) A certification from the promoter or advisor, that the formed group received both doctrinal
and technical instruction to enable it to fulfill its duties and demand its rights.

6) Certification from the banking entity, evidencing the deposit of the group's funds, or failing
that, a Statement of Situation demonstrating the economic condition of the group.

7) Certification from an official of the Cooperative Development and Credit Institute

(IDECOOP), that the Constitutive Act was duly signed by the members participating in the
Assembly.

Article 7.- The Institute of Cooperative Development and Credit (IDECOOP), within a period
of thirty (30) days from the date of receipt of the documents indicated in the previous article,
will point out the errors and deficiencies, if any, proceeding to return the documents to the
interested parties for pertinent corrections. Otherwise, the Institute for Cooperative
Development and Credit (IDECOOP), within a period of no more than fifteen (15) days, will
send all the documentation to the Executive Branch so that the Decree of incorporation can
be issued, as provided in the article 9 of Law 127 dated January 27, 1964.

Article 8.- For the purposes of article 10 of Law No. 127 dated January 27, 1964, school
cooperatives are considered included in the majority exception stated in said article in section
“A”.

Regulations for the Application of Law No. 127 of January 27, 1964 3
 Article 9.- Legal entity members, who are not cooperative members, will have a single vote in
the assemblies, the same being recorded through a delegate who must present his or her
credentials as such to the Secretary of the Cooperative at the time the Assembly is
constituted. .

Article 10.- The delegate of the legal entity, contemplated in the previous article, may not be
elected member of the governing bodies of the same.

Article 11.- Only primary producers and consumers of goods and services may be
established as cooperatives, including among them cooperatives of cooperatives.

Article 12.- Primary producers will be understood for the purposes of article 12 of Law No.
127 dated January 27, 1964, those natural or legal persons who originally produce a good or
service to be transferred directly and under any title to third parties for their use and
consumption; Primary consumers will be those natural or legal subjects who make official use
of goods and services, who acquire them for their personal and family consumption without
the intention of transferring them to third parties for profit.

Article 13.- Every cooperative will establish in its Statutes the procedure to follow to attend to
the voluntary withdrawal of a member, but the withdrawal request must be approved by the
Board of Directors in the first ordinary meeting held after receiving said request. provided that
the return of the contribution certificates and any other pecuniary rights that the member has
will be made within one year from the date of approval of the withdrawal request. Fixed-term
and demand deposits, investment certificates will be returned upon expiration of the
corresponding contract.

TITLE II
OF OPERATION AND ADMINISTRATION

CAPITULO I
OF THE ADMINISTRATION AND CONTROL BODIES

Article 14.- The General Assembly of each cooperative must be convened in writing, at least
ten (10) days in advance, indicating the agenda, date and place of the meeting.

Article 15.- For the Ordinary Annual General Assembly, the partners will be informed in
writing in advance of the meeting about the economic management, so that they can have an
active participation in the debates thereof.

Article 16.- For the purposes of Article 19 of Law No. 127 dated January 27, 1964, active
members are considered to be those members of the cooperative who are up to date with
their obligations to the cooperative and who have used its services regularly during the year
prior to the General Assembly; in addition to all new members accepted during the year and
who have been using the cooperative's services since joining.

Article 17.- For the purposes of Article 20 of Law No. 127 dated January 27, 1964, second
paragraph, it will be understood that the members present must also be active members as
defined in Article 17 of these regulations.

Article 18.- In cooperatives organized by district or sections, there will only be a Central

Regulations for the Application of Law No. 127 of January 27, 1964 4
 Board of Directors and a Central Supervisory Board, selected by the General Assembly made
up of the delegates of the districts as stipulated in the Statutes of the cooperative. In each
district the local group will choose as many committees as necessary, including an Advisory
committee that will carry out the functions expressly delegated to it by the Central
Administration Council.

Article 19.- For the purposes of applying proxy voting, only cooperatives organized by
cooperatives, federations or confederations of a federative or central nature and district
cooperatives will be considered.

Article 20.- The delegates to the General Assembly of cooperatives by district, federations or
confederations, must present the delegate credential that accredits them as such, for having
been elected in the Assembly of members of their respective organization.

Article 21.- Each delegation will choose from among its members a spokesperson who will be
responsible, among other things, for voting on behalf of his delegation, recording, each time
he votes, the number of votes represented by him.

Article 22.- For each regular delegate, a substitute will be chosen who will automatically
replace the regular in case of absence for any reason, following the system of numerals.

Article 23.- The Secretary of the local Committee, if it is a cooperative by district, or that of
the represented cooperative, if it is a federation or confederation, will certify before the
Secretary of the deliberative body where the delegation will act, the name of the titular
delegates. and their alternates and the name of the group spokesperson, as well as the
number of active members and the volume of business during the last year, if there is any
relationship between the votes by proxy and the last two data indicated.

