Republic of the Philippines

Congress of the Philippines

Metro Manila
Fourteenth Congress
Second Regular Session
Begun and held in Metro Manila, on Monday, the twenty-eighth day of July, two thousand eight.
Republic Act No. 9520 February !" 2009
AN AC# A$%N&'N( #)% C**P%RA#'+% C*&% *F #)% P)','PP'N%S #* -% .N*/N AS #)% 0P)','PP'N% C**P%RA#'+% C*&% *F 20010
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::
S%C#'*N . Articles 1, 2, 3, 4 and 5 of ha!ter 1 on "eneral once!ts and #rinci!les of $e!u%lic Act &o. '(3), otherwise *nown as the +oo!erati,e ode of the
#hili!!ines,+ are here%y a-ended to read as follows:
C)AP#%R '
(%N%RA, C*NC%P#S AN& PR'NC'P,%S
+A$./01 1. Title. - .his Act shall %e *nown as the 0Philippine Cooperative Code of 20080.
+A$.. 2. Declaration of Policy.- /t is the declared !olicy of the 2tate to foster the creation and growth of coo!erati,es as a !ractical ,ehicle for
!ro-oting self-reliance and harnessing !eo!le !ower towards the attain-ent of econo-ic de,elo!-ent and social 3ustice. .he 2tate shall encourage
the !ri,ate sector to underta*e the actual for-ation and organi4ation of coo!erati,es and shall create an at-os!here that is conduci,e to the growth
and de,elo!-ent of these coo!erati,es.
+.oward this end, the "o,ern-ent and all its %ranches, su%di,isions, instru-entalities and agencies shall ensure the !ro,ision of technical guidance,
financial assistance and other ser,ices to ena%le said coo!erati,es to de,elo! into ,ia%le and res!onsi,e econo-ic enter!rises and there%y %ring
a%out a strong coo!erati,e -o,e-ent that is free fro- any conditions that -ight infringe u!on the autono-y or organi4ational integrity of
coo!erati,es.
+5urther, the 2tate recogni4es the !rinci!le of su%sidiarity under which the coo!erati,e sector will initiate and regulate within its own ran*s the
!ro-otion and organi4ation, training and reserach, audit and su!!ort ser,ices relati,e to coo!erati,es with go,ern-ent assistance where necessary.
+A$.. 3. General Concepts. - A coo!erati,e is an autono-ous and duly registered association of !ersons, with a co--on %ond of interest, who ha,e
,oluntarily 3oined together to achie,e their social, econo-ic, and cultural needs and as!irations %y -a*ing e6uita%le contri%utions to the ca!ital
re6uired, !atroni4ing their !roducts and ser,ices and acce!ting a fair share of the ris*s and %enefits of the underta*ing in accordance with uni,ersally
acce!ted coo!erati,e !rinci!les.
+A$.. 4. Cooperative Principles. - 1,ery coo!erati,e shall conduct its affairs in accordance with 5ili!ino culture, good ,alues and e7!erience and the
uni,ersally acce!ted !rinci!les of coo!eration which include, %ut are not li-ited to, the following:
+819 oluntary and !pen "embership - oo!erati,es are ,oluntary organi4ations, o!en to all !ersons a%le to use their ser,ices and
willing to acce!t the res!onsi%ilities of -e-%ershi!, without gender, social, racial, cultural, !olitical or religious discri-ination.
+829 Democrative "ember Control - oo!erati,es are de-ocratic organi4ations that are controlled %y their -e-%ers who acti,ely
!artici!ate in setting their !olicies and -a*ing decisions. Men and wo-en ser,ing as elected re!resentati,es, directors or officers are
accounta%le to the -e-%ershi!. /n !ri-ary coo!erati,es, -e-%ers ha,e e6ual ,oting rights of one--e-%er, one-,ote. oo!erati,es at
other le,els are organi4ed in the sa-e de-ocratic -anner.
+839 "ember #conomic Participation - Me-%ers contri%ute e6uita%ly to, and de-ocratically control, the ca!ital of their coo!erati,es. At
least !art of that ca!ital is the co--on !ro!erty of the coo!erati,e. .hey shall recei,e li-ited co-!ensation or li-ited interest, if any, on
ca!ital su%scri%ed and !aid as a condition of -e-%ershi!. Me-%ers allocate sur!luses for any or all of the following !ur!oses:
de,elo!ing the coo!erati,e %y setting u! reser,es, !art of which should at least %e indi,isi%le: %enefitting -e-%ers in !ro!ortion to their
!artonage of the coo!erati,e;s %u%siness: and, su!!orting other acti,ities a!!ro,ed %y the -e-%ershi!.
+849 $utonomy and %ndependence - oo!erati,es are autono-ous, self-hel! organi4ations controlled %y their -e-%ers. /f they enter
into aggree-ents with other organi4ations, including go,ern-ent, or raise ca!ital fro- e7ternal sources, they shall do so on ter-s that
ensure de-ocratic control of their -e-%ers and -aintain their coo!erati,e autono-y.
+859 #ducation& Training and %nformation - oo!erati,es shall !ro,ide education and training for their -e-%ers, elected and a!!ointed
re!resentati,es, -anagers, and e-!loyees, so that they can contri%ute effecti,ely and efficiently to the de,elo!-ent of their
coo!erati,es.
+8'9 Cooperation $mong Cooperatives - oo!erati,es ser,e their -e-%ers -ost effecti,ely and strengthen the coo!erati,e -o,e-ent
%y wor*ing together through local, national, regional and international structures.
8<9 Concern for Community - oo!erati,es wor* for the sustaina%le de,elo!-ent of their co--unities through !olicies a!!ro,ed %y
their -e-%ers.
+A$.. 5. Definition of Terms. = .he following ter-s shall -ean:
+819 "ember includes a !erson either natural or 3uridical who adhering to the !rinci!les set forth in this ode and in the Articles of
oo!erati,e, has %een ad-itted %y the coo!erati,e as -e-%er:
+829 General $ssembly shall -ean the full -e-%ershi! of the coo!erati,e duly asse-%led for the !ur!ose of e7ercising all the rights
and !erfor-ing all the o%ligations !ertaining to coo!erati,es, as !ro,ided %y this ode, its articles of coo!eration and %ylaws: #ro,ided,
.hat for coo!erati,es with nu-erous and dis!ersed -e-%ershi!, the general asse-%ly -ay %e co-!osed of delegates elected %y
each sector, cha!ter or district of the coo!erati,e in accordance with the rules and regulations of the oo!erati,e >e,elo!-ent
Authority:
+839 Board of Directors shall -ean that %ody entrusted with the -anage-ent of the affairs of the coo!erati,e under its articles of
coo!eration and %ylaws:
+849 Committee shall refer to any %ody entrusted with s!ecific functions and res!onsi%ilities under the %ylaws or resolution of the general
asse-%ly or the %oard of directors:
+859 $rticles of Cooperation -eans the articles of coo!eration registered under this ode and includes a registered a-end-ent thereof:
+8'9 Byla's -eans the %ylaws registered under this ode and includes any registered a-end-ent thereof:
+8<9 Registration -eans the o!erati,e act granting 3uridical !ersonality to a !ro!osed coo!erati,e and is e,idenced %y a certificate of
registration:
+8)9 Cooperative Development $uthority refers to the go,ern-ent agency in charge of the registration and regulation of coo!erati,es as
such hereinafter referred to s the Authority:
+8(9 (niversally $ccepted Principles -eans that %ody of coo!erati,e !rinci!les adhered to worldwide %y coo!erati,es:
+81?9 Representative $ssembly -eans the full -e-%ershi! of a %ody of re!resentati,es elected %y each of the sectors, cha!ter or
district o the coo!erati,e duly asse-%led for the !ur!ose of e7ercising such !owers lawfully delegated unto the- %y the general
asse-%ly in accordance with its %ylaws:
+8119 !fficers of the Cooperative shall include the -e-%ers of the %oard of directors, -e-%ers of the different co--ittee created %y the
general asse-%ly, general -anager or chief e7ecuti,e officer, secretary, treasurer and -e-%ers holding other !ositions as -ay %e
!ro,ided for in their %ylaws:
+8129 Social $udit is a !rocedure wherein the coo!erati,e assesses its social i-!act and ethical !erfor-ance ,is-@-,is its stated
-ission, ,ision, goals and code of social res!onsi%ility for coo!erati,es to %e esta%lished %y the Authority in consultation with the
coo!erati,e sector. /t ena%les the coo!erati,e to de,elo! a !rocess where%y it can account for its social !erfor-ance and e,aluate its
i-!act in the co--unity and %e accounta%le for its decisions and actions to its regular -e-%ers:
+8139 Performance Audit shall refer to an audit on the efficiency and effecti,eness of the coo!erati,e as a whole: its -anage-ent and
officers: and its ,arious res!onsi%ility centers as %asis for i-!ro,ing indi,idual tea- or o,erall !erfor-ance and for o%3ecti,ely infor-ing
the general -e-%ershi! on such !erfor-ance:
+8149 $ Single)*ine or Single)Purpose Cooperative shall include coo!erati,e underta*ing acti,ities which are related to its -ain line of
%usiness or !ur!ose:
+8159 Service Cooperatives are those which !ro,ide any ty!e of ser,ice to its -e-%ers, including %ut not li-ited to, trans!ort,
infor-ation and co--unication, insurance, housing, electric, health ser,ices, education, %an*ing, and sa,ings and credit:
+81'9 Subsidiary Cooperative refers to three or -ore !ri-ary coo!erati,es, doing the sa-e line of %usiness, organi4ed at the -unici!al,
!ro,incial, city, s!ecial -etro!olitan !olitical su%di,ision, or econo-ic 4ones created %y law, registered with the Authority to underta*e
%usiness acti,ities in su!!ort of its -e-%er-coo!erati,es.+
S%C. 2. Articles ', <, (, 1?, 11, 12, 13, 14, 1', 1<, 1), 2?, 21, 23, 24 and 25 of ha!ter // on Argani4ation and $egistration of the sa-e ode are here%y a-ended
to read as follows:
C)AP#%R ''
*R(AN'2A#'*N AN& R%('S#RA#'*N
+A$.. '. Purposes of Cooperatives. = A coo!erati,e -ay %e organi4ed and registered for any or all of the following !ur!oses:
+819 .o encourage thrift and sa,ings -o%ili4ation a-ong the -e-%ers:
+829 .o generate funds and e7tend credit to the -e-%ers for !roducti,e and !ro,ident !ur!oses:
+839 .o encourage a-ong -e-%ers syste-atic !roduction and -ar*eting:
+849 .o !ro,ide goods and ser,ices and other re6uire-ents to the -e-%ers:
+859 .o de,elo! e7!ertise and s*ills a-ong its -e-%ers:
+8'9 .o ac6uire lands and !ro,ide housing %enefits for the -e-%ers:
+8<9 .o insure against losses of the -e-%ers:
+8)9 .o !ro-ote and ad,ance the econo-ic, social and educational status of the -e-%ers:
+8(9 .o esta%lish, own, lease or o!erate coo!erati,e %an*s, coo!erati,e wholesale and retail co-!le7es, insurance and
agriculturalBindustrial !rocessing enter!rises, and !u%lic -ar*ets:
+81?9 .o coordinate and facilitate the acti,ities of coo!erati,es:
+8119 .o ad,ocate for the cause of the coo!erati,e -o,e-ents:
+8129 .o ensure the ,ia%ility of coo!erati,es through the utili4ation of new technologies:
+8139 .o encourage and !ro-ote self-hel! or self-e-!loy-ent as an engine for econo-ic growth and !o,erty alle,iation: and
+8149 .o underta*e any and all other acti,ities for the effecti,e and efficient i-!le-entation of the !ro,isions of this ode.
