Module 2 Identify The Underpinnings of Coops

Module 2 – Topic 1
THE PHILIPPINE
COOPERATIVE
CODE OF 2008
(Republic Act No.
9520)
REPUBLIC ACT NO. 6938
The Cooperative Code of the
Philippines (the amended
Code)
Enactedinto law on
March 10,1990
Republic Act 9520, Article II
 “It is the declared policy of the State to

foster the creation and growth of
cooperatives as a practical vehicle for
promoting self reliance and harnessing
people power towards
the attainment of economic development
and social justice…”
The R.A. 9520 enabling features…
 Stronger statement of policy which encourages
autonomy, self regulation, empowerment
 Adopts the universal statement of coop identity
based in the ICA
 Adopts the 7 universal coop principles
 Strongly recognizes the need for conduct of holistic
audit for coops (financial, social and performance)
 Provides the formation of subsidiary coop
 Enabling formation of a federation (3 coops)
Enabling features…
 Adopts broader purposes of cooperatives
including advocacy
 Encourages utilization of new technologies and
systems for greater efficiency
 Provides preferential rights under RA 7160
 Organize and operate schools in accordance with
RA 9155
 Provides stronger emphasis on education with
PMES a must in membership, holistic education
program for officers, management and staff and
the MEMBERS.
 Provides varied type of coop (from 6 to 20 types)
includes advocacy, education, workers, fishermen,
financial service… 21st and others include Agri Coop
 Stress the function of federation that of
complementation, augmentation or supplement but
does not conflict, compete nor supplant the
business activities of its members
 Strengthened governance- putting clear delineation
on the role and responsibilities of Directors and
Management
 Heightened the responsibilities of Audit Committee
 Adoption of more GA created committees:

mediation and ethics
 All officers and committee members required to
undergo trainings required of the office by the
Authority
 More protection for members against possible
abuses (providing clear sanctions /penalties for
erring officers and employees)
 Provides emphasis on maintenance and
safekeeping of coop records and book of
accounts
 Provides greater coop transparency with annual

report, financial audit report and including reports on
socio-civic undertakings , progress and achievements
– all to be posted in coop premises for the members
viewing.
 Provides broader tax exemption and incentives not
only to coops but even extended to coop members
 Emphasis on the 7th coop principle by providing
allocation for community development fund of not less
than 3% of net surplus
 Provides protection to coops for possible abuses of
any government personnel or officers
 Provides specific enabling provisions for specific

coops such as transport, electric, coop banks, credit
coops, financial service and housing coops
 Provides support for the mediation framework in
coops
 Allows the Authority to formulate rules on specific
provisions
 Support of the Congressional Oversight Committee
 Provides re-registration of all registered coops and
enjoining coops to secure Tax Exemption Certificate
from the BIR
REPUBLIC ACT NO. 9520
The Philippine Cooperative
Code of 2008
Signed on February 17, 2009
Published on March 7, 2009
Effectivity: March 23, 2009

COOPERATIVE
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.
COOPERATIVE PRINCIPLES
 Patterned after the Principles as formulated

by the ICA
– Voluntary and Open Membership
– Democratic Member Control
– Member Economic Participation
– Autonomy and Independence
– Education, Training and Information
– Cooperation Among Cooperatives
– Concern for Community
ADDITIONAL DEFINITIONS
 Representative assembly –full
membership elected by sectors,
chapter or district to exercise powers
delegated to them by the general
assembly
 Officers –members of board of
directors, different committees
created by the GA, general manager or
CEO, secretary, treasurer and
members holding other positions as
provided for in their bylaws.
 Social Audit –cooperative assesses its social impact and

ethical performance vis-à-vis its stated mission, vision,
goals and code of social responsibility
 Performance Audit – audit on the efficiency and
effectiveness of the cooperative as a whole, its
management and officers, and its various responsibility
centers
 SubsidiaryCooperative –any organization

all or majority of whose membership
comes from a cooperative, organized for
any other purpose different from that
of, and receives technical, managerial
and financial assistance from, a
cooperative
Federation of cooperatives
 refers to THREE or more primary coops,

doing the same line of business organized
to undertake business activities in support
of its member cooperatives.
 should complement, augment or
supplement but does not conflict ,
compete with, nor supplant the business
or economic activities of its members.
RESPONSIBILITIES OF COOPERATIVES
 Accountant or bookkeeper is responsible for
maintenance and safekeeping of books of
accounts
 Audit committee responsible for continuous
and periodic review of books of accounts;
monitor adequacy and effectiveness of
management’s control system and audit the
performance of the cooperative
 Audited financial statements required to be
posted in principal office
ANNUAL REPORTS
 Filed within 120 days from close of
calendar year; non-submission
 Regular activities including socio-civic
undertakings
 Must show their progress and achievements
 Liability
for non-submission is fines and other penalties
imposable until the
cooperative has complied
TAX PRIVILEGES
 Not subject to taxes and fees imposed

under NIRC and other tax laws for
cooperatives transacting business with
members only
 Transactions with members are not subject to taxes
and fees, including final tax on members’ deposits
and documentary tax
TAX EXEMPTIONS
 Non-members will pay VAT; coop will
collect and remit to BIR
 25%of net surplus is returned to

members as interest and patronage
refund
ADDITIONAL PRIVILEGES
 Faculty cooperatives have right of first

refusal in management of canteen and
other services related to the operations of
educational institutions
 Housingagencies and financial institutions shall

create a window for financing housing projects
AUDIT
 Financial audit conducted by external

auditor in good standing with PICPA and
accredited by Board of Accountancy and
CDA
 Social and performance audits may be
conducted by an independent social
auditor accredited by CDA
CAPITAL
 Subsidies, donations, legacies, grants,
and aids shall not be divided into
individual share capital holdings
anytime but subject to escheat
proceedings upon dissolution
 Limitation on share capital held by one
member reduced from 20% to 10%
 Reasonable and realistic member
capital build-up program
SOCIAL AUDITING
 Based on the 7thCooperative Principle –
 Concern for Community Defined as the
systematic review and appraisal of the
cooperative in relation to the development of
its most essential building blocks-its members,
its people, and its distinctive contribution to
the development of its community and society
as a whole.
DISTRIBUTION OF NET SURPLUS
 At least10% of net surplus for Reserve Fund; however, in first 5 years

after registration, this is not less than 50% of the net surplus;
 Not more than 10% for CETF; half to be used
by the cooperative; other half may be remitted
to the federation/union chosen by the
cooperative; federation/ union should submit:
(a) list of contributing cooperatives; business
(b) consultancy assistance with nature and cost;
and (c) training activities specifying the
nature, participants, and cost
DISTRIBUTION OF NET SURPLUS
 Not less than 3% for community
development fund for projects/activities
for the benefit of the community where
the cooperative operates
 Not more than 7% for optional fund,
land and building, and other funds
OTHER PROVISIONS
 Additional Special Provisions
. Transportation Cooperatives
. Electric Cooperatives
. Cooperative Banks
. Credit Cooperatives
. Financial Service Cooperatives
. Housing Cooperatives
. Conciliation and Mediation Committee (ADR)
. Additional Penal Provisions
. CDA allowed to formulate rules on the Cooperative
Code on certain provisions
Final provisions
 The following are offenses punishable by a penalty of imprisonment from 1-5 years and
or fine not more than P50,000.
 Omission or refusal to furnish any information, report or other documents required
by the Code;
 Providing false or misleading info, reports or other documents
 Omission or refusal to keep a book or register or to make the required entry therein;
 Making an entry in a book or register which the person knows to be false or
misleading;
 Hindering an authorized person from making an inspection, audit, examination or
investigation
 Failure to comply with an order or written instructions issued or given by the
Authority
 Abetting, counseling, allowing, authorizing or commanding another person to
commit an offense punishable by this Code
RULE I –
REPRESENTATIVE
ASSEMBLY
APPLICABILITY
Numerous Membership:
At least 1,000 members

