MODULE 1

1-PRELIMINARIES
1a-Types and Categories of Cooperatives
2-Organization and Registration of Cooperatives
3-Administration

REPUBLIC ACT No. 9520 (February 17, 2009)

AN ACT AMENDING THE COOPERATIVE CODE OF THE PHILIPPINES TO BE KNOWN AS

THE "PHILIPPINE COOPERATIVE CODE OF 2008" (PCC)

The law which governs cooperatives, prior to the recent enactment of Republic Act No. 9520 (“Philippine
Cooperative Code of 2008“), is Republic Act No. 6938 (“Cooperative Code of the Philippines”).

WHAT IS COOPERATIVE (Art 3, PCC)

A cooperative is an autonomous and duly registered association of persons, with a common bond of
interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and
aspirations by making equitable contributions to the capital required, patronizing their products and
services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally
accepted cooperative principles.

TYPES OF COOPERATIVES (Art 23-1, PCC)

Cooperatives may fall under any of the following types, in addition to others which may be determined by the
Cooperative Development Authority (CDA):

A. Credit Cooperative
- promotes and undertakes savings and lending services among its members
- generates a common pool of funds in order to provide financial assistance to its members for
productive and provident purposes

B. Consumers Cooperative
- Primary purpose: procure and distribute commodities to members and non-members

C. Producers Cooperative
- undertakes joint production whether agricultural or industrial
- formed and operated by its 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

D. Marketing Cooperative
- engages in the supply of production inputs to members and markets their products
E. Service Cooperative
- engages in medical and dental care, hospitalization, transportation, insurance, housing, labor,
electric light and power, communication, professional and other services

F. Multipurpose Cooperative
- combines two (2) or more of the business activities of these different types of cooperatives

G. Advocacy Cooperative
- 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

H. Agrarian Reform Cooperative

- organized by marginal farmers majority of which are agrarian reform beneficiaries
- Purpose: develop an appropriate system of land tenure, land development, land consolidation or
land management in areas covered by agrarian reform

I. Cooperative Bank
- organized for the primary purpose of providing a wide range of financial services to cooperatives
and their members

J. Dairy Cooperative
- members are engaged in the production of fresh milk which may be processed and/or marketed as
dairy products

K. 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

L. 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

M. Financial Service Cooperative

- organized for the primary purpose of engaging in savings and credit services and other financial
services

N. Fishermen Cooperative
- organized by marginalized fishermen in localities
 - products are marketed either as fresh or processed products

O. Health Services Cooperatives

- organized for the primary purpose of providing medical, dental and other health services

P. 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
- co-owned and controlled by its members

Q. Insurance Cooperative
- engaged in the business of insuring life and poverty of cooperatives and their members

R. 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

S. 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

T. Workers Cooperative
- organized by workers, including the self-employed, who are at same time the members and
owners of the enterprise
- principal purpose is to provide employment and business opportunities to its members and
manage it in accordance with cooperative principles

U. Other types of cooperative as may be determined by the Authority

ORGANIZATION AND REGISTRATION (Art 6-25 PCC)

Purposes of Cooperatives (Art 6, RCC)
A cooperative may be organized and registered for any or all of the following purposes:

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 educational 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 cooperatives 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

14. To undertake any and all other activities for the effective and efficient implementation of
the provisions of this Code.

Objectives and Goals of a Cooperative (Art 7, PCC)

Primary Objective: Help improve the quality of life of its members

(a) Provide goods and services to its members to enable them to attain increased income, savings, investments,
productivity, and purchasing power, and promote among themselves equitable distribution of net surplus
through maximum utilization of economies of scale, cost-sharing and risk-sharing;

(b) Provide optimum social and economic benefits to its members;

(c) Teach them efficient ways of doing things in a cooperative manner;

(d) Propagate cooperative practices and new ideas in business and management;

(e) Allow the lower income and less privileged groups to increase their ownership in the wealth of the nation;
and

(f) Cooperate with the government, other cooperatives and people-oriented organizations to further the
attainment of any of the foregoing objectives.