+A$.. <. !b+ectives and Goals of a Cooperative. = .he !ri-ary o%3ecti,e of e,ery coo!erati,e is to hel! i-!ro,e the 6uality of life of its -e-%ers.
.owards this end, the coo!erati,e shall ai- to:
+8a9 #ro,ide goods and ser,ices to its -e-%ers to ena%le the- to attain increased inco-e, sa,ings, in,est-ents, !roducti,ity, and
!urchasing !ower, and !ro-ote a-ong the-sel,es e6uita%le distri%ution of net sur!lus through -a7i-u- utili4ation of econo-ies of
scale, cost-sharing and ris*-sharing:
+8%9 #ro,ide o!ti-u- social and econo-ic %enefits to its -e-%ers:
+8c9 .each the- efficient ways of doing things in a coo!erati,e -anner:
+8d9 #ro!agate coo!erati,e !ractices and new ideas in %usiness and -anage-ent:
+8e9 Allow the lower inco-e and less !ri,ileged grou!s to increase their ownershi! in the wealth of the nation: and
+8f9 oo!erate with the go,ern-ent, other coo!erati,es and !eo!le-oriented organi4ations to further the attain-ent of any of the
foregoing o%3ecti,es.
+A$.. ). Cooperatives ,ot in Restraint of Trade. = &o coo!erati,e or -ethod or act thereof which co-!lies with this ode shall %e dee-ed a
cons!iracy or co-%ination in restraint of trade or an illegal -ono!oly, or an atte-!t to lessen co-!etition or fi7 !rices ar%itrarily in ,iolation of any
laws of the #hili!!ines.
+A$.. (. oo!erati,e #owers and a!acities. = A coo!erati,e registered under this ode shall ha,e the following !owers, rights and ca!acities:
+819 .o the e7clusi,e use of its registered na-e, to sue and %e sued:
+829 Af succession:
+839 .o a-end its articles of coo!eration in accordance with the !ro,isions of this ode:
+849 .o ado!t %ylaws not contrary to law, -orals or !u%lic !olicy, and to a-end and re!eal the sa-e in accordance with this ode:
+859 .o !urchase, recei,e, ta*e or grant, hold, con,ey, sell, lease, !ledge, -ortgage, and otherwise deal with such real and !ersonal
!ro!erty as the transaction of the lawful affairs of the coo!erati,e -ay reasona%ly and necessarily re6uire, su%3ect to the li-itations
!rescri%ed %y law and the onstitution:
+8'9 .o enter into di,ision, -erger or consolidation, as !ro,ided in this ode:
+8<9 .o for- su%sidiary coo!erati,es and 3oin federations or unions, as !ro,ided in this ode:
+8)9 .o a,ail of loans, %e entitled to credit and to acce!t and recei,e grants, donations and assistance fro- foreign and do-estic
sources, su%3ect to the conditions of said loans, credits, grants, donations or assistance that will not under-ine the autono-y of the
coo!erati,e. .he Authority, u!on written re6uest, shall !ro,ide necessary assistance in the docu-entary re6uire-ents for the loans,
credit, grants, donations and other financial su!!ort:
+8(9 .o a,ail of !referential rights granted to coo!erati,es under $e!u%lic Act &o. <1'?, otherwise *nown as the 0ocal "o,ern-ent
ode, and other laws, !articularly those in the grant of franchises to esta%lish, construct, o!erate and -aintain ferries, whar,es,
-ar*ets or slaughterhouses and to lease !u%lic utilities, including access to e7tension and on-site research ser,ices and facilities
related to agriculture and fishery acti,ities:
+81?9 .o organi4e and o!erate schools in accordance with $e!u%lic Act &o. (155, "o,ernance of Basic 1ducation Act of 2??1 and other
!ertinent laws: and
+8119 .o e7ercise such other !owers granted %y this ode or necessary to carry out its !ur!ose or !ur!oses as stated in its Articles of
coo!eration.
+A$.. 1?. !rgani-ing a Primary Cooperative. = 5ifteen 8159 or -ore natural !ersons who are 5ili!ino citi4ens, of legal age, ha,ing a co--on %ond of
interest and are actually residing or wor*ing in the intended area of o!eration, -ay organi4e a !ri-ary coo!erati,e under this ode: Provided, .hat a
!ros!ecti,e -e-%er of a !ri-ary coo!erati,e -ust ha,e co-!leted a #re-Me-%ershi! 1ducation 2e-inar 8#M129.
+Any newly organi4ed !ri-ary coo!erati,e -ay %e registered as -ulti!ur!ose coo!erati,e only after co-!liance with the -ini-u- re6uire-ents for
-ulti!ur!ose coo!erati,es to %e set %y the Authority. A single-!ur!ose coo!erati,e -ay transfor- into a -ulti!ur!ose or -ay create su%sidiaries only
after at least two 829 years of o!erations.
+A$.. 11. #conomic Survey. - 1,ery grou! of indi,iduals or coo!erati,es intending to for- a coo!erati,e under this ode shall su%-it to the Authority
a general state-ent descri%ing, a-ong others the structure and !ur!oses of the !ro!osed coo!erati,e: Provided, .hat the structure and actual
staffing !attern of the coo!erati,e shall include a %oo**ee!er: Provided, further, .hat they shall not %e allowed to o!erate without the necessary
!ersonnel and shall also su%-it an econo-ic sur,ey, indicating therein the area of o!eration, the si4e of -e-%ershi!, and other !ertinent data in a
for-at !ro,ided %y the Authority.
+A$.. 12. *iability. = A coo!erati,e duly registered under this ode shall ha,e li-ited lia%ility.
+A$.. 13. Term. = A coo!erati,e shall e7ist for a !eriod not e7ceeding fifty 85?9 years fro- the date of registration unless sooner dissol,e or unless
said !eriod is e7tended. .he coo!erati,e ter-, as originally stated in the articles of coo!eration, -ay %e e7tended for !eriods not e7ceeding fifty 85?9
years in any single instance %y an a-end-ent of the articles of coo!eration, in accordance with this ode: Provided, .hat no e7tension can %e -ade
earlier than fi,e 859 years !rior to the original or su%se6uent e7!iry dateBdates unless there are 3ustifia%le reasons for an earlier e7tension as -ay %e
deter-ined %y the Authority.
+A$.. 14. $rticles of Cooperation. = 819 All coo!erati,es a!!lying for registration shall file with the Authority the articles of coo!eration which shall %e
signed %y each of the organi4ers and ac*nowledged %y the- if natural !ersons, and %y the chair!ersons or secretaries, if 3uridical !ersons, %efore a
notary !u%lic.
+829 .he articles of coo!eration shall set forth:
+8a9 .he na-e of the coo!erati,e which shall include the word coo!erati,e:
+8%9 .he !ur!ose or !ur!oses and sco!e of %usiness for which the coo!erati,e is to %e registered:
+8c9 .he ter- of e7istence of the coo!erati,e:
+8d9 .he area of o!eration and the !ostal addresses of its !rinci!al office:
+8e9 .he na-es, nationality, and the !ostal addresses of the registrants:
+8f9 .he co--on %ond of -e-%ershi!:
+8g9 .he list of na-es of the directors who shall -anage the coo!erati,e: and
+8h9 .he a-ount of its share ca!ital, the na-es and residences of its contri%utors and a state-ent of whether the coo!erati,e is !ri-ary,
secondary or tertiary in accordance with Article 23 hereof.
+839 .he articles of coo!eration -ay also contain any other !ro,isions not inconsistent with this ode or any related law.
+849 5our 849 co!ies each of the !ro!osed articles of coo!eration, %ylaws, and the general state-ent re6uired under Article 11 of this ode shall %e
su%-itted to the Authority.
+859 &o coo!erati,e, other than a coo!erati,e union as descri%ed under Article 25 hereof, shall %e registered unless the articles of coo!eration is
acco-!anied with the %onds of the accounta%le officers and a sworn state-ents of the treasurer elected %y the su%scri%ers showing that at least
twenty-fi,e per centum 825C9 of the authori4ed share ca!ital has %een su%scri%ed and at least twenty-fi,e per centum 825C9 of the total su%scri!tion
has %een !aid: Provided, .hat in no case shall the !aid-u! share ca!ital %e less than 5ifteen thousand !esos 8#15,???.??9.
+.he Authority shall !eriodically assess the re6uired !aid-u! share ca!ital and -ay increase it e,ery fi,e 859 years when necessary u!on consultation
with the coo!erati,e sector and the &ational 1cono-ic and >e,elo!-ent Authority 8&1>A9.
+A$.. 15. Byla's. = 819 1ach coo!erati,e to %e registered under this ode shall ado!t %ylaws not inconsistent with the !ro,isions of this ode. .he
%ylaws shall %e filed at the sa-e ti-e as the articles of coo!eration.
+829 .he %ylaws of each coo!erati,e shall !ro,ide:
+8a9 .he 6ualifications for ad-ission to -e-%ershi! and the !ay-ent to %e -ade or interest to %e ac6uired as a conditions for the
e7ercise of the right of -e-%ershi!:
+8%9 .he rights and lia%ilities of -e-%ershi!:
+8c9 .he circu-stances under which -e-%ershi! is ac6uired, -aintained and lost:
+8d9 .he !rocedure to %e followed in cases of ter-ination of -e-%ershi!:
+8e9 .he conditions under which the transfer of a share or interest of the -e-%ers shall %e !er-itted:
+8f9 .he rules and !rocedures on the agenda, ti-e, !lace and -anner of calling, con,ening, conducting -eetings, 6uoru-
re6uire-ents, ,oting syste-s, and other -atters relati,e to the %usiness affairs of the general asse-%ly, %oard of directors, and
co--ittees:
+8g9 .he general conduct of the affairs of the coo!erati,e, including the !owers and duties of the general asse-%ly, the %oard of
directors, co--ittees and the officers, and their 6ualifications and dis6ualifications:
+8h9 .he -anner in which the ca!ital, -ay %e raised and the !ur!oses for which it can %e utili4ed:
+8i9 .he -ode of custody and of in,est-ent of net sur!lus:
+839 .he accounting and auditing syste-s:
+8*9 .he -anner of loaning and %orrowing including the li-itations thereof:
+8l9 .he -ethod of distri%ution of net sur!lus:
+8-9 .he -anner of ado!ting, a-ending, re!ealing, and a%rogating %ylaws:
+8n9 A conciliation or -ediation -echanis- for the a-ica%le settle-ent of dis!utes a-ong -e-%ers, directors, officers and co--ittee
-e-%ers of the coo!erati,e: and
+8o9 Ather -atters incident to the !ur!oses and acti,ities of the coo!erati,e.
+A$.. 1'. Registration. = A coo!erati,e for-ed and organi4ed under this ode ac6uires 3uridical !ersonality fro- the date the Authority issues a
certificate of registration under its official seal. All a!!lications for registration shall %e finally dis!osed of %y the Authority within a !eriod of si7ty 8'?9
days fro- the filing thereof, otherwise the a!!lication is dee-ed a!!ro,ed, unless the cause of the delay is attri%uta%le to the a!!licant: Provided,
.hat in case of a denial of the a!!lication for registration, an a!!eal shall lie with the Affice of the #resident within ninety 8(?9 days fro- recei!t of
notice of such denial: Provided, further, .hat failure of the Affice of the #resident to act on the a!!eal within ninety 8(?9 days fro- the filing thereof
shall -ean a!!ro,al of said a!!lication.
+A$.. 1<. Certificate of Registration. = A certificate of registration issued %y the Authority under its official seal shall %e conclusi,e e,idence that the
coo!erati,e therein -entioned is duly registered unless it is !ro,ed that the registration thereof has %een cancelled.