Dispersed Membership
❖ Geographical location
❖Scope of Operation
❖Cluster
❖Work Shift
❖Other Similar Conditions
AND THE CONDUCT OF GENERAL
ASSEMBLY BECOMES EXTREMELY
DIFFICULT.
PROCEDURE:
I - Conduct of the Annual/Special Assembly
meeting for:
• Approval of the amendments of
Cooperative By-laws for
adoption of a representative
assembly;
• Division of the cooperative into
sector/chapter/ district; and
• Election of the local election
committee of each sector,
chapter or district.
II. Filing to and Approval of CDA of
the amendments of the
cooperative by-laws.
III. Conduct of the sector/chapter/ district
assembly meeting for the election of
the sector/chapter/district
representative/s or delegate/s by the
Local Election Committee as directed by
the Board of Directors, which shall be
held 60 day before the scheduled date
of the regular representative assembly
meeting as provided for in the by-laws.
IV. Conduct of the regular
representative assembly
meeting on the date as
provided for in the by-laws.
AMENDMENTS IN THE
COOP BY- LAWS.
1. The basis for dividing the
coop into sector, chapter or
district
The number of the members of the cooperative

shall be at least 1,000 and with dispersed
membership by reason of geographical location,
scope of operation, cluster, work shift and other
similar condition.
2. The minimum number of regular
members to compose each
sector, chapter or district.
The by-laws shall provide for the number of

the regular members to compose each
sector, chapter or district but shall not be
less than 100 members.
3. The quorum required in the
sector, chapter, or district.
At least 25% of the members entitled to

vote in each sector, chapter or district.
4. The number of representative/s or
delegate/s to be elected to
represent the total number of
the regular members in the
sector, chapter, or district.
The number of sector, chapter or district
representative or delegate to be elected
shall be as provided in the by-laws but in no
case shall be less than 10% of the total
number of the regular members entitled to
vote of the sector, chapter or district.
5. The term of office of the
sector, chapter or district
representative or delegate.
It shall be provided in the by-laws but not to

exceed 2 years which shall commence on
the 1st regular representative assembly
meeting.
6. The qualifications and
disqualifications of the
The sector, chapter or district

representative shall possess all the
qualifications and none of the
disqualifications as provided in the
7. The powers, functions, and
responsibilities of the
The representative or delegate shall have the
following powers, functions and
responsibilities: (1) to represent the sector,
chapter or district in the RAM; (2) to decide
for and in behalf of the sector, chapter or
district he/she represents in the RAM; and (3)
to inform his/her sector, chapter or district of
what transpired during the RAM.
8. The election of the sector,
chapter or district representative
or delegate.
1. Each sector, chapter or district shall elect

its local election committee that will
conduct the election of the sector,
chapter or district representative or
delegate to be held not later than 60
days before the scheduled date of
regular RAM as provided for in the by-
laws;
2. The BOD shall direct each sector, chapter or
district local election committee to conduct
the sector, chapter or district assembly
meeting to elect its representative/s or
delegate/s, which may be held either
simultaneously or sequentially;
3. Failure to elect its representative/s or

delegate/s, the right to send its
representative/s or delegate/s on that
particular representative assembly meeting
shall be deemed waived.
9. The vacancy in the sector,
chapter, or district
representative or delegate
Any vacancy shall be filled up in accordance

with the provisions of the cooperative by-
laws but the delegate or representative
elected or appointed to fill a vacancy shall
serve only the unexpired term of his/her
predecessor.
10. The resignation or removal
as well as the appeal of the
sector, chapter or district
(1). The sector, chapter or district representative
or delegate may resign for valid reasons.
Upon receipt of the notice, the BOD shall
act on the resignation letter within 60
days otherwise the resignation shall be
deemed approved;
(2) Any sector, chapter or district
representatives/delegates may be removed
by a vote of ¾ of all members with voting
rights present and constituting a quorum
at a sector, chapter or district meeting
called for the purpose;
(3) During the same meeting, the sector,
chapter or district shall fill the
vacancy. In case the removed
representative or delegate is an
incumbent officer of the cooperative,
his/her position shall be declared
vacant and shall be filled up in
accordance with the Rule of
Succession as provided for in the
by-laws of the cooperative but such
successor shall not necessarily
assume the position of his/her
predecessor unless it is provided in
However, in the case of membership in the
committee, the vacated membership shall be
filled up by the Board of Directors of the coop
from among the representatives / delegates.
11. The sector, chapter, or
district assembly meetings
The sector, chapter or district meetings shall

be a regular or special meeting. The regular
shall be conducted to elect the sector,
chapter or district representatives or
delegates and for such other purposes as
may be provided in the by-laws while the
special meeting shall be to report what has
transpired during the representative meeting
and for other purposes as may be provided in
the by-laws.
In either case, the conduct of the meeting
shall be presided by the lead representative
or delegate who obtained the highest
number of votes during the last sector,
chapter or district election.
12. The quorum required in
the representative assembly
meeting
At least 25% of all representatives/delegates

shall constitute a quorum for the RAM.
13. The powers of the
representative assembly.
The representative assembly shall exercise

the powers as provided for in the by-laws
14. The conduct of
meeting
The RAM shall be conducted in accordance with
the provision of the cooperative by-laws or in
absence thereof the following shall be observed:
1. The RAM shall be held In accordance with the

order of business addressing the agenda
prepared by the BOD;
2. The Chairperson or in absence thereof the
Vice Chairperson or Member of BOD shall
preside over the meeting;
3. The Election Committee shall supervise the
election of the BOD and Committee
Members of the cooperative; and
4. Each representative/delegate shall be
entitled to ONE (1) vote. The votes of each
sector, chapter or district shall be
considered the votes of all the members of
the sector, chapter or district they
represent.
15.The eligibility of the
representative or delegate
to be elected as officers of
the cooperative.
The Officers of the cooperative shall come from
the Representatives or Delegates of the sector,
chapter or district which shall be elected during
the RAM for a term fixed in the by-laws but not
to exceed 2 years and shall hold office until their
successors are duly elected and qualified or duly
removed for cause.
The term of office of the Officers of the
cooperative at the time of the adoption of RA
shall expire on the 1st regular RAM.
16. Other matters relevant to
the conduct of
meeting.
ILLUSTRATION :
A. SECTOR, CHAPTER, DISTRICT ASSEMBLY

a. 1,000 MEMBERS
b. GEOGRAPHICALLY LOCATED
Dist. 1 2 3 4 5 6 7 8 9 10 Total
# of 100 100 100 100 100 100 100 100 100 100 1000
Mem
bers
Quor 25 25 25 25 25 25 25 25 25 25 250
um
Dist. 10 10 10 10 10 10 10 10 10 10 100
Rep.
B. REPRESENTATIVE ASSEMBLY
QUORUM (10%) - 25
RULE II –
SUBSIDIARY
COOPERATIVE
PARTIES INVOLVED :
Parent Cooperative and the
Subsidiary Cooperative
Membership
All or majority of the members

shall come from the Parent
Cooperative.
GENERAL
REQUIREMENTS
In organizing a subsidiary
cooperative.
1. Parent cooperative shall be In
operation for at least 2 years, no
losses for the last 2 preceding years
of operation;
2. Parent cooperative shall have a net
worth of at least 10M as shown in the
latest Audited Financial Statements ;
3. All or majority of the members of the
Parent Cooperative are willing to
become members of the subsidiary
cooperative;
4. Business of the subsidiary
cooperative is different from the
business of the parent cooperative;
and
5. The creation of a subsidiary
cooperative and the technical,
managerial and financial assistance
to be given by the parent coop shall
be approved by at least ¾ votes of
the members of the parent
cooperative with voting right,
present and constituting a quorum
in the regular / special general /
representative assembly meeting
called for the purpose.
CONDITIONS to be
considered in the registration:
1. Only technical, managerial and financial

assistance shall be provided by the parent
cooperative to the subsidiary
cooperative;
CONDITIONS to be
considered in the registration:
2. Directors or Officers of the parent

cooperative cannot be Directors or
Officers of subsidiary cooperative but the
parent cooperative through the General
Assembly can appoint its representative
to act as ex-officio member of the Board
of Directors of the subsidiary cooperative;
3. The Management Staff of the Parent
Cooperative cannot be the Management
Staff of the subsidiary cooperative;
4. Transfer of shares of members and other
related interests from the parent
cooperative to the subsidiary cooperative
and vice versa are prohibited; and
5. The subsidiary cooperative cannot be a
recipient of any grant, donation or other
interests from the parent cooperative and
vice versa, in case of dissolution.
ALLOWED ASSISTANCE.
The financial assistance of the
parent cooperative to be given to its
subsidiary cooperative shall not to
exceed 10% of the net worth of the
parent cooperative. The technical
and managerial assistance shall
depend upon the needs of the
subsidiary cooperative.
RULE III
MULTI-
PURPOSE
COOPERATIVE
COVERAGE.
(1) All types of newly organized
primary cooperatives with
combined two or more business
activities of different types of
cooperatives.
(2) Single purpose cooperative
desiring to transform itself into a
multi-purpose cooperative after at
least 2 years of operation.
MINIMUM
CAPITALIZATION
REQUIREMENTS.
Minimum paid up capital of
P100,000.00 or as required by
the feasibility study whichever is
higher.
BOOKS OF ACCOUNTS.
The new and existing cooperatives

