Today is Saturday, March 11, 2017Custom Search Republic of the Philippines Congress of the Philippines Metro Manila Fourteenth Congress Second Regular Session Begun and held in Metro Manila, on Monday, the twentyeighth day of July, two thousand eight. 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" Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: SECTION 1. Articles 1, 2, 3, 4 and 5 of Chapter 1 on General Concepts and Principles of Republic Act No. 6938, otherwise known as the "Cooperative Code of the Philippines," are hereby amended to read as follows: CHAPTER I GENERAL CONCEPTS AND PRINCIPLES "ARTICLE 1. Title. This Act shall be known as the "Philippine Cooperative Code of 2008". "ART. 2. Declaration of Policy. It is the declared policy of the State to foster the creation and growth of cooperatives as a practical vehicle for promoting selfreliance and harnessing people power towards the attainment of economic development and social justice. The State shall encourage the private sector to undertake the actual formation and organization of cooperatives and shall create an atmosphere that is conducive to the growth and development of these cooperatives. "Toward this end, the Government and all its branches, subdivisions, instrumentalities and agencies shall ensure the provision of technical guidance, financial assistance and other services to enable said cooperatives to develop into viable and responsive economic enterprises and thereby bring about a strong cooperative movement that is free from any conditions that might infringe upon the autonomy or organizational integrity of cooperatives. "Further, the State recognizes the principle of subsidiarity under which the cooperative sector will initiate and regulate within its own ranks the promotion and organization, training and reserach, audit and support services relative to cooperatives with government assistance where necessary. "ART. 3. General Concepts. 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. "ART. 4. Cooperative Principles. Every cooperative shall conduct its affairs in accordance with Filipino culture, good values and experience and the universally accepted principles of cooperation which include, but are not limited to, the following: "(1) Voluntary and Open Membership Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, cultural, political or religious discrimination. "(2) Democrative Member Control Cooperatives are democratic organizations that are controlled by their members who actively participate in setting their policies and making decisions. Men and women serving as elected representatives, directors or officers are accountable to the membership. In primary cooperatives, members have equal voting rights of onemember, onevote. Cooperatives at other levels are organized in the same democratic manner. "(3) Member Economic Participation Members contribute equitably to, and democratically control, the capital of their cooperatives. At least part of that capital is the common property of the cooperative. They shall receive limited compensation or limited interest, if any, on capital subscribed and paid as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative by setting up reserves, part of which should at least be indivisible; benefitting members in proportion to their partonage of the cooperative's bubsiness; and, supporting other activities approved by the membership. "(4) Autonomy and Independence Cooperatives are autonomous, selfhelp organizations controlled by their members. If they enter into aggreements with other organizations, including government, or raise capital from external sources, they shall do so on terms that ensure democratic control of their members and maintain their cooperative autonomy. "(5) Education, Training and Information Cooperatives shall provide education and training for their members, elected and appointed representatives, managers, and employees, so that they can contribute effectively and efficiently to the development of their cooperatives. "(6) Cooperation Among Cooperatives Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures. (7) Concern for Community Cooperatives work for the sustainable development of their communities through policies approved by their members. "ART. 5. Definition of Terms. – The following terms shall mean: "(1) Member includes a person either natural or juridical who adhering to the principles set forth in this Code and in the Articles of Cooperative, has been admitted by the cooperative as member; "(2) General Assembly shall mean the full membership of the cooperative duly assembled for the purpose of exercising all the rights and performing all the obligations pertaining to cooperatives, as provided by this Code, its articles of cooperation and bylaws: Provided, That for cooperatives with numerous and dispersed membership, the general assembly may be composed of delegates elected by each sector, chapter or district of the cooperative in accordance with the rules and regulations of the Cooperative Development Authority; "(3) Board of Directors shall mean that body entrusted with the management of the affairs of the cooperative under its articles of cooperation and bylaws; "(4) Committee shall refer to any body entrusted with specific functions and responsibilities under the bylaws or resolution of the general assembly or the board of directors; "(5) Articles of Cooperation means the articles of cooperation registered under this Code and includes a registered amendment thereof; "(6) Bylaws means the bylaws registered under this Code and includes any registered amendment thereof; "(7) Registration means the operative act granting juridical personality to a proposed cooperative and is evidenced by a certificate of registration; "(8) Cooperative Development Authority refers to the government agency in charge of the registration and regulation of cooperatives as such hereinafter referred to s the Authority; "(9) Universally Accepted Principles means that body of cooperative principles adhered to worldwide by cooperatives; "(10) Representative Assembly means the full membership of a body of representatives elected by each of the sectors, chapter or district o the cooperative duly assembled for the purpose of exercising such powers lawfully delegated unto them by the general assembly in accordance with its bylaws; "(11) Officers of the Cooperative shall include the members of the board of directors, members of the different committee created by the general assembly, general manager or chief executive officer, secretary, treasurer and members holding other positions as may be provided for in their bylaws; "(12) Social Audit is a procedure wherein the cooperative assesses its social impact and ethical performance visàvis its stated mission, vision, goals and code of social responsibility for cooperatives to be established by the Authority in consultation with the cooperative sector. It enables the cooperative to develop a process whereby it can account for its social performance and evaluate its impact in the community and be accountable for its decisions and actions to its regular members; "(13) Performance Audit shall refer to an audit on the efficiency and effectiveness of the cooperative as a whole; its management and officers; and its various responsibility centers as basis for improving individual team or overall performance and for objectively informing the general membership on such performance; "(14) A SingleLine or SinglePurpose Cooperative shall include cooperative undertaking activities which are related to its main line of business or purpose; "(15) Service Cooperatives are those which provide any type of service to its members, including but not limited to, transport, information and communication, insurance, housing, electric, health services, education, banking, and savings and credit; "(16) Subsidiary Cooperative refers to three or more primary cooperatives, doing the same line of business, organized at the municipal, provincial, city, special metropolitan political subdivision, or economic zones created by law, registered with the Authority to undertake business activities in support of its membercooperatives." SEC. 2. Articles 6, 7, 9, 10, 11, 12, 13, 14, 16, 17, 18, 20, 21, 23, 24 and 25 of Chapter II on Organization and Registration of the same Code are hereby amended to read as follows: CHAPTER II ORGANIZATION AND REGISTRATION "ART. 6. Purposes of Cooperatives. – 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 selfhelp or selfemployment as an engine for economic growth and poverty alleviation; and "(14) To undertake any and all other activities for the effective and efficient implementation of the provisions of this Code. "ART. 7. Objectives and Goals of a Cooperative. – The primary objective of every cooperative is to help improve the quality of life of its members. Towards this end, the cooperative shall aim to: "(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, costsharing and risksharing; "(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 peopleoriented organizations to further the attainment of any of the foregoing objectives. "ART. 8. Cooperatives Not in Restraint of Trade. – No cooperative or method or act thereof which complies with this Code shall be deemed a conspiracy or combination in restraint of trade or an illegal monopoly, or an attempt to lessen competition or fix prices arbitrarily in violation of any laws of the Philippines. "ART. 9. Cooperative Powers and Capacities. – 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; "(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 onsite 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. "ART. 10. Organizing a Primary Cooperative. – Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having a common bond of interest and are actually residing or working in the intended area of operation, may organize a primary cooperative under this Code: Provided, That a prospective member of a primary cooperative must have completed a PreMembership Education Seminar (PMES). "Any newly organized primary cooperative may be registered as multipurpose cooperative only after compliance with the minimum requirements for multipurpose cooperatives to be set by the Authority. A single purpose cooperative may transform into a multipurpose or may create subsidiaries only after at least two (2) years of operations. "ART. 11. Economic Survey. Every group of individuals or cooperatives intending to form a cooperative under this Code shall submit to the Authority a general statement describing, among others the structure and purposes of the proposed cooperative: Provided, That the structure and actual staffing pattern of the cooperative shall include a bookkeeper; Provided, further, That 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. "ART. 12. Liability. – A cooperative duly registered under this Code shall have limited liability. "ART. 13. Term. – A cooperative shall exist for a period not exceeding fifty (50) years from the date of registration unless sooner dissolve or unless said period is extended. The cooperative term, as originally stated in the articles of cooperation, may be extended for periods not exceeding fifty (50) years in any single instance by an amendment of the articles of cooperation, in accordance with this Code: Provided, That no extension can be made earlier than five (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. "ART. 14. Articles of Cooperation. – (1) All cooperatives applying for registration shall file with the Authority the articles of cooperation which 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) The articles of cooperation shall set forth: "(a) The name of the cooperative which shall include the word cooperative; "(b) The purpose or purposes and scope of business for which the cooperative is to be registered; "(c) The term of existence of the cooperative; "(d) The area of operation and the postal addresses of its principal office; "(e) The names, nationality, and the postal addresses of the registrants; All applications for registration shall be finally disposed of by the Authority within a period of sixty (60) days from the filing thereof. board of directors. The bylaws shall be filed at the same time as the articles of cooperation. voting systems. shall be registered unless the articles of cooperation is accompanied with the bonds of the accountable officers and a sworn statements of the treasurer elected by the subscribers showing that at least twentyfive per centum (25%) of the authorized share capital has been subscribed and at least twentyfive per centum (25%) of the total subscription has been paid: Provided. 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. Bylaws. convening. "(3) The articles of cooperation may also contain any other provisions not inconsistent with this Code or any related law. further. "ART. directors. "(f) The common bond of membership; "(g) The list of names of the directors who shall manage the cooperative; and "(h) The amount of its share capital. That in case of a denial of the application for registration. place and manner of calling. Registration. and their qualifications and disqualifications; "(h) The manner in which the capital. bylaws. "(4) Four (4) copies each of the proposed articles of cooperation. and committees; "(g) The general conduct of the affairs of the cooperative. repealing. and the general statement required under Article 11 of this Code shall be submitted to the Authority. "The Authority shall periodically assess the required paidup share capital and may increase it every five (5) years when necessary upon consultation with the cooperative sector and the National Economic and Development Authority (NEDA). That in no case shall the paidup share capital be less than Fifteen thousand pesos (P15. "(2) The bylaws of each cooperative 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. 16. "ART. and other matters relative to the business affairs of the general assembly.000. including the powers and duties of the general assembly. an appeal shall lie with the Office of the President within ninety (90) days from receipt of notice of such denial: Provided. unless the cause of the delay is attributable to the applicant: Provided. the names and residences of its contributors and a statement of whether the cooperative is primary. 15. – (1) Each cooperative to be registered under this Code shall adopt bylaws not inconsistent with the provisions of this Code. committees and the officers. 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. officers and committee members of the cooperative; and "(o) Other matters incident to the purposes and activities of the cooperative. the board of directors. otherwise the application is deemed approved. time. – A cooperative formed and organized under this Code acquires juridical personality from the date the Authority issues a certificate of registration under its official seal. amending. "(5) No cooperative. quorum requirements. That failure of the Office of the President to act on the appeal within ninety (90) days from the filing thereof shall mean approval of said application. and abrogating bylaws; "(n) A conciliation or mediation mechanism for the amicable settlement of disputes among members. other than a cooperative union as described under Article 25 hereof. secondary or tertiary in accordance with Article 23 hereof. .00). conducting meetings. Merger and Consolidation of Cooperatives. 19. privileges. shall be the surviving cooperative. the merger or consolidation shall be effective upon the issuance of the certificate of merger or consolidation by the Authority. "(3) The Authority shall issue the guidelines governing the procedure of merger or consolidation of cooperatives. by a resolution approved by a vote of threefourths (3/4) of all the members with voting rights. in case of merger. Division of Cooperatives. 20. any provision or matter stated in the articles of cooperation and by laws may be amended by twothirds (2/3) vote of all the members with voting rights. action or proceeding pending by or against any such constituent cooperatives may be prosecuted by or against the surviving or consolidated cooperative. the merger or consolidation of cooperatives. without prejudice to the right of the dissenting members to exercise their right to withdraw their membership under Article 30. rights. Amendment of Articles of Cooperation and Bylaws. 23. rights. further. and. "ART. The procedure for such division shall be prescribed in the regulations of the Authority: Provided. privileges. Both the original and amended articles and/or bylaws shall contain all provisions required by law to be set out in the articles of cooperation and by laws. That all the requirements set forth in this Code have been complied with by the new cooperatives: Provided. "(2) No merger or consolidation shall be valid unless approved by a threefourths (3/4) vote of all the members with voting rights. – Contracts executed between private persons and cooperatives prior to the registration of the cooperative shall remain valid and binding between the parties and upon registration of the cooperative. In any case. immunities and franchises of each of the constituent cooperatives; and "(5) The surviving or the consolidated cooperative shall be responsible for all the liabilities and obligation of each of the constituent cooperatives in the same manner as if such surviving or consolidated cooperative had itself incurred such liabilities or obligations. in case of consolidation. "ART. The dissenting members shall have the right to exercise their right to withdraw their membership pursuant to Article 30. All amendments to the article of cooperation and/or bylaws shall be submitted to the Authority. shall be the consolidated cooperative; "(2) The separate existence of the constituent cooperatives shall cease. "ART. A formal written contract shall be adopted and made in the cooperative’s name or on its behalf prior to its registration. as the case may be. – Any registered cooperative may. except that of the surviving or the consolidated cooperative; "(3) The surviving or the consolidated cooperative shall possess al the assets. Certificate of Registration. – (1) Two (2) or more cooperatives may merge into a single cooperative which shall either be one of the constituent cooperatives or the consolidated cooperative. Type and Categories of Cooperatives. resolve to divide itself into the two (2) or more cooperatives. In any case. Effects of Merger and Consolidation. – (1) Types of Cooperatives – Cooperatives may fall under any of the following types: "(a) Credit Cooperative is one that promotes and undertakes savings and lending services among its members. 22. Contracts Executed Prior to Registration and Effects Thereof. present and constituting a quorum. – The merger or consolidation of cooperatives shall have the following effects: "(1) The constituent cooperatives shall become a single cooperative which. The amendments shall take effect upon its approval by the authority or within thirty (30) days from the date of filing thereof if not acted upon by the Authority for a cause not attributable to the cooperative. 21. Neither the rights of creditors nor any lien upon the property of any such constituent cooperatives shall be impaired by such merger or consolidation. immunities and franchises of each of the constituent cooperatives; "(4) The surviving or the consolidated cooperative shall possess all the assets. "ART."ART. Any claim. – Unless otherwise prescribed by this Code and for legitimate purposes. Amendments shall be indicated by underscoring or otherwise appropriately indicating the change or changes made and a copy of the amended articles or amended bylaws duly certified under oath by the cooperative secretary and a majority of the directors stating the fact that said amendment or amendments to the articles of cooperation and/or bylaws have been duly approved by the required vote of the members. "ART. present and constituting a quorum of each of the constituent cooperatives at separate general assembly meetings. 17. That no division of a cooperative in fraud of creditors shall be valid. "ART. – A certificate of registration issued by the Authority under its official seal shall be conclusive evidence that the cooperative therein mentioned is duly registered unless it is proved that the registration thereof has been cancelled. 18. It generates a common pool of funds in order to provide financial assistance to its members for productive and provident purposes; "(b) Consumers Cooperative is one of the primary purpose of which is to procure and distribute commodities to members and nonmembers; . hospitalization. It is coowned and controlled by its members; "(q) Insurance Cooperative is one engaged in the business of insuring life and poverty of cooperatives and their members; "(r) Transport Cooperative is one which includes land and sea transportation. who are at same time the members and owners of the enterprise. "(c) Producers Cooperative is one that undertakes joint production whether agricultural or industrial. land development. insurance. utilizing renewable energy sources. otherwise known as the Governance of Basic Education Act of 2001; "(l) Electric Cooperative is one organized for the primary purposed of undertaking power generations. transportation. cooperative shall be categorized into: "(i) Primary – The members of which are natural persons; . organized under the provisions of this Code; "(s) Water Service Cooperative is one organized to own. labor. education and training. and other similar activities to reach out to its intended beneficiaries; "(h) Agrarian Reform Cooperative is one organized by marginal farmers majority of which are agrarian reform beneficiaries for the purpose of developing an appropriate system of land tenure. "(2) Categories of Cooperative – Cooperatives shall be categorized according to membership and territorial considerations as follows: "(a) In terms of membership. including hybrid systems. land consolidation or land management in areas covered by agrarian reform; "(i) Cooperative Bank is one organized for the primary purpose of providing a wide range of financial services to cooperatives and their members; "(j) Dairy Cooperative is one whose members are engaged in the production of fresh milk which may be processed and/or marketed as dairy products; "(k) Education Cooperative is one organized for the primary purpose of owning and operating licensed educational institutions notwithstanding the provisions of Republic Act No. professional and other services; "(f) Multipurpose Cooperative is one which combines two (2) or more of the business activities of these different types of cooperatives; "(g) Advocacy Cooperative is a primary cooperative which promotes and advocates cooperativism among its members and the public through sociallyoriented projects. 9155. limited to small vessels. Any end product or its derivative arising from the raw materials produced by its members. dental and other health services; "(p) Housing Cooperative is one organized to assist or provide access to housing for the benefit of its regular members who actively participate in the savings program for housing. as defined or classified under the Philippine maritime laws. acquisition and operation of subtransmission or distribution to its household members; "(m) Financial Service Cooperative is one organized for the primary purpose of engaging in savings and credit services and other financial services; "(n) Fishermen Cooperative is one organized by marginalized fishermen in localities whose products are marketed either as fresh or processed products; "(o) Health Services Cooperative is one organized for the primary purpose of providing medical. It is formed and operated by its members to undertake the production and processing of raw materials or goods produced by its members into finished or processed products for sale by the cooperative to its members and nonmembers. shall be deemed a product of the cooperative and its members; "(d) Marketing Cooperative is one which engages in the supply of production inputs to members and markets their products; "(e) Service Cooperative is one which engages in medical and dental care. communication. research and communication. electric light and power. operate and manage waters systems for the provision and distribution of potable water for its members and their households; "(t) Workers Cooperative is one organized by workers. housing. Its principal purpose is to provide employment and business opportunities to its members and manage it in accordance with cooperative principles; and "(u) Other types of cooperative as may be determined by the Authority. sold in the name and for the account of the cooperative. including the selfemployed. accounting. – Registered cooperatives and federations at the appropriate levels may organize or join cooperative unions to represent the interest and welfare of all types of cooperatives at the provincial. 28. – A cooperative may have two (2) kinds of members. 29. city." SEC. "ART. "Cooperative unions may assist the national and local governments in the latter’s development activities in their respective jurisdictions. "Registered cooperatives may organize a federation according to the type of business activity engaged in by the cooperatives. financial. 26. economic. and economy in the conduct of the business of its member cooperatives and to facilitate the implementation of their bookkeeping. 31 and 32 of Chapter III on Membership of the same Code are hereby renumbered and amended to read. or supplements but does not conflict. cooperatives shall be categorized according to areas of operations which may or may not coincide with the political subdivisions of the country. social and other phases of cooperation. – A federation of cooperatives shall undertake the following functions: "(a) To carry on any cooperative enterprise authorized under Article 6 that complements augments. to wit: (1) regular members and (2) associate members. Articles 26. efficiency. An associate member is one who has no right to vote nor be voted upon and shall be entitled only to such rights and privileges as the bylaws may provide: Provided. and disseminate. Functions of a Federation of Cooperatives. and other information relating to its members and to all types of cooperatives within its area of operation; "(c) To sponsor studies in the economic. statistical. 24. That an . and assist educational and advisory work relating to its member cooperatives; "(c) To render services designed to encourage simplicity. 3. Kinds of Membership. complete with. donations. nor supplant the business or economic activities of its members; "(b) To carry on. and subsidies from local and foreign sources whether private or government; and "(h) To do and perform such other nonbusiness activities as may be necessary to attain the foregoing objectives. 25. regional. as follows: CHAPTER III MEMBERSHIP "ART. "A regular member is one who has complied with all the membership requirements and entitled to all the rights and privileges of membership. "A federation of cooperatives may be registered by carrying out the formalities for registration of a cooperative. 27. "ART. encourage. publish. and circulate any newspaper or other publication in the interest of its member cooperatives and enterprises; "(e) To coordinate and facilitate the activities of its member cooperatives; "(f) To enter into joint ventures with national or international cooperatives of other countries in the manufacture and sale of products and/or services in the Philippines and abroad; and "(g) To perform such other functions as may be necessary to attain its objectives. "(ii) Secondary – The members of which are primaries; and "(iii) Tertiary – The members of which are secondary cooperatives; and "(b) In terms of territory. and publish the results thereof; "(d) To promote the knowledge of cooperative principles and practices; "(e) To develop the cooperative movement in their respective jurisdictions; "(f) To advise the appropriate authorities on all questions relating to cooperatives; "(g) To raise funds through membership fees. analyze. Cooperative Unions. and national levels. legal. and other systems and procedures; "(d) To print. Cooperative unions may have the following purposes: "(a) To represent its member organizations; "(b) To acquire. 30. dues and contributions. In case membership is refused or denied by the board of directors. – An applicant for membership shall be deemed a member after approval of his membership by the board of directors and shall exercise the rights of member after having made such payments to the cooperative in respect to membership or acquired interest in the cooperative as may be prescribed in the bylaws. "A member whose membership the board of directors may wish to terminate shall be informed of such intended action in writing and shall be given an opportunity to be heard before the said board makes its decision. continues to patronize the cooperative for two (2) years. 30. for any valid reason. For this purpose. That the operations of the office concerned are not adversely affected. be allowed by the end of office concerned to use official time for attendance at the general assembly. in the discharge of is duties as a member in the cooperative. The general assembly may create an appeal and grievance committee whose members shall serve for a period of one (1) year and shall decide appeals on membership termination. – (1) A member of a cooperative may. "ART. – A member shall be liable for the debts of the cooperative to the extent of his contribution to the share capital of the cooperative. That in case of death or insanity of an agrarian reform beneficiarymember of a cooperative. – (1) Any officer or employee of the Authority shall be disqualified to be elected or appointed to any position in a cooperative: Provided. A laboratory cooperative shall be governed by special guidelines to be promulgated by the Authority. "(2) The death or insanity of a member in a primary cooperative. in accordance with this Code. Application. "ART. 28. 31. 27. "A cooperative organized by minors shall be considered a laboratory cooperative and must be affiliated with a registered cooperative. The committee is given thirty (30) days from receipt thereof to decide on the appeal. If the committee fails to decide within the prescribed period. – All sums computed in accordance with the bylaws to be due from a cooperative to a former member shall be paid to him either by the cooperative or by the approved transferee. That the disqualification does not extend to a cooperative organized by the officers or employees of the Authority. the membership remains in force. That the disqualification does not extend to a party list representative being an officer of a cooperative he or she represents; and "(3) Any government employee or official may. withdraw his membership from the cooperative by giving a sixty (60) day notice to the board of directors. That such fund shall not be made if upon such payment the value of the assets of the cooperative would be less than the aggregate amount of its debts and liabilities exclusive of his share capital contribution. the members of which shall serve for a period of one (1) year and shall decide appeals on membership application within thirty (30) days upon receipt thereof." . board and committee meetings of cooperatives as well as cooperative seminars. and training courses locally or abroad: Provided. 29. Failure to decide within the prescribed period. the appeal is deemed approved in favor of the member.associate who meets the minimum requirements of regular membership. "ART. Government Officers and Employees. the appeal is deemed approved in favor of the applicant. Subject to the bylaws of the cooperative. the withdrawing member shall be entitled to a refund of his share capital contribution and all other interests in the cooperative: Provided. Liability of Members. "ART. an appeal may be made to the general assembly and the latter’s decision shall be final. technical meetings. and signifies his/her intention to remain a member shall be considered a regular member. Termination of Membership. "(2) All elective officials of the Government shall be ineligible to become officers and directors of cooperatives: Provided. the nextofkin may assume the duties and responsibilities of the original member "(3) Membership in the cooperative may be terminated by a vote of the majority of all the members of the board of directors for any of the following causes: "(a) When a member has not patronized any of the services of the cooperative for an unreasonable period of time as may be previously determined by the board of directors; "(b) When a member has continuously failed to comply with his obligations; "(c) When a member has acted in violation of the bylaws and the rules of the cooperative; and "(d) For any act or omission injurious or prejudicial to the interest or the welfare of the cooperative. conferences. Refund of Interests. Pending a decision by the general assembly. as the case may be. workshops. The decision of the board shall be in writing and shall be communicated in person or by registered mail to said member and shall be appealable within thirty (30) days from receipt thereof to the general assembly whose decision shall be final. "ART. and the insolvency or dissolution of a member in a secondary or tertiary cooperative may be considered valid grounds for termination of membership: Provided. the general assembly may opt to create an appeal and grievance committee. in the articles of cooperation and in the bylaws of the cooperative. In the case of members of secondary or tertiary cooperatives. – A quorum shall consist of at least twentyfive per centum (25%) of all the members entitled to vote. in the case of the electric cooperatives registered under this Code. That a notice in writing shall be sent one (1) week prior to the meeting to all members who are entitled to vote. "Subject to such other provisions of this Code and only for purposes of prompt and intelligent decision making. unless otherwise provided in the bylaws. the general assembly may be a threefourths (3/4) vote of all its members with voting rights. a special meeting shall be called by the board of directors after compliance with the required notice within from at least ten per centum (10%) of the total members who re entitled to vote to transact specific business covered by the call. 32. In the case of electric cooperatives registered under this Code. or if not so fixed. by posting or publication. a special general assembly shall be called. Powers of the General Assembly. 4. 49. 36. "If the board fails to call a regular or a special meeting within the given period. Voting by proxy means allowing a delegate of a cooperative to represent or vote in behalf of another delegate of the same cooperative. 34. 35. within ninety (90) days from such approval; "(4) The Authority may call a special meeting of the cooperative for the purpose of reporting to the members the result of any examination or other investigation of the cooperative affairs; and "(5) Notice of any meeting may be waived. – Each member of a primary cooperative shall have only one (1) vote. Meetings. upon petition of ten per centum (10%) of all the members of the cooperative who are entitled to vote. shall consist of five per centum (5%) of all the members entitled to vote. 37. election of the members of the board shall be held in accordance with its bylaws or election guideline of such electric cooperative; and "(3) To approve developmental plans of the cooperative. the quorum shall be as provided in Article 99 of this Code. 48. 42. by any member. 45. 50 and 51 of Chapter IV on Administration of the same Code are hereby renumbered and amended to read. delegate some of its powers to a smaller body of the cooperative. a special meeting of the general assembly may be called at any time by a majority vote of the board of directors or as provided for in the bylaws: Provided. 33. – The general assembly shall be the highest policymaking body of the cooperative and shall exercise such powers as are stated in this Code. 44. – (1) A regular meeting shall be held annually by the general assembly on a date fixed in the bylaws. Powers of the General Assembly. The general assembly shall have the following exclusive powers which cannot be delegate: "(1) To determine and approve amendments to the articles of cooperation and bylaws; "(2) To elect or appoint the members of the board of directors. "(2) Whenever necessary. 34. or through other electronic means to all members of record. However. – Unless otherwise provided in the bylaws. Voting System. – The general assembly shall be composed of such members who are entitled to vote under the articles of cooperation and bylaws of the cooperative. 36. the Authority. as follows: CHAPTER IV ADMINISTRATION "ART. However. These powers shall be enumerated under the bylaws of the cooperative. a quorum. and for good cause shown. "However. "ART. Composition of the General Assembly. Composition and Term of the Board of Directors. the bylaws of a cooperative other than a primary may provide for voting by proxy. present and constituting a quorum. 47. shall issue an order to the petitioners directing them to call a meeting of the general assembly by giving proper notice as required in this Code or in the bylaws; "(3) In the case of a newly approved cooperative. .SEC. 35. 39. 46. "ART. – The general assembly shall be composed of such members who are entitled to vote under the articles of cooperation and bylaws of the cooperative. on any dated within ninety (90) days after the close of each fiscal year: Provided. 38. 40. 43. 32. and to remove them for cause. "ART. The votes cast by the delegates shall be deemed as votes cast by the members thereof. "ART. the direction and management of the affairs of a cooperative shall be vested in a board of directors which shall be composed of not less that five (5) nor more than fifteen (15) members elected by the general assembly for a term of two (2) years and shall hold office until their successors are duly elected an qualified. they shall have one (1) basic vote and as many incentive votes as provided for in the bylaws but not exceed five (5) votes. In the case of cooperative banks. 37. "ART. expressly or impliedly. Articles 33. as far as practicable. That notice of regular meetings shall be sent in writing. "ART. or until duly removed for caused. 42. Quorum. Directors. Officers of the Cooperative. "ART. – Directors. admit as directors. election. "When a director. may be filled by the vote of at least a majority of the remaining directors. as well as their training requirements. "Unless otherwise provided in the bylaws. – (1) The bylaws may create an executive committee to be appointed by the board of directors with such powers and duties as may be delegated to it in the bylaws or by a majority vote of all the members of the board of directors. officers or committee members shall be liable jointly and severally for all damages or profits resulting therefrom to the cooperative. if still constituting a quorum; otherwise. 44. 39. any interest or equity adverse to the cooperative in respect to any matter which has been reposed in him in . Officers and Committee Members. shall be in accordance with the rules and regulations issued by the Authority. and other persons. the vacancy must be filled by the general assembly in a regular or special meeting called for the purpose. is disqualified from election as a director of said cooperative. – (1) Any member of a cooperative who under the bylaws of the cooperative. rights. officer or committee member attempts to acquire or acquires."ART. "(3) The members of the board of directors shall not hold any other position directly involved in the day to day operation and management of the cooperative. officers and committee members. – Any vacancy in the board of directors. nor responsibilities except to provided technical assistance as required by the cooperative. The audit committee shall be directly accountable and responsible to the general assembly. No two (2) or more persons with relationships up to the third civil degree of consanguinity or affinity nor shall any person engaged in a business similar to that of the cooperative nor who in any other manner has interests in conflict with the cooperative shall serve as an appointive officer. in violation of his duty. 40. the board. and such other committees as may be necessary for the conduct of the affairs of the cooperative. "ART. "(4) Any person engaged in a business similar to that of the cooperative or who in any way has a conflict of interest with it. "(2) Special meetings of the board of directors may be held at any time upon the call of the chairperson or a majority of the members of the board: Provided. mediation and conciliation. All officers shall serve during good behavior and shall not be removed except for cause after due hearing. "(4) Directors cannot attend or vote by proxy at board meetings. "ART. The members of both the audit and election committee shall be elected by the general assembly and the rest shall be appointed by the board. "ART. Liability of Directors. 41. regular meetings of the board of directors shall be held at least once a month. "(3) A majority of the members of the Board shall constitute a quorum or the conduct of business. by resolution of its board of directors. Such director or committee member not be a member of the cooperative and shall have no powers. directionsetting and policyformulation activities of the cooperatives. "(2) The bylaws shall provide for the creation of an audit. Meeting of the Board and Quorum Requirement. 42. "ART. Powers of the Board of Directors. – The board of directors shall elect from among themselves the chairperson and vicechairperson. That written notices of the meeting specifying the agenda of the special meeting shall be given to all members of the board at least one (1) week before the said meeting. – (1) In the case of primary cooperatives. members. who are willfully and knowingly vote for or assent to patently unlawful acts or who are guilty of gross negligence or bad faith in directing the affairs of the cooperative or acquire any personal or pecuniary interest in conflict with their duty as such directors. Vacancy in the Board of Directors. "ART. 43. – the functions and responsibilities of directors. may call an election to fill the vacancy or appoint a person to fill the same subject to the provision that the person elected or appointed shall serve only for the unexpired portion of the term. "(2) The cooperative may. unless the bylaws proved otherwise. Responsibilities and Training Requirements of Directors. It shall have the power and duty to continuously monitor the adequacy and effectiveness of the cooperative’s management control system and audit the performance of the cooperative and its various responsibility centers. has the right to vote and who possesses all the qualifications and none of the disqualifications provided in the laws or bylaws shall be eligible for election as director. Officers and Committee Members. ethics. in case of a vacancy in the committees. or committee member one appointed by any financing institution from which the cooperative received financial assistance solely to provide technical knowledge not available within its membership. "ART. officers and committee members. 