+A$.. 1). $mendment of $rticles of Cooperation and Byla's. = Dnless otherwise !rescri%ed %y this ode and for legiti-ate !ur!oses, any !ro,ision
or -atter stated in the articles of coo!eration and %y laws -ay %e a-ended %y two-thirds 82B39 ,ote of all the -e-%ers with ,oting rights, without
!re3udice to the right of the dissenting -e-%ers to e7ercise their right to withdraw their -e-%ershi! under Article 3?.
Both the original and a-ended articles andBor %ylaws shall contain all !ro,isions re6uired %y law to %e set out in the articles of coo!eration and %y
laws. A-end-ents shall %e indicated %y underscoring or otherwise a!!ro!riately indicating the change or changes -ade and a co!y of the a-ended
articles or a-ended %ylaws duly certified under oath %y the coo!erati,e secretary and a -a3ority of the directors stating the fact that said a-end-ent
or a-end-ents to the articles of coo!eration andBor %ylaws ha,e %een duly a!!ro,ed %y the re6uired ,ote of the -e-%ers. All a-end-ents to the
article of coo!eration andBor %ylaws shall %e su%-itted to the Authority. .he a-end-ents shall ta*e effect u!on its a!!ro,al %y the authority or within
thirty 83?9 days fro- the date of filing thereof if not acted u!on %y the Authority for a cause not attri%uta%le to the coo!erati,e.
+A$.. 1(. Contracts #.ecuted Prior to Registration and #ffects Thereof. = ontracts e7ecuted %etween !ri,ate !ersons and coo!erati,es !rior to the
registration of the coo!erati,e shall re-ain ,alid and %inding %etween the !arties and u!on registration of the coo!erati,e. A for-al written contract
shall %e ado!ted and -ade in the coo!erati,eEs na-e or on its %ehalf !rior to its registration.
+A$.. 2?. Division of Cooperatives. = Any registered coo!erati,e -ay, %y a resolution a!!ro,ed %y a ,ote of three-fourths 83B49 of all the -e-%ers
with ,oting rights, !resent and constituting a 6uoru-, resol,e to di,ide itself into the two 829 or -ore coo!erati,es. .he !rocedure for such di,ision
shall %e !rescri%ed in the regulations of the Authority: Provided, .hat all the re6uire-ents set forth in this ode ha,e %een co-!lied with %y the new
coo!erati,es: Provided, further, .hat no di,ision of a coo!erati,e in fraud of creditors shall %e ,alid.
+A$.. 21. "erger and Consolidation of Cooperatives. = 819 .wo 829 or -ore coo!erati,es -ay -erge into a single coo!erati,e which shall either %e
one of the constituent coo!erati,es or the consolidated coo!erati,e.
+829 &o -erger or consolidation shall %e ,alid unless a!!ro,ed %y a three-fourths 83B49 ,ote of all the -e-%ers with ,oting rights, !resent and
constituting a 6uoru- of each of the constituent coo!erati,es at se!arate general asse-%ly -eetings. .he dissenting -e-%ers shall ha,e the right to
e7ercise their right to withdraw their -e-%ershi! !ursuant to Article 3?.
+839 .he Authority shall issue the guidelines go,erning the !rocedure of -erger or consolidation of coo!erati,es. /n any case, the -erger or
consolidation of coo!erati,es. /n any case, the -erger or consolidation shall %e effecti,e u!on the issuance of the certificate of -erger or
consolidation %y the Authority.
+A$.. 22. #ffects of "erger and Consolidation. = .he -erger or consolidation of coo!erati,es shall ha,e the following effects:
+819 .he constituent coo!erati,es shall %eco-e a single coo!erati,e which, in case of -erger, shall %e the sur,i,ing coo!erati,e, and, in
case of consolidation, shall %e the consolidated coo!erati,e:
+829 .he se!arate e7istence of the constituent coo!erati,es shall cease, e7ce!t that of the sur,i,ing or the consolidated coo!erati,e:
+839 .he sur,i,ing or the consolidated coo!erati,e shall !ossess al the assets, rights, !ri,ileges, i--unities and franchises of each of
the constituent coo!erati,es:
+849 .he sur,i,ing or the consolidated coo!erati,e shall !ossess all the assets, rights, !ri,ileges, i--unities and franchises of each of
the constituent coo!erati,es: and
+859 .he sur,i,ing or the consolidated coo!erati,e shall %e res!onsi%le for all the lia%ilities and o%ligation of each of the constituent
coo!erati,es in the sa-e -anner as if such sur,i,ing or consolidated coo!erati,e had itself incurred such lia%ilities or o%ligations. Any
clai-, action or !roceeding !ending %y or against any such constituent coo!erati,es -ay %e !rosecuted %y or against the sur,i,ing or
consolidated coo!erati,e, as the case -ay %e. &either the rights of creditors nor any lien u!on the !ro!erty of any such constituent
coo!erati,es shall %e i-!aired %y such -erger or consolidation.
+A$.. 23. Type and Categories of Cooperatives. = 819 .y!es of oo!erati,es = oo!erati,es -ay fall under any of the following ty!es:
+8a9 Credit Cooperative is one that !ro-otes and underta*es sa,ings and lending ser,ices a-ong its -e-%ers. /t generates a co--on
!ool of funds in order to !ro,ide financial assistance to its -e-%ers for !roducti,e and !ro,ident !ur!oses:
+8%9 Consumers Cooperative is one of the !ri-ary !ur!ose of which is to !rocure and distri%ute co--odities to -e-%ers and non-
-e-%ers:
+8c9 Producers Cooperative is one that underta*es 3oint !roduction whether agricultural or industrial. /t is for-ed and o!erated %y its
-e-%ers to underta*e the !roduction and !rocessing of raw -aterials or goods !roduced %y its -e-%ers into finished or !rocessed
!roducts for sale %y the coo!erati,e to its -e-%ers and non--e-%ers. Any end !roduct or its deri,ati,e arising fro- the raw -aterials
!roduced %y its -e-%ers, sold in the na-e and for the account of the coo!erati,e, shall %e dee-ed a !roduct of the coo!erati,e and its
-e-%ers:
+8d9 "ar/eting Cooperative is one which engages in the su!!ly of !roduction in!uts to -e-%ers and -ar*ets their !roducts:
+8e9 Service Cooperative is one which engages in -edical and dental care, hos!itali4ation, trans!ortation, insurance, housing, la%or,
electric light and !ower, co--unication, !rofessional and other ser,ices:
+8f9 "ultipurpose Cooperative is one which co-%ines two 829 or -ore of the %usiness acti,ities of these different ty!es of coo!erati,es:
+8g9 $dvocacy Cooperative is a !ri-ary coo!erati,e which !ro-otes and ad,ocates coo!erati,is- a-ong its -e-%ers and the !u%lic
through socially-oriented !ro3ects, education and training, research and co--unication, and other si-ilar acti,ities to reach out to its
intended %eneficiaries:
+8h9 $grarian Reform Cooperative is one organi4ed %y -arginal far-ers -a3ority of which are agrarian refor- %eneficiaries for the
!ur!ose of de,elo!ing an a!!ro!riate syste- of land tenure, land de,elo!-ent, land consolidation or land -anage-ent in areas
co,ered %y agrarian refor-:
+8i9 Cooperative Ban/ is one organi4ed for the !ri-ary !ur!ose of !ro,iding a wide range of financial ser,ices to coo!erati,es and their
-e-%ers:
+839 Dairy Cooperative is one whose -e-%ers are engaged in the !roduction of fresh -il* which -ay %e !rocessed andBor -ar*eted as
dairy !roducts:
+8*9 #ducation Cooperative is one organi4ed for the !ri-ary !ur!ose of owning and o!erating licensed educational institutions
notwithstanding the !ro,isions of $e!u%lic Act &o. (155, otherwise *nown as the "o,ernance of Basic 1ducation Act of 2??1:
+8l9 #lectric Cooperative is one organi4ed for the !ri-ary !ur!osed of underta*ing !ower generations, utili4ing renewa%le energy
sources, including hy%rid syste-s, ac6uisition and o!eration of su%trans-ission or distri%ution to its household -e-%ers:
+8-9 0inancial Service Cooperative is one organi4ed for the !ri-ary !ur!ose of engaging in sa,ings and credit ser,ices and other
financial ser,ices:
+8n9 0ishermen Cooperative is one organi4ed %y -arginali4ed fisher-en in localities whose !roducts are -ar*eted either as fresh or
!rocessed !roducts:
+8o9 Health Services Cooperative is one organi4ed for the !ri-ary !ur!ose of !ro,iding -edical, dental and other health ser,ices:
+8!9 Housing Cooperative is one organi4ed to assist or !ro,ide access to housing for the %enefit of its regular -e-%ers who acti,ely
!artici!ate in the sa,ings !rogra- for housing. /t is co-owned and controlled %y its -e-%ers:
+869 %nsurance Cooperative is one engaged in the %usiness of insuring life and !o,erty of coo!erati,es and their -e-%ers:
+8r9 Transport Cooperative is one which includes land and sea trans!ortation, li-ited to s-all ,essels, as defined or classified under the
#hili!!ine -ariti-e laws, organi4ed under the !ro,isions of this ode:
+8s9 1ater Service Cooperative is one organi4ed to own, o!erate and -anage waters syste-s for the !ro,ision and distri%ution of
!ota%le water for its -e-%ers and their households:
+8t9 1or/ers Cooperative is one organi4ed %y wor*ers, including the self-e-!loyed, who are at sa-e ti-e the -e-%ers and owners of
the enter!rise. /ts !rinci!al !ur!ose is to !ro,ide e-!loy-ent and %usiness o!!ortunities to its -e-%ers and -anage it in accordance
with coo!erati,e !rinci!les: and
+8u9 Ather ty!es of coo!erati,e as -ay %e deter-ined %y the Authority.
+829 Categories of Cooperative = oo!erati,es shall %e categori4ed according to -e-%ershi! and territorial considerations as follows:
+8a9 /n ter-s of -e-%ershi!, coo!erati,e shall %e categori4ed into:
+8i9 Primary = .he -e-%ers of which are natural !ersons:
+8ii9 Secondary = .he -e-%ers of which are !ri-aries: and
+8iii9 Tertiary = .he -e-%ers of which are secondary coo!erati,es: and
+8%9 /n ter-s of territory, coo!erati,es shall %e categori4ed according to areas of o!erations which -ay or -ay not coincide with the
!olitical su%di,isions of the country.
+A$.. 24. 0unctions of a 0ederation of Cooperatives. = A federation of coo!erati,es shall underta*e the following functions:
+8a9 .o carry on any coo!erati,e enter!rise authori4ed under Article ' that co-!le-ents aug-ents, or su!!le-ents %ut does not
conflict, co-!lete with, nor su!!lant the %usiness or econo-ic acti,ities of its -e-%ers:
+8%9 .o carry on, encourage, and assist educational and ad,isory wor* relating to its -e-%er coo!erati,es:
+8c9 .o render ser,ices designed to encourage si-!licity, efficiency, and econo-y in the conduct of the %usiness of its -e-%er
coo!erati,es and to facilitate the i-!le-entation of their %oo**ee!ing, accounting, and other syste-s and !rocedures:
+8d9 .o !rint, !u%lish, and circulate any news!a!er or other !u%lication in the interest of its -e-%er coo!erati,es and enter!rises:
+8e9 .o coordinate and facilitate the acti,ities of its -e-%er coo!erati,es:
+8f9 .o enter into 3oint ,entures with national or international coo!erati,es of other countries in the -anufacture and sale of !roducts
andBor ser,ices in the #hili!!ines and a%road: and
+8g9 .o !erfor- such other functions as -ay %e necessary to attain its o%3ecti,es.