transformed into an MPC are
required to maintain separate books
of accounts for each business
activity.
RULE IV
DIVISION
OF
COOPERATIVES
PROCEDURE
1. Approval of the Proposal to Divide;
2. Formulation of Plan of Division;
3. Presentation and approval of the Plan of
Division to the General Assembly;
4. Posting and publication of the Notice of
Division;
5. Written Notification to Creditors;
6. Filing of the required documents with
the CDA;
7. Issuance of Certificate of Registration.
PROPOSAL OF DIVISION
Majority members of the Board of Directors or at
least 10% of the members with voting rights may
propose for division, which must be approved by
at least majority of the members with voting
rights, present and constituting a quorum in a
general or representative assembly called for the
purpose. Upon approval, a committee to
formulate the Plan of Division shall be constituted
by the General/Representative Assembly.
PREFERENCE OF MEMBERS
Upon approval by the GA/RA in the meeting

called for the purpose, members of the original
cooperative shall be allowed within 2 weeks to
choose the new cooperative they prefer to join.
The management of the original cooperative shall
then transfer the member’s share and all other
interests to his/her chosen coop.
PRESENTATION AND
APPROVAL OF PLAN
The Board of Directors shall call a
General/Representative Assembly Meeting to act
on such Plan of Division with notice to all
members of record and creditors at least 30 days
prior to the scheduled meeting. The Plan of
Division shall be approved by ¾ votes of all
members with voting rights, present and
constituting a quorum in a general /
representative assembly meeting called for the
purpose.
RIGHT OF A
DISSENTING MEMBER
A dissenting member shall be entitled to a refund

of his/her share capital and all other interests
under Art. 30 of the Code.
PUBLICATION
The Plan of Division shall be published once a
week in newspaper of general circulation or
alternatively by posting in at least 3 conspicuous
places for 3 weeks within its area of operation. It
may be also supplemented by radio and
television announcements.
OBJECTION BY
THIRD PARTY
Objection may be filed within 15 days from
posting or last day of publication which maybe
decided within 60 days from receipt of objection
hereof. If meritorious, the plan of division may
be deferred or disapproved.
ISSUANCE OF CERTIFICATE
OF REGISTRATION. The
Certificate of Registration shall be
issued to the new cooperatives. The old
certificate of registration shall be
surrendered to the CDA for cancellation.
RULE 5
MERGER OR
CONSOLIDATIO
N
PARTIES INVOLVED.
Cooperatives belonging only to

same category. i.e Primary to
primary, secondary to secondary
and tertiary to tertiary
cooperatives
PROPOSAL TO MERGE
OR CONSOLIDATE. The
Proposal may be made by the Board of
Directors or by at least 10% of the members
with voting rights and shall be approved by a
least majority of the members of each of the
constituent cooperatives with voting rights,
present and constituting a quorum in a
separate general or representative meeting
called for the purpose.
ARTICLES OF COOPERATION
AND BY-LAWS. In case of merger,
the Articles of Cooperation and By-
laws shall be amended while in
consolidation, a new Articles of
Cooperation and By-laws shall be
filed.
PROCEDURE:
1. Approval of Proposal to Merge or
Consolidate ;
2. Formulation of Plan of Merger or
Consolidation;
3. Presentation to and approval of the
Plan to the General Assembly of each
constituent cooperatives;
4. Formulation of the amendment or new
Articles of Cooperation and By-laws;
5. Posting/publication of Merger or
Consolidation ;
6. Written Notification to creditors;
7. Filing of the required documents with
the CDA; and
8. Issuance of Certificate of Registration of
Merger/Consolidation.
APPROVAL OF PLAN OF
MERGER/CONSOLIDATION
. The affirmative vote of at least ¾ of
all members with voting rights,
present and constituting a quorum of
each of the constituent cooperatives
at a separate general or
representative assembly called for
the purpose shall be necessary.
POSTING/PUBLICATION.
Announcement of merger or consolidation
may be done through publication in a
newspaper of general circulation once a
week for 3 consecutive weeks or by posting
in at least 3 conspicuous places in their
respective area of operation. This may be
supplemented by radio and television
announcements or any electronic means of
communication.
NOTICE TO CREDITORS
AND INVESTORS. May be
sent through letters by registered
mail with return card announcing
such merger or consolidation.
OBJECTION BY THIRD
PARTY. A third party may file an
objection or opposition to the Plan of
Merger or Consolidation within 15 days
after the date of posting or from the last
day of publication which shall be decided
60 days from receipt of the objection or
opposition. If meritorious, the CDA may
cause the deferment or disproval of the
merger or consolidation.
CERTIFICATE OF MERGER
OR CERTIFICATE OF
REGISTRATION. The CDA shall
issue a Certificate of Merger in case
of merger, and a new Certificate of
Registration, in case of consolidation.
RULE VI
LABORATORY
COOPERATIVE
MINOR shall refer to 7 years
old but below 18 years of age.
ORGANIZATION.
(1) 15 or more minors;
(2) Filipino citizens, actually residing
in community or enrolled in an
educational institution within or
near the area of operation of the
guardian cooperative; or
(3) Out of school minors actually
residing in a community.
CAPITALIZATION.
No required capitalization but
program of continuous capital build-
up to be included in its By-laws.
AFFILIATION. Must be
affiliated with a duly registered
cooperative known as Guardian
Cooperative .
A laboratory cooperative primarily composed
of:
❖ Students from a particular school shall be
affiliated with school’s cooperative.
❖ Out of school minors shall be affiliated
with its choice within or nearest its area
of operation.
In the absence of a duly
registered cooperative in the area
or refusal of a duly registered
cooperative to accept the affiliation
of a laboratory cooperative, the
CDA nearest office may identify a
possible guardian cooperative for
the laboratory cooperative.
CONDITION FOR
TERMINATION OF
MEMBERSHIP.
❖ Upon reaching the age of
majority (18 years of age);
❖ Those provided under Art. 30
of the Code; and
❖ Such other conditions as may
be provided for in the by-laws.
REFUND OF SHARE. Upon
termination of membership, the
former member shall be entitled to
refund of his/her share capital
contribution and other interest in
accordance with Art. 31 of the Code.
OPTION OF MEMBER
WHO REACHES THE AGE
OF MAJORITY. May opt to
join the guardian cooperative upon
compliance with the requirements
of membership.
CERTIFICATE OF RECOGNITION
shall be issued by the CDA under its
official seal upon compliance of all the
requirements set forth under this Rule.
However, the issuance of Certificate of
Recognition does not bestow juridical
personality to a laboratory cooperative.
RULE VII
FUNCTIONS,
RESPONSIBILITES AND
TRAINING REQUIREMENTS
OF DIRECTORS, OFFICERS
AND COMMITTEE MEMBERS
OFFICERS OF THE
COOPERATIVE:
❖ Members of the Board of Directors;
❖ Members of the different committees
created by the General Assembly;
❖ General Manager or Chief Executive
Officer;
❖ Secretary;
❖ Treasurer; and
❖ Members holding other positions as
may be provided in the By-laws.
COMMITTEES OF
COOPERATIVE PROVIDED IN
THE BY-LAWS:
❖ Audit Committee;
❖ Election Committee;
❖ Mediation and Conciliation Committee;
❖ Ethics Committee; and
❖ Other Committee as may be necessary
for the conduct of the affairs of the
cooperative.
TRAINING REQUIREMENTS FOR THE
OFFICERS OF THE COOPERATIVE.
1. Officers of the cooperative shall be
required to undergo necessary trainings
conducted by cooperatives, federations
and/or other trainers or training
institutions duly accredited by CDA.
2. Training program should contain
minimum requirements in the
module/curriculum as prescribed by CDA.
3. The initial courses or any equivalent
substitute thereof must be undertaken.
COMPLIANCE. The training is
required for all officers of the cooperative.
In cases where the incumbent has not
undergone the required training program,
he/she shall undergo such training within
12 months from the effectivity of this
Rule. Non-compliance with the required
trainings shall be considered grounds for
disqualification for future election or
appointment until such time that he/she
has complied with all the trainings
required for the position.
DURATION OF TRAININGS
ATTENDED. All trainings
attended by the Officers of the
cooperative shall be considered
valid compliance with the intent of
this Rule for a period of 5 years from
the date of issuance of the
Certificate of Training. After which
they shall be required to undergo re-
training of the same.
TRANSITORY PERIOD. All
cooperatives are given 2 years from
the effectivity of this Rule to comply
with the training requirements.
RULE VIII
REPORTS
REQUIRED
FOR
COOPERATIVES
ANNUAL REPORTS TO BE
SUBMITTED TO CDA:
1. Cooperative Annual Performance Report