45. and elect or appoint other officers of the cooperative from outside of the board in accordance with their bylaws. Loss of confidence shall not be a valid ground for removal unless evidenced by acts or omission causing loss of confidence in the honesty and integrity of such officer. 38. – The board of directors shall be responsible for the strategic planning. A director so elected to fill a vacancy shall serve only the unexpired term of his predecessor in office. other than by expiration of term. Committees of Cooperatives. Functions. "ART. 51. 59. present and constituting a quorum in a meeting called for the purpose: Provided. Removal. confidence. notwithstanding the fact that the director used his own funds in the venture. – Every cooperative shall have an official postal address to which all notices and communications shall be sent. in the preceding calendar year. Majority of the board of directors may place the officer concerned under preventive suspension pending the resolution of the investigation. if generally known. Any compensation other than per diems may be granted to directors by a majority vote of the members with voting rights at a regular or special general assembly meeting specifically called for the purpose: Provided. That the directors and officers shall not be entitled to any per diem when. as a trustee for the cooperative. and that the contract is fair and reasonable under the circumstances. Disloyalty of a Director. "An elective officer may be removed by three fourths (3/4) votes of the regular members present and constituting a quorum. officers. 55. for his benefit or advantage or that of an associate. – A contract entered into by the cooperative with one (1) or more of its directors. unless all the following conditions are present. by virtue of his office. Officers. 48. unless his act has been ratified by a threefourths (3/4) vote of all the members with voting rights. the directors shall not receive any compensation except for reasonable per diems: Provided however. and committee members is voidable. "(2) The compensation of officers of the cooperative as well as the members of the committee as well as the members of the committees created pursuant to this Code or its bylaws may be fixed in the bylaws. RIGHTS AND PRIVILEGES OF COOPERATIVE "ART. The officer concerned shall be given an opportunity to be heard at said assembly. the contract with the officer or committee member has been previously authorized by the general assembly or by the board of directors. . "(3) Unless already fixed in the bylaws. This provision shall be applicable. in a regular or special general assembly meeting called for the purpose. present and constituting a quorum. 46. makes use of confidential information that. who. 53. 50. 49. That no additional compensation other than per diems shall be paid during the first year of existence of any cooperative. such contract may be ratified by a threefourths (3/4) vote of all the members with voting rights. "(2) The cooperative shall take the necessary steps to enforce the liabilities described in subsection (a) "ART. as follows: CHAPTER V RESPONSIBILITIES. 58. 61. "(1) That the presence of such director in the board meeting wherein contract was approved was not necessary to constitute a quorum for such meeting; "(2) That the vote of such director was not necessary for the approval of the contract; "(3) That the contract is fair and reasonable under the circumstances; and "(4) That in the case of an officer or committee member. Such address and every change thereof shall be registered with the Authority. 54. Address. – All complaints for the removal of any elected officer shall be filed with the board of directors. Rights and Privileges of Cooperatives of the same Code are hereby renumbered and amended to read. Articles 52. or Committee Members. 57. 60. Such officer shall be given the opportunity to be heard. acquires for himself an opportunity which should belong to the cooperative shall be liable for damages and must account for double the profits that otherwise would have accrued to the cooperative by refunding the same. Compensation. – (1) In the absence of any provisions in the bylaws fixing their compensation. 47. Upon finding of a prima facie evidence of guilt. Illegal Use of Confidential Information. SEC. as a result of the transaction. 56. the cooperative reported a net loss or had a dividend rate less than the official inflation rate for the same year. – (1) A director or officer. or an associate of a director or officer. he shall. in the case of a contract with a director. the compensation of all other employee shall be determined by the board of directors. That full disclosure of the adverse interest of the directors involved is made at such meeting. the board shall present its recommendation for removal to the general assembly. 5. Dealings of Directors. 62 and 63 of Chapter V on Responsibilities. be liable for damages and shall be accountable for double the profits which otherwise would have accrued to the cooperative. "Where any of the first two conditions set forth in the preceding paragraph is absent. "ART. – A director who. might reasonably be expected to adversely affect the operation and viability of the cooperative. "ART. at the option of the cooperative. shall be held: "(a) Liable to compensate the cooperative for the direct losses suffered by the cooperative as a result of the illegal use of information; and "(b) Accountable to the cooperative for any direct benefit or advantage received or yet to be received by him or his associate. "ART. the Authority shall. criminal and administrative proceedings. publish and file the reports required herein. 55. An inventory of the audited documents. "(3) Each cooperative shall maintain records of accounts such that the true and correct condition and the results of the operation of the cooperative may be ascertained therefrom at any time. board of directors and committee; "(f) Share books. records and books to be disposed of shall be drawn up and certified to by the board secretary and the chairman of the audit committee and presented to the board of directors which may thereupon approve the disposition of said records. "(4) Subject to the pertinent provisions of the National Internal Revenue Code and other laws. "ART. "(2) No person or a cooperative is possession of the books of such cooperative shall. These reports shall be filed with the Authority within one hundred twenty (120) days from the end of the calendar year. in any legal proceedings to which the cooperative is not a party. where applicable; "(g) Financial statement; and "(h) Such other documents as may be prescribed by laws or the bylaws. Probative Value of Certified Copies of Entries. the contents of which can be proved and the matters. "(2) If a cooperative fails to make. and shall be a ground for the revocation of authority of the cooperative to operate as such. record or book pertaining to its financial and nonfinancial operations which are already more than five (5) years old except those relating to transactions which are the subject of civil. be admissible as evidence of the existence of entry and prima facie evidence of the matters and transactions therein recorded. – (1) Every cooperative shall draw up regular reports of its program of activities. Register of Members as Prima Facie Evidence. within fifteen (15) days from the expiration of the prescribed period. a cooperative may dispose by way of burning or other method of complete destruction any document. register or list regularly kept in the course of business in the possession of a cooperative shall."ART. 53. or fails to include therein any matter required by the Code. shall be published annually and shall be kept posted in a conspicuous place in the principal office of the cooperative. "ART. The reports shall be made accessible to its members. The form and contents of the reports shall be as prescribed by the rules of the Authority. principles and practices. showing their progress and achievements at the end of every fiscal year. The financial statements. – Any register or list of members shares kept by any registered cooperative shall be prima facie evidence of the following particulars entered therein: "(1) The date on which the name of any person was entered in such register or list of member; and "(2) The date on which any such person ceased to be a member. send such cooperative a written notice. – (1) A copy of any entry in any book. if duly certified in accordance with the rules of evidence. – (1) Every cooperative shall have the following documents ready and accessible to its members and representatives of the Authority for inspection during reasonable office hours at its official address: "(a) A copy of this Code and all other laws pertaining to cooperatives; "(b) A copy of the regulations of the Authority; "(c) A copy of the articles of cooperation and bylaws of the cooperative; "(d) A register of members; "(e) The books of the minutes of the meetings of the general assembly. He shall also be responsible for the production of the same at the time of audit or inspection. . The fiscal year of every cooperative shall be the calendar year except as may be otherwise provided in the bylaws. Failure to file the required reports shall subject the accountable officer/s to fines and penalties as may be prescribed by the Authority. unless by order of a competent court. "(2) The accountant or the bookkeeper of the cooperative shall be responsible for the maintenance of the cooperative in accordance with generally accepted accounting practices. including those in pursuance of their sociocivic undertakings. be compelled to produce any of the books of the cooperative. audited according to generally accepted auditing standards. Reports. Books to be Kept Open. "ART. 54. 52. transactions and accounts therein recorded. stating its noncompliance and the commensurate fines and penalties that will be imposed until such time that the cooperative has complied with the requirements. He shall also be responsible for the production of the same at the time of audit or inspection. and copies thereof shall be furnished to all its members or record. "The audit committee shall be responsible for the continuous and periodic review of the books and records of account to ensure that these are in accordance with generally accepted accounting practices. equipment and spare parts used by them and which are not available locally a certified by the department of trade and industry (DTI). Instrument for Salary or Wage Deduction. officer. Duly registered cooperatives under this Code which do not transact any business with nonmembers or the general public shall not be subject to any taxes and fees imposed under the internal revenue laws and other tax laws. Cooperatives transacting business with both members and non members shall not be subjected to tax on their transactions with members. deposits or interest of a member for any debt due to the cooperative from such a member.000. "Upon the filing of the application for registration of a cooperative. 58. "(2) Upon the execution of such instrument and as may be required by the cooperative contained in a written request.61. the employer shall make the deduction in accordance with the agreement and deduction in accordance with the agreement and remit forthwith the amount so deducted within ten (10) days after the end of the payroll month to the cooperative. In relation to this. a cooperative shall have primary lien upon the capital. by such member through the proceeds of the loan or credit granted by the cooperative to him for as long as the same is not fully paid."ART. Tax and Other Exemptions. advance sales or compensating taxes on their importation of machineries.00) shall fee the following taxes at the full rate: . Notwithstanding the provision of any law with the contrary.000. "(3) Notwithstanding the provisions of any law to the contrary. provincial. – (1) Notwithstanding the provisions of existing laws. any sale or conveyance made in contravention of paragraph (2) hereof shall be void. Bonding of Accountable Officers. Notwithstanding the provisions of any law or regulation to the contrary. goods or services acquired and held. otherwise. the transactions of members with the cooperative shall not be subject to any taxes and fees. – Every director. notwithstanding the provisions of existing laws to the contrary. "(2) Cooperatives with accumulated reserves and divided net savings of more than Ten million pesos (P10. any debt due to the cooperative from the member shall constitute a first lien upon any raw materials. including not limited to final taxes on members’ deposits and documentary tax. facilities. rules and regulations to the contrary. "ART. Cooperatives not falling under this article shall be governed by the succeeding section. "ART. "(4) The provisions of this article shall apply to all similar agreements referred to in paragraph (1) and were enforced prior to the approval of this Code. The employer shall make the deduction for as long as such debt or other demand remains unpaid by the employee. the cooperative and the transferee or assignee shall be solidarily liable to pay twice the amount of the imposed tax and / or duties. commutation of leave credits and any other monetary benefits payable to him by the employer and remit such amount as maybe specified in satisfaction of a debt or other demand due from the member to the cooperative. Primary Lien. "(3) The term "employer" as used in this article shall include all private firms and the national and local governments and governmentowned or controlled corporations who have under their employer a member of a cooperative and have agreed to carry out the terms of the instrument mentioned in paragraphs (1) and (2) of this article.000. city. and employee handling funds. The board of directors shall determine the adequacy of such bonds. such cooperatives dealing with nonmembers shall enjoy the following tax exemptions: "(1) Cooperatives with accumulated reserves and undivided net savings of not more than Ten million pesos (P10. securities or property on behalf of any cooperative shall be covered by a surety bond to be issued for a duly registered insurance or bonding company for the faithful performance of their respective duties and obligations. Such bonds shall be renewed manually and the Authority shall accordingly be informed of such renewal. "(2) No property or interest on property which is subject to a lien under paragraph (1) shall be sold nor conveyed to third parties without the prior permission of the cooperative.000. inputs. All tax free importations shall not be sold nor the beneficial ownership thereof be transferred to any person until after five (5) years. but subject to the prior claim of the Authority. production. The lien upon the property or interest shall continue to exit even after the sale or conveyance thereof until such lien has been duly extinguished. the actual and reasonable cost deducting and remitting maybe collected. Preference of Claims. the responsibilities of the employer as stated in paragraphs (1) and (2) of this articles shall be mandatory: Provided. Tax Treatment of Cooperative. "ART. That in the case of private employer. the bonds of the accountable officers shall be required by the Authority. "ART. 56. 60. and products produced; or any land. 57. execute an instrument in favor of the cooperative authorizing his employer to deduct from his/her salary or wages.00) shall be exempt from all national. 59. "(5) Notwithstanding the provisions of existing laws to the contrary. municipal or barangay taxes of whatever name and nature. Such cooperatives shall be exempt from customs duties. building. – (1) A member of a cooperative may. "ART. equipment. tobacco and other agricultural commodities produced by their members shall be granted to the cooperatives concerned; . the National Internal Revenue Code. M and N of Republic Act No.000. milk. That at least twentyfive per centum (25%) of the net income of the cooperatives is returned to the members in the form of interest and/or patronage refunds; "(c) All other taxes unless otherwise provided herein; and "(d) Donations to charitable. notwithstanding any law or regulation to the contrary. shall render service. electricity. further. "(a) Income Tax On the amount allocated for interest on capitals: Provided. That cooperatives duly registered with the Authority; are exempt from the payment of valueadded tax; subject to Section 109. finally. "ART. the judge. free of charge. to any person or group of persons requiring the administration of oath or the acknowledgment of articles of cooperation and instruments of loan from cooperatives not exceeding Five Hundred Thousand Pesos (P500. 62. free of charge. meat. any instrument relative to a loan made under this Code which does not exceed Two Hundred Fifty Thousand Pesos (P250. That a certification of the Authority showing that the net assets of the cooperative are in excess of the amount of the bond required by the court in similar cases shall be accepted by the court as a sufficient bond.00) or the deeds of title of any property acquired by the cooperative or any paper or document drawn in connection with any action brought by the cooperative or with any court judgment rendered in its favor or any instrument relative to a bond of any accountable officer of a cooperative for the faithful performance of his duties and obligations. to enforce the payment of obligations contracted in favor of the cooperative. That cooperatives regardless of classification. after previous authorization by the Authority. That the exempt transaction under Section 109 (L) shall include sales made by cooperatives duly registered with the Authority organized and operated by its member to undertake the production and processing of raw materials or of goods produced by its members into finished or process products for sale by the cooperative to its members and nonmembers: Provided.000. are exempt income tax from the date of registration with the Authority; "(b) ValueAdded Tax – On transactions with nonmembers: Provided. – Cooperatives registered under this Code. be also accorded the following privileges: "(1) Cooperatives shall enjoy the privilege of depositing their sealed cash boxes or containers. and the custodian of such articles shall issue a receipt acknowledging the articles received duly witnessed by another person; "(2) Cooperatives organized among government employees. exercising his ex officio capacity as notary public. eggs. ice plant. That all sales or services rendered for nonmembers shall be subject to the applicable percentage taxes sales made by producers. fish and other marine products. further. That any processed product or its derivative arising from the raw materials produced by its members. notwithstanding the provisions of any law to the contrary. however. corn and other grains. That the same tax is not consequently imposed on interest individually received by members: Provided. 9337. subsections L. marketing or service cooperatives: Provided further. "(8) Any security issued by cooperatives shall be exempt from the provisions of the Securities Act provided such security shall not be speculative. "(3) All cooperatives. and similar services and facilities shall secure a franchise therefore. or where such actions is brought by the Authority before the court. Privileges of Cooperatives. "(5) Any register of deeds shall accept for registration. whether owned or rented by the Government; "(3) Cooperatives rendering special types of services and facilities such as cold storage.00). transportation. documents or any valuable papers in the safes of the municipal or city treasurers and other government offices free of charge. as amended: Provided. That nothing in this article shall preclude the examination of the books of accounts or other accounting records of the cooperative by duly authorized internal revenue officers for internal revenue tax purposes only. "(7) All cooperatives shall be exempt from putting up a bond for bringing an appeal against the decision of an inferior court or for seeking to set aside any third party claim: Provided. and such cooperatives shall open their membership to all persons qualified in their areas of operation; "(4) In areas where appropriate cooperatives exist. "(6) Cooperatives shall be exempt from the payment of all court and sheriff’s fees payable to the Philippine Government for and in connection with all actions brought under this Code. shall enjoy the free use of any available space in their agency. "(4) In areas where there are no available notaries public. research and educational institutions and reinvestment to socioeconomic projects within the area of operation of the cooperative may be tax deductible. vegetables. regardless of the amount of accumulated reserves and undivided net savings shall be exempt from payment of local taxes and taxes on transactions with banks and insurance companies: Provided. the preferential right to supply government institutions and agencies rice. sold in then name and for the account of the cooperative: Provided . except when the adverse party is the Republic of the Philippines; "(12) Cooperatives organized by faculty members and employees of educational institutions shall have the preferential right in the management of the canteen and other services related to the operation of the educational institution where they are employed: Provided. the Government Procurement Act; "(11) Cooperative shall enjoy the privilege of being represented by the provincial or city fiscal or the Office of the Solicitor General. as amended. It shall have the preferential right to the management and operation of public terminals and ports whether land or sea transport where the cooperative operates and on securing a franchise for active or potential routes for the public transport; "(10) Cooperatives transacting business with the Government of the Philippines or any of its political subdivisions or any of its agencies or instrumentalities. or better than those given for socialized housing projects. otherwise known as the Insolvency Law. 1956. as follows: CHAPTER VII DISSOLUTION OF COOPERATIVES . market vendors and such other cooperatives. Articles 65. including seeds and other agricultural inputs and implements. the Land Bank of the Philippines and other financial institutions except the Bangko Sentral ng Pilipinas (BSP); "The Philippine Deposit Insurance Corporation (PDIC) and other government agencies. 7. fisheries and small entrepreneurial industries and federations thereof. This financing shall be in the form of blanket loans or longterm wholesale loans to qualified cooperatives. That these rights shall only be utilized exclusively by cooperatives: Provided." SEC. however. as follows: CHAPTER VI INSOLVENCY OF COOPERATIVES "ART. further. shall issue rules and regulations on all matters concerning housing cooperatives." SEC. "(5) Preferential treatment in the allocation of fertilizers. 63. such cooperative may apply for such remedies as it may deem fit under the provisions of Act No. "The Authority. with interest rates and terms equal to. such as farm and fishery producers and suppliers. That such services are operated within the premises of the said educational institution; and "(13) The appropriate housing agencies and government financial institutions shall create a special window for financing housing projects undertaken by cooperatives. 69. "Nothing in this Article. 68. including governmentowned and controlled corporations shall be exempt from prequalification bidding requirements notwithstanding the provisions of Republic Act No. Proceeding Upon Insolvency. That no cooperative forming a joint venture. 70 and 71 of Chapter VII on Dissolution of Cooperatives of the same Code are hereby renumbered and amended to read. In case a cooperative is unable to fulfill its obligations to creditors due to insolvency. without need for individual processing. facilities and parts through the program of the government financial institutions. precludes creditors from seeking protection from said insolvency law. Article 64 of Chapter VI on Insolvency of Cooperatives of the same Code is hereby renumbered and amended to read. 66. and in rice distribution shall be granted to cooperatives by the appropriate government agencies; "(6) Preferential and equitable treatment in the allocation or control of bottomries of commercial shipping vessels in connection with the shipment of goods and products of cooperatives; "(7) Cooperatives and their federations. otherwise known as. shall have preferential rights in the management of public markets and/or lease of public market facilities. partnership or any other similar arrangement with a noncooperative entity can utilize these rights; "(8) Cooperatives engaged in credit services and/or federations shall be entitled to loans credit lines. in consultation with the appropriate government agencies and concerned cooperative sector. rediscounting of their loan notes. 67. government owned and controlled corporations and government financial institutions shall provide technical assistance to registered national federations and unions of cooperatives which have significant engagement in savings and credit operations in order for these federations and unions to establish and/or strengthen their own autonomous cooperative deposit insurance systems; "(9) A public transport service cooperative may be entitled to financing support for the acquisition and/or maintenance of land and sea transport equipment. and other eligible papers with the Development Bank of the Philippines. free of charge. stalls or spaces: Provided. 6.9184. which have for their primary purpose the production and/or the marketing of products from agriculture. present and constituting a quorum at a meeting called for that purpose. Involuntary Dissolution. Liquidation of a Cooperative. in a newspaper of general circulation in the Philippines: Provided. the cooperative is authorized and empowered to convey all of its properties to trustees for the benefit of its members. The order of dissolution shall set forth therein: "(1) The assets and liabilities of the cooperative; "(2) The claim of any creditor; "(3) The number of members; and "(4) The nature and extend of the interests of the members of the cooperative. the petition for dissolution shall be filed with the Authority. verified by its chairperson or board secretary or one of its directors and shall set forth all claims and demands against it and that its dissolution was resolved upon by the affirmative vote of at least threefourths (3/4) of all the members with voting rights. a copy of the order shall be published at least once a week for three (3) consecutive weeks in a newspaper of general circulation published in the municipality or city where the principal office of the cooperative is situated or in the absence of such local newspaper. If a cooperative has not commenced business and its operation within two (2) years after the issuance of its certificate of registration or has not carried on its business for two (2) consecutive years. That the notice of time. 67. Before such date. despite notice by the Authority. Voluntary Dissolution Where no Creditors are Affected. Dissolution by Failure to Organize and Operate. The Authority shall thereupon issue the certificate of dissolution. The petition shall be signed by a majority of its board or directors or other officers managing its affairs. the dissolution may be affected by a majority vote of the board of directors. "ART. "At any time during the said three (3) years. 68."ART. and a copy shall likewise be posted for three (3) consecutive weeks in three (3) public places in the municipality or city where the cooperative’s office is located. after due notice and hearing. of the provisions of this Code or its bylaws; "(4) Willful failure to operate on a cooperative basis; and "(5) Failure to meet the required minimum number of members in the cooperative. 64. "ART. it shall issue an order to dissolve the cooperative and direct the disposition of its assets in accordance with existing rules and regulations. or if no newspaper is published in such place. "ART. and by a resolution duly adopted by the affirmative vote of at least threefourths (3/4) of all the members with voting rights. creditors and other persons in interest. conveyance and distribution of its properties and assets. the Authority shall send a formal notice to the said cooperative to show cause as to its failure to operate. place and object of the meeting shall be published for three (3) consecutive weeks in a newspaper published in the place where the principal office of said cooperative is located. – A cooperative may be dissolved by order of a competent court after due hearing on the grounds of: "(1) Violation of any law. "Upon expiry of the five (5) day notice to file objections. Dissolution by Order of the Authority. in a newspaper of general circulation in the Philippines. – If the dissolution of a cooperative does not prejudice the rights of any creditor having a claim against it. present and constituting a quorum at a meeting to be held upon call of the directors: Provided. 69. A copy of the resolution authorizing the dissolution shall be certified to by a majority of the board of directors and countersigned by the board secretary. Failure of the cooperative to promptly provide justifiable cause for its failure to operate shall warrant the Authority to delete its name from the roster of registered cooperatives and shall be deemed dissolved. 65. 66. the certificate of registration of a cooperative on any of the following grounds: "(1) Having obtained its registration by fraud; "(2) Existing for an illegal purpose; "(3) Willful violation. "If the petition is sufficient in form and substance. – Every cooperative whose charter expires by its own limitation or whose existence is terminated by voluntary dissolution or through an appropriate judicial proceeding shall nevertheless continue to exist for three (3) years after the time it is dissolved; not to continue the business for which it was established but for the purpose of prosecuting and defending suits by or against it; settlement and closure of its affairs; disposition. From and after . "ART. regulation or provisions of its bylaws; or "(2) Insolvency. That the notice of such meeting is sent to each member of record either by registered mail or by personal delivery at least thirty (30) days prior to said meeting. the Authority shall proceed to hear the petition and try any issue raised in the objection filed; and if the objection is sufficient and the material allegations of the petition are proven. Voluntary Dissolution Where Creditors Are Affected. the Authority shall issue an order reciting the purpose of the petition and shall fix a date which shall not be less than thirty (30) nor more than sixty (60) days after the entry of the order. further. – Where the dissolution of a cooperative may prejudice the rights of any creditor. "ART. – The Authority may suspend or revoke. all interests which the cooperative had in the properties are terminated. aids and other assistance 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. "ART. 74. shareholder or member who is unknown or cannot be found shall be given to the federation or union to which the cooperative is affiliated with. donations. The term "share" refers to a unit of capital in a primary cooperative the par value of which may be fixed to any figure not more than One thousand pesos (P1. any asset distributable to any creditor. except in the case of decrease of share capital of the cooperative and as otherwise allowed by this Code. Te bylaws of every cooperative shall be provided for a reasonable and realistic member capital buildup program to allow the continuing growth of the members’ investment in their cooperative as their economic conditions continue to improve. That the total share holding of the heir does not exceed ten per centum (10%) of the share capital of the cooperative; Provided. grants. A cooperative may invest its capital in any of the following: "(a) In shares or debentures or securities of any other cooperative; . 73. the share or shares excess will revert to the cooperative upon payment to the heir of the value of such shares. 77. "Where a member of cooperative dies. No member of primary cooperative other than cooperative itself shall own or hold more than ten per centum (10%) of the share capital of the cooperative. legacies. Capital Sources. PROPERTY. and Funds of the same Code are hereby renumbered and amended to read. 73. Assignment of Share Capital Contribution or Interest. Shares.78. "(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 the membership of the cooperative; and "(3) The board of directors has approved such assignment. "(1) He has held such share capital contribution or interest for not less than one (1) year. "ART. as follows: CHAPTER VIII CAPITAL. any such conveyance. donations.76. 78. 72. – The Authority shall issue the appropriate implementing guidelines for the liquidation of cooperatives. "ART. That where the heir fails to qualify as a member or where his total share holding exceeds ten per centum (10%) of the share capital ." SEC. that such fine is fair and reasonable under the circumstances. 71.000. "ART. Provided. The capitalization of cooperatives and the accounting procedures shall be governed by the provisions of this Code and the regulations which shall be issued. his heir shall be entitled to the shares of the decedent: Provided. "Upon dissolution. Capital BuildUp. such donated capital shall be subject to escheat. Property. 79 and 80 of Chapter VIII on Capital. "ART. Limitation on Share Capital Holdings. "ART. legacies. 70. Rules and Regulations on Liquidation. Subject to the provisions of this Code. "ART. 76. grants.00). AND FUNDS "ART. 74. The share of capital of a cooperative is the money paid or required to be paid for the operations of the cooperative. Capital.75. aids and such other assistance from any local or foreign institution whether public or private: Provided. That the heir qualify and is admitted as members of the cooperative: Provided finally . or interest on share capital; and "(4) Subsidies. Articles 72.77. The method for the issuance of share certificates shall prescribed in its bylaws. Cooperatives registered under this Code may derive their capital from any or all of the following sources: "(1) Member’s share capital; "(2) Loans and barrowings including deposits; "(3) Revolving capital which consists of the deferred payment of patronage refunds. further. 8. "Upon the winding up of the cooperative affairs. no member shall transfer his shares or interest in the cooperative or any part thereof unless. That capital coming from such subsides. The bylaws of a cooperative may prescribe a fine on unpaid subscribed share capital. Investment of Capital. "ART. "A cooperative shall only distribute its assets or properties upon lawful dissolution and after payment of all its debts and liabilities. 75. Fines. That it shall be a defense to any action under this article that the member demanding to examine and copy excerpts from the cooperative records has improperly used any information secured through any prior examination of the records of such cooperative or was not acting in good faith or for a legitimate purpose in making his demand. Revolving Capital. "The social audit shall be conducted by an independent social auditor accredited by the Authority. Right to Examine. Safety of Records. 10. "ART. the net surplus of cooperatives shall be determined in accordance with its bylaws. "The Authority. 9. at its principal office. further. 82. . Inquiry and Members’ Right to Examine of the same Code are hereby renumbered and amended to read. for a copy of excerpts from said records without charge except the cost of production. Net Surplus. the liability under this article shall be imposed upon the directors who voted for such refusal: Provided. 82. "Performance and social audit reports which contain the findings and recommendations of the auditor shall be submitted to the board of directors. or per unit of product or services handled. "ART. 85. – Notwithstanding the provisions of existing laws. keep and carefully preserve the records required by this Code to be prepared and maintained. as follows: CHAPTER X ALLOCATION AND DISTRIBUTION OF NET SURPLUS "ART. amount. the board of directors shall present the complete audit report to the general assembly in its next meeting. 84 and 85 of Chapter IX on Audit. 84. 83. Articles 86 and 87 of Chapter X on Allocation and Distribution of Net Surplus of the same Code are hereby renumbered and amended to read. 81. name. and rate of interest to be paid and shall distinctly set forth the time of retirement of such certificates and the amounts to be returned. – Every cooperative shall." SEC. Every cooperative shall determine its net surplus at the close of every fiscal year and at such other times as may be prescribed by the bylaws. – A member shall have the right to examine the records required to be kept by the cooperative under Article 52 of this Code during reasonable hours on business days and he may demand. That if such refusal is pursuant to a resolution or order of the board of directors. Audit Report. in consultation with the cooperative sector. – The general assembly of any cooperative may authorize the board of directors to raise a revolving capital to strengthen its capital structure by deferring the payment of patronage refunds and interest on share capital or by the authorized deduction of a percentage from the proceeds of products sold or services rendered. Articles 81. The board of directors shall issue revolving capital certificates with serial number. 79. The financial audit shall be conducted by an external auditor who satisfies all the following qualifications: "(1) He is independent of the cooperative or any of its subsidiary that he is auditing; and "(2) He is a member in good standing of the Philippine Institute of Certified Public Accountants (PICPA) and is accredited by both the Board and Accountancy and the Authority. "Any officer of the cooperative who shall refuse to allow any member of the cooperative to examine and copy excerpts from its records shall be liable to such member for damages and shall be guilty of an offense which shall be punishable under Article 140 of this Code: Provided. shall promulgate the rules and standards for the social audit of cooperatives." SEC. "ART. It shall take all necessary precaution to prevent its loss. "ART. Nonliability for Defamations. as follows: "ART. – The auditor is not liable to any person in an action for defamation based on any act. or any cooperative; "(c) In securities issued or guaranteed by the Government; "(d) In real state primarily for the use of the cooperative or its members; or "(e) In any other manner authorized in the bylaws. or any statement made by him in good faith in connection with any matter he is authorized or required to do pursuant to this Code. Annual Audit. performance and social audit. done. in writing. 83. – Cooperatives registered under this Code shall be subject to an annual financial. – The auditor shall submit to the board of directors and to the audit committee the financial audit report which shall be in accordance with the generally accepted auditing standards for cooperatives as jointly promulgated by the Philippine Institute of Certified Public Accountants (PICPA) and the Authority. 80. "Thereafter. "ART. destruction or falsification. "(b) In any reputable bank in the locality. That any amount remaining after the allowable interest and the patronage refund have been deducted shall be credited to the reserve fund."Any provision of law to the contrary notwithstanding. contribute. That: . "(b) Upon the dissolution of the cooperative. the reserve fund shall not be distributed among the members. development and similar other cooperative activities geared towards the growth of the cooperative movement: "(a) Half of the amounts transferred to the education and training fund annually under this subsection shall be spent by the cooperative for education and training purposes; while the other half may be remitted to a union or federation chosen by the cooperative or of which it is a member. If the members cannot decide upon the disposal of the reserve fund. "The sum allocated for patronage refunds shall be made available at the same rate to all patrons of the cooperative in proportion to their individual patronage: Provided. The general assembly may resolves: "(i) To establish a usufructuary trust fund for the benefit of any federation or union to which the cooperative is affiliated; and "(ii) To donate. or otherwise dispose of the amount for the benefit of the community where the cooperative operates. or the goods and services availed by them from the cooperative or the difference of the rightful amount due to the members for their products sold or services rendered to the cooperative including other inflows of assets resulting from its other operating activities and which shall be deemed to have been returned to them if the same is distributed as prescribed herein. Such sum of the reserve fund in excess of the share capital may be used at anytime for any project that would expand the operations of the cooperative upon the resolution of the general assembly. The said union or federation shall submit to the Authority and to its contributing cooperatives the following schedules: "(i) List of cooperatives which have remitted their respective Cooperative Education and Training Funds (CETF); "(ii) Business consultancy assistance to include the nature and cost; and "(iii) Other training activities undertaken specifying therein the nature. which shall not be less than three per centum (3%) of the net surplus. this amount shall not be less than fifty per centum (50%) of the net surplus: "(a) The reserve fund shall be used for the stability of the cooperative and to meet net losses in its operations. "(3) An amount for the community development fund. a land and building. "Any sum recovered on items previously charged to the reserve fund shall be credited to such fund. "(c) Upon the dissolution of the cooperative. the same shall go to the federation or union to which the cooperative is affiliated. The general assembly may decrease the amount allocated to the reserve fund when the reserve fund already exceeds the share capital. "ART. That. The community development fund shall be used for projects or activities that will benefit the community where the cooperative operates. 