+A federation of coo!erati,es -ay %e registered %y carrying out the for-alities for registration of a coo!erati,e.
+$egistered coo!erati,es -ay organi4e a federation according to the ty!e of %usiness acti,ity engaged in %y the coo!erati,es.
+A$.. 25. Cooperative (nions. = $egistered coo!erati,es and federations at the a!!ro!riate le,els -ay organi4e or 3oin coo!erati,e unions to
re!resent the interest and welfare of all ty!es of coo!erati,es at the !ro,incial, city, regional, and national le,els. oo!erati,e unions -ay ha,e the
following !ur!oses:
+8a9 .o re!resent its -e-%er organi4ations:
+8%9 .o ac6uire, analy4e, and disse-inate, econo-ic, statistical, and other infor-ation relating to its -e-%ers and to all ty!es of
coo!erati,es within its area of o!eration:
+8c9 .o s!onsor studies in the econo-ic, legal, financial, social and other !hases of coo!eration, and !u%lish the results thereof:
+8d9 .o !ro-ote the *nowledge of coo!erati,e !rinci!les and !ractices:
+8e9 .o de,elo! the coo!erati,e -o,e-ent in their res!ecti,e 3urisdictions:
+8f9 .o ad,ise the a!!ro!riate authorities on all 6uestions relating to coo!erati,es:
+8g9 .o raise funds through -e-%ershi! fees, dues and contri%utions, donations, and su%sidies fro- local and foreign sources whether
!ri,ate or go,ern-ent: and
+8h9 .o do and !erfor- such other non-%usiness acti,ities as -ay %e necessary to attain the foregoing o%3ecti,es.
+oo!erati,e unions -ay assist the national and local go,ern-ents in the latterEs de,elo!-ent acti,ities in their res!ecti,e
3urisdictions.+
S%C. 3. Articles 2', 2<, 2), 2(, 3?, 31 and 32 of ha!ter /// on Me-%ershi! of the sa-e ode are here%y renu-%ered and a-ended to read, as follows:
C)AP#%R '''
$%$-%RS)'P
+A$.. 2'. 2inds of "embership. = A coo!erati,e -ay ha,e two 829 *inds of -e-%ers, to wit: 819 regular -e-%ers and 829 associate -e-%ers.
+A regular -e-%er is one who has co-!lied with all the -e-%ershi! re6uire-ents and entitled to all the rights and !ri,ileges of -e-%ershi!. An
associate -e-%er is one who has no right to ,ote nor %e ,oted u!on and shall %e entitled only to such rights and !ri,ileges as the %ylaws -ay
!ro,ide: Provided, .hat an associate who -eets the -ini-u- re6uire-ents of regular -e-%ershi!, continues to !atroni4e the coo!erati,e for two 829
years, and signifies hisBher intention to re-ain a -e-%er shall %e considered a regular -e-%er.
+A coo!erati,e organi4ed %y -inors shall %e considered a la%oratory coo!erati,e and -ust %e affiliated with a registered coo!erati,e. A la%oratory
coo!erati,e shall %e go,erned %y s!ecial guidelines to %e !ro-ulgated %y the Authority.
+A$.. 2<. Government !fficers and #mployees. = 819 Any officer or e-!loyee of the Authority shall %e dis6ualified to %e elected or a!!ointed to any
!osition in a coo!erati,e: Provided, .hat the dis6ualification does not e7tend to a coo!erati,e organi4ed %y the officers or e-!loyees of the Authority.
+829 All electi,e officials of the "o,ern-ent shall %e ineligi%le to %eco-e officers and directors of coo!erati,es: Provided, .hat the dis6ualification
does not e7tend to a !arty list re!resentati,e %eing an officer of a coo!erati,e he or she re!resents: and
+839 Any go,ern-ent e-!loyee or official -ay, in the discharge of is duties as a -e-%er in the coo!erati,e, %e allowed %y the end of office concerned
to use official ti-e for attendance at the general asse-%ly, %oard and co--ittee -eetings of coo!erati,es as well as coo!erati,e se-inars,
conferences, wor*sho!s, technical -eetings, and training courses locally or a%road: #ro,ided, .hat the o!erations of the office concerned are not
ad,ersely affected.
+A$.. 2). $pplication. = An a!!licant for -e-%ershi! shall %e dee-ed a -e-%er after a!!ro,al of his -e-%ershi! %y the %oard of directors and shall
e7ercise the rights of -e-%er after ha,ing -ade such !ay-ents to the coo!erati,e in res!ect to -e-%ershi! or ac6uired interest in the coo!erati,e
as -ay %e !rescri%ed in the %ylaws. /n case -e-%ershi! is refused or denied %y the %oard of directors, an a!!eal -ay %e -ade to the general
asse-%ly and the latterEs decision shall %e final. 5or this !ur!ose, the general asse-%ly -ay o!t to create an a!!eal and grie,ance co--ittee, the
-e-%ers of which shall ser,e for a !eriod of one 819 year and shall decide a!!eals on -e-%ershi! a!!lication within thirty 83?9 days u!on recei!t
thereof. /f the co--ittee fails to decide within the !rescri%ed !eriod, the a!!eal is dee-ed a!!ro,ed in fa,or of the a!!licant.
+A$.. 2(. *iability of "embers. = A -e-%er shall %e lia%le for the de%ts of the coo!erati,e to the e7tent of his contri%ution to the share ca!ital of the
coo!erati,e.
+A$.. 3?. Termination of "embership. = 819 A -e-%er of a coo!erati,e -ay, for any ,alid reason, withdraw his -e-%ershi! fro- the coo!erati,e %y
gi,ing a si7ty 8'?9 day notice to the %oard of directors. 2u%3ect to the %ylaws of the coo!erati,e, the withdrawing -e-%er shall %e entitled to a refund
of his share ca!ital contri%ution and all other interests in the coo!erati,e: Provided, .hat such fund shall not %e -ade if u!on such !ay-ent the ,alue
of the assets of the coo!erati,e would %e less than the aggregate a-ount of its de%ts and lia%ilities e7clusi,e of his share ca!ital contri%ution.
+829 .he death or insanity of a -e-%er in a !ri-ary coo!erati,e, and the insol,ency or dissolution of a -e-%er in a secondary or tertiary coo!erati,e
-ay %e considered ,alid grounds for ter-ination of -e-%ershi!: #ro,ided, .hat in case of death or insanity of an agrarian refor- %eneficiary-
-e-%er of a coo!erati,e, the ne7t-of-*in -ay assu-e the duties and res!onsi%ilities of the original -e-%er
+839 Me-%ershi! in the coo!erati,e -ay %e ter-inated %y a ,ote of the -a3ority of all the -e-%ers of the %oard of directors for any of the following
causes:
+8a9 Fhen a -e-%er has not !atroni4ed any of the ser,ices of the coo!erati,e for an unreasona%le !eriod of ti-e as -ay %e !re,iously
deter-ined %y the %oard of directors:
+8%9 Fhen a -e-%er has continuously failed to co-!ly with his o%ligations:
+8c9 Fhen a -e-%er has acted in ,iolation of the %ylaws and the rules of the coo!erati,e: and
+8d9 5or any act or o-ission in3urious or !re3udicial to the interest or the welfare of the coo!erati,e.
+A -e-%er whose -e-%ershi! the %oard of directors -ay wish to ter-inate shall %e infor-ed of such intended action in writing and shall %e gi,en an
o!!ortunity to %e heard %efore the said %oard -a*es its decision. .he decision of the %oard shall %e in writing and shall %e co--unicated in !erson
or %y registered -ail to said -e-%er and shall %e a!!eala%le within thirty 83?9 days fro- recei!t thereof to the general asse-%ly whose decision
shall %e final. .he general asse-%ly -ay create an a!!eal and grie,ance co--ittee whose -e-%ers shall ser,e for a !eriod of one 819 year and
shall decide a!!eals on -e-%ershi! ter-ination. .he co--ittee is gi,en thirty 83?9 days fro- recei!t thereof to decide on the a!!eal. 5ailure to
decide within the !rescri%ed !eriod, the a!!eal is dee-ed a!!ro,ed in fa,or of the -e-%er. #ending a decision %y the general asse-%ly, the
-e-%ershi! re-ains in force.
+A$.. 31. Refund of %nterests. = All su-s co-!uted in accordance with the %ylaws to %e due fro- a coo!erati,e to a for-er -e-%er shall %e !aid to
hi- either %y the coo!erati,e or %y the a!!ro,ed transferee, as the case -ay %e, in accordance with this ode.+
S%C. 4. Articles 33, 34, 35, 3', 3<, 3), 3(, 4?, 42, 42, 43, 44, 45, 4', 4<, 4), 4(, 5? and 51 of ha!ter /G on Ad-inistration of the sa-e ode are here%y
renu-%ered and a-ended to read, as follows:
C)AP#%R '+
A&$'N'S#RA#'*N
+A$.. 32. Composition of the General $ssembly. = .he general asse-%ly shall %e co-!osed of such -e-%ers who are entitled to ,ote under the
articles of coo!eration and %ylaws of the coo!erati,e.
+A$.. 32. Po'ers of the General $ssembly. = .he general asse-%ly shall %e co-!osed of such -e-%ers who are entitled to ,ote under the articles
of coo!eration and %ylaws of the coo!erati,e.
+A$.. 33. Po'ers of the General $ssembly. = .he general asse-%ly shall %e the highest !olicy--a*ing %ody of the coo!erati,e and shall e7ercise
such !owers as are stated in this ode, in the articles of coo!eration and in the %ylaws of the coo!erati,e. .he general asse-%ly shall ha,e the
following e7clusi,e !owers which cannot %e delegate:
+819 .o deter-ine and a!!ro,e a-end-ents to the articles of coo!eration and %ylaws:
+829 .o elect or a!!oint the -e-%ers of the %oard of directors, and to re-o,e the- for cause. Howe,er, in the case of the electric
coo!erati,es registered under this ode, election of the -e-%ers of the %oard shall %e held in accordance with its %ylaws or election
guideline of such electric coo!erati,e: and
+839 .o a!!ro,e de,elo!-ental !lans of the coo!erati,e.
+2u%3ect to such other !ro,isions of this ode and only for !ur!oses of !ro-!t and intelligent decision--a*ing, the general asse-%ly -ay %e a three-
fourths 83B49 ,ote of all its -e-%ers with ,oting rights, !resent and constituting a 6uoru-, delegate so-e of its !owers to a s-aller %ody of the
coo!erati,e. .hese !owers shall %e enu-erated under the %ylaws of the coo!erati,e.
+A$.. 34. "eetings. = 819 A regular -eeting shall %e held annually %y the general asse-%ly on a date fi7ed in the %ylaws, or if not so fi7ed, on any
dated within ninety 8(?9 days after the close of each fiscal year:Provided, .hat notice of regular -eetings shall %e sent in writing, %y !osting or
!u%lication, or through other electronic -eans to all -e-%ers of record.
+829 Fhene,er necessary, a s!ecial -eeting of the general asse-%ly -ay %e called at any ti-e %y a -a3ority ,ote of the %oard of directors or as
!ro,ided for in the %ylaws: Provided, .hat a notice in writing shall %e sent one 819 wee* !rior to the -eeting to all -e-%ers who are entitled to ,ote.
Howe,er, a s!ecial -eeting shall %e called %y the %oard of directors after co-!liance with the re6uired notice within fro- at least ten per
centum 81?C9 of the total -e-%ers who re entitled to ,ote to transact s!ecific %usiness co,ered %y the call.