(CAPR);
2. Social Audit including the program of
activities in pursuance of its socio-civic
undertakings showing its achievements at
the end of every fiscal year;
ANNUAL REPORTS TO BE
SUBMITTED TO CDA:
3. Performance Report;
4. Audited Financial Statement duly stamped
“received” by the BIR;
5. List of Officers and Training Undertaken /
Completed.
ADDITIONAL REPORTS FOR
FEDERATION AND
UNIONS:
1. List of Cooperatives which have remitted
their respective cooperative education
and training funds ( CETF);
2. Business Consultancy Assistance to
include the nature and cost; and
3. Other training activities undertaken
specifying the nature, participants and
cost of each activity.
WHEN AND HOW TO
FILE. A copy of the above required
reports shall be filed with the CDA
either through personal, registered
mail, courier, or electronic means
within 120 days from the end of
every calendar year.
PREPARATION OF
REPORTS. Reports shall be
typewritten or printed in the form
prescribed by the CDA certified by
the Chairperson and General
Manager.
FAILURE TO SUBMIT
REPORTS ON TIME shall be
considered delay or default.
The following fortuitous events
shall not considered delay provided
the CDA shall be officially notified of
the occurrence of such fortuitous
events:
1. Fire and other natural
calamities;
2. Public disorders including
strike or lock out; or
3. National emergency which
affects the operation of
the cooperative.
When delay or default shall
commence. Delay or default shall
commence on the day following the
last day required for the submission
of the reports. Should the last day
falls on a non-working day in the
locality where the reporting
cooperative is located, delay or
default shall start to run on the day
following the next working day.
DATE OF FILING. The date of
acknowledgement by CDA appearing
on the copies of such reports filed
or submitted or mailing postmarked
on the envelope/date of registry or
special delivery receipt, or the date
the electronic mail was sent as the
case may be shall be considered the
date of filing.
SANCTION FOR DELAYED
SUBMISSION.
•FINE. P 100.00/ REPORT / DAY OF
DELAY. A request for reconsideration on
grounds of fortuitous events and court
litigation/order within 30 days from receipt of
statement of accounts which shall be acted upon
within 60 calendar days otherwise the sanctions
shall be deemed lifted.
The decision of the CDA
shall be final and
executory.
•Dissolution/revocation after due
process of the cooperative to operate
as such.
RULE IX
LIQUIDATION OF
COOPERATIVES
COVERAGE .
1. Cooperatives whose charter

expires by its own limitation;
2. Cooperatives whose
existence is terminated by
voluntary dissolution; and
3. Cooperatives whose
existence is terminated by
appropriate judicial
proceedings.
MODE OF LIQUIDATION
1. Liquidation by cooperative itself
through a Board of Liquidators
elected from among the
member entitled to vote of the
cooperative.
2. By conveying all the cooperative
assets to trustee/trustees who
will take charge of liquidation.
PROCEDURE
1. Constitution of the Board of
Liquidators / Trustees.
2. Inventory of Assets and
Liabilities of the cooperative;
3. Payment of creditors in
accordance with the provision
of the Civil Code on the
Preference and Concurrence of
Credits.
4. Transfer of the Statutory Funds to
the intended beneficiaries.
5. Distribution of the remaining
assets;
6. Submission of the Board of
Liquidators / Trustees of the
Liquidator’s Final Report.
7. Cancellation of the Certificate of
Registration and Delisting of
Name of the cooperative in the
Cooperative Registry.
DONATED CAPITAL.
Subsidies, donations, legacies,
grants, aids and such other
assistance from any local or foreign
institutions whether public or private
shall be subject to escheat.
UNDISTRIBUTABLE
ASSETS. After winding up of the
affairs of the cooperative, the assets
distributable to creditor or member
whose whereabouts is unknown or
cannot be found shall be given to the
federation/union to which the
cooperative is affiliated with, the
distribution shall be done in proportion
to their share capital.
In case of non-affiliation, the
undistributed assets shall be given
to the community where the
cooperative operated.
ALLOWED TIME FOR THE
WINDING UP OF THE AFFAIRS
OF THE COOP. The cooperative shall
continue to exist for a period of 3 years from
the issuance of Order of Dissolution. The
purpose is not to continue the business for
which it was established but for the purpose
of prosecuting and defending suits filed by or
against the cooperative, settlement and
closure of its affairs, disposition, conveyance
and distribution of its assets.
Nevertheless, at any time during
the said three year period, the
cooperative is authorized and
empowered to convey all its
properties to trustees for the benefit
of its members, creditors, and other
persons in interest, after which, all
interests which the cooperative had
in its properties are terminated.
SUBMISSION OF BOARD
OF LIQUIDATOR’S REPORT.
Final Report to the members of the
liquidated cooperative, CDA, and
Federation/Union to which the
cooperative is affiliated with. After
which, the Liquidators/Trustees shall
be released from their duties and
functions.
For failure to submit the Final
Report, the Board of
Liquidators/Trustees shall not be
released from their duties and
functions, hence, no clearance shall
be issued by the CDA.
SUMMARY
PROCEEDINGS. The CDA may
choose to initiate summary
proceedings for cooperatives with
assets of not more than P
100,000.00 as shown in the Audited
Financial Statements by submitting
the following documents to CDA:
1. Schedule of Assets;
2. Proposal of Distribution of
Assets to its Members;
3. List of intended
beneficiaries of the
statutory funds;
4. Affidavit of No Creditors;
and
5. Audited Financial
Statements.
After evaluation, the CDA shall
issue a written authority to the
Board of Directors to distribute
the assets of the coop, after
which the Board of Directors
shall submit a final report.
EXCEPTION. OUTRIGHT
CANCELLATION OF CERTIFICATE
OF REGISTRATION. The CDA may
outrightly cancel the Certificate of
Registration of a cooperative which has
been proven to have no assets or in case
the cooperative can no longer be
located despite the best efforts to locate
the same. Such facts shall be stated in
the Order of Cancellation.
RULE X
CAPITALIZATION
AND ACCOUNTING
PROCEDURES OF
COOPERATIVES
CAPITAL SOURCES OF
COOPERATIVE. Capitalization
of cooperatives may be derived from
the following:
1. Member’s Share Capital;
2. Loans and Borrowings
including Deposits;
3. Revolving Fund which consists
of the deferred payment of
patronage refunds, or interest
on share capital;
4. Subsidies, Donations, Legacies, Grants,
Aids, and such other assistance from
any local or foreign institutions
whether public or private, provided
those coming from such shall not be
divided into individual share capital
holdings at any time but shall instead
form part of the donated capital or
fund of the cooperative.
SHARE CAPITAL.
• Par value may be fixed at any
figure not more than P1,000.00.
• Consist of:
• Common Share Capital and
• Preferred Share Capital if the
latter is provided under the
cooperatives Articles of
Cooperation and By-laws.
CAPITAL BUILD-UP. The By-
laws of the cooperative shall provide
for a reasonable and realistic
member capital build-up program to
allow the continuing growth of the
member’s investment in their
cooperative as their own economic
conditions continue to improve.
LIMITATION ON SHARE
CAPITAL.
1. On Primary cooperative. No member
of a primary cooperative other than
the cooperative itself shall own or
hold more than 10% of the share
capital of the cooperative.
2. On secondary or tertiary
cooperative. Members should own
not more than 10% of the share
capital of the cooperative.
FINES ON UNPAID
SUBSCRIBED SHARE
CAPITAL. The By-laws of a
cooperative shall prescribe a fine on
unpaid subscribed share capital
provided such fine is fair and
reasonable under the circumstances
as determined by the Board of
Directors.
ASSIGNMENT OF SHARE
CAPITAL CONTRIBUTION
OR INTEREST. Subject to the
provisions of R.A. 9520, no member
shall transfer his/her shares or
interest in the cooperative or any part
hereof unless:
1. He/she has held such share
capital contribution or interest
for not less than 1 year;
2. The assignment is made to the
cooperative or to a member of
the cooperative or to a person
who falls within the field of
membership of the
cooperative; and
3. The Board of Directors has
approved such assignment.
INTEREST ON SHARE CAPITAL.
Interest on Share Capital shall not
exceed the Rate of Return on
Investment. No allocation of interest
on share capital shall be made without
the approval of the Board of Directors.
No cumulative interest shall be
allowed for any kind or class of
shares issued by the cooperative.
Share capital shall receive a

strictly limited rate of interest.
Unless otherwise provided in the
by-laws, share capital shall earn
interest; the rate of interest shall be
computed as follows:
Rate of Interest = x (Net Surplus less Statutory Reserves)