86. the net surplus shall not be construed as profit but as an excess of payments made by the members for the loans borrowed. shall not be more than ten per centum (10%) of the net surplus. the unexpended balance of the education and training fund appertaining to the cooperative shall be credited to the cooperative education and training fund of the chosen union or federation. The fund shall provide for the training. in the first five (5) years of operation after registration. The bylaws may provide that certain fees or a portion thereof be credited to such fund. Order of Distribution. participants and cost of each activity. "(5) The remaining net surplus shall be made available to the members in the form of interest on share capital not to exceed the normal rate of return our investments and patronage refunds: Provided. "(4) An optional fund. and any other necessary fund the total of which shall not exceed seven per centum (7%). "(b) The reserve fund shall not be utilized for investment. "(2) An amount for the education and training fund. – The net surplus of every cooperative shall be distributed as follows: "(1) An amount for the reserve fund which shall be at least ten per centum (10%) of net surplus: Provided. other than those allowed in this Code. 92. 93. majority of which are agrarian reform beneficiaries. for the purpose of developing an appropriate system of land tenure. 89. The amount so allocated shall be credited to such patron toward payment of the minimum capital contribution for membership. his proportionate amount of patronage refund shall be paid to him unless he agrees to credit the amount to his account as additional share capital contribution; "(b) In the case of a member patron with unpaid share capital contribution. estates or haciendas acquired by the State for the benefit of the workers in accordance with the Comprehensive Agrarian Reform Program which shall be collectively owned by the workerbeneficiaries under a cooperative setup. "ART. – An agrarian reform cooperative is one organized by marginal farmers. health. . "(a) In the case of a member patron with paidup share capital contribution. 90. such patron shall be deemed and become a member of the cooperative if he so agrees or requests and complies with the provisions of the bylaws for admission to membership; and "(d) If within any period of time specified in the bylaws. 94 and 95 of Chapter XI on the Special Provisions Relating to Agrarian Reform Cooperatives of the same Code are hereby renumbered retitled and amended to read. hereinafter referred to as "beneficiaries"; "(3) To provide financial facilities to beneficiaries for provident or productive purposes at reasonable costs; "(4) To arrange and facilitate the expeditious transfer of appropriate and suitable technology to beneficiaries and marginal farmers at the lowest possible cost; "(5) To provide social security benefits. land consolidation or land management in areas covered by agrarian reform. at the option of the cooperative. the amount so accumulated or credited to their account together with any part of the general fund for nonmember patrons shall be credited to the reserve fund or to the education and training fund of the cooperative. – Landholdings like plantations. medical and social insurance benefits and other social and economic benefits that promote the general welfare of the agrarian reform beneficiaries and marginal farmers; "(6) To provide nonformal education. That the provisions of the other chapters of this Code shall apply suppletorily except insofar as this Chapter otherwise provides. When a sum equal to this amount has accumulated at any time within a period specified in the bylaws. land consolidation or land management in areas covered by agrarian reform; "(2) To coordinate and facilitate the dissemination of scientific methods of production. vocational/technical training. Coverage. Cooperative Estate. his proportionate amount of patronage refund shall be set aside in a general fund for such patrons and shall be allocated to individual nonmember patrons only upon request and presentation of evidence of the amount of his patronage. and provide assistance in the storage. "An agrarian reform cooperative as defined shall be organized for any or all of the following purposes: "(1) To develop an appropriate system of land tenure. 91. land development. "ART. and livelihood programs to beneficiaries and marginal farmers; "(7) To act as conduits for external assistance and services to the beneficiaries and marginal farmers; "(8) To undertake a comprehensive and integrated development program in agrarian reform and resettlement areas with special concern for the development of agrobased. any subscriber who has not fully paid his subscribed share capital or any nonmember patron who has accumulated the sum necessary for membership but who does not request nor agree to become a member or fails to comply with the provisions of the bylaws for admission to membership. as follows: CHAPTER XI AGRARIAN REFORM COOPERATIVES "ART." SEC. 11. land development. Articles 88. Definition and Purpose. his proportionate amount of patronage refund shall be credited to his account until his account until his share capital contribution has been fully paid; "(c) In the case of a nonmember patron. 88. 87. and cottagebased industries; "(9) To represent the beneficiaries on any or all matters that affect their interest; and "(10) To undertake such other economic or social activities as may be necessary or incidental in the pursuit of the foregoing purposes. – The provisions of this Chapter shall primarily govern agrarian reform cooperatives: Provided. transport. 89. marinebased. and marketing of farm products for agrarian reform beneficiaries and their immediate family. technological. 90. shall issue appropriate rules and regulations pertaining to the provisions of this Chapter. "The Government shall provide the necessary financial and technical assistance to agrarian reform cooperatives to enable them to discharge effectively their purposes under this article. – Subject to such reasonable terms and conditions as the Department of Agrarian Reform (DAR) and the Authority may impose. "ART. If there is an electric service provider in the area. and other services and facilities required by the beneficiaries in their daily lives and livelihood. machinery. irrigation systems. Infrastructure. it shall upon the request of an agrarian reform cooperative. Preferential Right. 94. in consultation with the concerned government agencies and cooperative sector. 95. the agrarian reform cooperative concerned may undertake to provide the electric services in the area through its own resources. and public health and medical care services; "(5) Management. and commercial development of marine. facilities and other services and requirements of the beneficiaries and marginal farmers at reasonable prices; "(2) Marketing of the products and services of the beneficiaries in local and foreign markets; "(3) Processing of the members’ products into finished consumer or industrial goods for domestic consumption or for export; "(4) Provision of essential public services at cost such as power. – In agrarian reform areas. If the electric service provider fails to provide the services requested within a period of one (1) year. water. reservoirs. Privileges. 12. "ART. For this purpose. "ART. Supervision. Lease of Public Lands. subject to renewal for another twentyfive (25) years only: Provided. communication services. further. shall formulate . Chapter XII as amended shall now read. "ART. "The Authority. The DAR. agricultural. wharves. production inputs. The BSP. upon consultation with the Authority and the concerned cooperative sector. facilities and equipment to such agrarian reform cooperatives. – The Government may lease public lands to any agrarian reform cooperative for a period not exceeding twentyfive (25%) years. an agrarian reform cooperative shall have the preferential right in the grant of franchise and certificate of public convenience and necessity for the operation of public utilities and services: Provided. – The provisions of this Chapter shall primarily govern cooperative banks registered under this Code and the other provisions of this Code shall apply to them only insofar as they are not inconsistent with the provisions contained in this Chapter. – In agrarian reform and resettlement areas. The joint program shall be geared towards the beneficiaries gradual assumption of full ownership and management control of the agrarian reform cooperatives. agrarian reform cooperatives may be given the exclusive right to do any or all of the following economic activities in agrarian reform and resettlement areas; "(1) Supply and distribution of consumer. the Government shall provide technical assistance. – The cooperative banks registered under this Code shall be under the supervision of the BSP. conservation. aquacultural. waterworks systems. the Authority and the BSP shall draw up a joint program for the organization and financing of the agrarian reform cooperatives subject of this Chapter. irrigation. and other infrastructures with government funding. as follows: CHAPTER XII COOPERATIVE BANKS "ART. That it meets the requirements and conditions imposed by the appropriate government agency granting the franchise or certificate of public convenience and necessity. mineral. forestry. equipment. That such lease shall be for the exclusive use and benefit of the beneficiaries and marginal farmers subject to the provisions of the Comprehensive Agrarian Reform Program. and industrial goods. Governing Law. 93. passenger and/or cargo transportation by land or sea. 91. and other natural resources subject to compliance with the laws and regulations on environmental and ecological controls; and "(6) Provision of financial. "ART. ports." SEC. the Government shall grant to agrarian reform cooperatives preferential treatment in the construction. 97 and 98 of Chapter XII on the Special Provisions on Public Services Cooperatives of the same Code are hereby transferred to another chapter. bridges. Organization and Registration. potable water. maintenance and management of roads. Articles 96. All investments made by the said agrarian reform cooperative for the electrification of the agrarian reform resettlement areas shall be the subject of sale to the electric service provider once it takes on the service. canals. 96. "ART. immediately provide electric services to the agrarian reform areas. That the application for renewal shall be made one (1) year before the expiration of the lease: Provided. 92. – Agrarian reform cooperatives may be organized and registered under this Code only upon prior written verification by the DAR to the effect that the same is needed and desired by the beneficiaries; results of a study that has been conducted fairly indicate the economic feasibility of organizing the same and that it will be economically viable in its operations; and that the same may now be organized and registered in accordance with requirements of this Code. and raw materials and supplies. any cooperative bank may perform any or all of the banking services offered by other types of banks subject to the prior approval of the BSP. – (1) Cooperative organizations duly established and registered under this Code may organize a cooperative bank. 98. All other voting requirements shall be as prescribed by the BSP. the quorum requirement shall be onehalf plus one of all the members of the board of directors. – The quorum requirement for general assembly meetings. present and constituting a quorum. ceilings and conditions on borrowing of a cooperative organization from a cooperative bank. "The voting rights of the members shall be proportionate to the number of their paidup shares. under its official seal. Associate members are those subscribing and holding preferred shares of the bank. "ART. – To maintain the quality of bank management and accord appropriate protection to depositors and the public in general. the number. which shall likewise be considered a cooperative registrable under provisions of this Code subject to the requirements and requisite authorization from the BSP. "(3) The articles of cooperative and bylaws of a cooperative bank. 99. or any amendment thereto. "ART. That the additional cooperative bank shall be located in the City or municipality other that the city or municipality where the first cooperative bank is located. Powers. "(2) Membership in a cooperative bank shall either be regular or associate. These guidelines shall give due recognition to the unique nature and character of cooperative banks. which may include but are not limited to the following: "(a) Individual members of the bank’s memberprimary cooperatives; and "(b) Samahang Nayon and Municipal Katipunan ng mga Samahang Nayon (MKSN) which held common shares of cooperative banks prior to the effectivity of this Act shall apply for conversion to full pledged cooperatives in order to maintain their status as regular members of cooperative banks: Provided. Only one cooperative bank may be established in each province: Provided. 100. Organization. "In addition to the powers granted by this Code and other existing laws. . "Notwithstanding the provisions of this Code to the contrary. shall be one half plus one of the number of voting shares of all the members in good standing. That they shall notify the cooperative bank concerned their intention to convert within a period of ninety (90) days from the effectivity of this Act. Administration of Cooperative Banks. 101. the quorum requirement for amendments of articles of cooperation and bylaws shall be threefourths (3/4) vote of all the members with voting rights. including the terms thereof and rights appurtenant thereto to determine compliance with laws and regulations governing capital and equity structure of banks: Provided. 97. That cooperative banks shall issue par value shares only. whether special or regular. further.guidelines regarding the operations and the governance of cooperative banks. Quorum and Voting Rights. the BSP shall prescribed the fit and proper qualifications of bank directors and officers for the purposes of this article. However. Membership and Establishment of a Cooperative Bank. Capital Requirements of Cooperative Banks. – (1) A cooperative bank shall have a minimum paid up capital in such amount as may be required by the BSP. "ART. whether special or regular. Regular membership shall be limited to cooperative organizations which are holders of common shares of the bank. the BSP may prescribe appropriate guidelines. "ART. To this end. Samahang Nayon and MKSN are hereby given a period of one (1) year from the effectivity of this Act to complete their conversion as cooperatives. "Notwithstanding the provisions of this Code. "The powers and functions of a cooperative bank shall be subject to such rules and regulations as may be promulgated by the BSP. "ART. Functions and Allied Undertakings of Cooperative Banks. giving due recognition to the unique nature and character of cooperative banks. the cooperative bank concerned may convert the common shares held by such associations to preferred shares. cooperative banks shall provide financial and banking services to its members. Each director shall only have one vote. computation and term of the board of directors shall be defined in the articles of cooperation and bylaws of the cooperative bank. shall be registered with the Authority only when accompanied by a certificate of authority issued by the BSP. Cooperative bank shall exert reasonable efforts to inform their member Samahang Nayon and MKSN to finally convert or to give the notice of conversion within the prescribed period. Upon the failure of the Samahang Nayon and MKSN to finally convert to a fullpledged cooperative within the maximum period of one (1) year. In the meetings of the board of directors. That an additional cooperative bank may be established in the same province to cater to the needs in the same province to cater to the needs of the locality depending on the economic conditions of the province as may be determined by the BSP: Provided. "The BSP may prescribe rules and regulations on the types of shares a cooperative bank may issue. banking and credit services to cooperative organizations and their members. – A cooperative bank shall primarily provide financial. "ART. or the barangay public market. in English or Filipino. Privileges and Incentives of Cooperative Banks. crop and livestock protection and equipment insurance. endowment. including those of its subsidiaries and affiliates in such terms understandable to the layman and in such frequency as may be prescribed by the BSP. then in a newspaper published in the nearest city or province or in a newspaper of general circulation. or if there is no cooperative bank in the province. government agencies.000. 104. – Existing cooperatives may organize themselves into a cooperative insurance entity for the purpose of engaging in the business of insuring life and property of cooperatives and their members. motor vehicle coverage. however. rules and regulations shall prevail. loan protection. . 8791. The BSP. develop and perform their role in countryside development towards a sustainable national economic development. "(2) The Barrio Savings Fund (BSF) and Barrio Guarantee Fund (BGF) collected/deducted by various banks throughout the country from the loan proceeds of farmerborrowers who were members of cooperatives and Samahang Nayon in compliance with Presidential Decree No. Assistance to Cooperative Banks. 104. within a period of sixty (60) days immediately preceding the public auction or the execution of judgment. a cooperative bank shall publish a statement of its financial statement of its financial condition. does not exceed Two hundred fifty thousand (P250. the BSP may designate one of its officials or a person of recognized competence. excluding interest and other charges due and unpaid. but not limited to. 101. the cooperative insurance societies shall provide its constituting members different types of insurance coverage consisting of. governmentowned or controlled corporations and financial institutions shall provide assistance. "(1) Subject to the approval of the BSP. 102. – The cooperative banks registered under this Code shall be given the same privileges and incentives granted to the rural banks. shall be deposited to the cooperative bank located in the province where the depository banks of BSF and BGF are located. – In accordance with existing policies. retirement plans. at least once every quarter in a newspaper of local circulation in the city or province where the principal office is located or. commercial banks. and all other banks to rediscount notes with the BSP. Chapter XIII as amended shall now read. 102. Whenever a cooperative bank organized under this Code is in a state of continuing inability or unwillingness to maintain a period of liquidity. shall come up with the implementing guidelines on how to credit the owners of the funds. "However. preferably with experience in cooperative banking and finance. "ART. if no newspaper is published in the same provinces. in consultation with the concerned cooperative sector. 6657. 13. to cooperative banks to permit them to grow. and other government banks without affecting in any way the provisions of this Code.00) or such amount as the BSP may prescribe. if there be any where the property mortgaged is situated. in cases of foreclosure of mortgages covering loans granted by a cooperative bank. – With respect to the provisions and governance of the cooperative banks. technical or otherwise. 103. "ART. – Under the cooperative insurance program established and formed by the virtue of the provisions of this Code. and the execution of judgments thereon involving real properties and levied upon by a sheriff. as conservator of the said bank pursuant to the appropriate provisions of existing banking laws. the provisions of the banking laws. "Those funds whose owners could not be located or identified shall be subject to escheat. otherwise known as Comprehensive Agrarian Reform Law of 1988. otherwise known as the General Banking Act of 2000. the Land Bank of the Philippines. Articles 99. 108 and 109 of Chapter XIII on Special Provisions Relating to Cooperative Banks of the same Code are hereby transferred to another chapter. may allow the posting of the financial statements of the cooperative bank in conspicuous places it may determine in lieu of the publication required in the preceding sentence when warranted by the circumstances. 105." SEC. 107. Proof of publication as required herein shall be accomplished by an affidavit of the sheriff or officer conducting the foreclosure sale or execution of judgment. "(2) A cooperative bank shall be allowed to foreclosure lands mortgaged to its subject to the provisions of Republic Act No. private development bank. life insurance with special group coverage. the municipal public market. as may be warranted by the prevailing economic conditions and by the nature and character of the cooperative banks. Types of Insurance Provided. the barangay hall. which are still floating and outstanding either as active or dormant deposit accounts in the books of those banks. shall issue appropriate rules and regulations pertaining to the provisions of this Chapter. 100. 175 and accompanying letters of instruction. notwithstanding Section 71 of Republic Act No. 105. Applicability of Banking Laws and Regulations. as follows CHAPTER XIII INSURANCE COOPERATIVE "ART. in coordination with the Authority. and shall be attached to the record of the case. the municipal hall. bonding. 106. "The BSP and the Authority. The BSP. 106. Cooperative Insurance Societies. It shall be sufficient publication in such cases if the notice of foreclosure and execution of judgment are posted in conspicuous areas in the cooperative bank’s premises. 103. it shall be exempt from publication requirement where the total amount of the loan. "ART. 112. A local monitoring committee shall likewise be established at the extension offices of the Authority to facilitate the monitoring of transportation cooperatives. slaughterhouses and other similar services; and "(6) Such other types of public services as may be engaged in by any cooperative. – The provisions of the Insurance Code and all other laws and regulations relative to the organization and operation of an insurance company shall apply to cooperative insurance entities organized under this Code. shall issue the appropriate rules and regulations implementing the provisions of this Chapter. Such services may include the following: "(1) Power generation. 110. equipment and facilities. primary transportation service cooperatives including secondary and tertiary federation of cooperatives may engage in a business related to transportation service. – (1) The internal affairs of public service cooperatives such as the rights and privileges of members. Definition and Coverage. "(3) The Authority and the proper government agency concerned shall jointly issue the necessary rules and regulations to implement this Chapter. The requirements on capitalization. rate fixing and such other matters affecting their public service operations shall be governed by the proper government agency concerned. 14. and the National Federation of Transportation Cooperatives. 112. "(2) All matters relating to the franchise or certificate of public convenience and necessity of public service cooperatives such as capitalization and investment requirements. but in no case may be requirement to be reduced to less than half of those provided for under the Insurance Code and other related laws. 107. 111. 113 and 114 of Chapter XIV on Special Provisions relating to Credit Cooperative of this Code are hereby transferred to another chapter. 109. board of directors and committees; for the election and qualifications of officers. no public service cooperative shall be registered unless it satisfies the following requirements. Articles 110. preference shall be given to a public service cooperative. "(4) The Authority shall establish a committee for the monitoring of transportation service cooperatives composed of representatives from the Authority. the rules and procedures for meetings of the general assembly. telegraph. "ART. Such cooperative shall be primarily governed by this Chapter and the general provisions of this Code insofar as they may be applicable unless they are inconsistent herewith. as may be necessary. – The Insurance Commission and the Authority. Applicability of Insurance Laws. "ART. including but not limited to: "(1) Importation. directors. "(1) Its articles of cooperation and bylaws provide for the membership of the users and/or producers of the service of such cooperatives; and "(2) Such other requirements as may be imposed by the other pertinent government agencies concerned. Chapter XIV as amended shall now read. within the meaning of this Code. – Unless otherwise provided in this Code. frequencies. the Land Transportation Franchising and Regulatory Board (LTFRB). Registration Requirements. as follows: CHAPTER XIV PUBLIC SERVICE COOPERATIVES "ART. Implementing Rules. 898. other concerned government agencies. Office of Transport Cooperatives (OTC). Engagement in Allied Business by Transportation Service Cooperatives. "ART. is one organized to render public services as authorized under a franchise or certificate of public convenience and necessity duly issued by the appropriate government agency. and/or distribution; "(2) Ice plants and cold storage services; "(3) Communication services including telephone. "ART. 111. all things being equal. Regulation of Public Service Cooperatives. "ART. Series of 1983. the Land Transportation Office (LTO). and committee members; allocation and distribution of surpluses; and all other matters relating to their internal affairs shall be governed by this Code. transmission. 108. Transport cooperatives organized under the provisions of Executive Order No. distribution and. marketing of petroleum products in accordance with existing laws; . shall be governed by this Chapter. – A public service cooperative. and communications: "(4) Land and sea transportation cooperatives for passenger and/or cargo. In case there are two (2) or more applicants for the same public service franchise or certificate of public convenience and necessity. "(5) Public markets. – Subject to pertinent national laws and local ordinances. in consultation with the concerned cooperative sector." SEC. investments and reserves of insurance firms may be liberally modified upon consultation with the Authority and the cooperative sector. Chapter XV as amended shall now read. Conversion of Credit Cooperatives to Financial Service Cooperatives. 116. . that provide savings and credit to their members only. Credit cooperatives shall be organized and registered in accordance with the general provisions of this Code. that provide savings and credit to their members." SEC. Articles 115. 118. 17. 114. OTC. A new Chapter on Financial Service Cooperatives shall be inserted in this Chapter and shall read. "ART. 116. regional and national levels may continue as such under this Code. Coverage. distribution and marketing of spare parts and supplies; and "(4) Marketing of vehicle/drivers insurance policies. – This Chapter shall apply to credit cooperatives and other cooperatives. including multipurpose cooperatives. 115. Should the said cooperatives decide to exercise enhanced functions." SEC. shall be registered with the Authority only if accompanied by a certificate of authority issued by the BSP. 16. under its official seal. The rest of the provisions of this Code shall apply to them insofar as the same are not inconsistent with the provisions of this Chapter. Renewal of Franchise and Vehicle Registration. Organizational Linkage. or any amendment thereto. as follows: CHAPTER XVI FINANCIAL SERVICE COOPERATIVES "ART. and"(b) Other financial services subject to regulation by the BSP. – Existing credit and multipurpose cooperatives with savings and credit facilities shall formally inform the Authority of its intention to continue performing its present functions. "The articles of cooperation and bylaws of any financial service cooperative. as follows: CHAPTER XV CREDIT COOPERATIVES "ART. or join leagues and federations for the purpose of providing commonly needed essential services including but not limited to the following: "(1) Interlending of surplus fund;"(2) Mutual benefits;"(3) Deposit guarantee;"(4) Bonding;"(5) Education and training;"(6) Professional and technical assistance;"(7) Research and development;"(8) Representation; and " (9) Other services needed to improve their performance. 119. "Existing support organizations such as federations of credit cooperatives. Definition and Functions of Financial Services Cooperatives. in consultation with the concerned government agencies and cooperative sector. 15. – Credit cooperatives may organize chapters or subsidiaries. and the local government unit concerned as proof that it has continuously provided the required public transportation services. as follows: "ART. 113. – A financial service cooperative is a financial organization owned and operated by its members and authorized to provide the following service. "The Authority. "(2) Operation of gasoline stations and transportation service centers; "(3) Importation. Organization and Registration. 117 and 118 of Chapter XV on Special Provisions relating to Cooperative Insurance Societies of the same Code are hereby transferred to another chapter. including multipurpose cooperatives. it shall notify the Authority and satisfy the requirements for conversion to financial service cooperative. "ART. That such cooperative presents a certificate of good standing issued by the Authority. – Renewals of franchise and vehicle registration shall be granted to transportation service cooperatives: Provided." SEC. "ART. shall issue appropriate rules and regulations pertaining to the provisions of this Chapter. 117. A new Article is inserted in Chapter XV on Credit Cooperatives and shall now read. Definition and Objectives. – A credit cooperative is a financial organization owned and operated by its members with the following objectives: "(1) To encourage savings among its members; "(2) To create a pool of such savings for which loans for productive or provident purpose may be granted to its members; and "(3) To provide related services to enable its members to maximize the benefit from such loans. exclusively to its members: "(a) The functions of credit cooperatives and other cooperatives. credit cooperatives at the provincial. "ART. they may open accounts. Membership and Affiliation. who are natural persons but who do not immediately qualify under the requirements for membership set out in the bylaws of the cooperative. however. 121."The authority granted this provision may be revoked by the BSP if any of the grounds for receivership mentioned under Section 53 and 56 of Republic Act No. through an approved accreditation criteria. subject to the bylaws and rules of the cooperative. They may. the main purpose of which is to perform savings and credit functions. conform to internationally accepted standards; "(4) Investigate to determine whether a financial service cooperative is conducting its business in a safe and sound manner; "(5) Conduct regular examination of the books of accounts. designate and deputize federations. records and other documents of financial service cooperatives; "(6) Inquire into the solvency and liquidity of a financial service cooperatives; "(7) Prescribe appropriate fees for supervision and examination of financial service cooperatives to among others. "The BSP shall issue a cease and desist order to cooperatives exercising the function of a financial service cooperative without authority from the BSP. examination and other services which it renders under this Code. limitations. "ART. or other forms of regulation on the different types of accounts and practices of financial service cooperatives which shall. taking into consideration the grounds. When they reach the age of majority and within two (2) years from acceptances of their associate membership. that will supervise primary financial service cooperatives and issue basic guidelines therefor; "(11) Require the submission of relevant reports from the deputized supervisor; "(12) Provide remedial measures in the operations of financial service cooperatives that are in a state of continuing inability or unwillingness to maintain a period of liquidity at the request of the deputized supervisor or when the deputized supervisor fails to perform its functions; "(13) Accredit external auditors in accordance with standards for audit and financial reporting in cooperation with the PICPA; and "(14) Appoint a conservator or a receiver as may be necessary subject to the rules and regulations to be promulgated by the Authority in coordination with the BSP. "Upon the favorable certification of the BSP and the prior approval of the Authority. "The BSP may charge equitable rates or fees. may convert to financial service cooperative subject to the required qualifications and procedures provided under this Code and in the implementing rules and regulations. as may be prescribed by the Monetary Board for licensing. and the rules and regulations of the Authority. 8791 is present or if the financial service cooperative has willfully violated this Code of any of the related rules and regulations. they have the option to convert into regular members. reapply as regular members after two (2) years. All associate members who are natural persons shall be given two (2) years to become regular members. to wit: "(1) Issue rules and regulations for the safe and sound conduct of operations of financial service cooperatives; "(2) Establish standards of operation for uniform application to all financial service cooperatives; "(3) Prescribe ratios. . who are natural persons; and "(2) Associate members. notwithstanding the provisions of existing laws to the contrary. "Minors who are dependents of regular members can qualify as associate members. Failure to convert within the said period shall mean automatic withdrawal of their associate membership. – A financial service cooperative shall have the two (2) types of members: "(1) Regular members. a cooperative. deposit funds and withdraw from their account. suspend or remove any director or officer who commits or omits an act which render him unfit for the position; "(10) Select. As associate members. monitor and oversee that existing laws and regulations are complied with; "(8) Pass upon and review the qualifications and disqualifications of individuals elected or appointed directors or officers and disqualify those found unfit; "(9) Disqualify. "ART. Regulation and Supervision. ceilings. 120. – The Authority shall exercise lead regulatory powers and supervision over the operations of the financial service cooperatives. powers and procedures under Sections 29 and 30 of Republic Act No. 7653 as may be deemed appropriate to financial service cooperatives. "The Authority shall include in its rules and regulations, appropriate sanctions and penalties, on the financial service cooperatives, its members, officers and responsible persons, for any action that fails to adhere to sound and prudent management practices or are inconsistent with the provisions of this Code, other applicable laws on cooperatives, rules, regulations, circulars or orders issued by the Authority, and require the cooperative to undertake corrective or remedial measures relative thereto. "The BSP is authorized to conduct riskbased supervision and examination of financial service cooperatives as it may deem necessary. "ART. 122. Promulgation of Rules and Regulations. – The BSP, in coordination with the Authority, shall prescribe the appropriate prudential rules and regulations applicable to the financial service cooperatives. "Subject to the regulations of the BSP, the banking laws, rules and regulations shall have suppletory application to financial services cooperatives: Provided, however, That the provisions on access to borrowing or financial assistance to be extended by the BSP of the Philippine Deposit Insurance Corporation (PIDC) shall not apply to financial service cooperatives: Provided, further, That the deposit liabilities of the financial service cooperatives shall not be insured by the PDIC. "ART. 123. Financial Service Cooperative Federations. – Financial service cooperatives may organize themselves into financial service cooperative may organize themselves into financial service cooperative federations, and register their federation with the Authority. These financial service cooperative federations may be deputized by the Authority as the supervisor of their members, and they shall have the following functions: "(a) Develop standards and provide services for the benefit of its affiliates and their members in accordance with the rules and regulations of the Authority; "(b) Define common objectives and coordinate activities for the financial service cooperative federation; "(c) Establish and administer funds such as liquidity fund, loan fund, investment fund, stabilization fund and such other funds; "(d) Establish a savings guarantee system for the protection of their affiliates' memberdepositors within three (3) years from the approval of this Code; "(e) Exercise onsite and offsite supervisory power over its members; "(f) Provide remedial assistance to its members concerning their operations and management; "(g) Act as the liquidator and when applicable, sequester properties to satisfy an obligation secured by a mortgage when authorized by the Authority; and "(h) Transmit relevant and required information regarding the operations and performance of member cooperatives to the Authority. "The Authority and other government agencies, governmentowned or controlled corporations and government financial institutions shall provide technical and such other assistance that may be allowed by their charters to financial service cooperative federations for the establishment and/or strengthening of their respective cooperative savings guarantee system. The technical assistance to be provided shall include, among others, training supervision and examination. "ART. 124. Designation of Existing Unit at the Cooperative Development Authority to Perform Regulatory and Supervisory Functions. – Within six (6) months from the approval of this Code, the Authority shall designate the unit to formulate and implement the necessary regulations, rules, policies, guidelines and standards applicable solely to financial service cooperatives and deputized federations in the performance of their savings, credit and such other related enhanced financial service operations. "The Department of Finance, the BSP and other concerned government agencies shall provide technical and training support for the effective and efficient implementation of the regulatory and supervisory functions and responsibilities of the Authority. "ART. 125. Prohibition. – The terms credit cooperative, financial service cooperative and financial service cooperative federation shall be used exclusively by those who are duly registered under this Code, and no person, group of persons, or organizations shall use the said terms unless duly registered with the Authority. Violations of this prohibition shall be punishable in accordance with Article 140 of this Code." SEC. 18. A new Chapter on Electric Cooperatives shall be inserted and shall read, as follows: CHAPTER XVII ELECTRIC COOPERATIVE "ART. 126. Coverage. – The provisions of this Code shall apply to all electric cooperatives registered with the Authority. This shall also cover new distribution utilities that will register with the Authority. "Electric cooperatives may undertake power generation utilizing renewable energy sources, including hybrid systems, acquisition and operation of subtransmission or distribution as its primary purposes. "ART. 127. Registration of Electric Cooperatives. – The registration of an electric cooperative with the Authority under this Code shall be submitted for approval to the members through a referendum, called for the purpose as provided for under Articles 183 and 129 of this Code. "ART. 128. Voting Requirement for Registration. – In compliance with the referendum as a voting procedure, the required number of votes for registration with the Authority shall be twenty percent (20%) of all members in good standing. "ART. 129. Documents to be Submitted for Registration with the Authority. – For purposes of registration, electric cooperatives shall submit the following documents: "(a) Copy of the board resolution certifying to the result of the vote approved through a referendum approving the registration of the cooperative with the Authority in compliance with Article 128; "(b) Certified copy of the articles of incorporation/cooperation and bylaws as required by the Authority; "(c) Duly audited financial statements for the past two (2) years; "(d) List of names of incumbent board of directors and their addresses certified by the board secretary and attested by the chairperson; "(e) Within six (6) months from the registration, the treasurer shall submit a sworn statement of the authorized share capital, the subscribed share capital of members and the amount of paidup share capital received by the treasurer; and "(f) Bonds of accountable officers. "ART. 130. Registration Options of Electric Cooperatives. – Electric Cooperatives registered with the National Electrification Administration (NEA) under Presidential Decree No. 269, as amended which opt not to register with the Authority are allowed to retain the word ‘cooperative’ in their registered names: Provided, That they shall not be entitled to the benefits and privileges under this Code. "ART. 131. Role of the Energy Regulatory Commission. – All rates and tariffs of electric cooperatives registered under the Authority shall be subject to the rules on application and approval of and by the Energy Regulatory Commission for distribution utilities. "ART. 132. Effects of Registration with the Authority. – (1) Upon the effectivity of this Code, electric cooperatives that are duly registered with the Authority, and issued a certificate of registration, shall no longer be covered by Presidential Decree No. 269, as amended by Presidential Decree No. 1645: Provided, That electric cooperatives registered with the Authority shall now be covered by the provisions of this Code as well as future rules and issuances of the Authority: Provided, however, That the security of tenure and the collective bargaining agreement between the cooperative management and the employees shall be respected, with no diminution of their existing salaries, emoluments, ranks and other benefits; "(2) The electric cooperatives registered with the Authority with existing loans obtained from NEA after June 26, 2001 shall continue to observe the terms of such loans until full payment or settlement thereof; "(3) Except as provided in the immediately preceding paragraph, the NEA shall no longer exercise regulatory or supervisory powers on electric cooperatives duly registered with the Authority; "(4) Electric cooperatives registered with the Authority are entitled to congressional allocations, grants, subsidiaries and other financial assistance for rural electrification which can be coursed through the Department of Energy, the Authority and/or local government units. The electric cooperatives registered under this Code can avail of the financial services and technical assistance provided by the government financial institutions and technical development agencies on terms respecting their independence as autonomous cooperatives; "(5) All condoned loans, subsidies, grants and other assistance shall form part of the donated capital and funds of the electric cooperatives and