Article 24.- Every delegate will have the right to speak, even if a spokesperson has been
designated by the group, but in case of discrepancy between the delegates of the same
group, they must request the President to grant them time to reach an agreement among
themselves. privately and then express your opinion or decision through the spokesperson

Article 25.- When the Administration and Surveillance Councils are selected, the term for
which each Councilor is chosen must be clearly indicated in the corresponding Minutes. This
should be done by setting the period according to the number of votes each individual
receives, with the longest periods corresponding to those individuals who received the
greatest number of votes and so on in ascending order.

Article 26.- No official of a Council or Committee will take possession of his or her duties until
the outgoing official has not satisfactorily delivered the accounts and documents up to date,
especially the minute book and the accounting books.

Article 27.- Officials who leave the Councils and committees will continue to be responsible
for the acts carried out by them in the performance of their duties and must attend all
meetings held by their respective governing bodies until the new official takes office. . The
Statutes of the cooperatives will establish deadlines and sanctions for compliance with this
article.

Regulations for the Application of Law No. 127 of January 27, 1964 5
 CAPITULO II
OF THE BOARD OF DIRECTORS

Article 28.- The Board of Directors may appoint from among its members an Executive
Committee composed of at least three officials, among whom the President and the Secretary
of the Board must be included, who will act in such functions in the committee.

Article 29.- The Board of Directors will delegate specific functions to the Executive Committee
and will establish its operating rules, as well as internal regulations for it.

Article 30.- The Executive Committee will report on all its efforts and Executive actions at
each meeting of the Board of Directors, making available to it copies of the minutes of every
meeting it holds.

Article 31.- When a change of officials in the Councils is made. Whether by resignation or by
a new appointment after a general Assembly, the outgoing official will deliver all the official
documentation in his custody, as well as all accounts, statements, balance sheets, bank
reports and a brief information of the pending matters under his control. responsibility to the
incoming official, who will sign for what was received. This delivery or transfer of functions and
obligations must be made at a meeting of the corresponding Council and the details thereof
will be recorded in the minutes of the day.

CAPITULO III
OF THE SURVEILLANCE COUNCIL

Article 32.- When the Board of Directors executes a decision of its own that has been vetoed
by the Supervisory Board, the latter may not intervene nor attempt to hinder by any means the
work of the Board of Directors, limiting itself to reporting at the next General Assembly in the
form objectively and in writing everything concerning his veto. The Assembly will support or
disauthorize what was done by the Board of Directors, annulling the acts that come from that
decision, if necessary and holding the Directors responsible for the prejudices that such acts
may cause to the cooperative.

Article 33.- The Supervisory Board will verify the balance sheets and statements of situation
before presenting them for the consideration of the partners. Likewise, you must approve and
sign said General Balance Sheets and Statements of Situation for them to be valid, providing
that a copy of them be posted in a visible place in the seat of the cooperative.

Article 34.- When a member needs to appeal a decision of the Board of Directors or the
Supervisory Board that has affected him or her, he or she may request advice from the
Cooperative Development and Credit Institute (IDECOOP), who will be obliged to advise the
petitioner and the may also guide the General Assembly if the matter is subsequently brought
before its consideration.

Article 35.- Conflicts that may arise between the Board of Directors and Supervisory Board,
for the purposes of article 32, of Law No. 127 dated January 27, 1964, on Cooperative
Associations, will be arbitrated by the President Administrator of the Institute for Cooperative
Development and Credit (IDECOOP) before they are brought to the consideration of the
General Assembly.
Regulations for the Application of Law No. 127 of January 27, 1964 6
 CAPITULO IV
FROM THE CREDIT COMMITTEE

Article 36.- The Credit Committee may use the services of a Credit Analyst to make the
calculations and operations necessary for a good evaluation of the requested loans when the
volume of operations of the cooperative warrants it.

Article 37.- The Credit Committee will act in harmony and coordination with the Board of
Directors and the General Administrator. Before starting any session to approve credits, it will
receive, through the General Administrator or the treasurer, a report on the State of Finances
and the resources available for immediate disposal by the cooperative and will act in
accordance with the availability of funds, refraining from approving credits when they do not.
There are sufficient resources to make the credits effective immediately.

Article 38.- When the Administrator of a cooperative is at the same time a member of the
cooperative and requests a loan from the same, his request will follow the same procedure
applied to the requests of the directors and members of the Credit Committee, as provided by
the Article 35 of Law No. 127 dated January 27, 1964.

CAPITULO V
OF CAPITAL AND SOCIAL FUNDS

Article 39.- The cooperative may keep an individual notebook where the capital contributions
of each member, their deposits, savings and surpluses, plus interests distributed in another
way that is not effective, will be recorded. This entry in the notebook must be initiated by the
officer who records the transaction. The aforementioned booklet does not exempt the
cooperative from providing a receipt for each income it receives, if necessary.