Cooperatives Not in Restraint of Trade (Art 8, PCC)

Cooperative Powers and Capacities (Art 9, PCC)

A cooperative registered under this Code shall have the following powers, rights and capacities:
(1) To the exclusive use of its registered name, to sue and be sued;

Guidelines on Cooperative Name Reservation Issued by Cooperative Development Authority

Sec 1. Scope

Sec 2. Submission of Cooperative Name Reservation Request Form

May Submitted through the following

a. Personal

b. Postal Mail/Courier

c. Electronic Mail

d. Fax Transmission

Sec 3. Issuance of Reservation Notice

Sec 4. Reservation Fee

Sec. 5 Extension of Reservation Period

Sec. 6 Preferential Right over Reserved Cooperative Name

Sec. 7 Validity Period

Sec. 8 Cooperative Name Reservation Request Form

Sec. 9 Cooperative Names

Identical or deceptively or confusingly similar to any existing cooperative shall not be

allowed

Proposed cooperative name shall incorporate the word “Cooperative”

(2) Of succession;

(3) To amend its articles of cooperation in accordance with the provisions of this Code;

(4) To adopt bylaws not contrary to law, morals or public policy, and to amend and repeal the same in
accordance with this Code;

(5) 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;

(6) To enter into division, merger or consolidation, as provided in this Code;

(7) To form subsidiary cooperatives and join federations or unions, as provided in this Code;

(8) 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. The Authority, upon written request, shall provide
necessary assistance in the documentary requirements for the loans, credit, grants, donations and other
financial support;

(9) To avail of preferential rights granted to cooperatives under Republic Act No. 7160, otherwise known as
the Local Government Code, and other laws, particularly those 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;

(10) To organize and operate schools in accordance with Republic Act No. 9155, Governance of Basic
Education Act of 2001 and other pertinent laws; and

(11) To exercise such other powers granted by this Code or necessary to carry out its purpose or purposes as
stated in its Articles of cooperation.

Organizing a Primary Cooperative (Art 10, PCC)

Requisites:

1. 15 or more natural persons, Filipino Citizens

2. Of legal age

3. Having common bond of interest

4. Residing or working in the intended area of operation

Prospective Member must have completed a Pre-Membership Education Seminar (PMES)

Newly organized primary cooperative may be registered as multipurpose cooperative only

after compliance with the minimum requirements for multipurpose cooperative.

Single-purpose cooperative may transform into a multipurpose or may create subsidiaries

only after at least two (2) years of operations

Economic Survey (Art 11, PCC)

Submission to the Authority of general statement describing: among others the structure and purposes of the
proposed cooperative.

Includes a bookkeeper

And they shall not be allowed to operate without the necessary personnel and shall also submit an economic
survey, indicating therein the area of operation, the size of membership, and other pertinent data in a format
provided by the Authority
Liability (Art 12, PCC)

Limited Liability

Term (Art 13, PCC)

Cooperative existence: Not exceeding 50 years from the date of registration

Exception: Dissolve or Extended

Extension: Amendment of Articles of Cooperation

No extension can be made earlier than 5 years prior to the original or subsequent expiry
date/dates unless there are justifiable reasons for an earlier extension as may be determined
by the Authority

Articles of Cooperation (Art 14, PCC)

(1)

- Shall be filed to the Authority by all cooperatives applying for registration

- Shall be signed by each of the organizers and acknowledged by them if natural

persons, and by the chairpersons or secretaries, if juridical persons, before a notary
public

(2) AOC shall be forth:

a. Name of the cooperative

b. Purpose or purposes and scope

c. Term of existence

d. Area of operation, postal addresses of its principal

e. Names, nationality, postal addresses of the registrants

f. common bond of membership

g. list of names of the directors

h. amount of its share capital, names and residences of its contributors, statement of whether
the cooperative is primary, secondary or tertiary in accordance with Article 23 hereof
(3) AOC may contain any other provisions not inconsistent with the PCC or any related law

(4) 4 copies of:

- AOC

- Bylaws

- General Statement (Art 11, PCC)

Shall be submitted to the Authority

Bylaws (Art 15, PCC)

(1)

- Adopt bylaws not inconsistent with the provisions of this Code.

- Shall be filed at the same time as the articles of cooperation.

(2) Shall provide

(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 meetings, quorum requirements, voting systems, and other matters relative to the
business affairs of the general assembly, board of directors, and committees;

(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.