_____________________________________
Total Average Share Month
PATRONAGE REFUND. The
principle of patronage refund is a principle
of equity wherein an equal right of
members to participate in the organization
and to equitably share in the benefits
accruing is established. Under the principle,
the net surplus shall not be construed as
profit, but as excess payments made by
them from the cooperative and which shall
be deemed to have been returned to them
if the same is distributed as prescribed by
the Code and by this Rule.
The amount allocated for
patronage refund shall not be less
than 30% of the net surplus after
deducting the statutory reserves
based on the principle of equity. In
no case shall the rate of patronage
refund be more than twice the rate
of interest on share capital.
ACCOUNTING PROCEDURE.
The accounting system to be installed /
maintained in the cooperative shall be in
accordance with the Generally Accepted
Accounting Principles and Practices, taking
into consideration the cooperative
principles and practices. The cooperative
shall use the Standard Chart of Accounts
and its accompanying Accounting Manual
prescribed by the CDA.
RULE XI
SOCIAL AUDIT
OF
COOPERATIVES
COVERAGE. All registered
cooperatives regardless of types and
categories shall be subject to Social
Audit.
OBJECTIVES / USES OF
SOCIAL AUDIT.
1. It validates the support of the
cooperative to the 7th coop principles
on the concern for community and
determines whether the coop work for
the community’s sustainable
development thru policies approved by
their members.
2. The audit focuses not only to the
economic side of the cooperative
but also the social aspect of the
organization and appraises the
cooperative performance as value
based organization usually
participative, user and community
oriented and non-profit but service
organization and how its social
responsibility for its members and
the community as a whole was
fulfilled.
COMPONENTS AND
SOCIAL AUDIT INDICATORS.
Social Audit of the cooperatives shall
consist of, but not limited to the following
major components/categories with its
membership:
1. Membership;
2. Assets Building;
3. Community Involvement and
Solidarity;
4. Information Accessing and
Dissemination;
5. Gender, Youth, Elderly,
Children and Persons with
Disability; and
6. Leadership and Organization
Management.
SOCIAL AUDIT
MANUAL. The CDA shall
develop a Social Audit Manual that
will be used for the purpose.
APPLICABILITY. All registered
cooperatives shall submit to the
Authority the Annual Social Audit
Report as conducted by an
Independent Social Auditor
accredited by the Authority.
SANCTIONS. The failure of the
cooperatives to submit to the CDA of
the required Social Audit Report
conducted by the Accredited
Independent Social Auditor shall
mean non-compliance with the
required reports and will meted with
corresponding penalties in
accordance with RA 9520.
TRANSITORY PERIOD. All
cooperatives are given 2 years from
the effectivity of this Rule to comply
with the Social Audit Requirements
as provided by this Rule.
RULE XII
FINANCIAL
SERVICE
COOPERATIVE
( FSC)
COVERAGE.
1. All FSC organized for the primary
purpose of engaging in savings and
credit services and other financial
services, and
2. Existing cooperatives with savings and
credit facilities which has formally
notified the CDA of their intention to
exercise enhanced functions and
satisfied the requirements of CDA for
conversion to FSC.
REGISTRATION. The Articles
of Cooperation and By-laws of any
FSC or any amendment thereto, shall
be registered with the CDA only if
accompanied by a Certificate of
Authority issued by the BSP under its
official seal.
Existing cooperative engaged in
credit and MPC activities, after it has
notified the CDA of its decision to
exercise enhanced functions and
satisfied the requirements for the
conversion of FSC shall register its
amended Articles of Cooperation
and By-Laws to the CDA upon
approval of the CDA and favorable
certification of the BSP.
MINIMUM
CAPITALIZATION.
Only cooperatives with minimum
paid-up capital of at least P10M shall
qualify to register as FSC without
prejudice to additional capital
requirements that may be prescribed
by BSP for a particular financial
service regulated by the BSP that will
be offered by the FSC.
MANUAL OF RULES AND
REGULATIONS. The CDA shall
develop a Manual that will cover:
1. The Rules and Regulations for
the safe and sound conduct of
operations of FSC;
2. Rules and Regulations for the
appointment of Conservator or a
Receiver as may be necessary in
coordination with the BSP; and
3. The BSP shall develop the
appropriate prudential Rules and
Regulations applicable to the
PROHIBITION. The terms
“Credit Cooperatives”, FSC and FSC
Federation shall be used exclusively by
those who are duly registered under
the Code, and no person, group of
persons, or organization shall use the
said terms unless duly registered with
CDA.
Violations of this prohibition
shall be punishable in accordance
with Art. 140 of the Code.
RULE XIII
VOLUNTARY
ARBITRATION
COVERAGE. All intra/inter
cooperative disputes not resolved in
accordance with the conciliation-
mediation mechanisms embodied in
the By-laws of a cooperative shall be
governed by this Rule.
COMMENCEMENT OF
ACTION. Any party of a dispute
not resolved through Conciliation /
Mediation proceeding in the
primary and union/federation level
can commence an action by filing a
Verified Complaint with the CDA.
In case of primary cooperative
affiliated with any federation/union,
the complaint shall be accompanied
by a Certificate of Non-Settlement
(CNS) issued by the said
federation/union to which the
primary cooperative is affiliated
with.
In the case of a primary cooperative
not affiliated with any federation/union,
the complaint shall be accompanied by a
Certificate of Non - Settlement issued by
the Mediation-Conciliation Committee of
such primary cooperative together with a
Certificate of Non-Affiliation with any
federation/union signed by the
Chairperson of the Board of Directors of
the same cooperative.
VENUE OF ACTION. All
complaints shall be filed with CDA
Extension Office having
administrative jurisdiction over the
cooperatives. For cooperatives
registered with the Central Office
said complaints shall be filed with
the latter.
CONTENTS OF COMPLAINT.
1. The names and addresses of the
complainant/s and respondent/s.
2. A brief description of the
complaint and documentary
evidences, if any; and
3. The relief prayed for.
PARTIES TO THE
COMPLAINT.
1. Complainant/s – the party who
filed the complaint.
2. Respondent/s- the party
complained of.
PROCEDURE:
1. Upon receipt of complaint, the
CDA shall issue a
Notice/Summons to the
respondent/s to file an
Answer/Comment.
2. Upon receipt of Answer /
Comment, the preliminary
conference shall be scheduled.
3. Notice indicating the time and
date of preliminary conference
shall be sent to all parties
concerned.
4. Signing of Submission Agreement.
5. Arbitration Proceedings.
6. Rendering of Decision/Award.
7. Enforcement/Execution of the
Decision/Award.
8. Appeal to the Office of the
President within 15 days from
receipt of Decision/Award.
CONTENTS OF SUBMISSION
AGREEMENT.
1. The Agreement to submit to
Voluntary Arbitration;
2. The specific issue/s or dispute /s
to be submitted for Resolution;
3. The name of the Voluntary
Arbitrator/s chosen by the
parties;
4. The manner of paying the
cost of arbitration
proceedings including the
arbitrator’s fee;
5. The name of the public
official who the parties may
designate to execute the
Final Decision or Award, if
necessary; and
6. The agreement to perform or
abide by the Decision/Award.
ARBITRATION PROCEEDINGS.
All parties to the dispute shall attend the
arbitration proceedings. The attendance of
any third party or the exclusion of any witness
in the proceeding shall be determined by the
Voluntary Arbitrators. Hearings may be
adjourned for a valid cause or upon
agreement of the parties. Unless the parties
agree otherwise, it is mandatory for the
Voluntary Arbitrator to render a Decision or
Award within 30 days from the date the
parties agreed to submit the case of
resolution.
DECISION/AWARD. The final
disposition of the issue/s submitted to
Voluntary Arbitration is the Decision /
Award. The Decision or Award must be
stated in clear, concise and definite terms.
It shall include the facts and the law
and/or contract which the decision or
award is based and shall be signed by the
Voluntary Arbitrators. A copy of this
Decision/Award shall be furnished the
Authority.
EXTENT OF THE
DECISION / AWARD. The
Voluntary Arbitrator/s shall have
only the power to decide the
matters which have been submitted
for arbitration.
ENFORCEMENT/ EXECUTION
OF DECISION OR AWARD. The
parties shall comply voluntarily and faithfully
the Decision/Award. In instances of non-
compliance, a Motion to Enforce or Execute
may be filed with the Voluntary Arbitrator
who may issue a Writ of Execution requiring
either the Sheriff of the Authority, if any, or
the regular courts or any public official
whom the parties may designate in the
submission agreement to execute the final
Decision or Award.
APPEAL TO OFFICE OF THE
PRESIDENT OF THE
PHILIPPINES. The Decision or
Award shall be appealable to the OP by
filing a Notice of Appeal within 15 days
after receipt of the copy of the Decision
or Award. If no Appeal is filed within the
time as prescribed herein, such Decision
or Award become final and executory.
COST OF ARBITRATION
AND ARBITRATOR’S
FEE. Unless agreed otherwise, the
parties shall mutually share the cost
of the proceedings including the
arbitrator’s fee.
ACCREDITATION OF
VOLUNTARY ARBITRATOR/S.
The CDA shall issue Guidelines
concerning the Accreditation and De-
listing of Voluntary Arbitrator/s as well
as the list of Qualified Voluntary
Arbitrator/s.
HOUSING
COOPERATIVES
LEGAL BASIS:
Article 62 (13) Chapter V
Coverage
All cooperatives duly registered