as such, it shall not be sold, traded nor be divided into shareholdings at any time; these donated capital/fund shall be valuated for the sole purpose of determining the equity participation of the members: Provided, That in the case of dissolution of the cooperative, said donated capital shall be subject to escheat; and "(6) Electric cooperatives registered and confirmed with the Authority under Republic Act No. 6938 and Republic Act No. 6939 are hereby deemed registered under this Code. "ART. 133. Share Capital in the Electric Cooperatives. – The electric cooperative shall issue and distribute share certificates under the name of their members, taking into consideration their previous equity contributions, the amortization component through the payments made, capital buildup and other capital contributions. "ART. 134. Cancellation of Registration with the Authority. – The cancellation of the registration of an electric cooperative shall be granted by the Authority as provided under Articles 64 to 70 of this Code. "The Authority, in consultation with the concerned cooperative sector, shall issue appropriate rules and regulations pertaining to the provisions of this Chapter." SEC.19. Articles 119, 120 and 121 of Chapter XVI on Miscellaneous Provisions of the same Code are hereby amended and shall now read, as follows: CHAPTER XVIII MISCELLANEOUS PROVISIONS "ART. 135. Compliance With Other Laws. – The Labor Code and all other labor laws, the Social Security Act, the Medical Care Act, and all other social legislations, and all other laws and executive orders shall apply to cooperatives duly registered under this Code. "ART. 136. Register of Cooperatives. – The Authority shall establish a register which shall contain a chronological entry of the name of every cooperative registered or dissolved under this Code together with the basic information required for registration or dissolution and any other information considered useful. The Authority shall publish annually a list of existing cooperatives, cooperatives under dissolution and those whose registration are cancelled during the year together with such information on each of them as may be prescribed in the rules and regulations. "ART. 137. Settlement of Disputes, Conciliation, and Mediation Proceedings. – Disputes among members, officers, directors, and committee members, and intracooperative, intercooperative, intrafederation or inter federation disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or mediation mechanisms embodied in the bylaws of cooperatives and in such other applicable laws. "The conciliation and mediation committee of the cooperative shall facilitate the amicable settlement of intra cooperative disputes and disputes among members, officers, directors, and committee members. "Should such conciliation or mediation proceeding fail, the matter shall be settled through voluntary arbitration: Provided, however, That before any party can validly file a complaint with the Authority for voluntary arbitration, it must first secure a certification from its conciliation and mediation committee and from its conciliation and mediation committee and from the cooperative union or federation to which it belongs that despite all efforts to settle the issues, the same have failed. "The jurisdiction of the voluntary arbitrators shall be exclusive and original and their decisions shall be appealable to the Office of the President. The Authority shall issue and adopt the proper rules of procedure governing arbitration as the primary and exclusive mode for dispute resolution in accordance with the Alternative Dispute Resolution Act of 2004. "For this purpose, the Authority shall constitute a list of qualified voluntary arbitrators." SEC. 20. A new article is inserted in Chapter XVIII on the Miscellaneous Provisions of the same Code and shall read, as follows: "ART. 138. Joint Congressional Oversight Committee on Cooperative (JCOCC). – There is hereby created a Joint Congressional Oversight Committee composed of the Chairman of the Senate Committee on Cooperatives and the Chairman of the House Committee on Cooperatives Development, with four (4) members each from both Houses. The said members shall be duly appointed by the Senate President and the Speaker of the House of Representatives from the members of the respective committee based on the proportional representation of the parties or coalition therein. "The Joint Oversight Committee shall review and approve the implementing rules and regulations of this Code and monitor its proper implementation. "The annual appropriate for the oversight committee shall be charged to the budget of both Houses of Congress in the General Appropriations Act (GAA)." SEC. 21. Article 122 is hereby deleted. Articles 123, 124, 125, 126, 127, 128, 129 and 130 of Chapter XVII on Final Provisions of this Code are amended to read, as follows: CHAPTER XIX FINAL PROVISIONS "ART. 139. Implementing Rules and Regulations. – The Authority shall issue rules and regulations to implement those provisions of this Code which expressly call for the issuance thereof. This paragraph shall not apply to those cases wherein a specific provision of this Code expressly designates particular government agencies which shall issue the regulations called for by any provision of this Code. "ART. 140. Penal Provisions. – The following acts or omissions affecting cooperatives are hereby prohibited: "(1) The use of the word ‘cooperative’ by any person or of persons or organizations, unless duly registered as a cooperative under this Code except as provided for under Article 130 hereof. In case of violation, the individual or individuals concerned, or in the case of an organization, its officers and directors shall, upon conviction, each suffer the penalty of imprisonment of not less than two (2) years nor more than five (5) years and a fine not exceeding Twenty thousand pesos (P20,000.00) or both at the discretion of the court; "The Authority may motu proprio, initiate complaints for violations of this provision. "(2) Any person who willfully attempts in any manner to evade or defeat tax in violation of the provisions of Articles 60 and 61 of this Code shall in addition thereof, be punished by a fine of not less than Thirty thousand pesos (P30,000.00) but not more than One hundred thousand pesos (P100,000.00) and suffer imprisonment of not less than two (2) years but not more than four (4) years: Provided, That the conviction or acquittal obtained under this Article shall not be a bar to the filing of a civil suit for the collection of taxes; "(3) Direct or indirect violation or circumvention of the provisions of Articles 60 and 61 of this Code committee by any public official or employee of any bureau, office or agency of the government that deprives, diminishes or in any manner hinders or restricts any duly registered cooperative from the full enjoyment of the exemption from the payment of the taxes, fees and charges enumerated therein, shall upon conviction, suffer a penalty of not less that one (1) year but not more than five (5) years imprisonment or a fine in the amount of not less than Five thousand pesos (P5,000.00) or both at the discretion of the court and shall further be disqualified to hold any other office; "(4) Direct or indirect interference or intervention by any public official or employee into the internal affairs of a cooperative of which he is not a member, such as, but not limited to, the following: "(a) Influencing the election or appointment of officers, directors, committee members and employees through public or private endorsement or campaign for or against any person or group of persons; "(b) Requiring prior clearances for any policy or decision within the cooperative; "(c) Requesting or demanding for the creation of positions or organizational units, or recommending any person for appointment, transfer, or removal from his position; or "(d) Any other acts inimical or adverse to the autonomy and independence of cooperatives. "(5) A director, officer or committee member who violated the provisions of Article 45 on the Liability of Directors, Officers and Committee Members, Article 48 on the Disloyalty of a Director, and Article 49 on the Illegal Use of Confidential Information shall upon conviction suffer a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than Five hundred thousand pesos (P500,000.00) or imprisonment of not less than five (5) years but not more than ten (10) years or both at the court’s discretion; "(6) The following are considered offenses punishable by a penalty of imprisonment of not less than one (1) year nor more than five (5) years or a fine of not more than Fifty thousand pesos (P50,000.00) or both at the discretion of the court: "(a) Omission or refusal to furnish any information, report or other document that is required under this Code; "(b) Providing information, reports or other documents to the Authority that are required under this Code which the person knows to be false or misleading; "(c) Omission or refusal to keep a book or register under this Code or to make the required entry therein; "(d) Making an entry required under this Code in a book or register, which the person knows to be false or misleading; "(e) Hindering an authorized person from making an inspection, audit, examination or investigation required under this Code; "(f) Failure to comply with an order or written instructions issued or given by the Authority; "(g) Violation of the provisions regarding transactions with a restricted party; and "(h) Abetting, counseling, allowing, authorizing or commanding another person to commit an offense punishable by this Code: Provided, That in case the violator is a cooperative or juridical person, the penalty shall be imposed on its directors and officers. "(7) Any violation of any provision of this Code for which no penalty is imposed shall be punished by imprisonment of not less than six (6) months nor more than one (1) year and a fine of not less than One thousand pesos (P1,000.00), or both at the discretion of the court. are hereby deemed registered under this code. Interpretation and Construction. the same shall be resolved liberally in favor of the cooperatives and their members. That such exemptions shall be valid of five (5) years from the date of issue: Provided. – Except as expressly provided by this Code. Printing and Distribution. BIR circulars. implementing rules and regulations. the registered cooperatives shall secured their certificate of tax exemption from the nearest office of the Bureau of Internal Revenue (BIR): Provided. and directors shall. Presidential Decree No. or both at the discretion of the court. Executive Order No. 175 and all other laws. including regional. decrees. "ART. – (1) The National Printing Office shall publish this Code in the Official Gazette in full within sixty (60) days from the date of approval thereof. "(2) All duly registered cooperatives and their federations.145. 6938 and Republic Act No. series of 2007. upon conviction by a Court. otherwise the shall be deemed cancelled motu proprio. "ART. 202001. 2264 and House Bill No. inconsistent with any provision of this Code shall be deemed repealed: Provided.000.) MARILYN B. otherwise known as the Electric Power Industry Reform Act: Provided. "ART. and status of the cooperative. and 7 of Presidential Decree No. memorandum orders.00). (1) All cooperatives registered and confirmed with the Authority under Republic Act No. (Sgd. suffer the accessory penalty of temporary absolute disqualification. provincial offices and local governments including governmentowned and controlled corporations. their bylaws. 2009 . Should any part of this code be declared unconstitutional. 4312 was finally passed by the Senate and the House of Representatives on December 16. 9136.) PROSPERO C. Revenue Regulation No. 143. Separabilty Clause. each suffer a penalty of not less than two (2) years but not more than five (5) years imprisonment or a fine in the amount of not less than Twenty thousand pesos (P20. Said registration shall not result in the revocation of the condoned loans under Republic Act No. (Sgd. – In case of doubt as to the meaning of any provision of his Code or the regulations issued in pursuance thereof. NOGRALES (Sgd.146. the articles of cooperation. 1645. That electric cooperatives with existing loans shall not be subject to the control and supervisions of its creditors and shall only be limited to the fulfillment of each civil obligations. "(2) Following the issuance of the new certificate of registration. "ART. In the case of a public official or employee. and cooperative corporations shall be given one (1) copy each at cost. further. and their latest audited financial statement within one (1) year from the effectivity of this code. "ART. and in the case of organizations or government agencies. letters of instruction. Transitory Provisions. unions and associations. 142. 141. "ART. 6939. or parts thereof. amended or modified accordingly. This code shall take effect fifteen (15) days from its publication in a newspaper of general circulation. the individual or individuals. 5. the validity of remaining provision hereof shall remain in full and effect. Approved.) JUAN PONCE ENRILE Speaker of the House of President of the Senate Representatives This Act which is a consolidation of Senate Bill No. executive orders. the offender shall upon conviction. finally. Repealing Clause. its officers. structure. every newly registered cooperative shall be issued at cost a copy of this Code and the regulations promulgated thereon together with its certificate of registration. That such cooperative shall submit to the nearest office of the authority a copy of their certificate of registration or certificate of confirmation. Effectivity Clause.144. and all laws. and a new certificate of registration shall be issued by the authority: Provided. agency and instrumentality of the National Government. BARUAYAP (Sgd. That the provisions of Sections 3. 623. "(3) Registration of electric cooperatives with the Authority shall not be considered as a transferred of ownership of its assets and liabilities nor shall it constitute a change in the nature.) EMMA LIRIOREYES Secretary General Secretary of Senate House of Represenatives Approved: FEB 17. Copies of this Code shall be given to every department. That all unpaid assessments of previously registered cooperative shall be the subject of compromise settlement on terms favorable to such cooperative; and: Provided. Thereafter. local government ordinances. 2008. That the BIR and the authority shall be jointly issue the necessary regulations on this exemption and compromise within ninety (90) days from the effectivity from this Code. or parts thereof inconsistent with any of the provisions of this Act are hereby repealed. "In case of violation of any provision of this Code. (2) Arbitrator shall refer to the person appointed to render an Award/Decision. 952 otherwise known as the Philippine Cooperative Code of 2008. occupational. (13) Capital shall refer to the sum total of member's share capital including deposits. land structures. (7) Authority shall refer to the Cooperative Development Authority (CDA). (6) Associate Member shall refer to member of a cooperative who has no right to vote or be voted upon and shall be entitled only to such rights and privileges as the Bylaws may provide. (14) Certificate of Merger shall refer to the document issued by the Authority evidencing registration of merger. plants. in a dispute that is the subject of an Arbitration Agreement. (16) Conciliation shall refer to the process whereby a neutral third party takes a vigorous and active role in assisting disputants to formulate between and among them an acceptable solution in order to reach an amicable settlement. early neutral evaluation. (Sgd. mediation. (11) Bond of Membership shall refer to the conditions where members associate themselves to attain their common goals and objectives which may either be residential. other than by adjudication of a presiding Judge of Court or an officer of a government agency. legacies. aids. the following terms are defined as follows: (1) Alternative Dispute Resolution shall refer to any process or procedure used to resolve a dispute or controversy. subsidies. the Cooperative Development Authority hereby issues the following rules and regulations implementing certain provisions of the said Code. otherwise known as the Philippine Cooperative Code of 2008. 9520) Pursuant to the provision of Art. (15) Code shall refer to the Republic Acts No. (5) Articles of Cooperation shall refer to the Articles of Cooperation registered under the Code. TITLES AND DEFINITIONS Section 1. if applicable. alone or with others. donations. (10) Board of Liquidators/Trustees shall refer to the body appointed by the Board of Directors or elected by the General Assembly that shall cause the liquidation of the cooperative in case of voluntary dissolution or appointed by the Authority/Court in case of involuntary dissolution of a cooperative. (3) Area of Business Operation shall refer to the principal place of business of a cooperative where the cooperative conducts its business as provided for in their Articles of Cooperative and Bylaws. and institutional. associational. (4) Area of Operation shall refer to the area where the cooperative members come from as provided for in their Articles of Cooperation and Bylaws. Title. Definition of Terms. 9520. in which a neutral third party participates to assist in the resolution of issue. 139 of Republic Act No. with includes a registered amendment thereto. grants. For the purpose of these Rules and regulations. machines and other assets of a cooperative. (12) ByLaws shall refer to the Bylaws registered under the Code which includes any registered amendments thereto. mini trial. equipment facilities. which includes arbitration. (8) Authorized Share Capital shall refer to the capitalization of the cooperative as prescribed in the Articles of Cooperation (9) Award/Decision shall refer to any partial or final decision by an Arbitrator in resolving the issue in a controversy." Section 2. These Rules shall be known as the "Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008.) GLORIA MACAPAGALARROYO President of the Philippines The Lawphil Project Arellano Law Foundation RULES AND REGULATION IMPLEMENTING CERTAIN PROVISIONS OF THE PHILIPPINE COOPERATIVE CODE OF 2008 (REPUBLIC ACT NO. or any combination thereof. revolving capital. conciliation. . (33) Internal Control shall refer to all the system and procedures adopted to safeguard the cooperative's assets. its Cooperation and Bylaws. (25) Division shall refer to the act of spiting a single cooperative into two or more cooperatives. It generates a common pool of funds in order to provide financial assistance and other related financial services to its members for productive and provident purposes. and assists the parties in reaching a voluntary agreement regarding a dispute. (29) Financial Statements shall refer to the means i. liabilities. (24) Dissenting Member shall refer to a member present during the meeting and who actually voted against the proposed activity/project of a cooperative. conveyance and distribution of its assets. whether natural or juridical. promote operational efficiency and encourage adherence to prescribed managerial policies. donations and aids received by the cooperative from any person. including any violations of the rights and conditions of membership provided in the cooperative Bylaws and/or in the Cooperative Code. by which the financial information accumulated and processed in financial accounting. Statement of Operation (Statement of Net Surplus) and Statement of Cash Flows. (18) Consolidation shall refer to a union of two or more existing cooperatives belonging to the same category to a form a new cooperative called the consolidated cooperative. . (19) Constituent Cooperatives shall refer to two or more existing cooperatives which are parties to a merger or consolidation. (22) Delay in the submission of reports shall refer to the failure of the cooperatives to submit a report on time. which may be the subject of a formal or informal request for conciliation/mediation or arbitration assistance sought by either one or both parties. (23) Dispute shall refer to intra/inter cooperative controversy or grievance from any violation or disagreement over any provisions. formed and managed principally by minors and is affiliated with another registered cooperative which is called the guardian cooperative. when no heir or rightful claimant can be found through an appropriate legal proceeding. disposition. as provided by this Code. (37) Mediation shall refer to the process in which a mediator. (30) Financial Service Cooperative (FSC) shall refer to one organized for the primary purpose of engaging in saving and credit services and other financial services regulated by the Bangko Sentral ng Pilipinas (BSP). is periodically communicated to those who use it. check the accuracy and reliability of its accounting data. grants. wherein the original cooperative shall be dissolved and the resulting cooperatives shall acquire separate and distinct juridical personalities. (32) Guardian Cooperative shall refer to duly registered cooperative to which a laboratory cooperative is affiliated with. (35) Laboratory Cooperative shall refer to a cooperative duly recognized by the Authority.(17) Conservator shall refer to any person appointed by the Authority empowered to take charge of the assets. (26) Donated Capital shall refer to the subsidies. after finding that the cooperative is in the state of continuing illiquidity or unwillingness to maintain a condition of liquidity which is deemed adequate to protect the interest of members and creditors of the cooperative. (20) Credit Cooperative shall refer to one that promotes and undertakes savings and lending services among its members. Statement of Financial Condition (Balance Sheet). (21) Cumulative Interest shall refer to the interest due to a member that must be added to in future interest if it is not paid when due. (27) Escheat shall refer to the right of the State to succeed to property either real or personal. (36) Liquidation shall refer to the process of settlement and closure of the cooperative affairs. (34) Involuntary Dissolution shall refer to the termination of the juridical personality of the cooperative through an appropriate judicial proceeding or by Order of the Authority. and the management of the cooperative.e. (31) General Assembly shall refer to the full membership of the cooperative duly assembled for the purpose of exercising all the rights and performing all the obligations pertaining to cooperatives. selected by the disputing parties. local or foreign both government and private. facilities a communication and negotiation. (28) Equity shall refer to the excess of cooperative assets over liabilities. and other administrative issuances. managerial. (51) Reports shall refer to any documents or statement required from cooperatives to be submitted to the Authority on a regular basis. lands owned used for operations. (59) Sequential Election of Representative/Delegate shall refer to the election of the representatives during the meetings held. (48) Receiver shall refer to any person of recognized competence appointed by the Authority empowered to take charge of all the assets and liabilities of the cooperative administer the same for the benefit of its creditors and exercise such other powers as provided under the Revised Rules of Court. . work shift or other similar conditions making it impossible and difficult to conduct their general assembly meeting. furniture and fixtures and equipment net of depreciation. and rate of interest to be paid and shall distinctly set forth the time of retirement of such certificates and the amounts to be returned. amount. The term may be used in the sense of "payment" or "adjustment" depending upon the circumstances under which. in different days and/or at various venues.(38) Merger shall refer to a union of two or more existing cooperatives belonging to the same category whereby the surviving cooperative. chapter or district to the representative assembly meeting. retaining its identity. (58) Settlement shall refer to any compromise or arrangements between the disputants to settle the matters in dispute and thus dispose of controversy. (43) Paidup Share Capital shall refer to the portion of the subscribed share capital. authorized to be deducted from total assets. work shift or such other similar subgroupings. donations. the Code and other related laws (56) Secondary Cooperative shall refer to a cooperative the members of which are primaries. the members of which are natural persons. chapter or district meetings who shall represent his/her sector. evidences of indebtedness. (50) Representative Assembly shall refer to the full membership of the body of representatives elected by each of the sectors. cluster. which initiates the organizational of another cooperative called a subsidiary cooperative and provides technical. absorbs one or more constituent cooperatives/s. real estate mortgage loan and other nonrisk items as the Authority may. which may be by reason of geographical location. (40) Multipurpose Cooperative shall refer to a cooperative. and the connection in which. these rules. (53) Revolving Capital shall refer to the amount available out of the deferred payment of the patronage refund and interest on share capital of the members or by authorized deduction of a percentage from the product sold or per unit of product handled by the cooperative. and financial assistance thereto. (52) Representative/Delegate shall refer to a member duly elected during the sector. (54) Risk Asset shall refer to the total assets minus cash on hand. chapters or districts of the cooperative duly assembled for the purpose of exercising such powers lawfully delegated unto them by the general assembly in accordance with its Bylaws. buildings and land improvements net of depreciation. loans to the extent covered by holdouts or assignments of deposits. (57) Sector. use of the term is made. name. by several sectors. 23 of the Code. grants and reserve funds less unbooked allowance for probable losses on loans. (44) Parent Cooperative shall refer to a cooperative. (45) Patronage Refund shall refer to the amount returned to individual members who patronize the goods and services of the cooperative in proportion to their individual patronage. which combines two (2) or more of the business activities of the different types of cooperatives as enumerated under Art. scope of operation. The Board of Director shall issue revolving capital certificates with serial number. (55) Sanctions shall refer to the penalties provided for in the cooperative bylaws. one after the other. (39) Minor shall refer to an individual below eighteen (18) years of age but at least seven (7) years old. investment and other assets and other capital adjustments as may be required by the CDA. from time to time. Chapter or District shall refer to a division of a cooperative. (41) Net worth shall refer to equity inclusive of member's equity. (47) Primary Cooperative shall refer to a cooperative. (46) Plan of Merger or Consolidation shall refer to a written document containing the proposed merger or consolidation of cooperatives duly approved by the General Assembly of each of the constituent cooperatives at separate General/Representative Assembly Meetings. (42) Numerous and Dispersed Membership shall refer to a cooperative whose membership are in large number and geographically scattered/distributed by reason of geographical location. (49) Registration shall refer to the operative act gaining juridical personality to a proposed cooperative as evidenced by a Certificate of Registration. which has been paid by the members of the cooperative. who shall decide on the merits of the case by rendering an award. Legal Basis. or district Representative or Delegate; . the district of the cooperative and in accordance with the rules and regulations of the Cooperative Development Authority. on the same day and at various venues. Applicability This rule shall apply to cooperatives. (61) Simultaneous Election of Representatives/Delegates shall refer to the election of the representatives during the meetings held. The basis for dividing the cooperative into sector. The election of the sector. (60) Share Capital shall refer to the money paid or required to be paid by the members for the conduct of the operations of the cooperative. (69) Voluntary Dissolution shall refer to the termination of the juridical personality of the cooperative at its own initiative or instance after complying with the requirements set forth in the Code and these rules. which is determined by adding the monthly ending balances of the member's share capital and dividing the sum by twelve (12) months. or district; c. The Legal basis for this rule is Art. the members of which are secondary cooperative. chapter. decide. (65) Total Average Share Month shall refer to the sum total of the average share month. organized for any other purpose different from that of. (68) Voluntary Arbitrator/Arbitrators shall refer to any authorized employee of the Authority or an accredited private individual chosen by the parties to hear. and financial assistance from the said parent cooperative. which by reason of having numerous and dispersed membership. chapter. The number of Representative/s or Delegate/s to be elected to represent the total number of the regular members in the sector. or district of the cooperative duly assembled for the purpose of exercising such powers lawfully delegated unto them by the general assembly in accordance with its bylaws" Section 2. by several sectors. chapters or districts of a cooperative for the purpose of electing their respective Representatives/Delegates to the representative assembly meeting. The qualification and disqualification of the Representative or Delegate; g. which shall specify the following matters: a. (64) Tertiary Cooperative shall refer to a cooperative. as provided by this Code. chapter. or districts of a cooperative for the purpose of electing their respective Representatives/Delegates to the representative assembly meeting. its articles of cooperation and bylaws. managerial. chapters. The term of office of the Representative or Delegate; f." "(10) Representative Assembly shall refer to the full membership of the body of representative elected by each of the sector. and receives technical. function and responsibilities of the Representative or Delegate; h. (67) Voluntary Arbitration shall refer to a dispute resolution process wherein any intra/inter cooperative dispute is settled by a voluntary arbitrator/s chosen by the disputing parties from a list of qualified and accredited arbitrators. which is not yet fully paid by a member. chapter. (10) of the Code. quoted as follows: "(2) General Assembly shall mean the full membership of the cooperative duly assembled for the purpose of exercising all rights and performing all the obligations pertaining to cooperatives. The minimum number of regular members to compose each sector. or district; b. That the adoption of representative assembly shall be stipulated in the cooperative Bylaws. The powers. Provided; that for cooperatives with numerous and dispersed membership. and render an award in a dispute. (62) Submission Agreement shall refer to the written agreement signed by the disputing parties to submit the dispute to voluntary arbitration. or district assembly meeting; d. the conduct of the general assembly meetings becomes extremely difficult; Provided. RULE 1 REPRESENTTATIVE ASSEMBLY Section 1. 1avvphi1 (66) Unpaid Subscription shall refer to the subscribed share capital. (63) Subsidiary Cooperative shall refer to any organization all or minority of whose membership or shareholders come from a cooperative called a parent cooperative. chapter. chapter. The quorum required in the sector. or district; e. 5 (2). or district Representative/Delegate may be removed by a vote of threefourths (3/4) of all the members with voting rights present and constituting a quorum at a sector. Chapter. Qualifications and Disqualifications of the Representative or Delegate. The Delegate or Representative elected/appointed to fill a vacancy shall serve only the unexpired term of his/her predecessor. Number of Sector. chapter. which shall be at least One Thousand (1. or District Representative or Delegate. work shift. Chapter. chapter. The Board of Directors shall direct sector. Election of Sector. Division of Cooperative into Sector. Upon the receipt of the notice. or District Representative or Delegate. or district. Each sector. or District. which shall not be less than one hundred (100) members. the resignation shall be deemed approved.000) and the geographical location. Section 10. which shall commence on the first regular representative assembly meeting. Composition of the Regular Members of Each Sector. chapter. chapter. chapter. The powers of the Representative Assembly; n. or district Representative or Delegate to be elected shall be provided in the Bylaws but in no case. the Board of Directors shall act on the resignation letter within sixty (60) days otherwise. Quorum Requirement for Sector. Section 6. The term of office of the Representative or Delegate shall be provided in the Bylaws but not exceed two (2) years. Vacancy in the sector. or district Local Election Committee to conduct the sector. or district Representative or Delegate; j. or district. Section 7. The eligibility of the Representative/Delegate to be elected as Officers of the cooperative; and p. Term of Office of the Sector. i. Chapter. chapter. or district meeting called for the purpose on the following grounds: . Section 3. or district. Section 5. for valid reason. At least twentyfive per centum (25%) of the members entitled to vote in each sector. chapter. or district Representative or Delegate k. or district shall constitute a quorum. Section 12. or district Representative/Delegate to be held no later than sixty (60) days before the schedule date of the regular representative assembly meeting as provided for in the Bylaws. The resignation or removal as well as the appeal of the sector. Functions. or district during the General Assembly meeting approving the adoption of the Representative Assembly shall elect its Local election Committee that will conduct the election of sector. Section 8. Powers. or district assembly meeting to elect its Representative/s or Delegate/s. chapter. Section 9. chapter. The conduct of the representative meeting; o. Chapter. In case the sector. chapter. which may be held either simultaneously or sequentially. Chapter. chapter. or district he/she represents in the Representative Assembly Meeting; and (3) To inform his/her sector. or district Representative or Delegate may resign. or District. chapter. functions. chapter. Any vacancy shall be filled up in accordance with the provisions of the cooperative Bylaws. or district in the Representative Assembly Meeting; (2) To decided for and in behalf of the sector. or District Representatives. and responsibilities: (1) To represent the sector. chapter. The sector. shall be less than ten percent (10%) of the total number of the regular members entitled to vote of the sector. The sector. Resignation and Removal of Sector. or district. or district assembly meetings; l. Other matters relevant to the conduct or representative assembly meeting. The quorum required in the representative assembly meeting; m. chapter. and Responsibilities of the Representative or Delegate. Section 4. or District. or other similar conditions shall be the basis in dividing the cooperative into sector. chapter. chapter. Section 11. The sector. or district of what transpired during the Representative Assembly Meeting. as Representative or Delegate of his sector. The Bylaws shall provide for the number of the regular members to compose each sector. chapter. chapter. The Number of the members of the cooperative. the right to send its Representative/s or Delegate/s on that particular representative or assembly meeting shall be deemed and waived. chapter. or district failed to elect its Representative/s or Delegate/s. The number of sector. Any sector. or district representative or delegate shall possess all the qualifications and none of the disqualifications as provided in the cooperative Bylaws. chapter. Vacancy in the Sector. Chapter. Chapter. The Representative or Delegate shall have the following powers. Chapter. or District Representative. scope of operation cluster. or District Representative or Delegate. the Bylaws of the cooperative and other issuances of the Authority; and 4." . At least twentyfive per centum (25%) of all Representatives/Delegates shall constitute a quorum for the representative assembly meeting. The legal basis for this Rule is Art. his/her position shall be declared vacant and shall be filled up in accordance with the Rule of Succession as provided for in the Bylaws of the Cooperative. Regular b. Legal Basis. The sector. Section 16. the conduct of the meeting shall be called and presided by the Lead Representative of Delegate. chapter. Section 17. or district meetings of the cooperative adopting this scheme shall be as follows: a. or district election. quoted as follows; "Art. The special meeting shall be conducted to report what has transpired during the representative assembly meeting and for such other purposes as maybe provided in the Bylaws. or until duly removed for cause. chapter. or district they represent. The Officers of the cooperative shall come from the Representative/s or Delegate/s of the sector. The term of office of the Officer of the Cooperative at the time of adoption of the Representative Assembly shall expire on the first representative assembly meeting. chapter. Quorum Requirements for Representative Assembly. Any violation of the provisions of the Code. The Representative Assembly shall exercise the powers as provided for in the Bylaws. Power of the Representative Assembly. Special The regular meeting shall be conducted to elect the sector. a cooperative. Section 14. or district Representatives or Delegates shall be considered the votes of all the members of the sector. The representative assembly meeting shall be held in accordance with the order of business addressing the agenda prepared by the Board of Directors; 2. Failure to attend the immediate preceding representative assembly meeting for unjustifiable reason; 2. Section 13. chapter. Section 15. Conduct of Representative Assembly Meeting. chapter. Any acts or omissions inimical or prejudicial to the interest of the cooperative. Eligibility of the Representative or Delegate to be elected as Officers of the Cooperative. in the case of the membership in the committee. or district. Chapter. Nonperformance of any functions and responsibilities stated in the Bylaws; 3. Unless otherwise provided for in their Bylaws. Representative Assembly Meeting shall be conducted in accordance with the provision of the cooperative Bylaws. Each Representative or Delegate shall be entitled to one (1) vote. In either case. or district Representatives or Delegates and for such other purposes as maybe provided in the Bylaws. or district shall fill the vacancy. organized for any other purpose different from that of. In case the removed Representative or Delegate is an incumbent Officer of the Cooperative. During the same meeting. The decision of the Representative Assembly shall be considered a valid cooperative act. the Vice Chairperson or any member of the Board of Directors shall preside over the meeting; 3. The chairperson or in his/her absence. such successor shall not necessarily assume the position of his/her predecessor. or District Assembly Meeting. the sector. 5 (16) of the Code. These Officer shall be elected during the Representative Assembly Meeting for a term fixed in the Bylaws but not exceeding a term of two (2) years and shall hold office until their successor are duly elected and qualified. RULE 2 SUBSIDIARY COOPERATIVE Section 1. managerial and financial assistance from. 5 (16) Subsidiary Cooperative refers to any organization all or majority of whose membership or shareholders come from a cooperative. chapter. the following shall be observed: 1. In the absence thereof. chapter. The Votes of the sector. and receives technical. The Election Committee shall supervise the election of the Board of Directors and committee members of the cooperative; and 4. Sector. 1. Such Lead Representative or Delegate shall be Representative or Delegate who obtained the highest number of votes during the last sector. in accordance with the rules and regulations of the Authority. the vacated membership shall be filled up by the Board of Directors of the Cooperative from among the Representatives/Delegates. However. Name of Subsidiary Cooperative.00) as shown in its latest Audited Financial Statements. 23 of the Code. (b) a single purpose cooperative desiring to transform itself into a multipurpose cooperative after at least two (2) years of operation. donations or other interests from the Parent Cooperative and vice versa. Any newly organized primary cooperative may be registered as multipurpose cooperative only after compliance with the minimum requirements for multi purpose cooperatives to be set by the Authority." Section 2. General Requirements. RULE 3 MULTIPURPOSE COOPERATIVE Section 1. This Rule shall cover (a) all types of newly organized primary cooperative with combined two (2) or more business activities of different types of cooperative as provided for in Art. The Management Staff of the Parent Cooperative cannot be at the time the Management Staff of the Subsidiary Cooperative; 4. Conditions. 4. 3. 2. In case of dissolution of the Parent Cooperative. The financial assistance to be provided shall not exceed ten (10%) of the net worth of the Parent Cooperative. the Subsidiary Cooperative cannot be a recipient of any grant. Coverage. The creation of a Subsidiary Cooperative and the technical. The following conditions shall be considered in the registration and operation of Subsidiary Cooperative: 1. The business of the Subsidiary Cooperative shall be different from that of the Parent Cooperative. Section 5. The terms and conditions of the financial assistance provided by the Parent Cooperative to the Subsidiary Cooperative shall be governed by a Memorandum of Agreement entered into by both parties. Documentary Requirements for Registration of Subsidiary Cooperatives. In addition to the requirements for registration of a new cooperative. 10. Minimum Capitalization Requirements. However. Only those cooperative with a minimum paidup capital of One Hundred Thousand Pesos (P100. which shall be taken up in the book at actual cost. All or majority of the Members of the Parent Cooperative are willing to become members of the Subsidiary Cooperative.000. Section 7. Directors or Officers of the Parent Cooperative cannot be elected or appointed as Officers of the Subsidiary Cooperative. A singlepurpose cooperative may transform into a multipurpose or may create subsidiaries only after at least two (2) years of operation. managerial and financial assistance to be provided shall be approved by at least threefourths (3/4) vote of members of Parents Cooperative with voting rights present and constituting a quorum in a regular special general assembly/representative assembly meeting called for the purpose. the Parent Cooperative through its General Assembly may appoint its Representative to act as ExOfficio member of the Board of Directors of the Subsidiary Cooperative; 3. Section 4. Section 3. Organizing a Primary Cooperative. It has a net worth of at least Ten Million Pesos (Php 10.00. Requirements for registration. Section 6. Transfer of shares of members and other related interests from Parent Cooperative to Subsidiary Cooperative and vice versa are prohibited; and 5. 