Article 40.- The Supervisory Board or any auditor authorized to intervene in the books of the
cooperative must require the members to present their notebooks to verify the data recorded
therein with their counterparts in the original books and records of the cooperative.

Article 41.- Any agreement to reduce the capital of a cooperative must be preceded by a
technical study. The Institute of Cooperative Development and Credit (IDECOOP) must
approve said reduction.

Article 42.- The capital of a cooperative may not be reduced without the written consent of its
main creditors, when this reduction represents a greater proportion of third-party debts
compared to the capital of the members.

Article 43.- No cooperative will distribute cash surpluses during its first five years of
operations, all of which will be used to increase the capital of the cooperative.

Article 44.- Credit may not be established by offering the member's capital contributions as
collateral, nor will these be used to guarantee transactions of other members with the
cooperative, with the exception of Savings and Credit transactions.

Article 45.- The cooperative, in the event of withdrawal of a member for any reason, will pay
the entire capital granted by the member, or the proportional part that is necessary, to the
payment of any obligation of the member with the cooperative before making final

Regulations for the Application of Law No. 127 of January 27, 1964 7
 settlement. . Once the liquidation is made and the corresponding document is delivered to the
member, he or she will not have the right to make any claim against the cooperative, thus
ending his or her legal relationship with it. If the cooperative has issued a contribution
certificate, they must be returned for cancellation. The same applies to passbooks that
replace contribution certificates.

Article 46.- In the event of loss of the contribution certificates or the member's passbook, the
member will request in writing the issuance of his or her documents, which will clearly indicate
that they are duplicates and the document that will be replaced.

Article 47.- No creditor may claim against the private assets of any member to respond for
debts of the cooperatives, except when the member has been legally bound by a guarantee of
specific assets to a specific debt of the cooperative.

Article 48.- All the funds of the cooperative will be deposited daily in a banking institution in
the town where its headquarters are located.

Paragraph.- In the event that there is no banking institution that facilitates compliance with
this article, an account will be opened in the name of the cooperative in a bank outside the
town and the Board of Directors will decide the frequency with which the payments should be
made. deposits, which will never be less than once a week.

Article 49.- Every check or payment order against the cooperative's funds must be signed by
at least two people.

Article 50.- Any official or employee who has the responsibility of signing checks and
handling money inside and outside the cooperative establishment must be guaranteed by
fidelity insurance that protects the cooperative from possible fraudulent actions.

Article 51.- The bond or insurance will be of the appropriate type for these purposes and may
be contracted with international insurance companies or cooperatives while a native insurance
cooperative is organized.

Article 52.- When insurance cooperatives operate in the country that offer adequate
insurance and bonds to the cooperatives, they must preferably use the services of national
insurance cooperatives, provided that the cost is the same and the protection is the same.

Article 53.- Every cooperative is obliged to keep the following books clearly and correctly:

a) All accounting books necessary for the proper functioning of the accounting system that is
adopted;

b) A capital registry book that will simultaneously serve as a registry of associates, indicating
at the top of the leafed pages the characteristics of each partner, assigning a number to
each partner in chronological order.

c) An inventory book of the cooperative's real and personal property, including annual
merchandise inventories;

d) Separate Minute Books for each council and committee, as well as one for General

Regulations for the Application of Law No. 127 of January 27, 1964 8
 Assemblies.

e) Any other book necessary for clarity in the interpretation of the operations and decisions of
the cooperative. All these books must be up to date.

Article 54.- The taking of inventories to prepare the balance sheets and financial statements
that are submitted to a General Assembly will be supervised by the Supervisory Board and
the result thereof will be recorded in triplicate. The Supervisory Board will initiate each
inventory sheet and keep a copy of it for its files.
By Resolution of the Council of Directors of the Institute of Development and Cooperative
Credit (IDECOOP) approved in its ordinary session on May 28, 1987, it was resolved that a
material error was recorded and that this article should read as follows:

Article 55.- Every cooperative has the obligation to allocate a percentage of its profits to a
Cooperative Education fund, from which five percent (5%) will be extracted to be applied in
2.5% to the Dominican Confederation of Cooperatives and a 2.5% to the federation to which it
is affiliated. In the event that the cooperative is not affiliated, the distribution of 5% of the
educational reserve fund will be 2.5% for the Confederation and 2.5% for the Institute of
Cooperative Development and Credit (IDECOOP).

Paragraph.- Housing cooperatives are excepted, which will pay RD$2.00 (TWO GOLD
PESOS) annually for members registered with it.

Article 56.- For the purposes of the previous article, net income will be understood as the
accounting concept that defines it, that is, the remainder of the total volume of annual
operations of all the activities of a cooperative after reducing total expenses, excluding
interest on the capital of the partners only.

