Cooperative

Cooperative
• Is a business that s owned by a group of individuals who also
serve as benefactors to the business endeavor.
• all the profits are given back to members.

It requires at least fifteen (15) members to function.

• Usually , a board of directors and officers are elected to
manage the business operation.
• Have set of by laws and articles of cooperation.
 Content of Articles of Cooperation
• Name of the cooperative
• Purpose of the cooperative
• Term of existence of the cooperative
• Amount of share capital
• Names and residences of its contributors
• Type of cooperative
 Type of Cooperative
• Credit cooperative
• Consumer cooperative
• Producers cooperative
• Marketing cooperative
• Service cooperative
• Multi-purpose cooperative
• Advocacy cooperative
• Agrarian reform cooperative
• Cooperative Bank
• Dairy Cooperative
• Education Cooperative
• Electric cooperative
• Financial Service cooperative
• Fisherman Cooperative
• Health services cooperative
• Housing cooperative
• Insurance cooperative
• Transport cooperative
• Water service cooperative
• Workers cooperative
• A credit coop is an association of small borrowers and savers
(typically micro and small business owners, small farmers,
and rank-and-file employees) who cannot afford access to
traditional banking services. This type of coop helps members
save and/or borrow money at a much lower cost than what
banks charge.
• A consumers cooperative is owned and controlled by
consumers who buy goods and services they need through
their coop. Consumers coops procure and distribute products
at better prices, quality, and delivery service to members and
non-members.
• This type of coop is created, owned, and operated by people who
produce the same types of goods such as crafts and agricultural
products for sale to members and non-members.
• Producers coops provide processing, marketing, and distribution
services to members who are usually farmers, fishermen, or artists.
They help members get better pricing and access bigger markets.
• Marketing coops cater to producer-members (typically farmers),
providing services such as packing, promoting, and selling
products for them. Doing so eliminates the need for middlemen
between producers and consumers, which helps maximize the
profits that members receive from their produce.
• Service coops provide a service to their members to meet a
specific need in the community—such as housing, healthcare
, transportation, insurance, or electricity
• An advocacy coop promotes and advocates a specific cause
such as education and environmental conservation. It
organizes and conducts charitable activities, like training and
livelihood projects, to help its beneficiaries.
• This type of coop exists to help marginal farmers and
agrarian reform beneficiaries develop a system for land
tenure, development, consolidation, or management in
locations covered by agrarian reform.
• A cooperative bank provides various financial services to
cooperatives and their members. Coop members, who are also
clients of the bank, own and operate a cooperative bank.
• Through this type of cooperative, dairy farmers produce, process,
and/or market milk and dairy products to retail stores, wholesale
stores, or in their own stores.
• Education cooperatives own and run licensed educational
institutions in the Philippines.
• Typically operating in rural communities, electric cooperatives
engage in power generation and distribution to provide electricity
to their members.
• Financial service coops provide services such as deposits,
loans, mortgages, insurance, and investment at the lowest cost
and highest return possible. Credit coops and cooperative banks
fall under this general category.
• This type of coop is created and operated by marginalized
fishermen who manage each others’ fishing activities and
market their fresh and processed products.
• Health services coops provide for the medical, dental,
maternity, and other healthcare needs of their members.
• Housing coops help their members get access to low-cost and
secure housing by sharing homeownership costs.
• Insurance coop members share their premium to insure the life
and property of their cooperative and members.
• Transport coops provide land or sea public transport services
using small vessels such as jeepneys, buses, taxis,
transportation network vehicle services (TNVS), or tourist
vehicles.
• A water service coop provides a reliable supply of potable
water for its members’ households by reducing the costs of
transactions and water system management.
• Workers cooperative Existing in various industries, workers
coops are built and owned by employees of a business to
create jobs and business opportunities for their members.
• A lot of cooperatives in the Philippines are of multi-purpose
type, offering two or more types of services to their
members. For example, a coop may provide both lending
and production services to its farmer-members.
 ADVANTAGES DISADVANTAGES
Unlimited Life. The change of members does Obtaining capital through investors.
not dissolve the business Cooperative has a “one-member-one-vote”
philosophy. Big investors may choose to
invest their money to other firms where their
voting power is equal to their ownership
interest

Democratic organization. Social equality of Lack of membership and participation. The

members is the most important component of cooperative may not fully function if
cooperatives. members do not involve themselves in the
routine business operation.

It ensures that it serves its members’ needs Inefficient management

Requirements for their formation
• Organizing a cooperative can be complex and simple.
• It requires an understanding of the basic needs of the
prospective cooperative members.
• It demands patience from organizer who must make the
cooperative’s long term goals and objectives
• Its vision a real part of the members lives
• Cooperative code of the Philippines (RA 6938) has devised
very clear –cut steps for the cooperative organizer and
members
Applicable Laws

• Presidential Decree 175 An act Strengthening the

Cooperative Movement
• Republic act 6938 The cooperative Code of the
Philippines
Types of Business
According to Activities
 Service Business
• Focus on providing
tangible products;
Examples:
a. Professional
- Accounting firms
skills
- Law firms
b. Proposals and, - Schools
c. Expertise - Medical Clinic
- Banks
- Hair salons and spas
- Repair shops
 ADVANTAGES DISADVANTAGES

No need for inventory Services are harder to value

Skills can be improved and can produce Less demand during economic
better service downturns
What other examples of
Service Businesses?
 Merchandising Business
• Buy and sell business
Examples:
- Grocery stores
- Hardware
- Department stores
- Drug store
 ADVANTAGES DISADVANTAGES

Good Merchandising attracts more Profits are highly dependent on prices

customers set by merchandise supplies

It is flexible to changes Merchandise inventory maybe

perishable
 What other examples of
Merchandising Businesses?
Manufacturing Business
• Materials are brought to create a new
product
Examples:
-Food factories
- Garment Factories
- Car manufacturing companies
 ADVANTAGES DISADVANTAGES

There is a continuous demand on Because of the scope of activities,

manufactured goods manufacturing firms are often more
labor and capital intensive
The creation of a manufactured The cost of the manufactured products
products leads to higher job satisfaction. highly depends on the price and
availability of the raw materials.
 What other examples of
Manufacturing Businesses?
Manufacturing
Merchandising
Service
Service