with CDA under R.A. 9520.
Organization
15 or more natural persons,
Filipino, of legal age, having a
common bond of interest and
actually residing or working in the
intended area of operation may
organize
Purposes and Objectives
Refer to Rule 1 - Sec. 3

Registration Jurisdiction
File application with CDA Extension

Office which shall have jurisdiction
over the said cooperative.
Capitalization
For purposes of registration with
CDA, shall have a minimum paid-up
capitalization of P 15,000.00
Requirements for
Registration
Refer to Rule 1-Section 7

Financing and Technical
Assistance
The CDA in coordination with
appropriate government agencies
and financial institutions, shall
assist housing cooperatives in
availing technical & financial
assistances for its housing projects.
A special window for financing of the
housing project shall be created by the
appropriate housing agencies &
government financial institutions, the
financing to be in the form of blanket
loans or wholesale loans to qualified
housing cooperatives w/ interest rates
& terms equal or better than those
given for socialized housing projects
without need for individual processing.
Documentary
Requirements in Availing
Technical/Financial
Assistance
Cooperatives shall file its
application for financial assistance
with the appropriate government
financial institutions and shall
comply with all the requirements as
may be required by such
government financial institutions.
Conditions for the
Proposed Housing
Projects
1. Availability of land suitable for
housing - the land is safe &
buildable, not affected by any
government infrastructure
project, agricultural or
industrial reserve.
2. Land Ownership - owned by the
cooperative or there is an
ongoing negotiation between
the landowner & the
cooperative.
3. Target Beneficiaries - 30.
Membership
Open to all natural persons who

meet the qualifications for
membership as prescribed in the
Regulatory Power
CDA to regulate the internal affairs
of the cooperative while matters
relating to technical aspects of the
housing program & such other
similar matters affecting housing
cooperatives shall be regulated by
NHA or HLURB as the case may be.
Joint Monitoring &
Evaluation Committee
Composed of CDA as lead
agency, NHA, HLURB, HDMF, SSS,
GSIS, LBP, DBP, concerned
cooperative sector and appropriate
government agencies & financial
institutions.
Settlement of Disputes
Inter / intra cooperative disputes
shall be resolved in accordance with
Mediation / Conciliation
Mechanism embodied in coop by-
laws following the CDA Guidelines
on Mediation / Conciliation and
applicable laws.
Should the conciliation - mediation
proceedings fail, the matter may be
settled through voluntary arbitration
or in a court of competent
jurisdiction.
In cases where the disputes fall
within the jurisdiction of
NHA/HLURB the same shall be
referred to said agency and shall
be resolved in accordance with
the NHA/HLURB regulations.
AGRARIAN REFORM
COOPERATIVES
LEGAL BASIS:
Art.93 (6), Art. 94 (par.2),
Chapter XI
Coverage
All Agrarian Reform Cooperatives

duly registered with CDA under
R.A. 9520.
Organization
At least 15 marginal farmers

majority of w/c are Agrarian
Reform Beneficiaries in an agrarian
reform areas may organize an ARB
Cooperative.
Purposes and
Objectives
Refer to Rule I1 - Sec. 3
Registration
Jurisdiction
File application with CDA
Extension Office which shall
have jurisdiction over the said
cooperative.
Capitalization
For purposes of registration with
CDA, shall have a minimum paid-
up capitalization of P 15,000.00.
However to engage in
operation of public utilities &
services, refer to Rule 5 of IRR
for Certain Provisions of RA
9520. In case it is engage in
transport service, it shall comply
with other requirements
prescribed in this Rule.
Membership
Termination &
Valuation and/or
Transfer of Share
Capital
Plantation Based Agrarian
Reform Coop covered by CLOA
shall be governed by DAR-CDA AO
No. 9.
Non-plantation Based Agrarian

Reform Coop shall be governed
by Art. 30, 31 & 74 of RA 9520
and by-laws of the cooperative.
Privileges
Governed by Art. 93 of RA 9520

Preferential Rights
and Treatment
Governed by Art. 90 & 92 of RA

9520.
Lease of Public Lands

Coop Estates
Requirements for
Registration
Refer to Rule I1- Section 5

Coop Name
All coops organized for any or
all of the purposes/objectives for
agrarian reform coops shall always
bear the word “Agrarian Reform”
whether engaged in the operation
of public utilities & services and/or
other business activities/services.
Existing ARB coops shall amend
their coop name.
Amendments of AC & BL
Agrarian Reform Cooperatives
intending to engage in the
operation of public utilities &
services shall amend its AC & BL. It
shall also comply w/ other
requirements imposed by CDA &
other appropriate government
agencies for cooperatives engaged
in public utilities & services.
Financing and
Technical
Assistance
The Government shall
provide the necessary financial &
technical assistance in accordance
with the joint program geared
towards the gradual assumption of
full ownership & management
control of the cooperative estate
by Agrarian Reform Cooperatives.
Financing Program to be
availed of by ARB cooperatives
shall be in accordance with the
joint program to be developed by
DAR, BSP and CDA.
R CDA to regulate the internal affairs
E
G
of the cooperative while matters
U relating to land acquisition,
L
A development of an appropriate
T
O
system of land tenure, land
R development, land consolidation or
Y
P land management in areas covered
O
W
by agrarian reform and such other
E similar matters affecting the
R
S Agrarian Reform Cooperatives shall
be regulated by DAR.
Settlement of
Disputes
Inter/intra cooperative disputes
shall be resolved in accordance
with Mediation / Conciliation
Mechanism embodied in coop
by-laws following the CDA
Guidelines on Mediation /
Conciliation and applicable laws.
Should the conciliation -
mediation proceedings fail, the
matter may be settled through
voluntary arbitration or in a court
of competent jurisdiction.
within the jurisdiction of the DAR,
the same shall be referred to the
said agency and shall be resolved in
accordance with the DAR
regulation.
INSURANCE
COOPERATIVES
LEGAL BASIS:
Art. 108 Chapter XIII

Coverage
All insurance cooperatives duly

registered with CDA under R.A.
9520.
Organization
15 or more duly registered

cooperatives may organize.
Refer to Rule II1 - Sec. 3

File application w/ CDA Central Office.