+/f the %oard fails to call a regular or a s!ecial -eeting within the gi,en !eriod, the Authority, u!on !etition of ten per centum 81?C9 of all the -e-%ers
of the coo!erati,e who are entitled to ,ote, and for good cause shown, shall issue an order to the !etitioners directing the- to call a -eeting of the
general asse-%ly %y gi,ing !ro!er notice as re6uired in this ode or in the %ylaws:
+839 /n the case of a newly a!!ro,ed coo!erati,e, a s!ecial general asse-%ly shall %e called, as far as !ractica%le, within ninety 8(?9 days fro- such
a!!ro,al:
+849 .he Authority -ay call a s!ecial -eeting of the coo!erati,e for the !ur!ose of re!orting to the -e-%ers the result of any e7a-ination or other
in,estigation of the coo!erati,e affairs: and
+859 &otice of any -eeting -ay %e wai,ed, e7!ressly or i-!liedly, %y any -e-%er.
+A$.. 35. 3uorum. = A 6uoru- shall consist of at least twenty-fi,e !er centu- 825C9 of all the -e-%ers entitled to ,ote. /n the case of coo!erati,e
%an*s, the 6uoru- shall %e as !ro,ided in Article (( of this ode. /n the case of electric coo!erati,es registered under this ode, a 6uoru-, unless
otherwise !ro,ided in the %ylaws, shall consist of fi,e per centum 85C9 of all the -e-%ers entitled to ,ote.
+A$.. 3'. oting System. = 1ach -e-%er of a !ri-ary coo!erati,e shall ha,e only one 819 ,ote. /n the case of -e-%ers of secondary or tertiary
coo!erati,es, they shall ha,e one 819 %asic ,ote and as -any incenti,e ,otes as !ro,ided for in the %ylaws %ut not e7ceed fi,e 859 ,otes. .he ,otes
cast %y the delegates shall %e dee-ed as ,otes cast %y the -e-%ers thereof.
+Howe,er, the %ylaws of a coo!erati,e other than a !ri-ary -ay !ro,ide for ,oting %y !ro7y. Goting %y !ro7y -eans allowing a delegate of a
coo!erati,e to re!resent or ,ote in %ehalf of another delegate of the sa-e coo!erati,e.
+A$.. 3<. Composition and Term of the Board of Directors. = Dnless otherwise !ro,ided in the %ylaws, the direction and -anage-ent of the affairs of
a coo!erati,e shall %e ,ested in a %oard of directors which shall %e co-!osed of not less that fi,e 859 nor -ore than fifteen 8159 -e-%ers elected %y
the general asse-%ly for a ter- of two 829 years and shall hold office until their successors are duly elected an 6ualified, or until duly re-o,ed for
caused.
+A$.. 3). Po'ers of the Board of Directors. = .he %oard of directors shall %e res!onsi%le for the strategic !lanning, direction-setting and !olicy-
for-ulation acti,ities of the coo!erati,es.
+A$.. 3(. Directors. = 819 Any -e-%er of a coo!erati,e who under the %ylaws of the coo!erati,e, has the right to ,ote and who !ossesses all the
6ualifications and none of the dis6ualifications !ro,ided in the laws or %ylaws shall %e eligi%le for election as director.
+829 .he coo!erati,e -ay, %y resolution of its %oard of directors, ad-it as directors, or co--ittee -e-%er one a!!ointed %y any financing institution
fro- which the coo!erati,e recei,ed financial assistance solely to !ro,ide technical *nowledge not a,aila%le within its -e-%ershi!. 2uch director or
co--ittee -e-%er not %e a -e-%er of the coo!erati,e and shall ha,e no !owers, rights, nor res!onsi%ilities e7ce!t to !ro,ided technical assistance
as re6uired %y the coo!erati,e.
+839 .he -e-%ers of the %oard of directors shall not hold any other !osition directly in,ol,ed in the day to day o!eration and -anage-ent of the
coo!erati,e.
+849 Any !erson engaged in a %usiness si-ilar to that of the coo!erati,e or who in any way has a conflict of interest with it, is dis6ualified fro-
election as a director of said coo!erati,e.
+A$.. 4?. "eeting of the Board and 3uorum Re4uirement. = 819 /n the case of !ri-ary coo!erati,es, regular -eetings of the %oard of directors shall
%e held at least once a -onth.
+829 2!ecial -eetings of the %oard of directors -ay %e held at any ti-e u!on the call of the chair!erson or a -a3ority of the -e-%ers of the
%oard: Provided, .hat written notices of the -eeting s!ecifying the agenda of the s!ecial -eeting shall %e gi,en to all -e-%ers of the %oard at least
one 819 wee* %efore the said -eeting.
+839 A -a3ority of the -e-%ers of the Board shall constitute a 6uoru- or the conduct of %usiness, unless the %ylaws !ro,ed otherwise.
+849 >irectors cannot attend or ,ote %y !ro7y at %oard -eetings.
+A$.. 41. acancy in the Board of Directors. = Any ,acancy in the %oard of directors, other than %y e7!iration of ter-, -ay %e filled %y the ,ote of at
least a -a3ority of the re-aining directors, if still constituting a 6uoru-: otherwise, the ,acancy -ust %e filled %y the general asse-%ly in a regular or
s!ecial -eeting called for the !ur!ose. A director so elected to fill a ,acancy shall ser,e only the une7!ired ter- of his !redecessor in office.
+A$.. 42. !fficers of the Cooperative. = .he %oard of directors shall elect fro- a-ong the-sel,es the chair!erson and ,ice-chair!erson, and elect or
a!!oint other officers of the coo!erati,e fro- outside of the %oard in accordance with their %ylaws. All officers shall ser,e during good %eha,ior and
shall not %e re-o,ed e7ce!t for cause after due hearing. 0oss of confidence shall not %e a ,alid ground for re-o,al unless e,idenced %y acts or
o-ission causing loss of confidence in the honesty and integrity of such officer. &o two 829 or -ore !ersons with relationshi!s u! to the third ci,il
degree of consanguinity or affinity nor shall any !erson engaged in a %usiness si-ilar to that of the coo!erati,e nor who in any other -anner has
interests in conflict with the coo!erati,e shall ser,e as an a!!ointi,e officer.
+A$.. 43. Committees of Cooperatives. = 819 .he %ylaws -ay create an e7ecuti,e co--ittee to %e a!!ointed %y the %oard of directors with such
!owers and duties as -ay %e delegated to it in the %ylaws or %y a -a3ority ,ote of all the -e-%ers of the %oard of directors.
+829 .he %ylaws shall !ro,ide for the creation of an audit, election, -ediation and conciliation, ethics, and such other co--ittees as -ay %e
necessary for the conduct of the affairs of the coo!erati,e. .he -e-%ers of %oth the audit and election co--ittee shall %e elected %y the general
asse-%ly and the rest shall %e a!!ointed %y the %oard. .he audit co--ittee shall %e directly accounta%le and res!onsi%le to the general asse-%ly. /t
shall ha,e the !ower and duty to continuously -onitor the ade6uacy and effecti,eness of the coo!erati,eEs -anage-ent control syste- and audit the
!erfor-ance of the coo!erati,e and its ,arious res!onsi%ility centers.
+Dnless otherwise !ro,ided in the %ylaws, the %oard, in case of a ,acancy in the co--ittees, -ay call an election to fill the ,acancy or a!!oint a
!erson to fill the sa-e su%3ect to the !ro,ision that the !erson elected or a!!ointed shall ser,e only for the une7!ired !ortion of the ter-.
+A$.. 44. 0unctions& Responsibilities and Training Re4uirements of Directors& !fficers and Committee "embers. = the functions and res!onsi%ilities
of directors, officers and co--ittee -e-%ers, as well as their training re6uire-ents, shall %e in accordance with the rules and regulations issued %y
the Authority.
+A$.. 45. *iability of Directors& !fficers and Committee "embers. = >irectors, officers and co--ittee -e-%ers, who are willfully and *nowingly ,ote
for or assent to !atently unlawful acts or who are guilty of gross negligence or %ad faith in directing the affairs of the coo!erati,e or ac6uire any
!ersonal or !ecuniary interest in conflict with their duty as such directors, officers or co--ittee -e-%ers shall %e lia%le 3ointly and se,erally for all
da-ages or !rofits resulting therefro- to the coo!erati,e, -e-%ers, and other !ersons.
+Fhen a director, officer or co--ittee -e-%er atte-!ts to ac6uire or ac6uires, in ,iolation of his duty, any interest or e6uity ad,erse to the
coo!erati,e in res!ect to any -atter which has %een re!osed in hi- in confidence, he shall, as a trustee for the coo!erati,e, %e lia%le for da-ages
and shall %e accounta%le for dou%le the !rofits which otherwise would ha,e accrued to the coo!erati,e.
+A$.. 4'. Compensation. = 819 /n the a%sence of any !ro,isions in the %ylaws fi7ing their co-!ensation, the directors shall not recei,e any
co-!ensation e7ce!t for reasona%le per diems: Provided ho'ever, .hat the directors and officers shall not %e entitled to any per diem when, in the
!receding calendar year, the coo!erati,e re!orted a net loss or had a di,idend rate less than the official inflation rate for the sa-e year. Any
co-!ensation other than per diems -ay %e granted to directors %y a -a3ority ,ote of the -e-%ers with ,oting rights at a regular or s!ecial general
asse-%ly -eeting s!ecifically called for the !ur!ose: Provided, .hat no additional co-!ensation other than per diems shall %e !aid during the first
year of e7istence of any coo!erati,e.
+829 .he co-!ensation of officers of the coo!erati,e as well as the -e-%ers of the co--ittee as well as the -e-%ers of the co--ittees created
!ursuant to this ode or its %ylaws -ay %e fi7ed in the %ylaws.
+839 Dnless already fi7ed in the %ylaws, the co-!ensation of all other e-!loyee shall %e deter-ined %y the %oard of directors.
+A$.. 4<. Dealings of Directors& !fficers& or Committee "embers. = A contract entered into %y the coo!erati,e with one 819 or -ore of its directors,
officers, and co--ittee -e-%ers is ,oida%le, at the o!tion of the coo!erati,e, unless all the following conditions are !resent.
+819 .hat the !resence of such director in the %oard -eeting wherein contract was a!!ro,ed was not necessary to constitute a 6uoru- for such
-eeting:
+829 .hat the ,ote of such director was not necessary for the a!!ro,al of the contract:
+839 .hat the contract is fair and reasona%le under the circu-stances: and
+849 .hat in the case of an officer or co--ittee -e-%er, the contract with the officer or co--ittee -e-%er has %een !re,iously authori4ed %y the
general asse-%ly or %y the %oard of directors.
+Fhere any of the first two conditions set forth in the !receding !aragra!h is a%sent, in the case of a contract with a director, such contract -ay %e
ratified %y a three-fourths 83B49 ,ote of all the -e-%ers with ,oting rights, !resent and constituting a 6uoru- in a -eeting called for the
!ur!ose: Provided, .hat full disclosure of the ad,erse interest of the directors in,ol,ed is -ade at such -eeting, and that the contract is fair and
reasona%le under the circu-stances.
+A$.. 4). Disloyalty of a Director. = A director who, %y ,irtue of his office, ac6uires for hi-self an o!!ortunity which should %elong to the coo!erati,e
shall %e lia%le for da-ages and -ust account for dou%le the !rofits that otherwise would ha,e accrued to the coo!erati,e %y refunding the sa-e,
unless his act has %een ratified %y a three-fourths 83B49 ,ote of all the -e-%ers with ,oting rights, !resent and constituting a 6uoru-. .his !ro,ision
shall %e a!!lica%le, notwithstanding the fact that the director used his own funds in the ,enture.