5. The legal basis for this Rule is Article 10 of the Code quoted as follows: "Art. The following documents shall be submitted to the Authority: . Effect of Dissolution of Parent or Subsidiary Cooperative. A parent cooperative may organize a subsidiary cooperative provided that: 1. Section 3.00) or as required in the feasibility study whichever is higher shall qualified to register as a multipurpose cooperative or can transform into a multipurpose cooperative. managerial and financial assistance shall be provided by the Parent Cooperative to its Subsidiary Cooperative; 2. The technical and managerial assistance shall depend upon the needs of the Subsidiary Cooperative and capacity of the Parent Cooperative.Section 2. Only assistance in the form of technical. Section 4. Assistance for Parent Cooperative. Legal Basis.000. The subsidiary Cooperative shall include in its name the word "Subsidiary Cooperative of (Name of Parent Cooperative)". It has been in operation for at least two (2) years and has incurred no losses for the two (2) preceding years of operation. The dissolution of either cooperative shall not affect the existence of the other. an applicant Subsidiary Cooperative shall submit a resolution from the Parent Cooperative approving the creation of such Subsidiary Cooperative and accepting the responsibilities therewith. That no division of cooperative in fraud of creditors shall be valid. Division of Cooperatives. Book of Accounts. Name Verification Slip. if applicable; 8. quoted as follows: "Art. Certificates of PreMembership Education Seminar (PMES); 6. Surety Bond of Accountable Officers; 5. Section 5. Legal Basis. Detailed Feasibility Study indicating viability of the proposed business activity; 10. (2) For existing cooperatives desiring to be transformed into a MultiPurpose Cooperative: 1. Audited Financial Statement showing profitable operations for the past two (2) years; 6. Name Verification Slip; 2. present and constituting a quorum. Approval of Proposal to Divide; 2. Any registered cooperative. 20. Undertaking to comply with the auditing and accounting standards prescribed by the Authority; and 11. Amended Articles of Cooperative and ByLaws; 3. (1) For a newly organized MultiPurpose Cooperative: 1. Economic Survey; 7. Presentation and Approval of the Plan of Division to the General Assembly; . Articles of Cooperative and ByLaws; 3. Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name; 8. 20 of the Code. The legal basis for this Rule is Art. resolve to divide itself into two (2) or more cooperatives. The new and existing cooperatives transformed into a MultiPurpose Cooperative are required to maintain separate Book of Accounts for each business activity. further. The following procedures shall be observed in the division of cooperatives: 1. Amendment Fee. RULE 4 DIVISION OF COOPERATIVES Section 1. Detailed Feasibility Study indicating viability of the proposed business activities; 9. The procedure for such division shall be prescribed in the regulations of the Authority. Surety Bond of Accountable Officers; 5. if applicable; 9. Favorable Endorsement from Other government Agencies. Procedures. may by a resolution approved by a vote of threefourths (3/4) of all the members with voting rights. Registration fee. in case of change of name; 2." Section 2. Formulation of Plan of Division; 3. The new cooperatives shall become legally established upon registration with the Authority: Provided. Certificate that the cooperative has complied with the auditing and accounting standards prescribed by the Authority; 10. Proof of business track records of the cooperative; and 11. That all the requirements set forth in this Code have been complied with by the new cooperatives: Provided. Favorable Endorsement from Other Government Agencies. Treasurer's Affidavit; 4. Undertaking to Change Name in the event that another cooperative has acquired a prior right to the use of the proposed name; 7. A Resolution certified by the cooperative's Secretary and by the majority of the Board of Directors stating the fact that said amendments have been duly approved by at least twothirds (2/3) vote of all the members with voting rights; 4. . The majority members of the Board of Directors or at least ten percent (10%) of members with voting rights may propose for division. Presentation and Approval of the Plan of Division. Publication. Section 7. List of all the receivables of the cooperative; 5. shall publish such plan of division once a week for three (3) consecutive weeks in a newspaper of general circulation within its area of operation. Benefit package for Management Staff to be affected by the plan. letters/notices duly signed by the Chairperson announcing such division shall be sent by the Secretary of the cooperative through registered mails to their creditors. Section 4. the cooperative can file its application for registration. determination of liabilities. The management of the original cooperative shall then transfer the member's share and all other interests to his/her chosen cooperative. Right of a Dissenting Member. the Secretary of the cooperative. A dissenting member shall be entitled to a refund of his/her share capital and all other interests under Art. Objection by a Third Party. Likewise. Section 9. Upon approval of the proposal to divide. Said publication may also be supplemented by radio and television announcements. The rationale or justification for the division of the cooperative; 2. statutory reserves. a committee to formulate the Plan of Division shall be constituted by the General/Representative Assembly. Contents of the Plan of Division. the announcement of the division may also be done by posting in at least three (3) conspicuous public places for three (3) consecutive weeks within its area of operation. Section 6. Section 5. Proposal of Division. allocation and settlement of the obligations and the collection of receivables of the cooperative; 7. undivided net surplus and members' share capital; 4. Filing with the Authority of the Required Documents for the Registration of Division; and 7. Issuance of the Certificate of Registration. The Plan of Division shall be approved by a vote of threefourths (3/4) of all members with voting rights. Upon approval by the General/Representative Assembly in the meeting called for the purpose. 30 of the Code. duly noted by the Chairperson. members of the original cooperative shall be allowed within two (2) weeks to choose the new cooperative they prefer to join. a party may file an objection or opposition to the Plan of Division before the Authority. Posting and Publication of the Notice of Division; 5. The Board of Directors shall call a General/Representative Assembly meeting to action such Plan of Division with notice to all members of record and Creditors at least thirty (30) days prior to the scheduled meeting. Written Notification to Creditors; 6. List of all the Creditors and their respective claims against the cooperative; 6. The Plan of Division must include the following: 1. which shall be decided within sixty (60) days from receipt of the objection or opposition. liabilities and share capital of the cooperative intending to divide; 3. A proposed revaluation of assets. copy furnished the cooperative concerned. Within fifteen (15) days from the day of posting or from the last day of publication. If the objection or opposition is meritorious. Procedure for the division of assets. List of members showing their share capital contributions certified by the Secretary and attested by the Board Chairperson of the cooperative; 9. The proposed name. in order not to prejudice the interest of the third party. Preference of Members. Within seven (7) days after the date of approval of the division of the cooperative. A Financial Statement duly certified by an independent Certified Public Accountant including a schedule of assets. Section 3. Section 8. 4. After the lapse of the period to file an objection/opposition and no objection/opposition has been filed or after all objections/oppositions have been resolved. the Authority shall cause the deferment or disapproval of the registration of the new cooperatives. Feasibility study ensuring the viability and sustainability of both cooperatives; 8. which must be approved by at least majority of the members of the cooperative with voting rights present and constituting a quorum in a general/representative assembly meeting called for the purpose. address and area of operation of the new cooperatives; and 10. present and constituting a quorum in such general/representative assembly meeting. Alternatively. 22. a . Original Certificate of Registration. No merger or consolidation shall be valid unless approved by threefourths (3/4) vote of all members with voting rights. The merger or consolidation of the cooperatives shall have the following effects: (1) The constituent cooperatives shall become a single cooperative. Two (2) or more cooperatives may merge into a single cooperative. rights. Issuance of Certificate. as the case may be. immunities and powers and shall be subject to all the duties and liabilities of a cooperative organized under this Code; (4) The surviving or the consolidated cooperative shall possess all the assets. immunities and franchises of each of the constituent cooperatives; and (5) The surviving or the consolidated cooperative shall be responsible for all the liabilities and obligations of each of the constituent cooperatives in the same manner as if the surviving or consolidated cooperative had itself incurred such liabilities or obligations. which in case of merger shall be the surviving cooperative. (3) The surviving or the consolidated cooperative shall possess all rights. Section 11. 21. Written Agreement to Settle Obligation; and 8. The Plan of Division including all its attachments; 3. Art. Effects of Merger and Consolidation. the merger or consolidation shall be effective upon the issuance of the Certificate of Merger or Consolidation by the Authority. which shall be either one of the constituent cooperatives or the consolidated cooperatives. RULE 5 GUIDELINES GOVERNING THE PROCEDURE FOR MERGER OR CONSOLIDATION Section 1. shall be the consolidated cooperative. Cooperatives formed and organized under this Rule shall acquire juridical personality from the date the Authority issues a Certificates of Registration under the Authority's official seal. Section 12. Legal Basis. Effect of Registration. quoted as follows: "Art. In addition to the regular requirements for registration of cooperatives. Any claim.Section 10. the following documents shall be filed with the Authority: 1. privileges. Proof of Notice to the Creditors; 7. The legal bases for this Rule are Articles 21 and 22 of the Code. Merger and Consolidation of Cooperatives. The resolution of division as approved by the General/Representative Assembly duly certified by the Secretary and duly noted by the Chairperson; 2. (2) The separate existence of the constituent cooperatives shall cease. The Certificate of Registration of the original cooperative shall be surrendered to the Authority for cancellation. Additional Requirements for Registration. or proceeding pending by or against any such constituent cooperatives may be prosecuted by or against the surviving or consolidated cooperative. (3) The Authority shall issue the guidelines governing the procedure of merger or consolidation of cooperatives. The Minutes of the General/Representative Assembly Meeting approving the Plan of Division; 4. Once the registration requirements are found to be completed and in order. In any case. A primary cooperative can only merge or consolidate with a primary cooperative. privileges. The dissenting members shall have the right to exercise their right to withdraw their membership pursuant to Article 30. Only cooperatives belonging to the same category can be parties to Merger or Consolidation. the Authority shall issue the Certificates of Registration to the new cooperatives. present and constituting a quorum of each of the constituent cooperatives at separate general assembly meetings. The Financial Statements of each of the new cooperatives duly certified by the respective Treasurers and Chairpersons; 5. Neither the rights of creditors nor any lien upon the property of any of such constituent shall be impaired by such merger or consolidation. except that of the surviving or the consolidated cooperative. Proof of Notice of Publication and/or posting of the announcement of such division; 6. and in case of consolidation. Parties to the Merger or Consolidation. action." Section 2. the Proposed Articles of Cooperation and Bylaws; 4. The affirmative vote of members representing at least threefourths (3/4) of all members with voting rights. Address and Area of Operation of the Surviving Cooperative. The Proposed Amendments to the Surviving Cooperative's Articles of Cooperation and Bylaws. Package Benefits of the Management Staff to be affected by the Plan. the Articles and ByLaws shall be signed by the Cooperating Directors. The Proposal to Merge or Consolidate may be made by the Board of Directors or by at least ten percent (10%) of the members with voting rights. present and constituting a quorum in separate general/representative assembly meetings called for the purpose. Section 5. Posting/Publication of Merger or Consolidation; 6. shall be attested by the Incumbent Directors of the Surviving Cooperative while in Consolidation. . Approval of the proposal to merge or consolidate by the General/Representative Assembly of each constituent cooperatives; 2. In case of Merger. Address and Area of Operation. During the same meeting. Written Notification to Creditors through registered mail with return card and other applicable electronic means; 7. Posting/Publication. List of Members of each Constituent Cooperatives showing their Share Capital Contribution duly certified by the respective Board Secretaries and attested by the respective Board Chairpersons; 5. The Articles of Cooperation and ByLaws. Section 7. Procedures.secondary with a secondary cooperative. Formulation of Plan of Merger or Consolidation by the representatives of the constituent cooperatives; 3. Addresses and Registration/Confirmation Numbers. in case of Merger and with respect to Consolidation. Statement of Purpose of such Merger or Consolidation; 2. if applicable. present and constituting a quorum of each of the constituent cooperatives at separate general/representative assembly meetings shall be necessary for the approval of the Plan of Merger or Consolidation. the General/Representative Assembly shall appoint or elect the representatives to the joint committee to draft the Plan of Merger or Consolidation. Presentation to and Approval of the Plan of Merger or Consolidation by the General/Representative Assembly of each constituent cooperatives; 4. It shall be approved by at least majority of the members of each of the constituent cooperatives with voting rights. Filing with the Authority the required documents for the registration of merger or consolidation; and 8. Announcement of the Merger or Consolidation may be done by posting in at least three (3) conspicuous places in their respective areas of operation; or publication in a newspaper of general circulation once a week for three (3) consecutive weeks. in case of Consolidation; 6. served either personally. the Proposed Name. Section 3. Contents of Plan of Merger or Consolidation. or by registered mail with return card or electronic means within the period as indicated in their Bylaws. The Name. Section 8. The following are the procedures to the Merger or Consolidation of cooperatives: 1. Issuance of Certificate of Registration of Merger/Consolidation by the Authority. liabilities and capital of the merging or consolidating cooperatives; and 8. Said publication may also be supplemented by radio and television announcements or any other electronic means of communication. or amendments thereto. Section 4. The Plan of Merger or Consolidation jointly prepared by representatives from the constituent cooperatives shall be submitted for approval to the members of each constituent cooperative at separate general/representative assembly meetings duly called for the purpose. if any. The Registered Names. The Plan of Merger or Consolidation shall include the following: 1. Proposal of Merger or Consolidation. Approval of the Plan of Merger or Consolidation. the Amended Articles of Cooperation and ByLaws. Notice of such meeting shall be given to all members of the respective cooperative. The Audited Financial Statements as of the immediate preceding year including the schedule of assets. Formulation of the Amendment/New Articles of Cooperation and Bylaws; 5. Feasibility Study indicating the Viability and Sustainability of the Merging/Consolidating Cooperatives; 7. Section 6. in case of Merger. and a tertiary with a tertiary cooperative. Contact Details and Respective Areas of Operation of the Constituent Cooperatives; 3. Notice to Creditors and Investors. Within fifteen (15) days after the date of posting or from the last day of publication. The Officers of the merged or consolidated cooperatives shall file with the Authority the following additional requirements for registration: A. The approved Plan of Merger and all its attachments as required under Section 4 of this Rule; 6. Surety Bond of Accountable Officers; 9. Proof of Publication/Posting of the announcement of consolidation; 10. a third party may file an objection or opposition to the Plan of Merger or Consolidation before the Authority which shall be decided within sixty (60) days from receipt of the objection or opposition. For Consolidation 1. Written Agreement to settle Obligations 11. Registration fee in accordance with the Schedule of Fees prescribed by the Authority. The excerpts from the minutes of the General/Representative Assembly meetings of the Consolidating Cooperatives with their respective attendance sheets duly certified by the Secretary and Chairperson or Presiding Officer; 4. the Authority will cause the deferment or disapproval of the registration of the Merger or Consolidation. Certification of the Secretaries duly attested by the Chairpersons of the Constituent Cooperatives that there was a quorum and the required number of votes for the approval was met; 5. Additional Requirements for Registration. Favorable endorsement from the concerned government agency if necessary/applicable; and 13. The proposed amendment to the Articles of Cooperation and Bylaws of the Surviving Cooperative. Surety Bond of Accountable Officers; 8. For Merger 1. the cooperative can file its application for registration. in order not to prejudice the interest of the third party. The Original Certificate of Registration of both constituent cooperatives; 2. Finding the objection or opposition meritorious. The General/Representative Assembly resolutions of both constituent cooperatives approving the Plan of Merger duly certified by the Secretaries and attested by the respective Chairpersons; 3. The Officers of the Merging or Consolidating Cooperatives shall also send letters by registered mail with return card to the Creditors and investors of their respective cooperatives announcing such Merger or Consolidation. Objection/s by a Third Party. if necessary; 7. Proof of Publication/Posting of the Announcement of Merger; 9. Certification of the Secretaries duly attested by the Chairpersons of the constituent cooperatives that there was a quorum and the required number of votes for the approval was met; 5. B. Written Agreement to settle Obligations; . The proposed Articles of Cooperation and Bylaws of the Consolidated Cooperative; 8. Section 10. Proof of Notice to Creditors; 11. The Original Certificate of Registration of the absorbed cooperative; 2. The approved Plan of Consolidation and all its attachments as required under Section 4 of this Rule; 6.Section 9. The excerpts from the minutes of the general/representative assembly meeting stating among others the approval of the Merger; 4. The General/Representative Assembly resolutions approving the consolidation of the cooperative duly certified by the Secretaries and attested by the Chairpersons of the Consolidating Cooperatives; 3. The Economic Survey; 7. Proof of Notice to Creditors; 10. Section 11. After the lapse of the period to file an objection/opposition and no objection/opposition has been filed or after all objections/oppositions have been resolved. The original Certificate of Registration of the Surviving Cooperative; 12. principles. financial discipline and leadership skills among its members; 4. ecological awareness and sustainable development. convening. The Articles of Cooperation of a Laboratory Cooperative signed by each of the organizers shall provide the following: 1. and other matters relative to the business affairs of the general assembly. Section 3. The area of operations and the postal address of the principal office of the guardian cooperative; 6. birthdates. and their qualifications and disqualifications; . the Authority shall issue the Certificate of Merger. To serve as a training ground for its members to prepare them for membership in regular cooperatives; 2. The Bylaws of a Laboratory Cooperative shall provide for the following: 1. The name of the cooperative which shall include the words "Laboratory Cooperative"; 2. Contents of the Articles of Cooperation. The term of existence; 4. The circumstances under which membership is acquired. To teach the value of thrift and saving mobilization among its members; 3. quorum requirements. The names. the board of directors. Issuance of Certificate. board of directors. Section 4. actually residing in the community or enrolled in an educational institution within or near the area of operation of the Guardian Cooperative or out of school minor actually residing in the community. 26 of the Code. The conditions under which the transfer of a share or interest of the members shall be permitted; 6. and committees; 7. maintained and lost; 4. A cooperative organized by minors shall be considered a laboratory cooperative and must be affiliated with a registered cooperative. or new Certificate of Registration in case of consolidation. place and manner of calling. The rules and procedures on the agenda. committees and. The purpose or purposes for which it is organized; 3. The qualifications for admission to membership and the payment to be made or interest to be acquired as a condition to the exercise of the right of membership; 2. Legal Basis. The general conduct of the affairs of the cooperative. The names. Purposes of Laboratory Cooperatives. The area of operations and the postal address of the principal office of the laboratory cooperative; 5. and postal addresses of the cooperators; 7. The rights and liabilities of membership; 3. Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name; and 14. and addresses of its members. Contents of the ByLaws. Section 12. RULE 6 GUIDELINES FOR LABORATORY COOPERATIVES Section 1. the names. To instill cooperative values. may organize a Laboratory Cooperative composed of minors. 26. A laboratory cooperative shall be governed by special guidelines to be promulgated by the Authority. Once the registration requirements are complied with. The original Certificates of Registration of the Consolidating Cooperatives; 13. The amount of its share capital. time. and postal addresses of members of the board of directors of its guardian cooperative; and 8. officers. The Certificate of Registration of the original cooperatives shall be surrendered to the Authority. Registration fee in accordance with the Schedule of Fees prescribed by the Authority. which shall be seven (7) years old but below eighteen (18) years of age. To promote and advance Filipino social and cultural values. A Laboratory Cooperative shall be organized for any or all of the following purposes: 1. including the powers and duties of the General Assembly. nationality. The legal basis for this Rule is the third paragraph of Art." Section 2. The procedures to be followed in cases of termination of membership; 5. Fifteen (15) or more minors who are Filipino citizens. Organization of Laboratory Cooperative. conducting meetings. Kinds of Membership. Section 5. voting systems. 12. quoted as follows: "Art. through the Guardian Cooperative. The Laboratory Cooperative shall include in its Bylaws a program on continuous Capital BuildUp. A Laboratory Cooperative primarily composed of students from a particular school shall be affiliated with the school's cooperative. 31 of the Code. Such other conditions as may be provided for in the Bylaws. Section 6. Section 14. Section 15. before the authority shall issue a Certificate of Recognition. RESPONSIBILITIES AND TRAINING REQUIREMENTS OF DIRECTORS. Articles of Cooperation and Bylaws; and 2. Refund of Share Capital. Liability of the Guardian Cooperative. Section 11. Termination of Membership. Option of Member Who Reaches the Age of Majority. It shall be responsible for the cooperative education and training of all officers and members of the laboratory cooperative. transactions with third parties when capacity to contract is required. If the Laboratory Cooperative is composed primarily of outofschool minors. A Laboratory Cooperative must be affiliated with a duly registered cooperative. 30 of the Code; and 3. 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. Limitation. it shall be affiliated with a cooperative of its choice within or nearest its area of operation. Responsibility of the Guardian Cooperative. Capitalization Requirements. A Guardian Cooperative shall supervise only one (1) laboratory cooperative. Upon reaching the age of majority (18 years of age); 2. Resolution of the Board of Directors of the Guardian Cooperative accepting its responsibility and liability as Guardian of the Laboratory Cooperative. Section 12. Section 13. The Guardian Cooperative shall supervise. monitor. the former member shall be entitled to a refund of his share capital contribution and all other interests in the Laboratory Cooperative in accordance with Art. OFFICERS AND COMMITTEE MEMBERS . Submission of reports to the Authority on the activities and economic operations of the Laboratory Cooperative shall likewise be the responsibility of the Guardian Cooperative. The Certificate shall be conclusive evidence that the Laboratory Cooperative therein mentioned is duly recognized unless such recognition has been earlier revoked. Any member reaching the age of majority may opt to join the Guardian Cooperative upon compliance of all the requirements for membership. Section 10. Issuance of Certificate of Recognition. The following shall be conditions for termination of membership in a Laboratory Cooperative: 1. the said Laboratory Cooperative may request assistance from the nearest CDA Office in identifying a possible Guardian Cooperative. The Guardian Cooperative exercising parental authority may be liable for any violations in the cooperative's operation. Section 7. A Certificate of Recognition shall be issued by the Authority under its official seal upon compliance with all the requirements set forth by this rule. 8. A Laboratory Cooperative seeking recognition as such shall submit. Requirements for Recognition of Laboratory Cooperative. if any. and act for and in behalf of the Laboratory Cooperative in their dealings. Upon termination of membership. Other matters incident to the purposes and activities of the cooperative. The manner of adopting and amending bylaws; 12. The method of distribution of net surplus; 11. Section 9. The manner in which the capital may be raised and the purposes for which it can be utilized; 9. Section 8. Those provided under Art. The issuance of the Certificate of Recognition does not bestow upon a Laboratory Cooperative with a juridical personality. Affiliation. to be known as the Guardian Cooperative. RULE 7 FUNCTIONS. The accounting and auditing systems; 10. the following requirements to the Authority for the issuance of a Certificate of Recognition: 1. Audit Committee; 2. Act on the recommendation of the Ethics Committee on cases involving violations of Code of Governance and Ethical Standards; and j. Establish policies and procedures for the effective operation and ensure proper implementation of such; f. 4. 4. Perform such other functions as may be prescribed in the Bylaws or authorized by the General/Representative Assembly. Preside over all meetings of the Board of Directors and of the General/Representative assembly; c. Perform such other functions as may be authorized by the Board of Directors or by the General/Representative Assembly. Election Committee; 3. Determine and prescribe the organizational and operational structure; d.1. Decide election related cases involving the Election Committee or its members; i. 44. and Committee Members.Section 1. The functions and responsibilities of the directors. Sign contracts. Provide general policy direction; b. quoted as follows: "Art. 4.1. Committees of Cooperatives. General Manager or Chief Executive Officer." Section 2. The Bylaws shall provide for the creation of the following committees: 1. The Officers of the cooperative shall include the Members of the Board of Directors.2 The Chairperson shall: a. Officers of the Cooperative. The legal basis for this Rule is Art. The members of Audit Election Committees shall be elected by the General Assembly while the Board of Directors shall appoint the rest. Treasurer and Members holding other positions as maybe provided for in their Bylaws. Evaluate the capability and qualification and recommended to the General/Representative Assembly the engagement of the services of an External Auditor; g. 44 of the Code. Functions.1. Section 4. Officers. as well as their training requirements shall be in accordance with the rules and regulations issued by the Authority. Functions and Responsibilities of the Officers of the Cooperative. Ethics Committee; and 5. Responsibilities. agreements.1 The Board of Directors shall have the following functions and responsibilities: a. As such they are entrusted with the power of exercising authority within the scope of their defined functions which is permanent in nature and include the exercise of control and discretion in the performance of their duly. 4. Mediation and Conciliation Committee; 4.1 Board of Directors. Review the Annual Plan and Budget and recommend for the approval of the General/Representative Assembly; e. Set the agenda foe board meetings in coordination with the other members of the Board of Directors; b. Perform all duties and functions of the Chairperson in the absence of the latter; . certificates and other documents on behalf of the cooperative as authorized by the Board of Directors or by the General/Representative Assembly; d. Section 3. Legal Basis. Members of the Different Committees created by the General Assembly. Formulate the strategic development plan; c.3 The Vice Chairperson shall: a. and Training Requirements of Directors. Issue Certificate of NonAffiliation with any Federation or Union; and e. Appoint the members of the Mediation/Conciliation and Ethics Committees and other Officers as specified in the Code and cooperative Bylaws; h. Other Committees as may be necessary for the conduct of the affairs of the cooperative. Secretary. officers and committee members. Prepare and issue Share Certificates; f. Proclaim the winning candidates; g. b. Maintain full and complete records of cash transactions; e. income and expenditures; c. Maintain a Petty Cash Fund and Daily Cash Position Report; and Perform such other functions as may be prescribed in the Bylaws or authorized by the General/Representative Assembly. Serve notice of all meetings called and certify the presence of quorum of all meetings of the Board of Directors and the General/Representative Assembly; g. The Treasurer shall: a.5 Audit Committee. Ensure that all cash collections are deposited in accordance with the policies set by the Board of Directors; b. 4. Keep and maintain the Share and Transfer Book; i. Serve as custodian of the cooperative seal; and Perform such other functions as may be prescribed in the Bylaws or authorized by the General/ Representative Assembly. manner and procedure of election and other election related activities and act on the changes thereto; e. Keep an updated and complete registry of all members; b. Recommended necessary amendments to the election rules and guidelines. for the General/Representatives Assembly's approval; d. liabilities. The committee shall: a. Canvass and certify the results of the election; f.4 Election Committee. To act as exofficio Chairperson of the Education and Training Committee; and c. Monitor and review the financial management operations of the cooperative. Formulate election rules and guidelines and recommended to the General/Representative Assembly for approval; b. Perform such other duties as may be delegated to him/her by the Board of Directors. Audit the performance of the cooperative and its various responsibility centers; .3 Secretary. Keep copy Treasure's reports and other reports; h. Decide election and other election related cases except those involving the Election Committee or its members; and h. 4. The Election Committee shall: a. in consultation with the Board of Directors.2 Treasurer. prepare and maintain records of all minutes of meetings of the Board of Directors and the General/Representative Assembly; c. Ensure that necessary Board of Directors actions and decisions are transmitted to the management for compliance and implementation; d. Monitor the adequacy and effectiveness of the cooperative's management and control system; b. Perform such other functions as prescribed in the Bylaws or authorized by the General/Representative Assembly. subject to such limitations and control as may be prescribed by the Board of Directors; d. 4. Have custody of all funds. Record. securities. Issue and certify the list of members who are in good standing entitled to vote as determined by the Board of Directors; e. Implement election rules and guidelines duly approved by the General/Representative Assembly; c. 4. Supervise the conduct. The Secretary shall: a. and documentation's relating to all assets. Ensure compliance with all administrative and other requirements of regulatory bodies; and g. 4. and in any other official business transaction as may be authorized by the Board of Directors; f. Submit reports on the result of the internal audit and recommend necessary changes on policies and other related matters on operation to the Board of Directors and General/Representative Assembly; e. Represent the Cooperative in any agreement. Recommend ethical rules and policy to the Board of Directors; f. .7 Ethics Committee. Their powers. The committee shall: a. e.9 General Manager. 4. and responsibilities shall be defined in the Bylaws. 4. d. Accept and file Evaluation Reports; e. Provide and submit to the Board of Directors monthly reports on the status of the Cooperative's operation visàvis its targets and recommend appropriate policy or operational changes.6 Mediation and Conciliation Committee. Submit recommendations for improvement to the Board of Directors; f. Other Committees that may be created shall assist in the formulation of policies and rules and in the implementation of the service of the cooperative. Recommend to the Board of Directors any member of the cooperative for ConciliationMediation Trainings as Cooperative ConciliatorMediator; g. management and administrative control over all the operating departments subject to such limitations as may be set forth by the Board of Directors or the General/Representative Assembly; b. officers and employees of the cooperative subject to the approval of the Board of Directors and ratification of the General/Representative Assembly; b. Issue the Certificate of NonSettlement (CNS); h. 4. the Cooperative's Annual and Medium Term Development Plan. contract. if necessary; e. Implement the duly approved plans and programs of the Cooperative and any other directive or instruction of the Board of Directors. programs and projects. c. Perform such other functions as may be prescribed in the Bylaws or authorized by the General/Representative Assembly. Formulate and recommend in coordination with the operating departments under his/her supervision. Submit semiannual reports of cooperative cases to the Authority within fifteen (15) days after the end of every semester; d. Formulate and develop the ConciliationMediation Program and ensure that it is properly implemented; b.8 Other Committees. for approval of the Board of Directors and ratification of the General/Representative Assembly; c. The committee shall: a. Perform such other functions as may be prescribed in the Bylaws or authorized by the General/Representative Assembly. functions. Monitor compliance with the Code of Governance and Ethical Standards and recommend to the Board of Directors measures to address the gap. business dealing. Review continuously and periodically the books of account and other financial records to ensure that these are in accordance with the cooperative principles and generally accepted accounting procedures; d. if any; d. The General Manager shall: a. Perform such other functions as may be prescribed in the Bylaws or authorized by the General/Representative Assembly. Develop Code of Governance and Ethical Standards to be observed by the members. Perform such other functions as may be prescribed in the Bylaws or authorized by the General/Representative Assembly. promote and implement the approved Code of Governance and Ethical standards; c. supervision. Conduct initial investigation or inquiry upon receipt of a complaint involving Code of Governance and Ethical Standards and submit report to the Board of Directors together with the appropriate sanctions. Oversee the overall day to day business operations of the cooperative by providing general direction. Monitor ConciliationMediation program and processes; c. Disseminate. Basic Accounting for NonAccountants 4. Implementing Rules and Regulations of RA 9520; 2. Orientation on Labor and Other Related Laws B. Secretary 1. 6. A. The initial courses or any equivalent substitute thereof must be undertaken. Basic Cooperative Course 2. Cooperative Management and Governance. Investment and Banking Procedures 6. Policy Development. 5. Cooperative Mission; d. Basic Cooperative Course 2. Audit Committee 1. Officers of the cooperative shall be required to undergo necessary training conducted by cooperatives. Records Management for Non Financial Transaction 3. Conflict Management. Cooperative Standards . Cooperative Strategic Plan; e. The training program should contain the minimum requirements in the module/curriculum as prescribed by the Authority. Basic Cooperative Course 2. Board of Directors 1. Parliamentary Procedure 4. Cooperative Vision; c. Treasurer 1. Records Management 4. Financial Management D.Section 5. Strategic Planning 9. Cooperative Standards 5. Financial Management. Cooperative Code of 2008 (RA 9520); h. Basic Cooperative Course primarily on: a. Basic Computer Program C. Audit Management 3. Basic Accounting for NonAccountant 5. Parliamentary Procedure 7. Federations and/or other trainers or training institutions duly accredited by the Authority. Leadership and Values Reorientation 8. 3. Training Requirements for the Officers of the Cooperative. Articles of Cooperative and Bylaws; b. Fundamentals of Cooperative; f. Policies and Programs of Cooperatives; g. 4. Records Management (Financial Transaction) 3. In cases where the incumbent has not undergone the required training program. Cooperative Management and Governance 3. Records Management 5. Compliance. Effective Communication 6. Internal Control including Inventory System 7. All trainings attended by cooperative officers shall be considered valid compliance with the intent of this Rule for a period of five (5) years from date of issuance of the Certificate of Training. Records Management 3. Ethics Committee 1. Leadership and Value Reorientation 5. Leadership and Values Reorientation 3. Basic Computer Program E. Transitory Period. Noncompliance 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. Computer Literacy Course 10. Conflict Management 4. The training is required for all cooperative officers. Rules Formulation 4. Basic Cooperative Course 2. Cooperative Standards 4. Human Resource Management 5. Entrepreneurial and Business Management Course 7. All cooperatives are hereby given two (2) years from effectivity of this Rule to comply with the Training Requirements as provided above. . Conflict Management 4. Basic Cooperative Course 2. Election Committee 1. Basic Cooperative Course 2. Leadership and Values Reorientation 3. Section 7. Leadership and Values Reorientation 9. Duration of Trainings Attended. Labor and other related Laws 8. he/she shall undergo such training within twelve (12) months from the effectivity of this Rule. Basic Computer Program F. After which. they shall be required to undergo retraining of the same. Strategic Planning and Management Section 6. Records Management 5. Effective Communication Skills 6. 6. Basic Computer Program H. General Manager / Chief Executive Officer 1. Basic Cooperative Course 2. Basic Computer Program G. Section 8. Mediation/Conciliation Committee 1. registered mail courier. Other training activities undertaken specifying therein the nature. 53. All registered cooperatives shall file with the Authority a copy of the required reports either through personal. and shall be a ground for the revocation of authority of the cooperative to operate as such. Required Regular Reports. Preparation of the Submit Reports on Time. Within thirty (30) calendar days upon receipt of Statement of Accounts. Failure to file the required reports shall subject the accountable officer/s to fines and penalties as may be prescribed by the Authority. Failure to submit reports on time shall be considered as Delay or Default. quoted as follows: "Art. List of Officers and Trainings Undertaken /Completed. or the date the electronic mail was sent as the case may be shall be considered as the date of filing. However.00 per day of delay. That the Authority shall be officially notified of the occurrence of such fortuitous events. Section 3. Social Audit Report including its program of activities in pursuance of its sociocivic undertakings showing its achievements and end of every fiscal year; 3. Federations and Unions shall submit to the Authority the following additional reports: 1. Filling. and cost of each activity. The legal basis for this rule is Art. Cooperative Annual Performance Report (CAPR); 2. The Chairperson and the General Manager shall certify to the truthfulness of the statement contained in the reports. List of cooperatives which have remitted their respective Cooperative Education and Training Funds (CETF); 2. (1) Every cooperative shall draw up regular reports of its program of activities. publish and file the reports required herein. or electronic means. These reports shall be filed with the Authority within one hundred twenty (120) days from the end of the calendar year. Failure to file the required reports on time shall subject the Accountable Officer to pay a fine of Php 100. The reports shall be typewritten or printed in a form prescribed by the Authority. the Authority within fifteen (15) days from the expiration of the prescribed period. For the purpose of establishing Delay or Default. the date of acknowledgement by the Authority appearing on the copies of such reports filed or submitted or mailing postmarked on the envelope/the date of registry or special delivery receipt. Performance Report; 4. Sanction For Delayed Submission. Section 5. including those in pursuance of their sociocivic undertakings. Preparation of the Required Reports. Provided. 