Capitalization
Minimum paid up of P125M or as
required in Dept. Order No. 27-06
of DOF. However, it may be
modified but in no case be
reduced to less than half of those
provided by rules, regulations or
laws.
Certificate of Authority
Secure within 2 years from the
date of registration. Valid until the
30th day of June of the year following
its issuance. Failure to secure the
same shall be a ground for
revocation / cancellation of the same.
After due notice & hearing the
IC may suspend or revoke the
Certificate of Authority issued to
Insurance Cooperatives for
violation of any existing laws, rules
or regulations or provisions of the
Insurance Code.
Membership
Open to all duly registered

cooperatives of all types &
categories.
Regulatory Powers
CDA to regulate the internal
affairs of the coop while matters
relating to the organization and
operations concerning insurance
business shall be regulated by
the Insurance Commission as
provided for in the Insurance
Code and other related laws.
Limitations
Coops intending to engage in
insurance, insurance like and
other similar activities shall
register with CDA and secure a
Certificate of Authority.
CIS are not allowed to serve the
insurance needs of other
cooperatives that are not member –
owners of CIS. A CIS serving the
insurance needs of non-member
cooperatives and the general public
shall be required to get a commercial
insurance license from the Insurance
Commission.
CIS – Cooperative Insurance Societies
Primary cooperatives not
registered and licensed to
operate as Insurance
Cooperative are prohibited to
engage in insurance, insurance
like and other similar business
activities with their members.
However, those already
engaging in such shall be given
2 years transition period to
undertake any of the following
option:
1) Organize an insurance
cooperative with other primary
cooperatives that have the
same insurance like business
activity;
2) Join an existing insurance
cooperative;
3) Partner with licensed micro -
insurance providers; and
4) Buy a micro-insurance product
through a licensed agent or
broker.
All existing insurance
cooperatives with member’s
which are non-cooperative
and/or cooperative oriented
societies and organizations are
hereby given 5 year period to
terminate and remove such
entities from their member
registry.
Failure to comply within the
given period shall constitute a
violation of the Rule and shall
be dealt with in accordance with
the provision of RA 9520 and
other applicable laws.
Joint Monitoring &
Evaluation Committee
Composed of 2 representatives
each from CDA and Commission
and representative from Insurance
Cooperatives. The representative
from CDA to chair the Committee.
Settlement of
Disputes
Mediation / Conciliation Mechanism
embodied in coop by-laws following
the CDA Guidelines on Mediation /
jurisdiction.
within the jurisdiction of the
Commission, the same shall be
referred to the said agency and
with the Commission’s
regulation.
WATER SERVICE
COOPERATIVES
LEGAL BASIS:
Art. 111(3) Chapter XIV

Coverage
All cooperatives duly registered
with CDA under RA 9520 whose
main purpose or one of its
purposes is to own, operate,
manage and supply water supply
systems for the provision &
distribution of potable water to its
members & other customers.
Organization
organize.
File application with CDA-E.O.

w/c shall have jurisdiction over
the same.
Capitalization
Minimum paid-up capitalization of P
15,000.00.
Requirements for
Registration
Refer to Rule IV - Sec. 4

Membership
A. Regular member - member
consumer.
B. Associate member - member
–institution or entity availing
of service of water service
cooperative as represented
by head of entity or
establishment.
Service Area
Provide services within the area
specified in CPC. In case of
expansion, the cooperative shall
apply for an extension of service
area with NWRB.
Water Permit
Shall secure water permit from
NWRB in accordance with the
provisions of Water Code of the
Philippines.
Requirements for
Filing Water Permit
Applications
Separate Requirements for
Domestic Purposes and
Municipal Use. Refer to Rule IV-
Sec.9.
Requirements for
Issuance of CPC
and Tariff Approval
Refer to Rule IV-Sec. 10
Regulatory Power
CDA to regulate the internal affairs
but all matters relating to CPC such
as capitalization & investment
requirements, equipment & facilities,
water tariff, and such other matters
affecting water service operations
shall be governed by NWRB.
Role of LWUA
1.Provide technical assistance
such as capacity building;
2.Assist in the determination of
water potability; and
3.Such other assistance as may
be required by the
cooperative.
Preferential Rights
In case there are two or more
public service entities applying
for CPC NWRB shall accord
preference to cooperatives duly
registered with CDA.
Responsibility of
Water Service
Cooperative
Among others, Water Service
Cooperative shall provide safe
and adequate potable water
service. It shall give notice to
member-consumers in advance to
any contemplated interruption of
water supply and duration and
affected areas & shall develop a
Consumer Service Code consistent
with its by-laws and NWRB
Economic Regulatory Guidelines.
Reporting Requirements
It shall submit reports to CDA as
required under the IRR of Certain
Provisions of RA 9520 and other
reports as required by NWRB,
DOH and other concerned
government agencies.
Requirements for
Renewal of CPC
Refer to Rule IV-Sec. 17
Securing of
Water Permit
Water Service Cooperative including
MPC with water service operation
shall secure water permit from
NWRB.
For those without water permit
and/or CPC, the CDA shall
report the matter to NWRB which
shall take action thereof.
Failure to legalize the operation
within 2 years from date of
referral to NWRB, the same shall
be considered a valid ground for
revocation of the cooperatives
Certificate of Registration after
due process.
Action on the
Application of CPC
NWRB shall approve or reject
the application within 6 mos.
from the date of receipt of the
complete requirements.
jurisdiction.
However, cases where the
issue/s fall within the jurisdiction
of NWRB, the same shall be
referred to the said agency and
with NWRB regulation.
TRANSPORTATION
SERVICE COOPERATIVES
LEGAL BASIS:
Art. 113 (2) Chapter XIV

Coverage
All transportation service cooperatives
duly registered with CDA under RA
9520 which are organized to render
public service such as land, sea/water
transportation services limited to small
vessels for safe conveyance of
passengers and/or cargo.
File application with CDA-E.O.

w/c shall have jurisdiction over
the same.
Capitalization
Minimum paid-up capitalization of
P15,000.00.
However to operate as such,
capitalization and minimum
number of cooperatively
owned units shall be :
TYPE AMOUNT MIN. NO. OF
UNITS
Tricycle P15,000.00 5 units
Jeepney P30,000.00 5 units
Taxi P30,000.00 5 units
AUV/FX/VAN P30,000.00 5 units
Mini Bus/Bus P50,000.00 2 units
Trucks for Hire P50,000.00 2 units
Ship P10,000,000.00 1 unit
Ferry Boat P5,000,000.00 1 unit
Motorized Banca P100,000.00 1 unit
Requirements for
Registration
Refer to Rule V - Sec. 6

Requirements for
Renewal of CPC
Renewal of franchise & vehicle
registration shall be granted
upon submission of CGS from
CDA & OTC and CO from Local
government in case of tricycle
Allied Services
Primary, secondary and tertiary
federation may engage in
business related to
transportation services including
but not limited to:
1. Importation, distribution &
marketing of petroleum
products in accordance with
existing laws;
2. Operation of gasoline stations &
transportation service centers;
3. Importation, distribution &
marketing of spare parts &
supplies; and
4. Marketing of vehicles/drivers
insurance policies.
Multi-Purpose
Cooperatives
intending to engage
in transportation
service
Shall comply with the following
requirements:
1. Amended AC & BL;

2. CETOS;
3. Franchise and vehicle units
requirements; and
4. Pay the amendment fee.
Regulatory Power
CDA to regulate the internal affairs but all
matters relating to franchise or CPCN such
as capitalization & investment
requirements, equipment & facilities,
frequencies, rate-fixing, registration,
dropping & substitution of units ,& such
other matters affecting transportation
service operations shall be governed by
LTFRB/LTO/OTC for land transportation;
MARINA/PCG for water transportation and
LGU/LTO/OTC for tricycle.
Monitoring Committee
A. CDA to create National Committee to
be composed of representative from
CDA, as ex-officio chairperson, LTO,
LTFRB, OTC, LGU & other concerned
government agencies & National
Federation of Transportation
Cooperatives. This shall be organized
30 days from effectivity of the Rule.
B.CDA to create a Local
Monitoring Committee in
its E.O, to be organized
within 90 days from receipt
of the rules & regulations
from the National
Committee.
jurisdiction.
However, where issues fall
within the jurisdiction of DOTC,
LTFRB, LTO, MARINA and OTC
the same shall be referred to
said agencies and shall be
resolved in accordance with
their regulations.
ELECTRIC
COOPERATIVES
LEGAL BASIS:
Art. 134 (2) Chapter XVII
Coverage
All EC’s registered w/ the CDA

under RA 9520 that undertake
its primary purpose. It shall also
cover new distribution utilities
that will register w/ CDA.
Primary Purpose – 1. To
undertake power generation
utilizing new & renewable
energy resources including
hybrid systems, acquisition, &
operation of sub-transmission
and/or distribution & supply of
electricity.
2. To venture into other purposes
as long it is related to the
primary purpose & objective of
the cooperative.
3. To undertake the
implementation of the Rural
Electrification program in their
respective areas of coverage in
consonance w/ their CPC; and
4. To exercise the power of
eminent domain which
shall not be diminished
subject to the
requirements of the
constitution and existing
relevant laws.
File application with CDA-E.O. w/c

shall have jurisdiction over the same.
However, if opted to register with
CDA - Central Office, if processes
& approved by the Central Office,
such registration shall be
forwarded to CDA-E.O. where the
cooperative is located and the
same E.O. shall assume
jurisdiction over the said
cooperative.
Capitalization
P5,000,000.00.
Requirements for
Registration
Refer to Rule VI - Sec. 5