+A$.. 4(. %llegal (se of Confidential %nformation. = 819 A director or officer, or an associate of a director or officer, who, for his %enefit or ad,antage or
that of an associate, -a*es use of confidential infor-ation that, if generally *nown, -ight reasona%ly %e e7!ected to ad,ersely affect the o!eration
and ,ia%ility of the coo!erati,e, shall %e held:
+8a9 0ia%le to co-!ensate the coo!erati,e for the direct losses suffered %y the coo!erati,e as a result of the illegal use of infor-ation:
and
+8%9 Accounta%le to the coo!erati,e for any direct %enefit or ad,antage recei,ed or yet to %e recei,ed %y hi- or his associate, as a result
of the transaction.
+829 .he coo!erati,e shall ta*e the necessary ste!s to enforce the lia%ilities descri%ed in su%section 8a9
+A$.. 5?. Removal. = All co-!laints for the re-o,al of any elected officer shall %e filed with the %oard of directors. 2uch officer shall %e gi,en the
o!!ortunity to %e heard. Ma3ority of the %oard of directors -ay !lace the officer concerned under !re,enti,e sus!ension !ending the resolution of the
in,estigation. D!on finding of a !ri-a facie e,idence of guilt, the %oard shall !resent its reco--endation for re-o,al to the general asse-%ly.
+An electi,e officer -ay %e re-o,ed %y three fourths 83B49 ,otes of the regular -e-%ers !resent and constituting a 6uoru-, in a regular or s!ecial
general asse-%ly -eeting called for the !ur!ose. .he officer concerned shall %e gi,en an o!!ortunity to %e heard at said asse-%ly.
S%C. 5. Articles 52, 53, 54, 55, 5', 5<, 5), 5(, '?, '1, '2 and '3 of ha!ter G on $es!onsi%ilities, $ights and #ri,ileges of oo!erati,es of the sa-e ode are
here%y renu-%ered and a-ended to read, as follows:
C)AP#%R +
R%SP*NS'-','#'%S" R'()#S AN& PR'+',%(%S *F C**P%RA#'+%
+A$.. 51. $ddress. = 1,ery coo!erati,e shall ha,e an official !ostal address to which all notices and co--unications shall %e sent. 2uch address
and e,ery change thereof shall %e registered with the Authority.
+A$.. 52. Boo/s to be 2ept !pen. = 819 1,ery coo!erati,e shall ha,e the following docu-ents ready and accessi%le to its -e-%ers and
re!resentati,es of the Authority for ins!ection during reasona%le office hours at its official address:
+8a9 A co!y of this ode and all other laws !ertaining to coo!erati,es:
+8%9 A co!y of the regulations of the Authority:
+8c9 A co!y of the articles of coo!eration and %ylaws of the coo!erati,e:
+8d9 A register of -e-%ers:
+8e9 .he %oo*s of the -inutes of the -eetings of the general asse-%ly, %oard of directors and co--ittee:
+8f9 2hare %oo*s, where a!!lica%le:
+8g9 5inancial state-ent: and
+8h9 2uch other docu-ents as -ay %e !rescri%ed %y laws or the %ylaws.
+829 .he accountant or the %oo**ee!er of the coo!erati,e shall %e res!onsi%le for the -aintenance of the coo!erati,e in accordance with generally
acce!ted accounting !ractices. He shall also %e res!onsi%le for the !roduction of the sa-e at the ti-e of audit or ins!ection.
+.he audit co--ittee shall %e res!onsi%le for the continuous and !eriodic re,iew of the %oo*s and records of account to ensure that these are in
accordance with generally acce!ted accounting !ractices. He shall also %e res!onsi%le for the !roduction of the sa-e at the ti-e of audit or
ins!ection.
+839 1ach coo!erati,e shall -aintain records of accounts such that the true and correct condition and the results of the o!eration of the coo!erati,e
-ay %e ascertained therefro- at any ti-e. .he financial state-ents, audited according to generally acce!ted auditing standards, !rinci!les and
!ractices, shall %e !u%lished annually and shall %e *e!t !osted in a cons!icuous !lace in the !rinci!al office of the coo!erati,e.
+849 2u%3ect to the !ertinent !ro,isions of the &ational /nternal $e,enue ode and other laws, a coo!erati,e -ay dis!ose %y way of %urning or other
-ethod of co-!lete destruction any docu-ent, record or %oo* !ertaining to its financial and nonfinancial o!erations which are already -ore than fi,e
859 years old e7ce!t those relating to transactions which are the su%3ect of ci,il, cri-inal and ad-inistrati,e !roceedings. An in,entory of the audited
docu-ents, records and %oo*s to %e dis!osed of shall %e drawn u! and certified to %y the %oard secretary and the chair-an of the audit co--ittee
and !resented to the %oard of directors which -ay thereu!on a!!ro,e the dis!osition of said records.
+A$.. 53. Reports. = 819 1,ery coo!erati,e shall draw u! regular re!orts of its !rogra- of acti,ities, including those in !ursuance of their socio-ci,ic
underta*ings, showing their !rogress and achie,e-ents at the end of e,ery fiscal year. .he re!orts shall %e -ade accessi%le to its -e-%ers, and
co!ies thereof shall %e furnished to all its -e-%ers or record. .hese re!orts shall %e filed with the Authority within one hundred twenty 812?9 days
fro- the end of the calendar year. .he for- and contents of the re!orts shall %e as !rescri%ed %y the rules of the Authority. 5ailure to file the re6uired
re!orts shall su%3ect the accounta%le officerBs to fines and !enalties as -ay %e !rescri%ed %y the Authority, and shall %e a ground for the re,ocation of
authority of the coo!erati,e to o!erate as such. .he fiscal year of e,ery coo!erati,e shall %e the calendar year e7ce!t as -ay %e otherwise !ro,ided
in the %ylaws.
+829 /f a coo!erati,e fails to -a*e, !u%lish and file the re!orts re6uired herein, or fails to include therein any -atter re6uired %y the ode, the Authority
shall, within fifteen 8159 days fro- the e7!iration of the !rescri%ed !eriod, send such coo!erati,e a written notice, stating its non-co-!liance and the
co--ensurate fines and !enalties that will %e i-!osed until such ti-e that the coo!erati,e has co-!lied with the re6uire-ents.
+A$.. 54. Register of "embers as Prima 0acie #vidence. = Any register or list of -e-%ers shares *e!t %y any registered coo!erati,e shall %e !ri-a
facie e,idence of the following !articulars entered therein:
+819 .he date on which the na-e of any !erson was entered in such register or list of -e-%er: and
+829 .he date on which any such !erson ceased to %e a -e-%er.
+A$.. 55. Probative alue of Certified Copies of #ntries. = 819 A co!y of any entry in any %oo*, register or list regularly *e!t in the course of %usiness
in the !ossession of a coo!erati,e shall, if duly certified in accordance with the rules of e,idence, %e ad-issi%le as e,idence of the e7istence of entry
and !ri-a facie e,idence of the -atters and transactions therein recorded.
+829 &o !erson or a coo!erati,e is !ossession of the %oo*s of such coo!erati,e shall, in any legal !roceedings to which the coo!erati,e is not a !arty,
%e co-!elled to !roduce any of the %oo*s of the coo!erati,e, the contents of which can %e !ro,ed and the -atters, transactions and accounts
therein recorded, unless %y order of a co-!etent court.
+A$.. 5'. Bonding of $ccountable !fficers. = 1,ery director, officer, and e-!loyee handling funds, securities or !ro!erty on %ehalf of any coo!erati,e
shall %e co,ered %y a surety %ond to %e issued for a duly registered insurance or %onding co-!any for the faithful !erfor-ance of their res!ecti,e
duties and o%ligations. .he %oard of directors shall deter-ine the ade6uacy of such %onds.
+D!on the filing of the a!!lication for registration of a coo!erati,e, the %onds of the accounta%le officers shall %e re6uired %y the Authority. 2uch
%onds shall %e renewed -anually and the Authority shall accordingly %e infor-ed of such renewal.
+A$.. 5<. Preference of Claims. = 819 &otwithstanding the !ro,isions of e7isting laws, rules and regulations to the contrary, %ut su%3ect to the !rior
clai- of the Authority, any de%t due to the coo!erati,e fro- the -e-%er shall constitute a first lien u!on any raw -aterials, !roduction, in!uts, and
!roducts !roduced: or any land, %uilding, facilities, e6ui!-ent, goods or ser,ices ac6uired and held, %y such -e-%er through the !roceeds of the
loan or credit granted %y the coo!erati,e to hi- for as long as the sa-e is not fully !aid.
+829 &o !ro!erty or interest on !ro!erty which is su%3ect to a lien under !aragra!h 819 shall %e sold nor con,eyed to third !arties without the !rior
!er-ission of the coo!erati,e. .he lien u!on the !ro!erty or interest shall continue to e7it e,en after the sale or con,eyance thereof until such lien
has %een duly e7tinguished.
+839 &otwithstanding the !ro,isions of any law to the contrary, any sale or con,eyance -ade in contra,ention of !aragra!h 829 hereof shall %e ,oid.
+A$.. 5). %nstrument for Salary or 1age Deduction. = 819 A -e-%er of a coo!erati,e -ay, notwithstanding the !ro,isions of e7isting laws to the
contrary, e7ecute an instru-ent in fa,or of the coo!erati,e authori4ing his e-!loyer to deduct fro- hisBher salary or wages, co--utation of lea,e
credits and any other -onetary %enefits !aya%le to hi- %y the e-!loyer and re-it such a-ount as -ay%e s!ecified in satisfaction of a de%t or other
de-and due fro- the -e-%er to the coo!erati,e.
+829 D!on the e7ecution of such instru-ent and as -ay %e re6uired %y the coo!erati,e contained in a written re6uest, the e-!loyer shall -a*e the
deduction in accordance with the agree-ent and deduction in accordance with the agree-ent and re-it forthwith the a-ount so deducted within ten
81?9 days after the end of the !ayroll -onth to the coo!erati,e. .he e-!loyer shall -a*e the deduction for as long as such de%t or other de-and
re-ains un!aid %y the e-!loyee.
+839 .he ter- +e-!loyer+ as used in this article shall include all !ri,ate fir-s and the national and local go,ern-ents and go,ern-ent-owned or
controlled cor!orations who ha,e under their e-!loyer a -e-%er of a coo!erati,e and ha,e agreed to carry out the ter-s of the instru-ent
-entioned in !aragra!hs 819 and 829 of this article.
+849 .he !ro,isions of this article shall a!!ly to all si-ilar agree-ents referred to in !aragra!h 819 and were enforced !rior to the a!!ro,al of this
ode.
+859 &otwithstanding the !ro,isions of e7isting laws to the contrary, the res!onsi%ilities of the e-!loyer as stated in !aragra!hs 819 and 829 of this
articles shall %e -andatory: #ro,ided, .hat in the case of !ri,ate e-!loyer, the actual and reasona%le cost deducting and re-itting -ay%e collected.
+A$.. 5(. Primary *ien. - &otwithstanding the !ro,ision of any law with the contrary, a coo!erati,e shall ha,e !ri-ary lien u!on the ca!ital, de!osits
or interest of a -e-%er for any de%t due to the coo!erati,e fro- such a -e-%er.
+A$.. '?. Ta. Treatment of Cooperative. - >uly registered coo!erati,es under this ode which do not transact any %usiness with non--e-%ers or the
general !u%lic shall not %e su%3ect to any ta7es and fees i-!osed under the internal re,enue laws and other ta7 laws. oo!erati,es not falling under
this article shall %e go,erned %y the succeeding section.