53 of this Code. RULE 8 REPORTS REQUIRED FOR COOPERATIVE Section 1. The form and contents of the reports shall be prescribed by the rules of Authority. which the Authority shall act upon within sixty (60) calendar days otherwise the sanctions. Business consultancy assistance to include the nature and cost; and 3. The fiscal year of every cooperative shall be the calendar year. . However. shall be deemed lifted. The reports shall be made accessible to its members of record. if the failure to submit reports on time is due to fortuitous events; such as fire and other natural calamities and public disorders including strike or lockout or a national emergency which affects the operation of the cooperative. Section 6. within one hundred twenty (120)days from the end of every year calendar year. showing their progress and achievements at the end of every fiscal year." Section 2. Additional Reports for Federations and Unions. the Accountable Officer may request for Reconsideration of such fine on the grounds of fortuitous event and court litigation/order. participants. the failure shall not be considered a delay. Delay or Default shall start to run\on the day following the next working day. send such cooperative a written notice stating its noncompliance and the commensurate fines and penalties that will be imposed until such time that the cooperative has complied with the requirement. The following reports shall submitted to the Authority: 1. or fails to include therein any matter required by this Code. except as may be otherwise provided in the bylaws. Section 4. The decision of the Authority shall become final and executory. Report. Delay or default shall commence on the day following the last day required for the submission of reports. (2) If a cooperative fails to make. Legal Basis. should the last day of filing falls on a nonworking day in the locality where the reporting cooperative is situated. Section 7. Audited Financial Statements duly stamped "Received " by the BIR; and 5. 70. The following procedure shall be observed in liquidation: 1. 69. Rules and Regulations on Liquidation. quoted as follows: "Art. These Guidelines shall cover the following: 1. 3. Distribution of the remaining assets. The Authority shall issue the appropriate implementing guidelines for the liquidation of cooperatives. Cooperatives whose existence is terminated by voluntary dissolution. 72. The manner of liquidation or winding up may be provided for in the cooperative By laws and this would prevail unless it is inconsistent with law. Art. At any time during the said three (3) years. the Authority may dissolve/revoke. grants. Inventory of Assets and Liabilities of the Cooperative." "Art. Coverage of Liquidation. In this jurisdiction. except in the case of decrease of share capital of the cooperative and as otherwise allowed by this Code. conveyance and distribution of its properties and asset. creditors and other persons in interest. Payments of Creditors in accordance with the Provisions of the New Civil Code on the Preference and Concurrence of Credits. Capital Sources. disposition. . donations. aids and such other assistance from any local or foreign institution whether public or private: Provided. legacies. 5. Submission of the Board of Liquidators/Trustees of the Liquidation's Final Report. 4. The legal bases for the Rule are Art. donations. Upon the winding up the cooperative affairs. Upon dissolution. 7. grants. such donated capital shall be subject to escheat.Other than the imposition of monetary penalties. 72 (4) of the code. 6. 2. any6 asset distributable to any creditor. the cooperative may avail of the following modes of liquidation: (1) Liquidation by cooperative itself through a Board of Liquidators. A cooperative shall only distribute its assets or properties upon unlawful dissolution and after payment of all its debts and liabilities. Legal Basis. Cooperatives whose existence is terminated by appropriate judicial proceedings. That capital coming from such subsidies. Section 3. From and after any such conveyance. 69. 3. shareholder or member(s) who is unknown or cannot be found shall be given to the federation or union to which the cooperative is affiliated with. Procedure of Liquidation. legacies.xxx (b) Subsidies. Cooperatives whose charter expires by its own limitation. Every cooperative whose charter expires by its own limitation or whose existence is terminated by voluntary dissolution or through an appropriate judicial proceeding shall nevertheless continue to exist for three (3) years after the time it is dissolved. Section 5. Constitution of the Board of Liquidators/Trustees. Cancellation of the Certificates of Registration and delisting of the name of the cooperative in the Cooperative Registry. the authority of the cooperative to operate as such. 2." "Art. Section 4. The members of cooperative entitled to vote shall elect from among themselves their Board Liquidators; and/or By conveying all the cooperative assets to Trustee or Trustees who will take charge of liquidation. all interests which the cooperative had in the properties are terminated." Section 2. 2. Transfer of the Statutory Funds to the intended beneficiaries. Mode of Liquidation. aids and other assistance shall not be divided into individual share capital holding at any time but shall instead from part of the donated capital or fund of the cooperative. not to continue the business for which was established but for the purpose of prosecuting and defending suits by or against it; settlement6 and closure of its affairs. RULE 9 GUIDELINES FOR THE LIQUIDATION OF COOPERATIVES Section 1. Liquidation of a Cooperative. after due process. the cooperative is authorized and empowered to convey all its properties to trustees for the benefit of its members.70 and par. Board of Liquidators/Trustees. All the statutory funds established by the cooperative shall be disposed of in accordance with the provision for Art. settlement and closure of its affairs. In case of nonaffiliation. Section 12. Section 8. grants. Convert all assets of the cooperative into cash; 4. Make final report on the liquidation and submit the same to the Authority. after which. They shall take their oath of office before the Authority prior to assumption of their functions and responsibilities. Payment of Creditors. In case the Board of Directors and the General/Representative Assembly fail to select the Board of Liquidators/Trustees. All studies. Periods Allowed for the Winding Up of the Affairs of the Cooperative. Subject to the preceding sections and upon written authority from the Authority. Treatment of Donated Capital. all interest which the cooperative had in properties are terminated. the distribution shall be done in proportion to their capital. at any time during the said three (3) year period. donations. Nevertheless. Section 6. Section 10. The Cooperative Board of Liquidators/Trustees shall submit a final report to the members of the liquidated cooperative and to the Authority. The purpose of which is not to continue the business for which it was established but for purpose of prosecuting and defending suits filed or against the cooperative. The dissolved cooperative shall continue to exist for three (3) years from the issuance of the Order of Dissolution. the board of Directors shall select/constitute the Board of Liquidators/Trustees. Section 7. 86 of the Code. Preserve the existing assets of the cooperative; 3. Section 13. The Board of Liquidators/Trustees shall not be less than three (3) but not more than five (5) members. any assets remaining after the payments of the cooperative's obligations to its creditors shall be distributed to the members in payments of their respective share capital. legacies. the cooperative is authorized and empowered to convey all its properties to Trustees for the benefits of its members. Power to Sue and Be Sued. Section 9. The Board of Liquidators/Trustees shall: 1. at least twenty five percent (25%) of the members entitled to vote shall convene and select/appoint the Liquidators/Trustees.Within sixty (60) days from receipt of the Order of Dissolution from the Authority or competent Court. Upon receipt of the Final Report of the Board of Liquidators/Trustees and finding that said final report is complete and in order. at the option of the Board of Liquidators/Trustees. the Authority shall release the Liquidators/Trustees from their duties and functions. . creditors and other persons in interest. Submission of the Board of Liquidators/Trustees' Financial Report. Undistributed Assets. Functions. or Union to which the cooperative is affiliated with. for cooperative development. The Board of Liquidators/Trustees shall be allowed to receive a reasonable honorarium to be paid out from the funds of the cooperative which shall be equal to but not less than the honorarium being received by the Board of Directors of the cooperative before its dissolution. Section 14. The Board of Liquidators/Trustees shall post an adequate bond as may be fixed by the Authority during the period of liquidation. Pay the outstanding obligations including any and all valid claims against the cooperative; 5. In the event the Board of Directors fails or refuses to constitute the Board of Liquidators/Trustees. the undistributed assets shall be given to the community where the cooperative operated. Federation. distribution of its assets. If the remaining assets is not sufficient to pay the full share capital contribution of the members. In the discharge of the abovementioned functions. Distribute remaining assets pursuant to the provision of the Code and this Rules; and 6. Statutory Funds. Thereafter shall effect the cancellation of the Certificate of Registration of the subject cooperative and delisting of the name of the cooperative in the Cooperative Registry. to be paid out of the funds of the cooperative. aids and such other assistance from any local or foreign institutions whether public or private shall be subjected to escheat. Make an inventory of all assets and to be determine all liabilities including Share Capital holdings; 2. Payment of creditors shall be in accordance with the contract upon which it is based and the provision of the New Civil Code on the Preference and Concurrence of Credits. Powers and Obligations of the Board of Liquidators/Trustees. Section 11. Distribution of Assets. the assets distributable to creditor or member whose whereas about is unknown or cannot be found shall be given to the federation/union to which the cooperative is affiliated with. After the winding up of the affairs of the cooperative. the Authority shall appoint the same. the Board of Liquidators/Trustees may sue and be sued under the name of the cooperative in order to protects and defend its rights and interests. The Capitalization of cooperatives and the accounting procedures shall be governed by the provisions of this Code and the regulations which shall be issued. Proposal of Distribution of Assets to its members; 3. Section 16. or interest on share capital; and 4. In case of liquidation. the same shall issues a written authority to the Board of Directors to distributed the assets of the cooperative. Subsidies. (b) Preferred Share Capital may be issued to regular and associate members. Loans and Borrowing Including Deposits; 3. quoted as follows: "Art. Capitalization of a duly registered cooperative may be derived from any or all of the following sources; 1. donations. may outrightly cancel the Certificate of Registration of a cooperation of a cooperative which has been proven to have no assets. Issuance and limitation on Preferred Share Capital shall be prescribed in the Bylaws of the cooperative. Audited Financial Statement; After due evaluation by the Authority. For cooperative with assets of not more that One Hundred Thousand Pesos (P100.For failure to submit the Final Report the Board of Liquidators/Trustees shall not be released from their duties and functions. the rate which should not exceeded the normal rate on investment. hence no clearance shall be issued by the Authority.000. . Revolving Capital which consist of the deferred payment of patronage refunds. and shall receive interest. grants. 71 of the Code. After which. That capital coming from such subsidies. Exception. Capital Sources. Preference in the payment of interest as provided for in the Bylaws of the cooperative; and 2. List of intended beneficiaries of the Statutory Funds; 4. The legal basis for this Rule is Art. grants. may consist of common share capital and preferred share capital if the latter is provided for under the cooperative's Articles of Cooperation and Bylaws. the per value of which may be fixed at any figure not more than One Thousand Pesos (P1. However. aids and such other assistance from any local or foreign institution whether public or private; Provided. Section 4. Share Capital. one vote principle. The Share Capital of a cooperative.00) as shown in the Audited Financial Statements and with no known creditors. the Board of Directors shall submit a final report. The following documents shall be required to be submitted by the Board of Directors to the Authority: 1. 71. Such facts shall be stated in the Order of Cancellation. Summary Proceedings. legacies. Its holders shall be entitled to vote and be voted under the principle of oneman. Suppletory Laws. or in case the cooperative can no longer be located despite the best to locate it. Legal Basis. Section 3. The Authority. Provided. among others the following: 1. Affidavit of No Creditors; and 5. at its own discretion. (a) Common Share Capital shall be issued only to regular members. aids and other assistance 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. Preferred Shares. that it shall not be withdrawn and should not be used in offsetting obligations whether past due or current while the membership subsists. The share capital contribution of the members shall be considered as equity. associate Members shall not be eligible to vote nor be voted on account of such shareholdings but shall be entitled to. donations. Section 17." Section 2. Capital. Schedule of Assets; 2. RULE 10 CAPITALIZATION AND ACCOUNTING PROCEDURES OF COOPERATIVES Section 1.00). Members' Share Capital; 2. Section 15. priority in the distribution on Preferred Share Capital shall be prescribed in the Bylaws of the cooperative. the Authority may choose to initiate summary proceedings. The provisions of Chapter Two (2) and Three (3) of title 19 on the Concurrence and Preference of Credit under the New Civil Code and the provisions of Rule 104 of the Revised Rules of Court on the Voluntary Dissolution of Corporations shall be used as suppletory rules. legacies.000. Provided. Payment of interest. however. Legal Basis. The Board of Directors has approved such assignment. share capital shall earn interest; the Rate of Interest shall be computed as follows: X (Net Surplus less Statutory Reserves) Rate of Interest = Total Average Share Month Where: X shall be a percentage to be determined by the Board of Directors allocated for interest on share capital.A. The Bylaws of every cooperative shall provide for a reasonable and realistic member capital buildup program to allow the continuing growth of the members' investment in their cooperative as their own economic conditions continue to improve. The legal basis for this Rule is Art. Assignment of Share Capital Contribution or Interest. further. Section 11. unless otherwise provided for in the Bylaws. withdraw his/her membership from the cooperative by giving a sixty (60) days notice to the Board of Directors. paragraph 4. the Net Surplus shall not be construed as profit. That the amount allocated for patronage refund shall not be less than thirty percent (30%) of the net surplus after deducting the statutory reserves based on the principle of equity. Provided. He/She has held such share capital contribution or interest for not less than one (1) year; 2. Section 8. The assignment is made to the cooperative or to a person who falls within the field of membership of the cooperative; and 3." . Section 6. The General/Representative Assembly '. Under the principle. Withdrawal of Share Capital. Section 9. 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. quoted as follows: "Art. Cooperatives registered under this Code shall be subject to an annual financial. Unless otherwise provided for in the Bylaws of the cooperative. Limitation on Share Capital Holdings. Subject to the provision of R.owever. 80. 9520. Share Capital shall receive a strictly limited Rate of Interest. That such refund shall not be made if upon such payment the value of the assets of the cooperative would be less than the aggregate amount of its debts and liabilities exclusive of his/her share capital contribution. A member of a cooperative may. 5 and 6 of the Code. RULE 11 SOCIAL AUDIT OF COOPERATIVE Section 1. The principle of Patronage Refund is a principle of a equity wherein an equal right of members to participate in the organization and to equitably share in the benefits accruing is established. Fines on Unpaid Subscribed Share capital. Provided. must be made on such date as may be determined by the Board of Directors. Capital BuildUp. that in no case shall the rate of patronage refund be more than twice the rate of interest on share capital. In the case of Secondary and Tertiary Cooperatives. Annual Audit. taking into consideration cooperative principles and practices. may defer the payment of such interest including Patronage Refund to raise Revolving Capital. The Bylaws of a cooperative shall prescribe a fine on unpaid subscribed share capital. that such fine is fair and reasonable under the circumstances as determined by the Board of Directors. Provided. No allocation of interest on share capital shall be made without the approval of the Board of Directors which may increase or decrease any or both. The cooperative shall use the Standard Chart of Accounts and its accompanying Accounting Manual prescribed by the Authority. for any valid reason. No member of a primary cooperative other that a cooperative itself shall own or hold mere than ten percent (10%) of the share capital of the cooperative. Patronage Refund. members should own not more that ten percent (10%) of the share capital of the cooperative. Section 7. upon the recommendation of the Board of Directors. performance and social audit. The accounting system to be installed/maintained in the cooperative shall be in accordance with the generally accepted accounting principles and practices. the withdrawing member shall be entitled to a refund of his/her share capital contribution and all other interests in the cooperative. Section 12. Section 10. Accounting Procedure. Interest on Share Capital. No cumulative interest shall be allowed for any kind or class of share issued by the cooperative. Interest on Share Capital shall not exceed the Rate of Return on Investment. Subject to the Bylaws of the cooperative. 80.Section 5. no member shall transfer his/her shares or interest in the cooperative or any part thereof unless: 1. and social responsibility as it relates to the impact not only to the community but to its regular members as the immediate beneficiary of the decisions and actions it promulgated. It looks into the function of the organization as an empowering and responsive mechanism. Section 5. and as far as practicable to conduct treeplanting activities in the community where they operate or its immediate environs. Section 9. To determine the effectiveness of the cooperative in meeting the needs of its members visàvis the socioeconomic upliftment and empowerment of the members. Social Audit validates the support of the cooperative to the seventh cooperative principles on the "Concern Community" and determines whether the cooperative work for the community's sustainable development through policies approved by their members. all cooperatives are encourage to promote environmental awareness and instill environmental protection and conservation to their members and the community where they operate. Applicability. the elderly. Section 3. Information accessing and dissemination. "The social audit shall be conducted by an independent social auditor accredited by the Authority. 4. 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 valuebased organization usually participative. vision. To highlight the attributes of the leaders/officers of the cooperative and efficiency in managing the affairs of the organization as it relates with its members and with government. 121." "The Authority in consultation with the cooperative sector. To determine how the cooperative has contributed in the social capital development for the welfare of the youth. All registered cooperatives regardless of types and categories shall be subject to social audit. It is a procedure where the cooperative assesses its social impact and ethical performance visàvis its stated mission. Elderly. 5. The Authority shall develop a Social Audit Manual that will be used for the purpose. 3. quoted as follows: "Art. Section 4. The failure of the cooperatives to the Authority of the required Social Audit Report conducted by the Accredited Independent Social Auditor shall mean noncompliance with the required reports and will be meted with corresponding penalties in accordance with R. behavior. Objectives/Uses of Social Audit." Section 2. 2. Membership. environmental involvement and solidarity of the cooperative. children. It is a process to assess the cooperative's contribution for the upliftment of the status not only to its members' economic needs but also social needs and the community where it operates. Section 8. Components and Social Audit Indicators. All registered cooperatives shall submit to the Authority the Annual social Audit Report as conducted by an Independent Social Auditor accredited by the Authority. The Authority shall exercise lead regularity powers and supervision over the operations of the financial service cooperatives. user and community oriented and nonprofit but service organization and how its social responsibility for its members and the community as a whole was fulfilled. programs and activities being implemented by the cooperative. passed and implemented. Gender. social. Youth. Transitory Period. Social Audit Manual. To determine the cooperatives' performance in building up its economic capacity to respond to its social responsibility and development income generating undertakings for its members. 9520. and Persons with Disability. Sanctions. 6. and degree of interaction of people within the cooperative as well as the policies. Leadership and Organizational Management. shall promulgated the rules and standards for the social audit of cooperatives. to wit: (1) Issue rules and regulations for the safe and sound operations of financial service cooperatives.A. and persons with disability and the promotion of the gender fair culture and practices. Social Audit. goals. values. Children. Section 7. The legal basis for this Rule is Art. Social Audit will serve as control mechanism to account for its social performance and evaluate its impact in the community taking into account the community development fund which shall be used for projects or activities that will benefit the community where the cooperative operates. Assets building. Coverage. To determine the degree of community. goals and code of social responsibility. To determine the capability of the cooperative to access. The cooperative's actual performance and accomplishment are compared to its vision. Community Involvement and Solidarity. process and disseminate information from/to its members and community. All cooperative are hereby given two (2) years from effectivity of this Rule to comply with the Social Audit Requirements as provided above. Regulation and Supervision. In relation to this. Section 6. xxx . The Social Audit of the cooperative shall consists of but not limited to the following major components/categories with its objectives: 1. 121 (1) and (14) of the Code. Social Auditing is the systematic review of the attitudes. RULE 12 FINANCIAL SERVICE COOPERATIVE (FSC) Section 1. Legal Basis. Failure to convert within said period shall mean automatic withdrawal of their associate membership.000. Revocation of Authority. and officers and responsible. Section 4. stationeries.2 The amount of paidup capital allocated for such purposes shall be at least Ten Million Pesos (Php 10.00); 3. 7653. powers and procedures under Sections 29 and 30 of Republic Act. Section 8. and (2) Existing cooperatives with savings and credit facilities which has formally notified the Authority of their intention to exercise enhanced functions and satisfied the requirements of CDA for conversion to Financial Service Cooperative. Registration. Minors who are dependents of regular members can qualify as associate members. its members. and vault and provide required special training/seminar for officers of the cooperative; 4. reapply as regular members after two (2) years. under its official seal. subject to the Bylaws and rules of the cooperative. otherwise known as The New Central Bank Act and sections 53 and 56 of Republic Act No. Section 5. Coverage. No. Certificate of Authority from BSP; 2. the following shall be likewise submitted: 1. however. Trust Entities and for Other Purposes are present or if the FSC has willfully violated the Code or any of the related rules and regulations. credit and other financial services; 2. its members. Functions of FSC. Section 7. Section 9. As associate members. deposit funds. Audited Financial Statement of the immediately preceding year in case of existing cooperative; 5.00) shall qualify to register as FSC without prejudice to additional capital requirements that maybe prescribed by the BSP for a particular financial service regulated by the BSP that will be offered by the FSC. for any action that fails to adhere to sound and prudent management practices or are inconsistent with the provisions of this Code xxx. The FSC shall submit the regular reports as provided under Section 2 of Rule 8 of this Rule. forms. and the rules and regulations of the Authority. taking into consideration the grounds. The Articles of Cooperation and Bylaws of any FSC. (1) All Financial Service Cooperative organized for the primary purpose of engaging in savings and credit services and other financial services. and withdraw from their account.000. may be revoked by the BSP if any of the grounds for receivership mentioned under Section 30 of Republic Act. Section 3. Other papers. that provide savings and credit to their members; and (b) other financial services subject to regulation by the BSP. they may open accounts. Section 6. QuasiBanks.000.(14) Appoint a conservator or a receiver as may be necessary subject to the rules and regulations to be promulgated by the Authority in coordination with the BSP.1 The function or one of the functions of the cooperative shall be savings. Membership and Affiliation. All associate members who are natural persons shall be given two (2) years to become regular members. They may. they have the option to convert into regular members. A FSC is a financial organization owned and operated by its members and authorized to provide the following services. after it has notified the Authority of its decision to exercise enhanced functions and satisfied the requirements for the conversion to Financial Service Cooperative. or any amendment thereto. No. shall register its amended Articles of Cooperation and Bylaws to the Authority upon approval of the Authority and favorable certification of the BSP. Undertaking to accomplish within a year from the issuance of Certificate of Registration to establish the business site equipped with facilities. In addition to the documents required by the authority for registration of new cooperative/amendments. Documentary Requirements. on the financial service cooperatives. officers and responsible persons. which may be required by Authority.000. The authority granted. The Authority shall include in its rules and regulation appropriate sanctions and penalties. exclusively to its members: (a) the functions of credit cooperatives and other cooperatives. When they reach the age of majority and within two (2) years from acceptance of their associate membership." Section 2. otherwise known as An Act Providing for the Regulation of the Organization and Operations of Banks. notwithstanding the provisions of existing laws to the contrary. Existing cooperative engaged in credit and multi purpose activities. shall be registered with the Authority only if accompanied by a Certificate of Authority issued by the BSP. Resolution of the Board stating that: 2. 7653 as may be deemed appropriate to financial service cooperatives. Only those cooperatives with minimum Paidup capital of at least Ten Million pesos (Php 10. 8791. Reportorial Requirements. including multipurpose cooperatives. A FSC shall have two (2) types of members: (1) Regular members. . who are natural persons; and (2) Associate members who are natural persons but who do not immediately qualify under the requirements for membership set out in the Bylaws of the cooperative. Minimum Capitalization Requirements. Performance Standards. Section 15. Any compensation other than per diems may be granted to Directors by a majority vote of the members with voting rights at a regular or special general assembly meeting specifically called for the purpose: Provided further. internal control standards. administrative control. accounting records procedures and other measures to safeguard the FSC's assets. Board Resolutions and Committee Reports are properly kept and made accessible to members. not be less than an amount equal to eight percent (8%) of its risk assets. securities.Section 10. The FSC shall not invest in any single entity more than 20% of its net worth. The net worth positions should be sufficient to meet competitive pressure and adverse economic conditions as they arise. Bonding of Accountable Officers. Loans. Only members and its affiliate laboratory cooperative may open savings and/or time deposit accounts. 7653 as may deemed appropriate to Financial Service Cooperatives; and (3) the appropriate sanctions and penalties on the Financial Service Cooperatives. In the absence of any provision in the Bylaws fixing their compensation. The Board of Directors shall determine the adequacy of such bonds. The Net Worth of the FSC shall. Section 14. Section 17. Secretary. check the accuracy and reliability of accounting data. promote operational efficiency. the Board of Directors shall present its recommendation for removal to the General/Representative Assembly. or property on behalf of the FSC shall be covered by a surety bond to be issued by a duly registered insurance or bonding company for the faithful performance of their respective duties and obligations. Deposit and Borrowing Operations. Manual of Rules and Regulations. That the Directors and Officers shall not be entitled to any per diem when. accounting control. The FSC shall adopt a proper plan of organization. Officers. liquidity and yield. Majority of the Board of Directors may place the Officer concerned under preventive suspension pending the resolution of the investigation which period shall be specified in the Bylaws or policies of the cooperative duly approved by the General/Representative Assembly. Section 22. A policy of transparency and openness must be always maintained whereby the Books of Accounts. and the regular financial statements are periodically prepared and made known to the members. Reserve Requirements against Deposit Liabilities. 3765. It should enhance the safety of the members' share and keep pace with growth in FSC assets. however. Committee Members. shall not receive any compensation except for reasonable per diems: Provided. powers and procedures under Section 29 and 30 of Republic Act No. The Board of Directors shall be responsible for setting loan policies and lending procedures. and Employees handling funds. its Members. Officers and Responsible Persons. The Authority shall develop a Manual that will cover: (1) the Rules and Regulations for the safe and sound conduct of operations of Financial Service Cooperatives; (2) Rules and Regulations for the appointment of a Conservator or a Receiver as may be necessary in coordination with the BSP. That the immediately preceding proviso shall not apply to cooperatives which converted into Financial Service Cooperative. FSC shall maintain a Liquidity Reserve Fund that will be restricted in nature equivalent to at least two percent (2%) of their savings and time deposit liabilities. Standard Chart of Accounts. Section 20. through the Board of Directors as authorized by the General Assembly. Section 21. Officer. Section 11. at all times. the Directors. A sound investment program shall be the sole responsibility and accountability of the Board of Directors. The FSC. Net worth. Savings and Time Deposits with FSC may be opened with a minimum amount to be determined by the Board of Directors. Every Director. Compensation. General/Representative Assembly. accounting system. Section 18. Upon finding of a prima facie evidence of guilt.A. for any action that fails to adhere . and valuation/assessment of securities. The Officer concerned shall be given an opportunity to be heard at said assembly. diversification. An Elective Officer may be removed by threefourths (3/4) vote of the regular members present and constituting a quorum in a regular or special general assembly meeting called for the purpose. Treasurer and Members holding other positions as may be provided for in their Bylaws. Section 16. The scope of the program will depend largely on the FSC size and the extent of its surplus funds. All FSCs shall adopt the Standard Chart of Accounts and its accompanying Accounting Manual for Credit and Other Types of Cooperatives with Credit Service issued by the Authority. Investment Program. and encourage adherence to prescribed managerial policies. Provided finally. It shall comply with the provisions of R. in the preceding calendar year. That no additional compensation other than per diems shall be paid during the first year of existence of the FSC. Section 19. may borrow from any source at the best terms or conditions available and in such amount that may be needed. Removal of Officers. taking into consideration the grounds. Section 13. an integral part of every loan contract. The compensation of Officers as well as the Members of the Committee created pursuant to the Code or its Bylaws maybe fixed in Bylaws. Such Officer shall be given the opportunity to be heard. the cooperative reported a net loss or had dividend rate less than the official inflation rate for the year. All complaints for the removal of any elected Officer shall be filed with the Board of Directors. The officers of the FSC shall be composed of the Members of the Board of Directors. otherwise known as the "Truth in Lending Act" and shall make the true and effective cost of borrowing. Section 12. to the Authority and to other parties interested in the FSC's operations. General Manager or Chief Executive Officer. Investment policies should be in writing and should address the safety. Internal Control. delegation of authority. 137 of the Code quoted as follows: "Art. Disputes among members. The Authority shall issue and adopt the proper rules of procedure governing arbitration as the primary and exclusive mode for dispute resolution in accordance with the Alternative Dispute Resolution Act of 2004. To hold hearings and to receive evidence necessary to resolve the issue/s subject of the dispute. intra federation or intrafederation disputes shall. Voluntary Arbitration is an administrative proceeding. group of persons. circulars or orders issued by the Authority. Coverage. and no person. intercooperative. Prohibition. other applicable laws on cooperatives. f. Section 4. c. RULE 13 VOLUNTARY ARBITRATION Section 1. For this purpose. and committee members. e. in coordination with the Authority. the Authority shall constitute a list of Qualified Voluntary Arbitrators. The conciliation and mediation committee of the cooperative shall facilitate the amicable settlement of intra cooperative disputes and disputes among members. Conciliation. and their decision shall be appealable to the Office of the President of the Republic of the Philippines. be settled amicably in accordance with the conciliation or mediation mechanism embodied in the bylaws of cooperatives and in such other applicable laws. The jurisdiction of the voluntary arbitration shall be exclusive and original and their decisions shall be appealable to the Office of the President. Section 3.to sound and prudent management practices or are inconsistent with the provisions of the Code. the matter shall be settled through voluntary arbitration: Provided. Legal Basis. Section 5. as far as practicable." Section 2. The technical rules applicable to court or judicial proceedings may not apply strictly. directors. Should such conciliation and mediation proceedings fail. regulations. 'Financial Service Cooperative'. Any party of a dispute not resolved through Conciliation/Mediation Proceeding in the primary and union/federation level can commence an action for Voluntary Arbitration by filing a Verified Complaint with the Authority. To cite contempt any person disturbing the proceeding and/or who willfully defy lawful orders of the Voluntary Arbitrator/Arbitrators. officers. it must first secure a certification from its conciliation and mediation committee and from the cooperative union or federation to which it belongs that despite all efforts to settle the issues. and require the cooperative to undertake corrective or remedial measures relative thereto. or organization shall use the said terms unless duly registered with the Authority. However. Section 23. Powers/Authority of the Voluntary Arbitrator/s. In the case of a primary cooperative affiliated with any federation/union. Violations of this prohibition shall be punishable in accordance with Art. . The appropriate prudential Rules and Regulations applicable to the Financial Service Cooperatives will be developed by the BSP. d. if necessary. 140 of the Code. b. To require any person to attend hearing/s as witness or to cause production of documents when the relevancy and the materiality thereof are vital to the resolution of the case. Section 6. Exclusive and Original Jurisdiction of the Voluntary Arbitrator/Arbitrator. rules. The Voluntary Arbitrator/Arbitrator mutually chosen by the parties shall have exclusive and original jurisdiction over the dispute. Nature of Proceedings. Settlement of Disputes. To issue a Writ of Execution. The hearing may proceed even in the absence of any party. That before any party can validly file a complaint with the Authority for voluntary arbitration. and Mediation Proceedings. officers. To administer oath. the complaint shall be accompanied by a Certificate of NonSettlement issued by the said federation/union to which the primary cooperative is affiliated with. directors. Commencement of Action. All intra/inter cooperative disputes not resolved amicably in accordance with the Conciliation/Mediation Mechanisms embodied in the Bylaws of a cooperative shall be governed by this Rule. the same have failed. and intracooperative. the requirements of due process must be observed at all times. provided the parties were duly notified and their failure to appear in such scheduled meeting is unjustified as determined by the Voluntary Arbitrator/s handling the proceedings. The terms 'Credit Cooperatives'. To exercise such other powers and functions as may be necessary to resolve the dispute. and committee members. The legal basis for this Rule is Art. 137. The Voluntary Arbitrator/s shall have the following powers/authority: a. and 'Financial Service Cooperative Federation' shall be used exclusively by those who are duly registered under the Code. however. if necessary; and 6. Arbitration Proceedings. a Motion to Enforce or Execute may be filed with the Voluntary . However. Section 11. The manner of paying the cost of arbitration proceedings including the Arbitrator's fee; 5. The attendance of any third party or the exclusion of any witness in the proceeding shall be determined by the Voluntary Arbitrator/s. Section 10. the Authority shall issue a Notice/Summons to the Respondent/s to file Answer/Comment. The Party who filed the complaint shall be called the "Complainant/s" and the Party complained of shall be called the "Respondent/s". The final disposition of the issue/s submitted to Voluntary Arbitration is the Decision/Award. The Agreement to perform or abide by the Decision/Award. Contents of the Complaint. a second Notice/Summons shall be issued. Hearings may be adjourned for a valid cause or upon agreement of the parties. Extent of Decision/Award. it is mandatory for the Voluntary Arbitrator/s to render a Decision or Award within thirty (30) calendar days from the date the parties agreed to submit the case for resolution. among other things. The Names and Addresses of the Complainant/s and Respondent/s; 2. indicating the time and date of the conference. Decision/Award. It shall include the facts and the law and/or contract upon which the Decision/Award is based and shall be signed by the Voluntary Arbitrator/s. The parties shall comply voluntarily and faithfully the Decision/Award. A Notice shall be sent to all parties concerned. Section 13. It shall be the duty of the parties or their Counsel to appear at the Preliminary Conference. concise and definite terms. The complaint shall contain: 1. The unjustified failure of the Complaint to appear in the Preliminary Conference shall be cause for dismissal of the complaint. The Notice shall be served on Counsel. Upon receipt of the Answer/Comment. the notice may be effected by publication in a newspaper of general circulation at the expense of the complainant. otherwise the complaint shall be dismissed. Procedures. The Voluntary Arbitrator/s shall have the power to decide only the matters which have been submitted for arbitration. the complaint shall be accompanied by a Certificate of NonSettlement issued by the Conciliation/Mediation Committee of such primary cooperative together with a Certificate of NonAffiliation with any Federation/Union signed by the Chairperson of the Board of Directors of the same cooperative. However. Whenever the Respondent's whereabouts are unknown or cannot be ascertained by diligent inquiry. All parties to the dispute shall attend the arbitration proceedings. Section 9. Section 12. However. Venue of Action. Preliminary Conference. The name of the Voluntary Arbitrator/s chosen by the parties; 4. The Decision or Award must be stated in clear. A similar failure on the part of the Respondent at the first instance. if any; and 3. Should the parties appear in the Preliminary Conference. The nonappearance of a party may be excused only if a valid cause is shown therefore or if a Representative shall appear in his/her behalf fully authorized in writing. Enforcement/Execution of Decision/Award. The Agreement shall contain. The name of the public official whom the parties may designate to execute the final decision or award. a Preliminary Conference shall be scheduled. the following matters: 1. a Certificate of NonResolution may be issued upon request of the Complainant.In the case of a primary cooperative not affiliated with any federation or union. Section 14. Upon receipt of the Complaint. Noncompliance with the second Notice/Summons by the Respondent/s shall be cause for the dismissal of the complaint. a Certificate of NonResolution may be issued to the Complainant. The agreement to submit to Voluntary Arbitration; 2. Unless the parties agree otherwise. for complaints involving cooperatives registered with the Central Office such complaint shall be filed with the latter. Contents of the Submission Agreement. All complaints shall be filed with CDAExtension Office having administrative jurisdiction over the cooperatives. Parties to the Dispute. The specific issue/s or dispute/s to be submitted for resolution; 3. or on the party who has no Counsel. In instances of noncompliance. A Brief Description of the Complaint and the Documentary Evidences. Section 16. The Relief Prayed For. the parties shall be required to sign a Submission Agreement. Section 8. Section 15. Section 7. A copy of this Decision/Award shall be furnished the Authority. ZUBIRI Rep. These Rules and Regulations shall take effect fifteen (15) days after publication in the Official Gazette or in a newspaper or general circulation. Effectivity. Amendment. For Joint Congressional Oversight Committee on Cooperatives For the Senate of the Philippines: For the House of the Representatives: Sen. The provisions of this Rule shall apply to Rules 1 to 13. and not inconsistent thereto. such Decision/Award becomes final and executory. if any. If no appeal is filed within the time as provided herein. Accreditation of Voluntary Arbitrator/s. Appeal to the Office of the President of the Republic of the Philippines. S2010 shall from part of these Rules. or the regular courts or any public official whom the parties may designate in the submission agreement to execute the final decision or award. COMMON PROVISIONS Section 1. Section 4. Unless agreed otherwise. shall have suppletoy application to these Rules. If any provision of these Rules and Regulations is declared null and void or unconstitutional. Section 3. Interpretation. The Voluntary Arbitrator/Arbitrator shall arrange the taking of stenographic notes/transcript of the testimony when one or more parties request such a record. PABLO Chair. 