Registration Option
EC’s registered w/ NEA shall be
allowed to retain the word
“cooperative” in their registered
names and shall not be entitled
to the benefits & privileges
provided under RA 9520.
Registration with
CDA shall be:
1. Submitted for approval to
members through a referendum.
2. Required number of votes shall
be 20% of all members in good
standing w/in the area of
coverage. No proxy voting
shall be allowed.
Procedures in the
Conduct of
Referendum
1. BOD Initiated Referendum
2. Member - Consumer Initiated
Referendum
Amendments of
Existing AC and BL
Provisions inconsistent with RA 9520
and to Rule VI of the IRR for EC’s shall
be amended. Such amendments shall
conform to Art. 18 of RA 9520 and shall
be filed with concerned CDA E.O. or
Central Office at the option of the EC.
Rates and Tariff
Electricity rates & tariffs shall be

subject to the rules on
application and approval of and
by the ERC.
jurisdiction.
However where issues fall within
the jurisdiction of ERC the same
shall be referred to said agency
and shall be resolved in
accordance with their regulation.
DAIRY COOPERATIVES
LEGAL BASIS:
Republic Act No. 9520.

Coverage
All dairy cooperatives duly

registered with CDA under R.A.
9520.
Organization
organize a Dairy Cooperative.
Refer to Rule VII - Sec. 3

File application with CDA Extension

Office which shall have jurisdiction
over the said cooperative.
Capitalization
P15,000.00.
Requirements for
Registration
Refer to Rule VII - Section 6

Membership
Open to all dairy farmers.

Regulatory Power
CDA to regulate the internal affairs of
the cooperative while matters
relating to technical and operations
concerning dairy business shall be
regulated by NDA, DOH-BFAD and
other concerned government
agency.
jurisdiction.
within the jurisdiction of NDA,
DOH-BFAD, the same shall be
referred to said agency and shall
be resolved in accordance with
their regulations.
ARTICLES OF
COOPERATION AND
BY-LAWS
Articles of Cooperation
 act as a charter to establish the existence of a

cooperative organization in the Philippines, and
are filed with the Cooperative Development
Authority
 outlines the governance of a cooperative
organization along with the by-laws
ARTICLES OF COOPERATION
ARTICLE I. NAME OF COOPERATIVE
ARTICLE II. OBJECTIVES AND PURPOSES
ARTICLE III AREA OF OPERATION
ARTICE IV TERM OF EXISTENCE
ARTICLE V. NAMES,
CITIZENSHIP AND ADDRESSES
OF COOPERATORS
ARTICLE VI COMMON BOND OF MEMBERSHIP
ARTICLE VII. BOARD OF DIRECTORS
ARTICLE VIII. CAPITALIZATION
ARTICLE IX SUBSCRIBED CAPITAL AND PAID-UP
BY-LAWS
 Article I Purpose(s) and Goals
 Article II Membership
 Qualification for Membership
 Requirements for Membership.
 Application for Membership.
 Appeal.
 Minimum Share Capital Requirement.

 Duties and Responsibilities of a Member.
 Article II Membership
 Rights and Privileges of Members.
 Member Entitled to Vote.
 Liability of Members.
 Termination of Membership.
 Manner of Involuntary Termination.
 Refund of Share Capital Contribution.
ARTICLE III. Administration
 The General Assembly (GA)
 Powers of the General Assembly.
 Meetings.
 Regular General Assembly Meeting.

 Special General Assembly Meeting.
 Notice of Meeting.
 Order of Business.
 Quorum for General Assembly Meeting.
 Voting System.
 ARTICLE IV Board of Directors
 Composition of the Board of Directors (BOD).
 Functions and Responsibilities.
 Qualifications.
 Disqualifications.
 Election of Directors.
 Election of Officer within the Board.
 Meeting of the Board of Directors.
 Vacancies.
 Removal of Members of the Board of Directors and Committee
Members.
 Prohibitions
 ARTICLE V Committees
 Audit Committee.
 Functions and Responsibilities
 Election Committee
 Mediation and Conciliation Committee
 Ethics Committee
 Other Committees
 ARTICLE VI Officers and Management Staff of the
Cooperative
 Officers and their Duties.
Chairperson
Vice-Chairperson
Treasurer
Secretary
General Manager
 Liabilities of Directors, Officers and Committee
Members.
 Management Staff
 Qualification of the General Manager.
 Duties of Cashier.
 Duties of the Accountant.
 Duties of the Bookkeeper.
 Qualifications of Accountant, Cashier, and
Bookkeeper.
 Compensation.
 ARTICLE VII Capital Structure
Source of Funds.
Continuous Capital Build-Up.
Borrowing.
Revolving Capital.
Retentions.
Share Capital Contribution.
Share Capital Certificate.
Transfer of Shares.
ARTICLE VIII Operations
Primary Consideration.
 ARTICLE IX Allocation and Distribution
of Net Surplus
 Allocation
Reserve Fund.
Education and Training Fund.
Community Development Fund.
Optional Fund.
Interest on Share Capital and Patronage
Refund.
ARTICLE X Settlement of
Disputes
Mediation and Conciliation.
Voluntary Arbitration
Article XI Miscellaneous
Investment of Capital.
Accounting System.
Financial Audit, Performance
Audit, and Social Audit.
Annual Report.
ARTICLE XII Amendments
Amendment of Articles of
Cooperation and By-laws.

Module 2 Identify The Underpinnings of Coops

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Module 2 Identify The Underpinnings of Coops

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Module 2 – Topic 1

 “It is the declared policy of the State to

 Adoption of more GA created committees:

 Provides greater coop transparency with annual

 Provides specific enabling provisions for specific

Signed on February 17, 2009

Published on March 7, 2009

Effectivity: March 23, 2009

An autonomous and duly registered

 Patterned after the Principles as formulated

 Social Audit –cooperative assesses its social impact and

 SubsidiaryCooperative –any organization

 refers to THREE or more primary coops,

 Not subject to taxes and fees imposed

 25%of net surplus is returned to

 Faculty cooperatives have right of first

 Housingagencies and financial institutions shall

 Financial audit conducted by external

 At least10% of net surplus for Reserve Fund; however, in first 5 years

At least 1,000 members

The number of the members of the cooperative

The by-laws shall provide for the number of

At least 25% of the members entitled to

It shall be provided in the by-laws but not to

The sector, chapter or district

1. Each sector, chapter or district shall elect

3. Failure to elect its representative/s or

Any vacancy shall be filled up in accordance

The sector, chapter or district meetings shall

At least 25% of all representatives/delegates

The representative assembly shall exercise

1. The RAM shall be held In accordance with the

A. SECTOR, CHAPTER, DISTRICT ASSEMBLY

All or majority of the members

1. Only technical, managerial and financial

2. Directors or Officers of the parent

The new and existing cooperatives

Upon approval by the GA/RA in the meeting

A dissenting member shall be entitled to a refund

Cooperatives belonging only to

1. Cooperative Annual Performance Report

1. Cooperatives whose charter

Share capital shall receive a

Rate of Interest = x (Net Surplus less Statutory Reserves)

All cooperatives duly registered

Refer to Rule 1 - Sec. 3

File application with CDA Extension

Refer to Rule 1-Section 7

Open to all natural persons who

All Agrarian Reform Cooperatives

At least 15 marginal farmers

Non-plantation Based Agrarian

Governed by Art. 93 of RA 9520

Governed by Art. 90 & 92 of RA

Governed by Art. 91 of RA 9520

Refer to Rule I1- Section 5

Art. 108 Chapter XIII

All insurance cooperatives duly

15 or more duly registered