Article 57.- Each cooperative will create from its first year of operations a fund that will be
known as the “General Reserve Fund”, represented by at least two tenths of one percent of
the total sum of its gross operations, with the exception of housing cooperatives that will
dedicate five pesos (RD$5.00) for each registered member to this purpose.

Article 58.- The General Reserve Fund will be used exclusively with the approval of the
Cooperative Development and Credit Institute (IDECOOP). Any contingency that is not
covered by insurance will be covered with it.

Article 59.- It is prohibited to use funds from the General Reserve to remedy or restore losses
caused by negligence of the Board of Directors or losses in the normal operations of the
cooperative caused by poor Administration.

Article 60.- It is prohibited to use funds from the Education Reserve to pay expenses for
assemblies, parties, entertainment, trips and officials and any other activity that is not directly
intended to increase the cooperative knowledge of the majority of the members.

Article 61.- The funds that are allocated for cooperative education according to article 52 of
Law No. 127 dated January 27, 1964, will be used directly by the cooperative for purposes of
guiding and educating potential members who are using the services of the cooperative as
non-members.

Regulations for the Application of Law No. 127 of January 27, 1964 9
 Article 62.- Every cooperative that grants credit to its members will establish a reserve for
bad debts of no less than five percent (5%) of the interest received on said credits.

Article 63.- Every cooperative must submit to the Institute of Cooperative Development and
Credit (IDECOOP), a copy of the Financial Statements, reports, balance sheets and surplus
distribution plan, no less than fifteen (15) days after their submission to an Assembly.
General. The Supervision Department of the Cooperative Development and Credit Institute
(IDECOOP) will certify its receipt and point out any notable deficiencies it observes so that it
can be corrected before submitting it to the General Assembly.

Article 64.- The balance sheets, financial statements and other accounting documents of any
cooperative whose volume of annual operations exceeds the sum of five hundred thousand
pesos (RD$ 500,000.00), must be certified by an Authorized Public Accountant, with the
exception of federations and confederations. , whose financial statements must always be
certified by an Authorized Public Accountant no matter what the volume of operations.

Article 65.- Any cooperative whose annual operations exceed Two hundred and fifty
thousand pesos (RD$ 250,000.00) must use the services of an auditor who may be hired
through the federations or the Confederation. The auditor must be a Certified Public
Accountant.

Article 66.- Every cooperative, in the months of March, June, September and December of
each year, must send to the Supervision Department of the Cooperative Development and
Credit Institute (IDECOOP), an Account Verification Statement signed by the auditor, if had it,
by the person responsible for the accounting of the cooperative or by the treasurer.

Article 67.- The Institute of Cooperative Development and Credit (IDECOOP) may suspend
the holding of the Annual Ordinary Assembly of the cooperative that fails to comply with the
previous article.

CHAPTER VI
OF DISSOLUTION AND LIQUIDATION

Article 68.- When it is necessary to dissolve a cooperative for any of the causes determined
in article 47 of Law No. 127 dated January 27, 1964, the following procedure will be followed:

a) The President of the Board of Directors, or in his absence the President of the Supervisory
Board, will call an Extraordinary General Assembly to present to the partners the causes
and reasons for the dissolution. In the event of ineffectiveness of the two aforementioned
governing bodies, the President-Administrator of the Cooperative Development and Credit
Institute (IDECOOP) will convene the members to an Assembly, which will be legally
established when two-thirds of the active members are present. An official from the
Inspection Department of the Cooperative Development and Credit Institute (IDECOOP)
will preside.

b) The Liquidation Agreement will be taken by a majority of two thirds of the partners present;
c) A copy of the agreement will be sent to the Institute of Cooperative Development and
Credit (IDECOOP) for its information;

d) The Institute for Cooperative Development and Credit (IDECOOP) will appoint a liquidation
Regulations for the Application of Law No. 127 of January 27, 1964 10
 commission of three members: the legal advisor of the Institute for Cooperative
Development and Credit (IDECOOP), who will chair the commission; a representative of
the cooperative; and a representative of the federation of cooperatives corresponding to
the type being liquidated or of the Confederation;

e) The Liquidation Commission will take charge of all assets, obligations to pay, accounts
receivable, documents, cooperative facilities, bank accounts and will proceed to sell the
liquidable assets to the highest bidder.

f) Before proceeding to apply the social assets resulting from the liquidation, as provided in
the article of Law No. 127 dated January 27, 1964, the Liquidation Commission will publish
an advertisement in the newspaper with the greatest circulation for two consecutive times
notifying whoever may be interested of the result of the liquidation. The Liquidation
Commission will set a period of no more than eight days from the date of publication of the
last notice to address any claim from partners or third parties.

g) After the established period, no claim will be made and the claim resulting from the sale of
the cooperative's assets will be applied in the order established by Law No. 127 dated
January 27, 1964, article 48, letters a), b) and e).