682. the other provisions not affected thereby shall continue to be in force and effect. Circulars. Unless otherwise stated in these Rules. Cost of Arbitration and Arbitrator's Fee. Section 8. House Panel The Lawphil Project Arellano Law Foundation RULES AND REGULATIONS IMPLEMENTING THE SPECIAL PROVISIONS OF THE PHILIPPINE COOPERATIVE CODE OF 2008 (REPUBLIC ACT NO. Section 7. Section 18. RECOMMENDING APPROVAL: FOR THE BOARD OF ADMINISTRATORS COOPERATIVE DEVELOPMENT AUTHORITY LECIRA V. Stenographic Notes/Transcript. Section 20. Section 17. These Rules and Regulations shall be subject to automatic review three (3) years after the effectivity thereof. Bureau of Local Government Finance Memorandum Circular No. 9520) TITLE AND DEFINITIONS .Arbitrator/s who may issue a Writ Execution requiring either the sheriff of the Authority. JUAN MIGUEL F. The Authority is mandated to implement and enforce these Rules and Regulations. Section 5. Suppletory Rule. Section 19. A copy of these Rules shall be among the documents required to be kept ready and accessible for inspection and examination by the members of the cooperative and the Authority in accordance with Art. The Appeal is taken by filing a Notice of Appeal within fifteen (15) days after receipt of the copy of the Decision/Award appealed from. ____ and Bangko Sentral ng Pilipinas Circular No. 52 of the Code. The Decision/Award rendered shall be appealable to the Office of the President of the Republic of the Philippines. Applicability. Pasay City pursuant to Article 138 of RA 9520. 2010 at the Senate of the Philippines. in case of doubt as to the meaning of any provision of these Rules. shall be subject to the review and approval of the JCOCC. and such party or parties thereof assume payment of the cost. the parties shall equally share the cost of the proceedings including the Arbitrator's Fee. Special Rules. Any amendment thereto. Separability. Requirements. the same shall be resolved and interpreted liberally in favor of the cooperatives and their members. The Authority shall issue guidelines concerning the accreditation and delisting of Voluntary Arbitrator/s as well as the list of qualified Voluntary Arbitrator/s. JUAREZ Chairman This Implementing Rules and Regulations (Part I) was approved by the Joint Congressional Oversight Committee on Cooperatives during its meeting on February 16. Senate Panel Chair. Section 6. Orders and other issuances by appropriate government agencies in pursuance of the provisions of the Code and these Rules. Mandate. Section 2. ERNESTO C. Title. 11. Chapter VII of R. governmentowned utility. . 14. 3. DOTC shall refer to Department of Transportation and Communications. 4. Agrarian Reform Area shall refer to the area subject to the coverage of Comprehensive Agrarian Reform Program (CARP)/Comprehensive Agrarian Reform Program Extension with Reform (CARPER). 20. land development. 2. CLOA shall refer to the Certificate of Land Ownership Award. in partnership with government/nongovernment agencies involved in a housing program. 17. 18. Distribution of Electricity shall refer to the conveyance of electric power by a distribution utility through its distribution system pursuant to the provisions of the EPIRA Law. DAR shall refer to the Department of Agrarian Reform. or renovation and other similar purposes. Agrarian Reform Community (ARC) shall refer to a community composed and managed by ARBs who are willing to be organized and to undertake the integrated development of an area and/or their organizations or cooperatives as defined under RA 9700. Transportation Service Cooperative shall also secure another CGS from OTC or LGU. or existing local government unit which has an exclusive franchise to operate a distribution system in accordance with the EPIRA Law. the following terms are defined as follows: 1. 8. 12. 5. 9. BFAD shall refer to Bureau of Food and Drugs. Commission shall refer to the Insurance Commission. Accreditation shall refer to the act of the OTC Board of Directors recognize the Transportation Service Cooperatives and which shall take place after registration with the CDA as evidenced by a Certificate of Accreditation. home improvement. Agrarian Reform Beneficiaries (ARBs) shall refer to the qualified beneficiaries of Comprehensive Agrarian Reform Program (CARP) as defined under Section 22. These Rules shall be known as the "Rules and Regulations Implementing the Special Provisions of the Philippine Cooperative Code of 2008. 15. CGS shall refer to the Certificate of Good Standing issued by the Authority to all types of cooperatives. 05. otherwise known as the Comprehensive Agrarian Reform Program Extension with Reform (CARPER) Act. DOH shall refer to Department of Health. BSP shall refer to Bangko Sentral Pilipinas. 19. Dairy Cooperative shall refer to one whose members are engaged in the production of fresh milk which may be processed and/or marketed as dairy products. Cooperative Housing Program shall refer to an alternative housing approach.A. 21. For the purpose of these Rules and Regulations. 10. Series of 2009." Section 2. land improvement. 6657. 16. undertaken by a financially and organizationally stable cooperative to address the housing problems of its members primarily the lowincome earners through its own cooperative efforts in planning and direct production of affordable. CPCN/Franchise/Permit shall refer to the Certificate of Public Convenience and Necessity issued by the appropriate government agencies which authorizes the grantee thereof to render the appropriate public service. Cooperative Education and Transport Operation Seminar (CETOS) shall refer to seminars conducted by CDA and/or OTC for the purpose of providing continuing education on cooperative and transport operation to enhance the knowledge and capability of the officers as well as the members of the Transportation Service Cooperative. whichever is applicable. Distribution of Utility shall refer to any Electric Cooperative. house construction. private corporation. Authority shall refer to Cooperative Development Authority (CDA).Section 1. The same shall also refer to Agrarian Reform Beneficiaries Cooperative (ARB Coop) as defined in DAR Administrative Order No. 13. land consolidation or land management in areas covered by agrarian reform and for other purposes as provided by law. Definition of Terms. 7. Agrarian Reform Cooperative shall refer to one organized by marginal farmers majority of which are Agrarian Reform Beneficiaries duly registered with the Authority for the purpose of developing an appropriate system of land tenure. 6. decent and adequate housing units. Blanket Loan/Wholesale Loan shall refer to a housing loan contracted/obtained by a housing cooperative intended to identify memberbeneficiaries for land acquisition. 22. 39. 43. HDMF shall refer to the Home Development Mutual Fund or PagIBIG Fund. contributions. contributions. LWUA shall refer to the Local Water Utilities Administration. 40. or charges prior to the occurrence of contingent event and the payment of guaranteed benefits upon the occurrence of such event. LGU shall refer to Local Government Unit. GSIS shall refer to the Government Service Insurance System. 23. Electric Cooperative shall refer to one organized for the primary purpose of undertaking power generation. High Rise/Condominium Housing shall refer to the construction of at least five (5) storey residential building in high density urban and rural areas to provide housing to low income earners. EPIRA shall refer to the Electric Power Industry Reform Act of 2001. LTO shall refer to the Land Transportation Office. It is coowned and controlled by its members. Next of Kin shall. 36. for purposes of succession. and other similar products and services that meet the needs of the lowincome sector for risk protection and relief against distress. MicroInsurance shall refer to an activity providing specific insurance. 35. This shall include all forms of insurance. 44. Marginal Farmers shall refer to farmers who are tilling an area of not more than three (3) hectares. 25. Insurance Like Activity shall refer to any activity involving regular collection of premiums. Insurance Cooperative shall refer to one engaged in the business of insuring life and property of cooperatives and their members. HLURB shall refer to the Housing and Land Use Regulatory Board. created under PD 198. as amended. 33. Extension Offices shall refer to the offices of the Authority covering one geopolitical region each as their area of jurisdiction. Housing Cooperative shall refer to one organized to assist or provide access to housing for the benefit of its regular members who actively participate in the savings program for housing. 42. contributions. refer to an natural person who is an heir of an agrarian reform beneficiary and who is qualified to be a member of the cooperative as ARB under its Bylaws and as determined by DAR. 29. MARINA shall refer to Maritime Industry Authority. NHA shall refer to the National Housing Authority. LTFRB shall refer to the Land Transportation Franchising and Regulatory Board. LBP shall refer to the Land Bank of the Philippines. fees. MicroInsurance Product shall refer to a financial product or service that meets the risk protection needs of the poor where the amount of premiums. as may be defined by concerned regulatory bodies with features such as: premiums. 32. One who possesses all the qualifications and none of the disqualifications provided in the Cooperative Bylaws as ascertained by the Board of Directors and has the right to vote and be voted upon. 26. It shall also refer to Cooperative Insurance Societies (CIS). . 27. fees or charges computed on a daily basis does not exceed five percent (5%) of the current daily minimum wage rate for nonagricultural workers in Metro Manila. 38. 31. as approved by the National Wages Productivity Board (NWPB)/Regional Tripartite Wages Productivity Board (RTWPB) and the maximum sum of guaranteed benefits is not more than 500 times the daily minimum wage rate for nonagricultural workers in Metro Manila. 45. Member in Good Standing shall refer to one who is a regular member and has complied with all the requisites for membership. 28. misfortune and other contingent events. utilizing renewable energy sources. acquisition and operation of subtransmission or distribution to its household members. insurancelike. 46. 37. including hybrid system. fees or charges collected/deducted prior to the occurrence of a contingent event and guaranteed benefits provided upon occurrence of a contingent event. NDA shall refer to National Dairy Authority. Housing Beneficiaries shall refer to regular members in good standing of the Housing Cooperative who actively in the Bylaws and duly approved internal policies of the cooperative. 41. Medium Rise Housing shall refer to the construction of a maximum of four (4) storey residential building in high density urban and rural areas to provide housing to low income earners. insurancelike and other similar activities. 30. 34. 24. 55. the Cooperative Development Authority in consultation with NHA. SSS. 61. 59. monthly or "pakyaw" basis. RULE I HOUSING COOPERATIVES Pursuant to the provisions of Art. Urbanizable Areas shall refer to the sites and lands within display marked and great potential of becoming urban areas within the period of five (5) years. 68. reactive compensation equipment to improve customer power factor. 62(13) (par. and manage water supply systems for the provision and distribution of potable water for its members/consumers. This includes sites and services development. the architectural and detailed engineering and housing design. Referendum shall refer to a mechanism of securing the approval of the general membership of an Electric Cooperative on issues affecting its registration. 66. longterm financing and liberalized terms on interest payments. 67. organized under the provision of the Code. and management. the bar chart and construction schedule. wind. Urban Areas shall refer to all cities regardless of their population density and to municipalities with a population density of at least 500 persons per square kilometer. Renewable Energy Resources shall refer to energy resources that do no have an upper limit on the total quality to be used. commercial. including. weekly. 63. operation. industrial. solar. and concerned cooperative sector hereby promulgates the following rules and Regulations for the proper guidance and compliance of Housing Cooperatives. 9520. regardless of whether his compensation is paid on a daily. NWRB shall refer to the National Water Resources Board. 48. These include among others. PCG shall refer to the Philippine Coast Guard. 65. 53. created under PD 424. Regular Insurance Product shall refer to all other insurance policies not covered by MicroInsurance Product. Water Supply shall refer to the supply of potable water as provided by the cooperative for domestic. These include NPC assets linking transmission system and the distribution system which are neither classified as generation nor transmission. as defined or classified under the Philippine Maritime laws. 47. contract documents. otherwise known as the Philippine Cooperative Code of 2008. 52. systematic development plan. but not limited to stepdown transformers used solely by load customers. 60. Subtransmission Assets shall refer to the facilities related to the power delivery service below the transmission voltages and based on the functional assignment of assets. LBP. associated switchyard/substation. technical and material specification. control and protective equipment. RTWPB shall refer to the Regional Tripartite Wages Productivity Board. 62. 57. 49. . and the land where such facilities/equipment are located. hydro and ocean energy. Such resources are renewable on a regular basis and the renewable rate is rapid enough to consider availability over an infinite time. overhead lines. Water Tariff shall refer to the water rate charged to customers/members for water consumption as determined by the cooperative and approved by the NWRB. 54. Transportation Service Cooperative shall refer to one which engages in land and sea transportation.2) under Chapter V of Republic Act No. Water Permit shall refer to the authority to appropriate and use water. Worker Beneficiaries shall refer to a natural person who renders service for a value as an employee or laborer in an agricultural enterprise or farm within an ARC. limited to small vessels. Supply of Electricity shall refer to the sale of electricity by a party other than a generator or a distributor in the franchise area of a distribution utility using the wires of the distribution utility concerned. 51. Technical Plan shall refer to all technical documents required in planning a housing project namely. Water Service Cooperative shall refer to a duly registered cooperative organized to own. 50. Water Right shall refer to the privilege granted by the government to appropriate and use water. and other uses. operate. SSS shall refer to the Social Security System. 56. Transmission of Electricity shall refer to the conveyance of electricity through the high voltage system. biomass. 58. Socialized Housing shall refer to the housing program and project undertaken by the government and private sector for the underprivileged and homeless which may also be undertaken by a Housing Cooperative. 64. HDMF. OTC shall refer to the Office of Transportation Cooperatives. (6) To undertake such other economic or social activities as may be necessary or incidental in the pursuit of the foregoing purposes. Student/Faculty Dormitory Housing; e. NHA. Section 6. Housing Cooperatives shall file their application for registration with the CDA Extension Office. Estate Management; and g. 9520 organized to assist or provide access to housing for the benefit of its regular members. may organize a housing cooperative. Section 5. Section 7. of legal age. (4) To develop collaborative efforts and partnership with other cooperatives. HDMF. A Housing Cooperative shall be organized for any or all of the following purposes: (1) To facilitate access and/or provide affordable housing units to its members; (2) To create a resource mobilization program to ensure financial stability for the cooperative; (3) To foster and strengthen the principles of cooperativism by promoting a comprehensive and integrated community development program which are planned and managed by the cooperative members thereby ensuring a sustained and selfreliant cooperative community.00). High Rise/Condominium Housing; d. 000. Section 3. Capitalization. having a common bond of interest and actually residing or working in the intended area of operation. CDA. financial institutions and entities thereby assuring availability of resources and lower cost of housing development. Registration Jurisdiction. Housing Cooperatives may engage in the following activities: a. LBP. Housing Programs and activities. Production and Distribution of Housing Materials; f. Section 4. This Rule shall cover all cooperatives duly registered with the Authority under R. Socialized Housing; b. Medium Rise Public and Private Housing; c. Fifteen (15) or more natural persons who are Filipino citizens.A. a housing cooperative shall have a minimum paidup capitalization of Fifteen Thousand Pesos (P 15. Requirements for Registration.00); (4) Surely Bond of Accountable Officers handling funds.Section 1. That in no case shall the paidup share capital be less than Fifteen Thousand Pesos (15. The following shall be complied with upon filing of application: A. GSIS. . Organization. For purposes of registration with the Authority. DBP. which shall have jurisdiction over the said cooperatives. Section 2. Other similar activities. (5) To expand the cooperatives business operations by stabilizing the available resources for the continuing production of housing units for its members.000. SSS. Purpose and Objectives. HLURB and other government agencies. Coverage. New Applicant (1) Name Verification Slip; (2) Articles of Cooperation and byLaws; (3) Sworn Statement of the treasurer elected by the subscribers showing that at least ` twentyfive per centum (25%) of the authorized share capital has been subscribed and at least twentyfive per centum (25%) of the total subscription has been paid: Provided. properties and securities; (5) PreMembership Education Seminar (PMES); (6) Economic Survey; (7) PreFeasibility Study of the housing projects undertaking as reviewed by NHA; (8) Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name; and (9) Registration Fee. 2. Financing and Technical Assistance. Target Beneficiaries. The land proposed for housing is classified as a safe and buildable area and not affected by any government infrastructure project. and development of the cooperative housing projects. NHA. All matters relating to the technical aspects of the housing program and such other similar matters affecting the Housing Cooperatives shall be regulated by the NHA or HLURB as the case maybe. as the lead agency. the applicant cooperative shall comply with the documentary requirements as maybe required by such appropriate government financial institution. The financing shall be in the form of blanket loans or wholesale loans to qualified housing cooperatives. To recommend changes to this IRR from time to time if the need arises. organization. Other matters relating to the internal affairs of Housing Cooperatives. The land is owned by the cooperative or there is an ongoing negotiation between the landowner and cooperative through a Contract to Sell or Reservation Agreement between the landowner and the cooperative and that the land is free from any liens and encumbrances. DBP. Joint Monitoring and Evaluation Committee. HLURB. Board of Directors and Committees. agricultural or industrial reserve. Membership in Housing Cooperatives shall be open to all natural persons who meet the qualifications for membership prescribed in the cooperative Bylaws. Formulation of rules and procedures and the conduct of meetings of General Assembly. The proposed housing project of the cooperative shall have the following features as certified by the NHA: 1. management. Documentary Requirements in Availing for Technical and/or Financial Assistance. Section 13. Section 12. To formulate joint standards for the proper implementation. Section 9. or better than those given for socialized housing projects without need for individual processing. The cooperative in availing technical and/or financial assistance shall file its application with the appropriate government financial institutions. in coordination with appropriate government agencies and financial institutions. Availability of Land Suitable for Housing. a special window for the financing of the housing projects shall be created by the appropriate housing agencies and government financial institutions. For this purpose. B. Section 8. The Joint Monitoring and Evaluation Committee shall be composed of CDA. Regulatory Power. management. The Authority shall have the power to regulate the internal affairs of Housing Cooperative such as: a. SSS. monitoring. c. Section 11. Land Ownership. with interest rates and terms equal to. For this purpose. concerned cooperative sector and other appropriate government agencies and financial institutions. shall assist the housing cooperative in availing technical and financial assistance for its housing projects. The Committee shall have the following functions: 1. Conditions for the Proposed Housing Project. Exercise of rights and privileges of members; b. Directors and Committee Members; d. Manner of election and qualifications of Officers. HDMF. 2. Membership. 3. Allocation and distribution of surplus; and e. . GSIS. Existing Cooperative (1) Amended Articles of Cooperation and Bylaws; (2) A Resolution certified by the Board Secretary and by the majority of the Board of Directors stating that the said amendments have been duly approved by at least twothirds (2/3) vote of the members with voting rights; (3) Audited Financial Statements showing profitable operations for the past two (2) years; (4) Prefeasibility study of the housing projects undertaking as reviewed by NHA; (5) Proof of business track record of the cooperative; and (6) Amendment Fee. Section 10. The Authority. and development of cooperative housing project all matters relating to the organizations. The proposed housing project should have at least 30 initial target member beneficiaries. LBP. However. The following shall be complied with upon filing of application: (1) Name Verification Slip; (2) Articles of Cooperation and ByLaws; (3) Sworn Statement of the Treasurer elected by the subscribers showing that at least twentyfive per centum (25%) of the authorized share capital has been subscribed and at least twentyfive per centum (25%) of the total subscription has been paid: Provided. otherwise known as the Philippine Cooperative Code of 2008. marinebased. Settlement of Disputes. the matter may be settled through voluntary arbitration or in court of competent jurisdiction. Agrarian Reform Cooperatives shall be organized for any or all of the following purposes: (1) To develop an appropriate system of land tenure. Should such conciliationmediation proceedings fail. That in no case shall the paidup share capital be less than Fifteen Thousand Pesos (P15. and marketing of farm products for Agrarian Reform Beneficiaries and their immediate families. No. 9520. vocational/technical training and livelihood program to beneficiaries and marginal farmers; (7) To act as channels for external assistance and services to the beneficiaries and marginal farmers; (8) To undertake a comprehensive and integrated development program in agrarian reform and resettlement areas with special concern for the development of agrobased. be settled amicably through the conciliation and mediation mechanism embodied in the Bylaws of the cooperative. Section 5. medical and social insurance benefits and other social and economic benefits that promote the general welfare of the agrarian reform beneficiaries and marginal farmers; (6) To provide a nonformal education. 1avvphi Section 4. LBP. 2) under Chapter XI of Republic Act. Section 2. the same shall be referred to the said agency and it shall be resolved in accordance with the NHA or HLURB regulations. Section 14. No. Intra/inter cooperative disputes shall. Coverage. in cases where the dispute/s fall within the jurisdiction of the NHA or HLURB.00); (4) Surety Bond of Accountable Officers; . Section 1. hereinafter referred to as "beneficiaries"; (3) To provide financial facilities to beneficiaries for provident or production purposes at reasonable costs; (4) To arrange and facilitate the expeditious transfer of appropriate and suitable technology to beneficiaries and marginal farmers at the lowest possible costs; (5) To provide social security benefits. BSP. Organization. which shall have jurisdiction over the said cooperatives. To assist in settling inter/intra cooperative disputes. Agrarian Reform Cooperatives shall file their duly accomplished application for registration with the CDA Extension Office. Registration Jurisdiction. land consolidation or land management in areas covered by agrarian reform; (2) To coordinate and facilitate the dissemination of scientific methods of production and provide assistance in the processing. and the concerned cooperative sector hereby promulgates the following rules and regulations for proper guidance and compliance of Agrarian Reform Cooperatives. 4. This Rule shall cover all Agrarian Reform Cooperatives duly registered with the Authority under R. 3.000. Registration Requirements. At least fifteen (15) marginal farmers majority of which are Agrarian Reform Beneficiaries in an agrarian reform areas may organized an Agrarian Reform Cooperative. storage. the Authority in consultation with the DAR. To submit annual accomplishment report to the Authority. Section 3. health. 94 (par. 9520.A. transport. 93 (6) and Art. RULE II AGRARIAN REFORM COOPERATIVES Pursuant to the provisions of Art. Purposes and Objectives. and cottagebased industries; (9) To represent the beneficiaries on any or all matters that affect their interest; and (10) To undertake such other economic or social activities as may be necessary or incidental in the pursuit of the foregoing purposes. as far as impracticable. which shall be in accordance with the CDA Guidelines for the Implementation of ConciliationMediation for Cooperative Disputes. and in applicable laws. land development. Preferential Right/Treatment. Section 6. However. and the same may now be organized and registered in accordance with the requirements of the Philippine Cooperative Code of 2008; and (10) Registration fee. equipment. IT shall also comply with the other requirements imposed by the Authority and the appropriate government agencies for cooperatives engaged in public utilities and services. In an agrarian reform and resettlement areas.00). and other services and facilities requires by the beneficiaries in their daily lives and livelihood. 09. Amendments of Articles of Cooperation and Bylaws. irrigation. an Agrarian Reform Cooperatives duly registered with the Authority may be given exclusive right to do any or all of the following economic activities in agrarian reform and resettlement areas: (1) Supply and distribution of consumer. Rule 5 of these Rules and Regulation. Capitalization. Existing ARB Coops shall amend their cooperative name to conform to this Section. and other infrastructures with government funding . and raw material and supplies. Section 9. canals. facilities and other services and other services and requirements of the beneficiaries and marginal farmers at reasonable prices; (2) Marketing of the products and services of the beneficiaries in local and foreign markets; (3) Provision of essential public services at cost such as power. Such terms and conditions shall be jointly formulated by the DAR and the Authority. and public health and medical care services; (4) Management. and industrial good. reservoirs. it shall comply with the other requirements prescribed in Section 5. the minimum capitalization shall be in accordance with the Rules and Regulations prescribed by the Authority for MultiPurpose cooperatives under Rule 3 of the Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008 (Republic Act No. shall be governed by the joint DARCDA Administrative Order No. passenger and/or cargo transportation by land or sea. and commercial development of marine. agricultural. potable water. ports. conservation. waterworks systems. to engage in the operation of public utilities and services. other than plantationbased Agrarian Reform Cooperative shall be governed by Articles 30. Section 10. Membership Termination and Valuation and/or Transfer of Share Capital. However. mineral. Agrarian Reform Cooperative intending to engage in the operation of public utilities and services shall amend its Articles of Cooperation and ByLaws to legally provide for such services. wharves. Series of 2008 entitled "Revised Rules and Regulations on ARB Membership Status and Valuation and/or Transfer of PaidUp Share Capital in Agrarian Reform PlantationBased Cooperatives dated September 4. communication services. water and other natural resources subject to compliance with the laws and regulations on environmental and ecological controls; and (5) Provision of financial. forestry. Subject to reasonable terms and conditions that may be imposed by the DAR and the Authority.31 and 74 of RA 9520 and the Bylaws of the Cooperative. (5) PreMembership Education Seminar (PMES); (6) Economic Survey; (7) Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name; (8) Mother CLOA in case of plantation based ARBs; (9) Written verification from the DAR to the effect that the cooperative organization is needed and desired by the beneficiaries; results of a study that has bee conducted fairly indicate the economic feasibility of organizing the same and that will be economically viable in the operations; that at least majority of the members are Agrarian Reform Beneficiaries. machinery.000. Section 11. a duly registered Agrarian Reform Cooperatives shall have preferential right/treatment form the government in the following matters: (1) In the construction. Section 8. maintenance and management of roads. In case the ARB Coop engages in Transport Service. aquacultural. plantationbased Agrarian Reform Cooperative which is covered by collective Certificate of Land Ownership Award (CLOA). technological. 2008" including any amendments thereto or subsequent issuances. For purposes of registration with the Authority. irrigation systems. bridges. Agrarian Reform Cooperative. production inputs. Cooperative Name. 9520) and by the concerned government agency. Agrarian Reform Cooperatives shall have a minimum paid up capitalization of Fifteen Thousand Pesos (P15. Section 7. Privileges. All cooperatives organized for any or all of the purposes/objectives enumerated under Section 3 of this Rule shall always bear the word "Agrarian Reform" whether engaged in the operation of public utilities and services and/or other business activities/services. that it meets the requirements and conditions imposed by the appropriate government agency granting the Franchise or Certificate of Public Convenience and Necessity. otherwise known as the Philippine Cooperative Code of 2008. Agrarian Reform Cooperative may lease public lands for a period not exceeding twenty five (25) years. provided the application for renewal shall be made one (1) year before the expiration of the lease and such lease shall be for the exclusive use and benefit of the beneficiaries and marginal farmers subject to the provisions of the CARP. the same shall be referred to the said agency and it shall be resolved in accordance with the DAR regulation. or land management in areas covered by agrarian reform and such other similar matters affecting the Agrarian Reform Cooperatives shall be regulated by the DAR. (2) In the grant of Franchise and Certificate of Public Convenience and Necessity for the operation of public utilities and services: Provided. it shall. in cases where the dispute/s fall within the jurisdiction of the DAR. as amended. land development. for the benefit of the workers shall be collectively owned through a Mother CLOA by the worker beneficiaries under a cooperative setup. Directors. estates. facilities and equipments to such agrarian reform cooperatives shall be provided by the Government. subject to renewal for another twenty five (25) years only. Manner of election and qualifications of Officers. 9520. development of an appropriate system of land tenure. If the electric service provided fails to provide the services requested within a period of one (1) year. This Rules shall cover all Insurance Cooperatives duly registered under R. Board of Directors and Committees; c. . Any Financing Program to be availed of by ARB Coops shall be in accordance with the joint program to be developed by the DAR. Section 17. upon the request of an Agrarian Reform Cooperative. Section 12. All investments made by the said Agrarian Reform Cooperative for the electrification of the agrarian reform resettlement areas shall be subject to the electric services provider once it takes on the service. Section 2. Organization. the matter may be settled through voluntary arbitration or in court of competent jurisdiction. the Agrarian Reform Cooperative may undertake to provide the electric services in the area through its own resources. Lease of Public Lands. Cooperative Estates. RULE III INSURANCE COOPERATIVES Pursuant to the provisions of Art. land consolidation. All matters relating to land valuation and assessment shall be regulated by the LBP. Intra/inter cooperative disputes shall other than land disputes. All matters relating to land acquisition. Section 16. immediately provide electric services to the agrarian reform areas. the Commission and the Authority in consultation with the concerned cooperative sector hereby promulgate the following rules and regulations for the proper guidance and compliance of the Insurance Cooperatives. Should such conciliation mediation proceedings fail. Section 14. Regulatory Power..A. as far as practicable. Exercise of rights and privileges of members; b. Coverage. 9520 organized for the purpose of engaging in the business of insuring life and property of cooperatives and their members. The Government shall provide the necessary financial and technical assistance to Agrarian Reform Cooperatives to enable them to discharge the purposes and objectives under Section 3 of this Rule which shall be in accordance with a joint program for the organization and financing of the Agrarian Reform Cooperatives. Settlement of Disputes. The Authority shall have the power to regulate the internal affairs of Agrarian Reform Cooperative such as: a. In case of electric service provider in the area. The technical assistance. the BSP. Other matters relating to the internal affairs of Agrarian Reform Cooperatives. 108 under Chapter XIII of Republic Act. as amended. Fifteen (15) or more duly registered cooperatives may organize as Insurance Cooperative. Financing Program. and Committee Members; d. Landholdings like plantations. or haciendas acquired by the State in accordance with the CARP. Section 15. Formulation of rules and procedures and the conduct of meetings of General Assemble. be settled amicably through the conciliation and mediation mechanism embodied in the Bylaws of the cooperative. No. However. Allocation and distribution of surplus; and e. The joint program shall be geared towards the gradual assumption of full ownership and management control of the cooperative estate by the Agrarian Reform Cooperatives. Section 13. which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation Mediation for Cooperative Disputes and in applicable laws. Section 1. Assistance. and the Authority. Section 9. after due notice and hearing. A CIS serving the insurance needs of nonmember cooperatives and the general public shall be required to get a commercial insurance license from the Insurance Commission. Capitalization. livestock protection and equipment insurance. Such other function as the need arises. In order to fully implement the provisions of this Rule. rules or regulations. Regulatory Power. The representative from the Authority shall Chair of the Committee. those already engaging in such shall be given two (2) years transition period to undertake any of the following options: To organize an insurance cooperative with other primary cooperatives that have the same insurancelike business activity; (2) To join an existing Insurance Cooperative; (3) To partner with licensed microinsurance providers; and (4) To buy a microInsurance product through a licensed agent or broker. insurance like and other similar activities with their members. retirement plans. Limitation. are prohibited to engage in insurance. Section 10. crop. Formulation of rules and procedures and the conduct of meetings of the General Assembly. endowment with health and accident coverage.Section 3. . a Joint Committee. To oversee the implementation of this Rule; 2. Registration Jurisdiction. Joint Committee. Board of Directors and Committees; c. Primary Cooperatives which are not registered and licensed to operate as Insurance Cooperative. An Insurance Cooperative registered with the Authority pursuant to this Rule shall secure a Certificate of Authority from the Commission within two (2) years from the date of its registration. fire insurance. Section 12. Section 11. Failure to secure the same shall be a ground for the revocation/cancellation of the certificate of Registration. Functions of the Joint Committee. bonding. To ensure compliance with the administrative and other requirements of the Authority and the Commission; 3. motor vehicle coverage. Other matters relating to the internal affairs of Insurance Cooperatives. and Committee Members; d. It may also provide "microinsurance products" and regular insurance to cooperatives and its members. The Joint Committee shall be constituted within thirty (30) days upon effectivity of these Rules and Regulations. insurance like. Suspension or Revocation of Certificate of Authority. Purposes and Objectives. Section 4. life insurance with special group coverage. Membership. Cooperatives intending to engage in insurance. To make recommendation on the amendment of this Rule as maybe necessary; and 4. Directors. Any applicant cooperative proposing to engage into the business of insuring life and property of cooperatives and their members shall file their duly accomplished application for registration with the CDA Central Office Registration Division. Exercise of rights and privileges of members; b. but not limited to. Said Certificate of Authority shall be valid until the 30th day of June of the year following its issuance. Manner of election and qualifications of Officers. or any provisions of the Insurance Code. The Joint Committee shall have the following functions: 1. and other similar activities shall register with the Authority and secure a Certificate of Authority from the Commission. However. An Insurance Cooperative shall provide its constituting members different types of insurance coverage consisting of. All matters relating to the organization and operations concerning insurance business of such Insurance Cooperative shall be regulated by the Commission as provided for in the Insurance Code and other related laws. Section 8. Section 6. suspend or revoke the Certificate of Authority issued to an Insurance cooperative for violation of any existing laws. However. loan protection. Allocation and distribution of net surplus; and e. CIS are not allowed to serve the insurance needs of other cooperatives that are not memberowners of the CIS. The Commission may. to be composed of two (2) representatives each from the Authority and the Commission and a representative from the Insurance Cooperatives shall be formed. Membership in Insurance Cooperative shall be open to all duly registered cooperatives of all types and categories Section 5. The Authority shall have the power to regulate the internal affairs of Insurance Cooperative such as: a. This Rule shall apply to all cooperative duly registered with the Authority under R. Deed of Sale. the matter may be settled through voluntary arbitration by the Authority or in court of competent jurisdiction. The following shall be complied with upon filing of application: (1) Name Verification Slip; (2) Articles of Cooperation and Bylaws; (3) Sworn statement of the treasurer elected by the subscribers showing that at least twentyfive per centum (25%) of the authorized share capital be less than Fifteen Thousand Pesos (P15. However. Section 1. RULE IVWATER SERVICE COOPERATIVES Pursuant to the provisions of Art. local government building or facility.A. which shall have jurisdiction over the said cooperatives. Section 3. For purposes of registration with the Authority. and applicable laws. Intra/inter cooperative disputes shall be settled as far as practicable through conciliationmediation mechanism embodied in the cooperative bylaws. having a common bond of interest and actually residing or working in the intended area of operation. place worship. etc. . 