+A$..'1. Ta. and !ther #.emptions. oo!erati,es transacting %usiness with %oth -e-%ers and non--e-%ers shall not %e su%3ected to ta7 on their
transactions with -e-%ers. /n relation to this, the transactions of -e-%ers with the coo!erati,e shall not %e su%3ect to any ta7es and fees, including
not li-ited to final ta7es on -e-%ersE de!osits and docu-entary ta7. &otwithstanding the !ro,isions of any law or regulation to the contrary, such
coo!erati,es dealing with non-e-%ers shall en3oy the following ta7 e7e-!tions:
+819 oo!erati,es with accu-ulated reser,es and undi,ided net sa,ings of not -ore than .en -illion !esos 8#1?,???,???.??9 shall %e e7e-!t fro- all
national, city, !ro,incial, -unici!al or %arangay ta7es of whate,er na-e and nature. 2uch coo!erati,es shall %e e7e-!t fro- custo-s duties,
ad,ance sales or co-!ensating ta7es on their i-!ortation of -achineries, e6ui!-ent and s!are !arts used %y the- and which are not a,aila%le
locally a certified %y the de!art-ent of trade and industry 8>./9. All ta7 free i-!ortations shall not %e sold nor the %eneficial ownershi! thereof %e
transferred to any !erson until after fi,e 859 years, otherwise, the coo!erati,e and the transferee or assignee shall %e solidarily lia%le to !ay twice the
a-ount of the i-!osed ta7 and B or duties.
+829 oo!erati,es with accu-ulated reser,es and di,ided net sa,ings of -ore than .en -illion !esos 8#1?,???,???.??9 shall fee the following ta7es
at the full rate:
+8a9 /nco-e .a7 - An the a-ount allocated for interest on ca!itals: #ro,ided, .hat the sa-e ta7 is not conse6uently i-!osed on interest
indi,idually recei,ed %y -e-%ers: #ro,ided, further, .hat coo!erati,es regardless of classification, are e7e-!t inco-e ta7 fro- the date
of registration with the Authority:
+8%9 Galue-Added .a7 = An transactions with non--e-%ers: Provided, ho'ever, .hat coo!erati,es duly registered with the Authority:
are e7e-!t fro- the !ay-ent of ,alue-added ta7: su%3ect to 2ection 1?(, su%-sections 0, M and & of $e!u%lic Act &o. (33<, the
&ational /nternal $e,enue ode, as a-ended:Provided, .hat the e7e-!t transaction under 2ection 1?( 809 shall include sales -ade %y
coo!erati,es duly registered with the Authority organi4ed and o!erated %y its -e-%er to underta*e the !roduction and !rocessing of
raw -aterials or of goods !roduced %y its -e-%ers into finished or !rocess !roducts for sale %y the coo!erati,e to its -e-%ers and
non--e-%ers: Provided, further, .hat any !rocessed !roduct or its deri,ati,e arising fro- the raw -aterials !roduced %y its -e-%ers,
sold in then na-e and for the account of the coo!erati,e: Provided , finally, .hat at least twenty-fi,e per centum 825C9 of the net
inco-e of the coo!erati,es is returned to the -e-%ers in the for- of interest andBor !atronage refunds:
+8c9 All other ta7es unless otherwise !ro,ided herein: and
+8d9 >onations to charita%le, research and educational institutions and rein,est-ent to socioecono-ic !ro3ects within the area of
o!eration of the coo!erati,e -ay %e ta7 deducti%le.
+839 All coo!erati,es, regardless of the a-ount of accu-ulated reser,es and undi,ided net sa,ings shall %e e7e-!t fro- !ay-ent of local ta7es and
ta7es on transactions with %an*s and insurance co-!anies:Provided, .hat all sales or ser,ices rendered for non--e-%ers shall %e su%3ect to the
a!!lica%le !ercentage ta7es sales -ade %y !roducers, -ar*eting or ser,ice coo!erati,es: Provided further, .hat nothing in this article shall !reclude
the e7a-ination of the %oo*s of accounts or other accounting records of the coo!erati,e %y duly authori4ed internal re,enue officers for internal
re,enue ta7 !ur!oses only, after !re,ious authori4ation %y the Authority.
+849 /n areas where there are no a,aila%le notaries !u%lic, the 3udge, e7ercising his e. officio ca!acity as notary !u%lic, shall render ser,ice, free of
charge, to any !erson or grou! of !ersons re6uiring the ad-inistration of oath or the ac*nowledg-ent of articles of coo!eration and instru-ents of
loan fro- coo!erati,es not e7ceeding 5i,e Hundred .housand #esos 8#5??,???.??9.
+859 Any register of deeds shall acce!t for registration, free of charge, any instru-ent relati,e to a loan -ade under this ode which does not e7ceed
.wo Hundred 5ifty .housand #esos 8#25?,???.??9 or the deeds of title of any !ro!erty ac6uired %y the coo!erati,e or any !a!er or docu-ent drawn
in connection with any action %rought %y the coo!erati,e or with any court 3udg-ent rendered in its fa,or or any instru-ent relati,e to a %ond of any
accounta%le officer of a coo!erati,e for the faithful !erfor-ance of his duties and o%ligations.
+8'9 oo!erati,es shall %e e7e-!t fro- the !ay-ent of all court and sheriffEs fees !aya%le to the #hili!!ine "o,ern-ent for and in connection with all
actions %rought under this ode, or where such actions is %rought %y the Authority %efore the court, to enforce the !ay-ent of o%ligations contracted
in fa,or of the coo!erati,e.
+8<9 All coo!erati,es shall %e e7e-!t fro- !utting u! a %ond for %ringing an a!!eal against the decision of an inferior court or for see*ing to set aside
any third !arty clai-: Provided, .hat a certification of the Authority showing that the net assets of the coo!erati,e are in e7cess of the a-ount of the
%ond re6uired %y the court in si-ilar cases shall %e acce!ted %y the court as a sufficient %ond.
+8)9 Any security issued %y coo!erati,es shall %e e7e-!t fro- the !ro,isions of the 2ecurities Act !ro,ided such security shall not %e s!eculati,e.
+A$.. '2. Privileges of Cooperatives. = oo!erati,es registered under this ode, notwithstanding the !ro,isions of any law to the contrary, %e also
accorded the following !ri,ileges:
+819 oo!erati,es shall en3oy the !ri,ilege of de!ositing their sealed cash %o7es or containers, docu-ents or any ,alua%le !a!ers in the
safes of the -unici!al or city treasurers and other go,ern-ent offices free of charge, and the custodian of such articles shall issue a
recei!t ac*nowledging the articles recei,ed duly witnessed %y another !erson:
+829 oo!erati,es organi4ed a-ong go,ern-ent e-!loyees, notwithstanding any law or regulation to the contrary, shall en3oy the free
use of any a,aila%le s!ace in their agency, whether owned or rented %y the "o,ern-ent:
+839 oo!erati,es rendering s!ecial ty!es of ser,ices and facilities such as cold storage, ice !lant, electricity, trans!ortation, and si-ilar
ser,ices and facilities shall secure a franchise therefore, and such coo!erati,es shall o!en their -e-%ershi! to all !ersons 6ualified in
their areas of o!eration:
+849 /n areas where a!!ro!riate coo!erati,es e7ist, the !referential right to su!!ly go,ern-ent institutions and agencies rice, corn and
other grains, fish and other -arine !roducts, -eat, eggs, -il*, ,egeta%les, to%acco and other agricultural co--odities !roduced %y
their -e-%ers shall %e granted to the coo!erati,es concerned:
+859 #referential treat-ent in the allocation of fertili4ers, including seeds and other agricultural in!uts and i-!le-ents, and in rice
distri%ution shall %e granted to coo!erati,es %y the a!!ro!riate go,ern-ent agencies:
+8'9 #referential and e6uita%le treat-ent in the allocation or control of %otto-ries of co--ercial shi!!ing ,essels in connection with the
shi!-ent of goods and !roducts of coo!erati,es:
+8<9 oo!erati,es and their federations, such as far- and fishery !roducers and su!!liers, -ar*et ,endors and such other
coo!erati,es, which ha,e for their !ri-ary !ur!ose the !roduction andBor the -ar*eting of !roducts fro- agriculture, fisheries and s-all
entre!reneurial industries and federations thereof, shall ha,e !referential rights in the -anage-ent of !u%lic -ar*ets andBor lease of
!u%lic -ar*et facilities, stalls or s!aces: Provided, .hat these rights shall only %e utili4ed e7clusi,ely %y coo!erati,es: Provided, further,
.hat no coo!erati,e for-ing a 3oint ,enture, !artnershi! or any other si-ilar arrange-ent with a non-coo!erati,e entity can utili4e these
rights:
+8)9 oo!erati,es engaged in credit ser,ices andBor federations shall %e entitled to loans credit lines, rediscounting of their loan notes,
and other eligi%le !a!ers with the >e,elo!-ent Ban* of the #hili!!ines, the 0and Ban* of the #hili!!ines and other financial institutions
e7ce!t the Bang*o 2entral ng #ili!inas 8B2#9:
+.he #hili!!ine >e!osit /nsurance or!oration 8#>/9 and other go,ern-ent agencies, go,ern-ent-owned and controlled cor!orations
and go,ern-ent financial institutions shall !ro,ide technical assistance to registered national federations and unions of coo!erati,es
which ha,e significant engage-ent in sa,ings and credit o!erations in order for these federations and unions to esta%lish andBor
strengthen their own autono-ous coo!erati,e de!osit insurance syste-s:
+8(9 A !u%lic trans!ort ser,ice coo!erati,e -ay %e entitled to financing su!!ort for the ac6uisition andBor -aintenance of land and sea
trans!ort e6ui!-ent, facilities and !arts through the !rogra- of the go,ern-ent financial institutions. /t shall ha,e the !referential right
to the -anage-ent and o!eration of !u%lic ter-inals and !orts whether land or sea trans!ort where the coo!erati,e o!erates and on
securing a franchise for acti,e or !otential routes for the !u%lic trans!ort:
+81?9 oo!erati,es transacting %usiness with the "o,ern-ent of the #hili!!ines or any of its !olitical su%di,isions or any of its agencies
or instru-entalities, including go,ern-ent-owned and controlled cor!orations shall %e e7e-!t fro- !re6ualification %idding
re6uire-ents notwithstanding the !ro,isions of $e!u%lic Act &o.(1)4, otherwise *nown as, the "o,ern-ent #rocure-ent Act:
+8119 oo!erati,e shall en3oy the !ri,ilege of %eing re!resented %y the !ro,incial or city fiscal or the Affice of the 2olicitor "eneral, free
of charge, e7ce!t when the ad,erse !arty is the $e!u%lic of the #hili!!ines:
+8129 oo!erati,es organi4ed %y faculty -e-%ers and e-!loyees of educational institutions shall ha,e the !referential right in the
-anage-ent of the canteen and other ser,ices related to the o!eration of the educational institution where they are e-!loyed:
#ro,ided, .hat such ser,ices are o!erated within the !re-ises of the said educational institution: and
+8139 .he a!!ro!riate housing agencies and go,ern-ent financial institutions shall create a s!ecial window for financing housing
!ro3ects underta*en %y coo!erati,es, with interest rates and ter-s e6ual to, or %etter than those gi,en for sociali4ed housing !ro3ects.
.his financing shall %e in the for- of %lan*et loans or long-ter- wholesale loans to 6ualified coo!erati,es, without need for indi,idual
!rocessing.