Article 69.- The Liquidation Commission will submit a report to the Institute of Cooperative
Development and Credit (IDECOOP), a copy to the federation to which the liquidated
cooperative was affiliated, or to the Confederation, within thirty (30) days after the date when
The last property of the cooperative was sold.

Article 70.- Said report must contain all the details related to the Commission's efforts and the
result of the auction sale of the assets sold.

Article 71.- The commission will deliver to the Supervision Department of the Cooperative
Development and Credit Institute (IDECOOP), all the books and documents of the liquidated
cooperative and all the receipts related to the liquidation process.
The delivery will be made before a Notary Public and a record of said process will be drawn
up. Once the minutes of the liquidation process have been drawn up, no one may act on
behalf of the cooperative, nor use its name under any circumstances. The violation of this
article will be punished with the above, by articles 406 and 408 of the Penal Code, as the case
may be.

Article 72.- The President-Administrator of the Cooperative Development and Credit Institute
(IDECOOP) will notify the Board of Directors of the result of the liquidation, who will issue a
resolution informing the Executive Branch of the same.

Article 73.- When the Executive receives the resolution of the Council of Directors of the
Cooperative Development and Credit Institute (IDECOOP), it may issue a decree canceling
the incorporation of the liquidated cooperative.

Article 74.- To modify the statutes of any type of cooperative, procedures will be carried out
internally as established by the Statutes themselves. The proposed modifications must be
made known to the partners through a written call, at least fifteen days in advance of the
Assembly that must know said modification.

Regulations for the Application of Law No. 127 of January 27, 1964 11
 Article 75.- After the modifications to the Statutes have been approved with the statutory
quorum, the Institute for Cooperative Development and Credit (IDECOOP) will be notified,
sending a copy of the minutes of the General Assembly.

Article 76.- The Statutes of the cooperative will be automatically modified as soon as the
Council of Directors of the Institute for Cooperative Development and Credit (IDECOOP)
issues a resolution approving modifications and written notification, through the President-
Administrative, to the Secretary of the cooperative.

TITLE III
NATIONAL COOPERATIVE ORGANIZATION

CAPITULO I
OF COOPERATIVES

Article 77.- Consumer Cooperatives are understood to be those organized by primary

consumers to jointly supply themselves with the goods and services they need for their
personal use and that of their families.

Article 78.- Consumer cooperatives may not begin their operations, even if they have held
their constitutive assembly, if they do not have a minimum of one hundred (100) active
members and a minimum paid-in capital of RD$3,000.00 (Three thousand Pesos).

Article 79.- Every consumer cooperative will keep a record of sales to members where the
individual sales of each member will be recorded. The accounting system will provide the
most efficient way to record the sale to each one, so that the interested party can verify their
purchases with those registered by the cooperative, if necessary.

Article 80.- Consumer cooperatives, through their second-level organizations, may carry out
any economic activity that facilitates the fulfillment of their goals and purposes.

Article 81.- Consumer cooperatives may initiate and carry out industrial and production
activities, as long as they lead to self-supply of their fundamental needs.

Article 82.- The organization of consumer cooperatives by intermediaries is prohibited.

Article 83.- The radius of action of a consumer cooperative will be limited to the geographical
area where its members reside, but the cooperative may establish branches when the number
of its members and the volume of its operations so require.

Article 84.- Agricultural cooperatives are understood to be those organizations with no less
than fifty (50) farmers and peasants with the purpose of increasing the income from
agricultural livestock activity, improving the quality of agricultural products, raising the level of
rural life, giving the producer a greater share of the total income that results from his risk and
effort through the joint purchase and sale of the necessary goods and services inherent to
agricultural and livestock activity. Agricultural cooperatives may create as many departments
as necessary to satisfy the needs of their members.

Article 85.- Agricultural cooperatives will have a limited radius of action, and may be
organized at the local or regional level.

Regulations for the Application of Law No. 127 of January 27, 1964 12
 Article 86.- The surpluses of the departments of agricultural cooperatives will be distributed
among the members in relation to the total use they have made of the cooperative, without
considering the departments separately.

Article 87.- Production and work cooperatives are understood to be those organized by
workers for the production and/or distribution of goods and services intended for consumption,
at any stage of this, to third parties.

Article 88.- Production and Work cooperatives may not hire services from non-members,
except in cases where labor or specialized professional services are necessary.

Article 89.- Members of Production and Work cooperatives will receive weekly, biweekly or
monthly labor advances, in amounts similar to the average salaries in the country according to
the different jobs or professional categories. These advances are periodic payments paid
against the final results of the cooperative's economic activity.
These advances, due to the vital needs they cover, will enjoy the same protection guarantees
as salary payments.

Article 90.- The terms: worker, laborer, employee and other similar terms will not be used to
designate the members of a Production and Work cooperative in their usual relationship with
it.