111 (3) under Chapter XIV of Republic Act.00). Coverage. the same shall be referred to the said agency and it shall be resolved in accordance with the Commission regulation. shall be entitled to the preferential rights and privileges as indicated in the Cooperative Bylaws and under the Code. Membership in Water Service Cooperative. and manage water supply systems for the provision and distribution of potable water to its members and other customers. other cooperative. Section 6. in cases where the dispute/s fall within the jurisdiction of the Commission. Deed of Donation. the LWUA. a Water Service Cooperative shall have a minimum paidup capitalization of Fifteen Thousand Pesos (P15. Section 5. Lease Agreement. Registration Jurisdiction. However. Section 4. 9520 whose main purpose or one of its purposes is to own. of legal age. Requirements for Registration. No. industrial and commercial establishment. Fifteen (15) or more natural person who are Filipino citizens.000. Regular Member refers to a natural person (memberconsumer) with water service connection with the right to voted upon and entitled to all the rights and privileges of membership under the Code. It shall also refer to member institution or entity availing of the services of Water service Cooperative. Organization. Water Service Cooperatives shall file their application with the CDA Extension Office. etc. may organize a Water Service Cooperative.All existing Insurance Cooperative with members which are noncooperative and/or cooperative oriented societies and organizations are hereby given five (5) year period to terminate and remove such entities from their member registry. Associate Member refers to a natural person other than a regular member of the household. which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation of Cooperative Disputes. Settlement of Disputes. Should such conciliationmediation proceedings fail. and concerned cooperative hereby promulgates the following rules and regulations for the proper guidance and compliance of the Water Service Cooperative. but not limited to: corporation. but is not entitled to vote and be voted upon. Capitalization. b. Membership in Water Service Cooperative is composed of two kinds: a. joint venture.000. 9520. Section 2.) (9) Well Drilling Data (in case of existing groundwater source ) including Physical & Chemical Analysis of water; and (10) Registration fee.00); (4) Surely Bond of Accountable Officers handling funds properties and securities; (5) Certificate of PreMembership Education Seminar (PMES); (6) Economic Survey; (7) Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name; (8) Land Ownership (any of the following: Certificate of Title Declaration. operate. as maybe represented by the head of such establishment or entity. Failure to comply within the given period shall constitute a violation of this Rule and shall be dealt with accordance with the provision of RA 9520 and other applicable laws. otherwise known as the Philippine Cooperative Code of 2008. the Authority in consultation with the NWRB. such as. Section 13. Lease Agreement. For domestic purpose 1. Water Permit. sworn to by the applicants and supported by the following documents: 1. Certificate of Potability; 12. 2. Such other documents that may be required by the NWRB. Proof of land ownership of. Latest Audited Financial Statements for the last two years. Requirements for Filing Water Permit Applications. Favorable Endorsement from LWUA; 5. the property on which the water source is situated; 2. For Municipal Use 1. Clearance from DOH. Plan of water distribution system; 9. Certificate of Conformance from the LWUA; 4. Section 9. Duly accomplished Water Permit Application and Notices; 2. Environmental Compliance Certificate (for projects considered as Environmentally Critical Projects Areas) or Certificate of NonCoverage from the Department of Environment and Natural Resources Regional Office; and 8. The following documents are required to be submitted for an Application for a CPC and Approval of Tariff: 1. Requirements for the Issuance of CPC and Tariff Approval. Well drilling Data (in case of existing ground water source): and 7. if applicable; . Land Ownership (any of the following: Certificate of Title. Vicinity map/Location Plan with scale : 1:10. Articles of Cooperation and ByLaws; 3. or right to use. Approved water permits and/or MOA with water service provider. legal title to. Well Drilling Data (in case of existing groundwater source authenticated by the well driller) including Physical and Chemical. Every Water Service Cooperative shall secure a water permit from the NWRB in accordance with the provisions of the Water Code of the Philippines. Deed of Donation. Official receipt of annual water charge(s); 7. Special Power of Attorney authorizing the signatory to sign and file the application; 4. Certificate of Conformance from LWUA; 4. Clearance that applicant has no unpaid fees and charges from NWRB; 8. The cooperative shall only provide services within the area specified in the CPC. Deed of Sale. Plan elevation and crosssectional views of tank/reservoir; 10. Submission Plan (if applicable); 6. Vicinity map/Location Plan with scale : 1:10. Subdivision Plan (if applicable); 6. etc; 3. in case of bulk water supply; 6. Plan elevation and crosssectional views of pump house. if reuse of wastewater for human consumption.Section 7. In case of expansion. the cooperative shall apply for an extension of service area with the NWRB. Tax Declaration. Analysis water; 7.000 or scale 1:500 showing the exact location of the point of diversion; 5. Certificate of Registration with the Authority; 3. Service Area. All applications shall be filed in the prescribed form. Section 8. machinery and equipment; 11. Section 10. Certificate of Registration from the Authority; 2.000 or scale 1:500 showing the exact location of the point of diversion; 5. Income Statement b. Section 13. The Authority shall have the power to regulate the internal affairs of Water Service Cooperative. Actual Balance sheet showing Balance Sheet items for water operations for the last 2 years. Directors. 13. maintain. Other matters relating to the internal affairs of Water Service Cooperatives. Every Water Service Cooperative shall operate. such as: a. and provide safe and adequate potable water service. Service Coverage . Levels of Service agreed with consumers commensurate with proposed rates. Responsibility of Water Service Cooperative. In all cases where practicable. Such other assistance as maybe requested by the cooperatives. the Water Service Cooperative's responsibilities shall include: 1. To provide technical assistance such as capacity building; 2. Regulatory Power. Manner of election and qualifications of Officers. Whenever two or more public service entities have competing interests with respect to the granting and renewal of CPC and one is an Water Service Cooperative duly registered with the Authority under R. Exercise of rights and privileges of members; b. Allocation and Distribution of surplus; and e. Accumulated Depreciation e. Preferential Rights. Board of Directors and Committees; c. Projected Financial Statement for five years with the following: a. The LWUA shall have the following roles relating to Water Service Cooperative: 1. Customers Deposits 14. Section 14. Accounts receivable Water Supply b. Proposed schedule of water rates; and 20. and Committee Members; d. 9520. Itemized list of new investments for the next 5 years; 19. water tariff.A. Assumptions 18. Property and Equipment in Service. ROLE OF LWUA. the NWRB shall accord preference to the latter over any type of public service entity. To assist in the determination of water potability; and 3. Formulation of rules and procedures and the conduct of meetings of the General Assembly. if applicable; 16. Actual Income Statement showing Income Statement items for water operations for the last 2 years. equipment and facilities. Service Standards a. Balance Sheet c. Section 11. All matters relating to the Certificate of Public Convenience such as capitalization and investment requirements. if not available. at cost d. and such other matters affecting their water service operations shall be governed by the NWRB. This should support the Property and Equipment in Service referred to in item 10 above; 15. submit the following: a. Section 12. the concerned Water Service Cooperative shall give notice to its memberconsumers in advance of any contemplated interruption of water supply and the probable duration thereof in the area(s) affected. In addition. Business plan for the next 5 years; 17. Itemized list of assets entitled to return as of the end of the last historical year. Materials Inventory c. Property and Equipment in Service. Plan elevation and crosssectional views of pump house. the cooperative shall develop its own Customer Service Code consistent with its Bylaws and in compliance with the NWRB Economic Regulatory Guidelines. Certificate of Good Standing issued by the Authority; 3. Official receipts of Annual Water change; 5. Water Quality c. Standard Response Time 4. Account Receivable Water Supply b. Actual Balance Sheet showing Balance Sheet items for water operations for the last 5 years. Approved Water Permits; 4. This should support the Property and Equipment in Service referred to in item 13 (c) above; 15. if not available. Plan elevation and crosssectional views of tank/reservoir; 9. Materials Inventory c. Sanctions and Penalties. Customers' Deposits 14. Official receipt of Supervision and Regulation Fee; 6. The following requirements to be submitted: 1. b. Plan of Water Distribution System; 8. Other reports required by the NWRB. Accumulated Depreciation e. Section 15. Annual Reports for the last five years; 12. Board Resolution authorizing the signatory to sign and file the application; 2. Operational Performance a. Customer Service a. Latest Audited Financial Statement for the last five years; 13. Reporting Requirements. Clearance that applicant has no unpaid fees and charges from the NWRB; 7. All Water Service Cooperatives shall submit reports to the Authority as required under Rule 8 of the Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008 (RA 9250). Actual Income Statement showing Income Statement items for water operations for the last 5 years; . at cost d. Section 17. Operational Efficiency b. Service Request and Complaints b. machinery and equipment; 10. Financial Viability 3. All Water Service Cooperative shall be subjected to corresponding Sanctions and Penalties as maybe imposed by the Authority and the NWRB for violation or noncompliance with administrative and statutory requirements. Section 16. Operating Policies and Procedures on Billing and Collection 5. Protection of MemberConsumers In relation to this Section. Itemized list of assets entitled to return as of the end of the last historical year. The CPC shall be valid for five (5) years and renewable prior to its expiry date. the DOH and other government agencies shall likewise be submitted to the concerned agency. Requirements for Renewal of CPC. submit the following: a. Reliability of Supply 2. Certificate of Potability; 11. after due process. distribution and marketing of spare parts and supplies; and (4) Marketing of vehicle/drivers insurance policies. Section 2. Business plan for the next 5 years; 17. Section 3. LTFRB. shall be governed by Chapter XIV of RA 9520. hereby promulgates the following rules and regulations for the proper guidance and compliance of Transportation Service Cooperatives. Intra/inter cooperative disputes shall be settled as far as practicable through conciliationmediation mechanism embodied in the cooperative bylaws. Transportation Service Cooperative organized under the provisions of Executive Order No. as provided in this Rule and other requirements as may be prescribed by appropriate regulatory agencies; and 4. Series of 1983. for the safe conveyance of passengers and/or cargo. 9520. This Rule shall cover all Transportation Service Cooperatives duly registered with the Authority under RA 9520 which are organized to render public services such as land and sea/water transportation services. Section 1. the Authority in consultation with the DOTC. the same shall be referred to the said agency and it shall be resolved in accordance with the NWRB regulation. Amended Article of Cooperation and ByLaws; 2. 16. . failure of the cooperative to legalize its operation within two (2) years from the date of referral to the NWRB. the Authority shall report the matter to the NWRB for appropriate action. Section 19. LTO. Section 20. CETOS; 3. 2) under Chapter XIV of Republic Act. Amendment Fee. Should such conciliationmediation proceedings fail. otherwise known as the Philippine Cooperative Code of 2008. 898. Securing of Water Permit and/or CPC. Proposed Schedule of Water Tariff; and 20. 113 (par. No. Upon submission of the complete requirements for the issuance of CPC. Assumptions 18. MARINA. Settlement of Disputes. Income Statement b. Subject to pertinent national laws and local ordinances. Henceforth. and applicable laws. Franchise and vehicle units requirement. may engage in a business related to transportation service. Allied Businesses by Transportation Service Cooperative. However. OTC and the concerned cooperative sector. For Water Service Cooperative operating without water permit and/or CPC. Balance Sheet c. The NWRB shall notify the Authority of whatever action taken on the matter. distribution and marketing of petroleum products in accordance with existing laws; (2) Operation of gasoline stations and transportation service centers; (3) Importation. Coverage. the matter may be settled through voluntary arbitration or in court of competent jurisdiction. in cases where the issue/s fall within the jurisdiction of the NWRB. Multipurpose Cooperatives intending to engage in Transportation Service. Water Service Cooperative including MultiPurpose Cooperative with water service operation is required to secure water permit from the NWRB. primary Transportation Service Cooperatives including secondary and tertiary federation of cooperatives. the same shall be considered a valid ground for the revocation of its Certificate of Registration. Levels of Service agreed with consumers commensurate with proposed rates. Section 18. Projected Financial Statement for five years with the following: a. RULE V TRANSPORTATION SREVICE COOPERATIVES Pursuant to the provisions of Art. Multipurpose cooperatives intending to engage in regular passenger and/or cargo services as an additional activity shall comply with the foregoing requirements: 1. limited to small vessels. Action on the Application for CPC. Itemized list of new investments for the next 5 years; 19. the NWRB shall approve or reject the same within six (6) months from date of receipt thereof. including but not limited to: (1) Importation. which shall be in accordance with the CDA Guidelines for the Implementation of ConciliationMediation of Cooperative Disputes. and by this Rule. That in no case shall the paidup share capital be less than Fifteen Thousand Pesos (P15. Transportation Service Cooperatives shall have a minimum paid up capitalization of Fifteen Thousand Pesos (P15. Registration Requirements. Section 7. WATER Ship P 10. to operate as such.000.00 2 B.00 5 Jeepney P 30.000. The Authority shall have the power to regulate the internal affairs of Transportation Service Cooperative. and Committee Members; d. Section 5.000.000. Capitalization. Formulation of rules and procedures and the conduct of meetings of the General Assembly.00 1 Section 6.000. Regulatory Power. Registration Jurisdiction. SERVICE CAPITALIZATION OF UNITS COOPERATIVE A.000. Manner of election and qualifications of Officers. Exercise of rights and privileges of members; b. 000. .00 1 Ferry Boat P 5.00).000. Other matters relating to their internal affairs of Transportation Service Cooperatives.000.000. such as: a.Section 4.00); (4) PreMembership Education seminar (PMES); (5) Cooperative Education and Transport Operation Seminar (CETOS); (6) Surety Bond Of Accountable Officers handling funds.000.000. Transportation Service Cooperative shall file its duly accomplished registration documents with the CDAExtension Office where its principal office is located. Allocation and distribution of surplus; and e. properties and sureties; (7) Economic Survey; (8) Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name; (9) Undertaking to comply with the auditing and accounting standards prescribed by the Authority; (10) Other requirements as may be required by law; and (11) Registration Fee. For purposes of registration with CDA. 000. which shall have jurisdiction over the said cooperative.00 5 AUV/FX/Van P 30. However. The following shall be complied with upon filing of application: (1) Name Verification Slip; (2) Articles of Cooperation and Bylaws; (3) Sworn Statement of the treasurer elected by the subscribers showing that at least twentyfive per centum (25%) of the authorized share capital has been subscribed and least twentyfive per centum (25%) of the total subscription has been paid: Provided. Directors.00 5 Taxi P 30.00 1 Motorized Banca P 100.00 5 Mini Bus/Bus P 50. Board of Directors and Committees; c. the minimum capitalization and number of cooperatively owned units shall be in accordance with the rules and regulations prescribed by the concerned government agency as shown below: TYPE OF TRANSPORTATION MINIMUM MINIMUM NO. LAND Tricycle P 15.00 2 Trucks for Hire P 50. and other matters necessary to exercise such functions. in cases where the issue/s fall within the jurisdiction of the DOTC. RULE VI ELECTRIC COOPERATIVES Pursuant to the provisions of Art. Intra/Inter cooperative dispute shall be settled as far as practicable through conciliationmediation mechanism embodied in the cooperative bylaws. Monitoring Committee. it shall not be precluded to venture into any other purpose that other laws. conduct of meeting. Settlement of Disputes. Should such conciliationmediation proceedings fail. including hybrid systems. all things being equal. the matter may be settled through voluntary arbitration or in court of competent jurisdiction. LTFRB. dropping and substitution of units. Section 8. Section 9. The Authority shall establish a committee for the monitoring of Transportation Service Cooperative composed of representative from the Authority. OTC. Section 10. frequencies. LTO. The concerned agencies involved in the Transportation Service Cooperative shall form a trainer's team which shall formulated educational program/module to be used in the training seminar. However. LGU. preference shall be given to a Transportation Service Cooperative by the concerned government agency. who shall be ExOfficio Chairperson thereof. and their own Bylaws may allow as long as it is related to the primary purpose and objective of the cooperative. The Authority shall likewise create a Local Monitoring Committee in its extension offices to facilitate the monitoring of these Transportation Service Cooperatives.All matters relating to the Franchise or Certificate of Public Convenience and Necessity of Transportation Service Cooperatives such as capitalization and investment requirements. In the case of Tricycle Transportation Service Cooperative. Renewal of Franchise and Vehicle Registration. which shall be in accordance with the CDA Guidelines for the Implementation of ConciliationMediation of Cooperative Disputes. The permanent Secretariat shall come from the Authority. Continuing Education and Training. Section 1. and such other matters affecting their transportation service operations shall be governed by the following government agency: (a) For land transportation LTFRB/LTO/OTC (b) For water transportation MARINA/PCG (c) For tricycle LGU/LTO/OTC In case there are two (2) or more applicants for the same public service Franchise or Certificate of Public Convenience and Necessity. Purposes and Objectives. acquisition. the Authority in consultation with the concerned cooperative sector hereby promulgates the following rules and regulations for the proper guidance and compliance of Electric Cooperatives. the LTO. LTFRB. Section 11. 9520. ratefixing. regulations. rules. Electric Cooperatives shall be organized to undertake power generation utilizing new and renewable energy sources. and OTC the same shall be referred to the said agencies and shall be resolved in accordance with their regulations. and other concerned government agencies as may be necessary. otherwise known as the Philippine Cooperative Code of 2008. and the National Federation of Transportation Cooperatives. 134 (par.2) under Chapter XVII of Republic Act No. and operation of sub transmission and/or distribution and supply of electricity as its primary purposes. The concerned government agencies shall coordinate to support registered cooperatives by extending seminars for the purpose of continuing education on cooperative and other related trainings in order to enhance the knowledge and capability of the officers as well as members of the cooperative. However. The Committee shall have the following functions: (1) To oversee the implementation of this Rule; (2) To recommend changes on this Rule from time to time if a need arises; (3) To assist as far as practicable the cooperative in settling inter and intra cooperative disputes; (4) To submit quarterly accomplishment report including recommendation/resolution to be adopted in the settlement of the aforesaid disputes to the CDA Board of Administrators through the Executive Director and to the OTC Board of Directors through its Executive Director copy furnished all agencies involved. Said Committee shall likewise be organized within ninety (90) days from the receipt of the rules and functions formulated by the National Committee convene every quarter to discharge its functions and appoint a Secretary from among its members. a Certificate of Operation from the Local Government Unit concerned shall be required as proof that it has continuously provided the required public transportation services. It shall also continue to undertake the implementation of the Rural Electrification Program in their respective areas of coverage in consonance with the . registration. Said Committee shall be organized within thirty (30) days from the effectivity of this Rule and establish its own internal rules as to its operation. and applicable laws. equipment and facilities. MARINA. Renewals of franchise and vehicle registration shall be granted to Transportation Service Cooperatives provided such cooperative presents a Certificate of Good Standing from the Authority and the OTC. Education. onevote. members have equal voting rights of onemember. Democratic Member Control Electric Cooperatives are democratic organizations that are controlled by their members who actively participate in setting their policies and making decisions.A. Cooperation Among Cooperatives Electric Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local. They shall receive limited compensation or limited interest. or raise capital from external sources. managers. selfhelp organizations controlled by their members. political or religious discrimination; 2. elected and appointed representatives. Section 2. or officers are accountable to the membership. but are not limited to. Voluntary and Open Membership Electric Cooperatives are voluntary organizations. shall be entitled to the preferential rights and privileges as indicated in the bylaws and under the Code. Membership in the Electric Cooperatives. Coverage. open to all persons able to use their services and willing to accept the responsibilities of membership. other cooperative. Cooperatives at other levels are organized in the same democratic manner; 3. Concern for Community Electric Cooperatives work for the sustainable development of their communities through policies approved by their members. shall not be diminished. but not limited to: corporation. This Rule shall also cover new distribution utilities that will register with the Authority. and employees so that they can contribute effectively and efficiently to the development of their cooperatives; 6. The following are the requirements for the registration of electric cooperatives which shall be submitted in four (4) copies to the Authority: A. Membership in Electric Cooperatives registered with the Authority shall have the following types: a. on capital subscribed and paid as a condition of membership. In primary cooperatives. part of which should at least be indivisible; benefiting members in proportion to their patronage of the cooperative's business; and supporting other activities approved by the membership; 4.terms and conditions appurtenant to their Certificates of Franchise; provided the right of the Electric Cooperatives to exercise the power of eminent domain in furtherance of the rural electrification program. etc. Section 3. national. Members allocate surpluses for any or all of the following purposes: developing the cooperative by settingup reserves. industrial and commercial establishment. if any. as represented by its head of such establishment or entity. including government. Training and Information Electric Cooperatives shall provide education. Regular Member refers to a natural person (memberconsumer) with electrical service connection who has the right to vote and be voted upon and entitled to all the rights and privileges of membership under the Code. but is not entitled to vote and be voted upon. without gender. This Rule shall apply to all Electric Cooperatives registered with the Authority under R. Duly audited financial statement for the past two (2) immediately preceding years; . certificate true copy of the board resolution certifying the result of the vote approved through a referendum approving the registration of the cooperative with the Authority in compliance with Article 128; 2. However. the capital of their cooperative. subject to the requirements of the Constitution and existing relevant laws. joint venture. Electric Cooperatives registered with the Authority shall conduct their affairs in accordance with Filipino culture. and democratically control. training and information for their members. 9520 that may undertake power generation utilizing renewable energy sources. Associate Member refers to a memberinstitution or entity availing of the services of electric cooperative.1 For existing electric cooperative not registered with the Authority: 1. good values and experience and the universallyaccepted principles of cooperation which include. including hybrid systems. Member Economic Participation Members of the Electric Cooperatives contribute equitably to. If they enter into agreements with other organizations. acquisition and operation of sub transmission or distribution as its primary purposes. b. the following: 1. Cooperative Principles and Practices. Certified copy of Articles of Cooperation and ByLaws; 3. directors. such as. racial. Section 4. Registration Requirements. Section 5. At least part of that capital is the common property of the cooperative. social. place of worship. regional and international structures; and 7. instead it shall be in full force and effect. Autonomy and Independence Electric Cooperatives are autonomous. they shall do so on terms that ensure democratic control of their members and maintain their cooperative autonomy; 5. Men and women serving as elected representatives. local government building or facility. Registration Documents: a. as amended. Upon submission of the abovementioned documents. 269. Registration fee as prescribed by the Authority. Unless otherwise provided in the Bylaws of the cooperative. Articles of Cooperation and Bylaws; and 3. Jurisdiction Upon Registration. and such registration has been processed and approved by the CDA Central Office. which shall have jurisdiction over the said cooperatives upon approval of their registration.A. Sworn Statement of the Treasurer of the authorized share capital. Articles of Cooperation and Bylaws; 4. which opt not to register with the Authority. The Board of Directors shall undertake the following: . Procedure in the Conduct of Referendum for registration with the Authority. Certificate of Registration and/or Certificate of Confirmation; 2. Surety Bond of Accountable Officers handling funds. Electric Cooperatives registered with the National Electrification Administration (NEA) under Presidential Decree No. properties and sureties; 6. Latest audited financial statement. The registration on an Electric Cooperative with the Authority under Article 127 of the Code shall be submitted for approval to the members through a referendum. Section 7. if an electric cooperative opted to register with the CDA Central Office as provided for in the preceding Section.000. BOD Initiated Referendum. 9520. Undertaking to comply with the auditing and accounting standards prescribed by the Authority. Surely Bond Accountable Officers handling funds. Economic Survey; 8. at the option of the Cooperative. Section 8. to be submitted within six (6) months from the registration; and 6. properties and sureties; a. the term member in good standing shall be as defined in the Code of in this Rule. 4. Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name; 9. Certified true copy of the Grant Franchise; 3. a. 128 of RA 9520 hereunder are the procedures in conducting the same: A. 144 of the Code: 1. Electric Cooperative Deemed Registered under Art. the subscribed share capital of the members. as a voting procedure. the Authority shall issue the new certificate of registration to the Cooperative. and the amount of paidup share capital of members and the amount of paidup share capital received by the Treasurer. The required number of votes for registration with the Authority shall be twenty percent (20%) of all members in good standing within the area of coverage.2 For new electric cooperatives: 1. However. The said documents shall be submitted to the nearest office of the Authority of to the CDA Central Office. That in no case shall the paidup share capital be less than Fifteen Thousand Pesos (P15. Certificate of PreMembership Education seminar (PMES); 7. Registration of Electric Cooperatives.3. are allowed to retain the world "cooperative" in their registered names. but they shall not be entitled to the benefits and privileges provided under R. List of names of incumbent Board of Directors and their addresses certified by the Board Secretary and attested to by the Chairperson; 5. specially called for such purpose.00); 5. Section 9. In compliance with Art. Name Verification Slip; 2. Section 6. No proxy voting shall be allowed. Detailed feasibility study indicating viability of the proposed business activity; and 10. Electric Cooperative intending to register with the Authority shall file their application with the CDA Extension Office. such registration shall be forwarded to the CDA Extension Office where the cooperative is located and the same Extension Office shall assume jurisdiction over the said cooperative. B. Sworn Statement of the treasurers elected by the subscribers showing that at least twentyfive per centum (25%) of the authorized share capital has been subscribed and at least twentyfive per centum (25%) of the total subscription has been paid: Provided. Registration Options. Mode of Conduct of the Referendum which may either be: b. rates and Tariffs. Section 13. which are found to be inconsistent or contrary to the provisions of the Code and of this Rule shall be amended accordingly. Section 15. which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation of Cooperative Disputes. Any provision or any part thereof in the existing Articles of Cooperation and Bylaws of the cooperative.000. Section 11. Electric Cooperatives shall issue and distribute share certificates under the name of each of their members. in four (4) copies for registration. however. Posting/Publication of Notice of referendum shall be done not later than 30 days prior to the scheduled conduct of referendum. The general membership through their proponents for referendum shall submit all the documentary requirements for resignation to the concerned CDA Extension Office. 6. the term of office of the members of the Board shall not exceed two (2) years. Failure of the Board of Directors to act within the given period or the denial of the petition. Intra/inter cooperative disputes shall be settled as far as practicable through conciliationmediation mechanism embodied in the cooperative bylaws. quorum shall be five per centum (5%) of all the members entitled to vote. the matter may be settled through voluntary arbitration or in court of competent jurisdiction. Section 16. through the payments made. Collection of Questionnaire forms and canvassing of Votes by the cooperative's Election Committee. B. Amendments of Existing Articles of Cooperation and Bylaws. 18 of the Code. Said share certificates shall take into consideration. among others. Settlement of Disputes. the petitioners may conduct motu proprio the said referendum through the procedures above prescribed. Section 10. Unless otherwise provided in the Bylaws of the Electric Cooperative. Provision of Referendum Questionnaire Form to qualified members to vote whether to register or not to register with the Authority. However. Share Capital in the Electric Cooperatives. Section 12. All electricity rates and tariffs of electric cooperatives registered under the Authority shall be subject to the rules on application and approval of and by the Energy Regulatory Commission. Rule 10 of the Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008 (RA 9520). The Board of Directors shall act within thirty (30) days from receipt thereof whether to grant or deny said petition. 5. in cases where the issue/s fall within the jurisdiction of the Energy Regulatory Commission. 3. In case the Board of Directors shall refuse to conduct a referendum.1 survey Form; and b. Term of Office. RULE VIIDAIRY COOPERATIVES . Unless otherwise provided in the Bylaws of the Electric Cooperative. The result of the referendum shall be certified by a committee designated during the conduct of a referendum to supervise the same. Reporting of the results of the canvassing. Certification by the Election Committee as to the result of the referendum duly noted by the majority of the Board of Directors. they shall be eligible for reelection. 4. the MemberConsumers may initiate a referendum through a petition duly signed by at least three hundred (300) members of each district of the cooperation who are entitled to vote by filling the same to the Board of Directors.00). and applicable laws.2 Assembly Meeting in the respective districts which maybe simultaneous sequential.000. Identification of members in good standing based on the qualification and disqualification provisions in the Bylaws. capital buildup and other capital contributions. 1. the same shall be referred to the said agency and shall be resolve in accordance with this regulation. Said application for amendments shall be filed with the concerned CDA Extension Office or the CDA Central Office. the previous equity contributions. An electric cooperative shall not be registered with the Authority unless it complies with the financial requirements of minimum paid up capitalization of Five Million Pesos (P5. Capitalization. Such amendments shall conform to the provision of Art. The interest on share capital shall be paid to the members in accordance with the provision of Sec. i. which may register the applicant Electric Cooperative upon finding that all the documents for registration are complete and in order. MemberConsumer Initiated referendum. 2. Issue Notice referendum indicating the following: a.e. Quorum Requirement. Should such conciliationmediation proceedings fail. Date of Referendum; b. at the option of the Cooperative. 7. and the amortization component. Section 14. favor or not favor. 9. the Cooperative development Authority and National Dairy Authority hereby promulgated the following rules and regulations for the guidance and compliance of the Dairy Cooperatives. Directors.Pursuant to the provisions of Republic Act. That in no case shall the paidup share capital be less than Fifteen Thousand Pesos (P15. Registration Jurisdiction. balancing plant needs. Undertaking to Change Name in the event that another cooperative acquired prior right to the use of the proposed name; 8. such as: a. Purposes and Objectives. Coverage. Board of Directors and Committees; c. Capitalization. Sworn Statement of the treasurer elected by the subscribers showing that the least twentyfive per centum (25%) of the authorized share capital has been subscribed and at least twentyfive per centum (25%) of the total subscription has been paid: Provided. Any applicant Dairy Cooperative shall file its duly accomplished application for registration with the VDA Extension Office.A. 9520 organized for the purpose of engaging in the procurement. i. otherwise known as the Philippine Cooperative Code of 2008. Registration fee.00); 4. To assist its members a guaranteed market outlet. Other requirements as may be required by law; and 10. Manner of election and qualifications of Officers. Section 3. The following shall be compiled with upon filing of application: 1. Allocation and distribution of net surplus; and e. Section 4. including overorder premiums in milk marketing orders. Economic Survey; 7. of legal age. Section 5. Membership. regulatory and public relations arenas.000. uniformly of grade of milk. To standardize the quality. Section 7. Articles of Cooperation and Bylaws; 3. to bargain for the best price terms possible in the market place. All matters relating to the technical and operations concerning dairy business of such Dairy Cooperative shall be regulated by NDA. Settlement of Disputes. 9520. Exercise of rights and privileges of members; b. The Authority shall have the power to regulate the internal affairs of Dairy Cooperative. Section 2. Organization. . and to market the milk efficiently. A Dairy Cooperative shall be organized for any or all of the following purpose: 1.00). Regulatory Power.000. Section 8. properties and sureties; 6. This Rule shall cover all dairy Cooperatives duly registered under R. A Dairy Cooperative shall have a minimum paidup capitalization of at least Fifteen Thousand Pesos (P15. DOHBFAD and other concerned government agency. Registration Requirements. Surety Bond Accountable Offices handling funds. Section 9. may organize a dairy cooperative. and other dairy products; 2. Fifteen (15) or more natural persons who are Filipino citizens.e. Other matters relating to the internal affairs of Dairy Cooperatives. Membership in Dairy Cooperative shall be open to all dairy farmers. having a common bond interest and actually residing or working in the intended area of operation. diverting milk surpluses. Intra/inter cooperative disputes shall be settled as far as practicable through conciliationmediation mechanism embodied in the cooperative bylaws and in applicable laws. Undertaking to comply with the auditing and accounting standards prescribed by the Authority; 9. No. Section 1. which shall have jurisdiction over the said cooperative. and Committee Members; d. and assembling producer milk and to have the highest quality producer milk possible in the market; and 3. To effectively represent their constituting members in the legislative. Section 6. Name Verification; 2. Premembership Education Seminar (PMES); 5. Formulation of Rules and procedures and the conduct of meetings of the General Assembly. processing and marketing of milk and dairy products.. 2010 at the Senate of the Philippines. Unless otherwise stated in these Rules.Should such conciliationmediation proceedings fail. 52 of the Code. JUAREZ Chairman This Implementing Rules and Regulations (Part I) was approved by the Joint Congressional Oversight Committee on Cooperatives during its meeting on February 16. DOHBFAD the same shall be referred to the said agencies and shall be resolved in accordance with their regulations. Suppletory Rule. in cases where the issue/s fall within the jurisdiction of the NDA. the matter may be settled through voluntary arbitration by the Authority or adjudication by the Commission or in a Court of competent jurisdiction. and not inconsistent thereto. Special Rules. These Rules and Regulations shall be subject to automatic review three (3) years after the effectivity thereof. Amendment. A copy of these Rules shall be among the documents required to be kept ready and accessible for inspection and examination by the members of the cooperative and the Authority in accordance with Art. Circulars. If any provision of these Rules and Regulations is declared null and void or unconstitutional. House Panel The Lawphil Project Arellano Law Foundation . Any amendment thereto. Section 2. Pasay City pursuant to Article 138 of RA 9520. Interpretation. shall have suppletory application to these Rules. Section 4. Effectivity. These Rules and Regulations shall take effect fifteen (15) days after publication in the Official Gazette or in a newspaper of general circulation. Senate Panel Chair. Requirements. PABLO Chair. Section 3. The Authority is mandated to implement and enforce these Rules and Regulations. However. Section 7. Separability. Mandate. JUAN MIGUEL F. ZUBIRI Rep. Orders and other issuances by the appropriate government agencies in pursuance of the provisions of the Code and these Rules. ERNESTO C. the other provisions not affected thereby shall continue to be in force and effect. RECOMMENDING APPROVAL: THE BOARD OF ADMINISTRATORS COOPERATIVE DEVELOPEMNT AUTHORITY LECIRA V. In case of doubt as to the meaning of any provision of these Rules. Section 5. Members of the Joint Congressional Oversight Committee on Cooperatives. Section 6. COMMON PROVISIONS Section 1. For the Senate of the Philippines: For the House of the Representatives: Sen. shall be subject to the review and approval of the JCOCC. the same shall be resolved and interpreted liberally in favor of the cooperatives and their members.