Article 91.- For a cooperative to be classified as production and work, if its scope of action is
agriculture or livestock, the members must jointly contribute their work and their land to the
production process, with the cooperative being the owner under any title. of all productive
assets, including land. If these conditions do not occur, the cooperative will be classified under
the definition of “agricultural”.

Article 92.- The Production and Work cooperative will have a local or regional limit to carry
out its operations and must have a specific headquarters.

Article 93.- The Production and Work cooperative may be organized with a minimum of (15)
members and its initial capital contributed will not be less than Five Thousand Pesos (RD$
5,000.00).

Article 94.- Housing cooperatives are understood to be those organized by natural persons to
provide themselves with their own home.

Article 95.- To establish a housing cooperative, a minimum of one hundred (100) members
and a paid-in capital of no less than One Hundred Thousand Pesos (RD$ 100,000.00) will be
required.

Article 96.- Housing cooperatives may acquire land and other assets, such as construction
materials and equipment for the individual and joint use of their members.

Article 97.- Housing cooperatives may contract services for the direction and administration
of the work, at any stage thereof, from individuals or entities specialized in the matter, whether
national or foreign.

Article 98.- Every member of a housing cooperative will be obliged to live in the house

Regulations for the Application of Law No. 127 of January 27, 1964 13
 acquired through the cooperative, if the property is individual, and may transfer the title of
ownership thereof with the prior agreement of the Board of Directors.

Article 99.- Any third party who acquires a house within a housing cooperative through
purchase from a member must meet the income requirements stipulated by the statutes of the
cooperative before legalizing the transfer of property.

Article 100.- When the housing cooperative is under common ownership, the allocation of
vacant houses or apartments to new members is the exclusive function of the Board of
Directors. To this end, the Statutes of each cooperative will establish the pertinent norms and
rules.

Article 101.- Income fees and any other charges made to the members of a housing
cooperative for organization and start-up expenses of the cooperative are not refundable upon
retirement of the member.

Article 102.- No member will have the right to more than one home for family use. The
commercial premises erected in housing cooperative buildings will be awarded by lottery
among the members. When the cooperative is interested in setting up a certain business,
based on service to the community, priority will be given to the member capable, for reasons
of economy and initiative, of executing said project.

Article 103.- When a housing cooperative uses the self-construction system totally or
partially, the work of the members will be estimated according to the wage scale that governs
the industry and capitalized as decided by the Statutes.

Article 104.- Housing cooperatives will not grant privileges to their organizers in terms of the
location, size, type or quality of the housing, nor in terms of the waiting time for adjudication, it
will be by means of a lottery in relation to topology and location of each home.

Article 105.- Savings and Credit cooperatives are understood to be those organizations with
the objective of promoting savings, granting loans to their members and training them in the
economic and social order.

Article 106.- Loans will be granted for useful and productive purposes or of a provident
nature.

Article 107.- The minimum capital for a savings and credit cooperative to request official
recognition will be RD$3,000.00 (Three Thousand Pesos).

Article 108.- The radius of action of the Savings and Credit cooperative can be local, regional
or national. In this case it must be organized by districts.

Article 109.- Savings and Credit cooperatives may also be established by people linked by
the nature of their activities, even if the members have their residences outside the province
where the cooperative is located.

Article 110.- During the first (5) years of their legal existence, Savings and Credit
cooperatives will not grant credits for terms greater than three years.

Regulations for the Application of Law No. 127 of January 27, 1964 14
 Article 111.- Insurance cooperatives are understood to be those organized by the
cooperatives themselves, to provide users with all types of insurance against personal or
property risks.

Article 112.- Insurance cooperatives will present evidence that they have a minimum capital
of RD$ 500,000.00 (Five Hundred Thousand Pesos), before being granted legal status.

Article 113.- The radius of action of insurance cooperatives will be national.

Article 114.- Any request for legal incorporation of insurance cooperatives must be
accompanied by a study and work plan carried out by professional actuaries.

Article 115.- Insurance cooperatives may reinsure their risks with private, state, national or
foreign insurance companies.

Article 116.- The Insurance Superintendency may, on its own initiative or at the request of the
Cooperative Development and Credit Institute (IDECOOP), carry out any investigations or
inspections necessary in insurance cooperatives.

Article 117.- Health cooperatives are understood to be those organized by consumers of

medical and pharmaceutical services for the optimal maintenance of health and the
prevention of diseases.

Article 118.- The minimum capital for a health cooperative to request official recognition will
be RD$ 50,000.00 (Fifty Thousand Pesos).

Article 119.- The radius of action of health cooperatives may be local, regional or national.

Article 120.- Any request for legal incorporation of a health cooperative must be accompanied
by a study and work plan carried out by professional actuaries.

Article 121.- Health cooperatives may operate hospitals or clinics under any title and may
subcontract professional services, but without associating with them. However, any medical
professional has the right to be a member and the cooperative to hire their services.

Article 122.- A cooperative with state participation is understood to be those in which the
Dominican State participates in the capital and administration of the cooperative company.

Article 123.- For the creation of cooperatives with state participation and when this is
necessary, an investment agreement will be formed with the interested natural or legal
persons. This agreement will provide the form and amount of the State's participation.

Article 124.- The right to represent the State in the Board of Directors arises from its
contributions. These will be capital assets or capitalizable cash. The loans that state entities
grant to cooperatives cannot be considered as contributions.

Article 125.- The representation of the State in the General Assemblies of the State
participation cooperatives will be through its representatives in the Board of Directors of the
cooperatives, in the ways indicated in the Statutes and will have the voting proportion that is
established in it.

Regulations for the Application of Law No. 127 of January 27, 1964 15
 Article 126.- The State will participate in the distribution of surpluses in proportion to its
sponsorship and will receive the interests agreed upon in the statutes.

Article 127.- State participation cooperatives will have a local, regional or national radius of
action, depending on the nature of their operations.

Article 128.- State participation cooperatives will be established with a number of no less than
100 (one hundred) members, and the capital contribution per member will not be less than
RD$ 10,000.00 (Ten Thousand Pesos).

Article 129.- State participation cooperatives may be intervened and audited by the
Comptroller General of the Republic in coordination with the Institute of Cooperative
Development and Credit (IDECOOP), while the contribution in State capital lasts.

Article 130.- Youth cooperatives are understood to be those organized for recreational,
sporting, cultural and educational purposes by those under 25 years of age. For incorporation
purposes, a minimum of 15 (Fifteen) minor members will be required. Minors may not be part
of management bodies or the Administration.

Article 131.- The radius of action of a youth cooperative will be the city, municipality, district
or section where the majority of youth members live.

Article 132.- Youth cooperatives may begin their activities with a capital of RD$ 500.00 (Five
Hundred Pesos). Each associate must acquire a contribution certificate of RD$ 25.00
(Twenty-Five Pesos).

Article 133.- School cooperatives are understood to be those organized in educational

centers by students and teachers, parents or guardians. Cooperatives will be incorporated
with a minimum of 15 (Fifteen) members of legal age.

Article 134.- The obligations of minor members in school cooperatives will be formed by a
special committee elected in an assembly, made up of a minimum of three (3) people of legal
age.

Article 135.- The radius of action of school cooperatives will be the educational center in
which the group develops.

Article 136.- School cooperatives may begin their activities with a capital of RD$ 150.00 (One
Hundred and Fifty Pesos). Each associate must acquire a contribution certificate of RD$ 5.00
(Five Pesos).

Article 137.- Public service cooperatives are understood to be those organized by users of
public services with the help of the State.

Article 138.- The distribution of electrical energy, telephone service, drinking water served by
pipes or agricultural irrigation channels, radio and television broadcasting and any other
activity where the interest of the community takes precedence over that of the public will be
considered public services. individuals.

Article 139.- To incorporate a public services cooperative, at least two hundred active

Regulations for the Application of Law No. 127 of January 27, 1964 16
 members and a contributed capital of no less than fifty thousand pesos (RD$ 50,000.00) will
be required.

Article 140.- Public service cooperatives may be organized at the local, regional or national
level.

Article 141.- Public service cooperatives will enjoy the necessary franchises for their public
service operations.

Article 142.- It is established that the State may participate as an associate in public service
cooperatives.

Article 143.- Public service cooperatives will be supervised by the Cooperative Development
and Credit Institute (IDECOOP), but will generally conform to the supervision applicable to
entities that provide similar services.

Article 144.- Public service cooperatives will not be subject to import quotas and will receive
preferential treatment by the Central Bank of the Dominican Republic in the importation of
materials and equipment essential for the supply of services, when there is no availability in
the National market.

CAPITULO II

OF THE FEDERATIONS AND THE CONFEDERATION

NATIONAL COOPERATIVES

Article 145.- Federations of Cooperatives are understood to be those organized for the
protection of the interests of the associated cooperatives through economic and social action.
The Cooperative Federations will be established with a minimum of Five (5) first grade
cooperatives.

Article 146.- Cooperative Federations may be formed by districts; In these cases, each
district must be made up of no less than two (2) cooperatives.

Article 147.- The radius of action of a federation may be regional, provincial or national. The
Statutes will provide in relation to the radius, depending on the type of service provided to the
affiliated cooperatives.

Article 148.- More than one (1) Federation per type of Cooperative may be organized in the
Republic, provided that the radius of action covers different geographical spaces.

Article 149.- Federations organized by Districts, each district will have at least one vote per
cooperative. The Statutes may provide a representative combination taking into account the
number of members of the cooperative and the volume of operations of each district with the
federation.

Article 150.- For their incorporation, the Federations of Cooperatives may have a minimum
paid capital of RD$ 15,000.00 (Fifteen Thousand Pesos).

Article 151.- When a group of cooperatives of the same type organize a federation, they must

Regulations for the Application of Law No. 127 of January 27, 1964 17
 prepare a feasibility project to be submitted to the consideration and approval of the
Cooperative Development and Credit Institute (IDECOOP), prior to the Constitutive Assembly,
independently of the others. documents required for incorporation.

Article 152.- The Dominican Confederation of Cooperatives or the Dominican Confederation

of Cooperatives, will be governed in relation to its constitution and liquidation, by the general
provisions of Law No. 127 dated January 27, 1964, applicable to cooperatives and by specific
provisions of this Regulation and the Statutes.

Article 153.- In the event of liquidation of a Federation of Cooperatives or the Dominican

Confederation of Cooperatives, the liquidation commission that will be in charge of the
liquidation process will be composed of the Director of the Supervision Department, the Legal
Advisor of the Institute of Cooperative Development and Credit (IDECOOP), who will chair it,
and Five (5) representatives of the associates, selected, in an assembly by the Cooperative
Development and Credit Institute (IDECOOP).

Article 154.- The Liquidation Commission will act in accordance with the provisions of this
Regulation and the Statutes for the liquidation of any cooperative.

Article 155.- International cooperative organizations that are established according to the
previous Article may not engage in economic activities similar to those carried out by the
Federations and the Dominican Confederation of Cooperatives, without prior agreement with
them.

TITLE IV
OF RELATIONS WITH THE STATE

CAPITULO I
ON TAXES AND PROTECTION
TO COOPERATIVE ORGANISMS

Article 156.- The Institute of Cooperative Development and Credit (IDECOOP) will send to all
tax agencies of the State and Municipalities, a list of cooperatives so that officials comply with
the provisions of Articles 60, 61 and 62. Law No. January 127, 1964.

Article 157.- For the purposes of Article 62 of Law No. 127 dated January 27, 1964, the
President-Administrative of the Institute of Development and Cooperative Credit (IDECOOP),
in coordination with the Secretaries of State of Finance, Industry and Commerce and the
Director General of Customs, will establish an administrative procedure that facilitates the
procedures related to the exemptions that the cooperatives need and request.

Article 158.- The Cooperative that makes improper use of any of the privileges granted by the
State under Articles 62, 63 and 64 of Law No. 127 dated January 27, 1964, will be subject to
the application of the penalties imposed by the Laws of the Republic for similar cases and the
sanctions that the Secretary of State for Finance deems appropriate.

CAPITULO II
OF EDUCATIONAL, TECHNICAL AND FINANCIAL ASSISTANCE
TO COOPERATIVE SOCIETIES

Regulations for the Application of Law No. 127 of January 27, 1964 18
 Article 159.- For the application of Article 65 of Law No. 127 dated January 27, 1964, the
Federations and the Dominican Confederation of Cooperatives must submit, no later than the
Fifteenth (15th) of December of each year, a work plan that must be discussed and carried
out in coordination with the Development Institute. and Cooperative Credit (IDECOOP).
CAPITULO III
REGISTRATION, SURVEILLANCE AND
STATE CONTROL

Article 160.- In accordance with Article 66 of Law No. 127 dated January 27, 1964, every
cooperative active and recognized under the provisions of the aforementioned Law, must
submit annually within thirty (30) days after its Annual General Assembly is held, the following
documents to the Institute of Cooperative Development and Credit (IDECOOP).

a) Four (4) copies of the annual report, the annual balance sheets together with their auxiliary
statements.

b) Four (4) copies of the Minutes of the General Assembly of partners, signed by the
President and Secretary of the Board of Directors.

c) Budget

d) Nominate new Directors and Committees.

e) Any other document that the Inspection Department considers essential to help and
facilitate the inspection of the cooperative.

Article 161.- The Institute for Cooperative Development and Credit (IDECOOP) may
intervene and appoint a provisional Administrator when the Inspection Department verifies
irregularities that endanger the economic and social stability of the cooperative.

Article 162.- The interventions of the Cooperative Development and Credit Institute
(IDECOOP) will have a provisional nature, no longer than six (6) months, until the General
Assembly is convened.

PARAGRAPH:- If it is not possible to convene the Assembly due to the degree of

disintegration of the cooperative, the Cooperative Development and Credit Institute
(IDECOOP) will proceed to liquidate it.

GIVEN in Santo Domingo, on the twenty-fifth (25th) day of the month of July of the year one
thousand nine hundred and eighty-six, year of independence and 123rd. From the
Restoration.

SALVADO JORGE BLANCO

Regulations for the Application of Law No. 127 of January 27, 1964 19