+.he Authority, in consultation with the a!!ro!riate go,ern-ent agencies and concerned coo!erati,e sector, shall issue rules and
regulations on all -atters concerning housing coo!erati,es.+
S%C. 5. Article '4 of ha!ter G/ on /nsol,ency of oo!erati,es of the sa-e ode is here%y renu-%ered and a-ended to read, as follows:
C)AP#%R +'
'NS*,+%NC6 *F C**P%RA#'+%S
+A$.. '3. Proceeding (pon %nsolvency.- /n case a coo!erati,e is una%le to fulfill its o%ligations to creditors due to insol,ency, such coo!erati,e -ay
a!!ly for such re-edies as it -ay dee- fit under the !ro,isions of Act &o. 1(5', as a-ended, otherwise *nown as the /nsol,ency 0aw.
+&othing in this Article, howe,er, !recludes creditors fro- see*ing !rotection fro- said insol,ency law.+
S%C. !. Articles '5, ''. '<, '), '(, <? and <1 of ha!ter G// on >issolution of oo!erati,es of the sa-e ode are here%y renu-%ered and a-ended to read, as
follows:
C)AP#%R +''
&'SS*,7#'*N *F C**P%RA#'+%S
+A$.. '4. oluntary Dissolution 1here no Creditors are $ffected. = /f the dissolution of a coo!erati,e does not !re3udice the rights of any creditor
ha,ing a clai- against it, the dissolution -ay %e affected %y a -a3ority ,ote of the %oard of directors, and %y a resolution duly ado!ted %y the
affir-ati,e ,ote of at least three-fourths 83B49 of all the -e-%ers with ,oting rights, !resent and constituting a 6uoru- at a -eeting to %e held u!on
call of the directors: Provided, .hat the notice of ti-e, !lace and o%3ect of the -eeting shall %e !u%lished for three 839 consecuti,e wee*s in a
news!a!er !u%lished in the !lace where the !rinci!al office of said coo!erati,e is located, or if no news!a!er is !u%lished in such !lace, in a
news!a!er of general circulation in the #hili!!ines: Provided, further, .hat the notice of such -eeting is sent to each -e-%er of record either %y
registered -ail or %y !ersonal deli,ery at least thirty 83?9 days !rior to said -eeting. A co!y of the resolution authori4ing the dissolution shall %e
certified to %y a -a3ority of the %oard of directors and countersigned %y the %oard secretary. .he Authority shall thereu!on issue the certificate of
dissolution.
+A$.. '5. oluntary Dissolution 1here Creditors $re $ffected. = Fhere the dissolution of a coo!erati,e -ay !re3udice the rights of any creditor, the
!etition for dissolution shall %e filed with the Authority. .he !etition shall %e signed %y a -a3ority of its %oard or directors or other officers -anaging its
affairs, ,erified %y its chair!erson or %oard secretary or one of its directors and shall set forth all clai-s and de-ands against it and that its dissolution
was resol,ed u!on %y the affir-ati,e ,ote of at least three-fourths 83B49 of all the -e-%ers with ,oting rights, !resent and constituting a 6uoru- at a
-eeting called for that !ur!ose.
+/f the !etition is sufficient in for- and su%stance, the Authority shall issue an order reciting the !ur!ose of the !etition and shall fi7 a date which shall
not %e less than thirty 83?9 nor -ore than si7ty 8'?9 days after the entry of the order. Before such date, a co!y of the order shall %e !u%lished at least
once a wee* for three 839 consecuti,e wee*s in a news!a!er of general circulation !u%lished in the -unici!ality or city where the !rinci!al office of
the coo!erati,e is situated or in the a%sence of such local news!a!er, in a news!a!er of general circulation in the #hili!!ines, and a co!y shall
li*ewise %e !osted for three 839 consecuti,e wee*s in three 839 !u%lic !laces in the -unici!ality or city where the coo!erati,eEs office is located.
+D!on e7!iry of the fi,e 859 day notice to file o%3ections, the Authority shall !roceed to hear the !etition and try any issue raised in the o%3ection filed:
and if the o%3ection is sufficient and the -aterial allegations of the !etition are !ro,en, it shall issue an order to dissol,e the coo!erati,e and direct the
dis!osition of its assets in accordance with e7isting rules and regulations. .he order of dissolution shall set forth therein:
+819 .he assets and lia%ilities of the coo!erati,e:
+829 .he clai- of any creditor:
+839 .he nu-%er of -e-%ers: and
+849 .he nature and e7tend of the interests of the -e-%ers of the coo!erati,e.
+A$.. ''. %nvoluntary Dissolution. = A coo!erati,e -ay %e dissol,ed %y order of a co-!etent court after due hearing on the grounds of:
+819 Giolation of any law, regulation or !ro,isions of its %ylaws: or
+829 /nsol,ency.
+A$.. '<. Dissolution by !rder of the $uthority. = .he Authority -ay sus!end or re,o*e, after due notice and hearing, the certificate of registration of
a coo!erati,e on any of the following grounds:
+819 Ha,ing o%tained its registration %y fraud:
+829 17isting for an illegal !ur!ose:
+839 Fillful ,iolation, des!ite notice %y the Authority, of the !ro,isions of this ode or its %ylaws:
+849 Fillful failure to o!erate on a coo!erati,e %asis: and
+859 5ailure to -eet the re6uired -ini-u- nu-%er of -e-%ers in the coo!erati,e.
+A$.. '). Dissolution by 0ailure to !rgani-e and !perate.- /f a coo!erati,e has not co--enced %usiness and its o!eration within two 829 years after
the issuance of its certificate of registration or has not carried on its %usiness for two 829 consecuti,e years, the Authority shall send a for-al notice to
the said coo!erati,e to show cause as to its failure to o!erate. 5ailure of the coo!erati,e to !ro-!tly !ro,ide 3ustifia%le cause for its failure to o!erate
shall warrant the Authority to delete its na-e fro- the roster of registered coo!erati,es and shall %e dee-ed dissol,ed.
+A$.. '(. *i4uidation of a Cooperative. = 1,ery coo!erati,e whose charter e7!ires %y its own li-itation or whose e7istence is ter-inated %y ,oluntary
dissolution or through an a!!ro!riate 3udicial !roceeding shall ne,ertheless continue to e7ist for three 839 years after the ti-e it is dissol,ed: not to
continue the %usiness for which it was esta%lished %ut for the !ur!ose of !rosecuting and defending suits %y or against it: settle-ent and closure of
its affairs: dis!osition, con,eyance and distri%ution of its !ro!erties and assets.
+At any ti-e during the said three 839 years, the coo!erati,e is authori4ed and e-!owered to con,ey all of its !ro!erties to trustees for the %enefit of
its -e-%ers, creditors and other !ersons in interest. 5ro- and after any such con,eyance, all interests which the coo!erati,e had in the !ro!erties
are ter-inated.
+D!on the winding u! of the coo!erati,e affairs, any asset distri%uta%le to any creditor, shareholder or -e-%er who is un*nown or cannot %e found
shall %e gi,en to the federation or union to which the coo!erati,e is affiliated with.
+A coo!erati,e shall only distri%ute its assets or !ro!erties u!on lawful dissolution and after !ay-ent of all its de%ts and lia%ilities, e7ce!t in the case
of decrease of share ca!ital of the coo!erati,e and as otherwise allowed %y this ode.
+A$.. <?. Rules and Regulations on *i4uidation. = .he Authority shall issue the a!!ro!riate i-!le-enting guidelines for the li6uidation of
coo!erati,es.+
S%C. 1. Articles <2, <3, <4, <5, <', <<, <), <( and )? of ha!ter G/// on a!ital, #ro!erty, and 5unds of the sa-e ode are here%y renu-%ered and a-ended to
read, as follows:
C)AP#%R +'''
CAP'#A," PR*P%R#6" AN& F7N&S
+A$.. <1. Capital. - .he ca!itali4ation of coo!erati,es and the accounting !rocedures shall %e go,erned %y the !ro,isions of this ode and the
regulations which shall %e issued.
+A$.. <2. Capital Sources.- oo!erati,es registered under this ode -ay deri,e their ca!ital fro- any or all of the following sources:
+819 Me-%erEs share ca!ital:
+829 0oans and %arrowings including de!osits:
+839 $e,ol,ing ca!ital which consists of the deferred !ay-ent of !atronage refunds, or interest on share ca!ital: and
+849 2u%sidies, donations, legacies, grants, aids and such other assistance fro- any local or foreign institution whether !u%lic or
!ri,ate: Provided, .hat ca!ital co-ing fro- such su%sides, donations, legacies, grants, aids and other assistance shall not %e di,ided
into indi,idual share ca!ital holdings at any ti-e %ut shall instead for- !art of the donated ca!ital or fund of the coo!erati,e.
+D!on dissolution, such donated ca!ital shall %e su%3ect to escheat.
+A$.. <3. *imitation on Share Capital Holdings.- &o -e-%er of !ri-ary coo!erati,e other than coo!erati,e itself shall own or hold -ore than ten per
centum 81?C9 of the share ca!ital of the coo!erati,e.
+Fhere a -e-%er of coo!erati,e dies, his heir shall %e entitled to the shares of the decedent: Provided, .hat the total share holding of the heir does
not e7ceed ten per centum 81?C9 of the share ca!ital of the coo!erati,e: Provided, further, .hat the heir 6ualify and is ad-itted as -e-%ers of the
coo!erati,e: Providedfinally , .hat where the heir fails to 6ualify as a -e-%er or where his total share holding e7ceeds ten per centum 81?C9 of the
share ca!ital , the share or shares e7cess will re,ert to the coo!erati,e u!on !ay-ent to the heir of the ,alue of such shares.
+A$.. <4. $ssignment of Share Capital Contribution or %nterest.- 2u%3ect to the !ro,isions of this ode, no -e-%er shall transfer his shares or
interest in the coo!erati,e or any !art thereof unless.
+819 He has held such share ca!ital contri%ution or interest for not less than one 819 year.
+829 .he assign-ent is -ade to the coo!erati,e or to a -e-%er of the coo!erati,e or to a !erson who falls within the field of the
-e-%ershi! of the coo!erati,e: and
+839 .he %oard of directors has a!!ro,ed such assign-ent.
+A$..<5. Capital Build)(p.- .e %ylaws of e,ery coo!erati,e shall %e !ro,ided for a reasona%le and realistic -e-%er ca!ital %uild-u! !rogra- to allow
the continuing growth of the -e-%ersE in,est-ent in their coo!erati,e as their econo-ic conditions continue to i-!ro,e.
+A$..<'. Shares.- .he ter- +share+ refers to a unit of ca!ital in a !ri-ary coo!erati,e the !ar ,alue of which -ay %e fi7ed to any figure not -ore than
Ane thousand !esos 8#1,???.??9. .he share of ca!ital of a coo!erati,e is the -oney !aid or re6uired to %e !aid for the o!erations of the coo!erati,e.
.he -ethod for the issuance of share certificates shall !rescri%ed in its %ylaws.
+A$..<<. 0ines. - .he %ylaws of a coo!erati,e -ay !rescri%e a fine on un!aid su%scri%ed share ca!ital. #ro,ided, that such fine is fair and
reasona%le under the circu-stances.
+A$..<). %nvestment of Capital. - A coo!erati,e -ay in,est its ca!ital in any of the following:
+8a9 /n shares or de%entures or securities of any other coo!erati,e:
+8%9 /n any re!uta%le %an* in the locality, or any coo!erati,e:
+8c9 /n securities issued or guaranteed %y the "o,ern-ent:
+8d9 /n real state !ri-arily for the use of the coo!erati,e or its -e-%ers: or
+8e9 /n any other -anner authori4ed in the %ylaws.
+A$.. <(. Revolving Capital. = .he general asse-%ly of any coo!erati,e -ay authori4e the %oard of directors to raise a re,ol,ing ca!ital to
strengthen its ca!ital structure %y deferring the !ay-ent of !atronage refunds and interest on share ca!ital or %y the authori4ed deduction of a
!ercentage fro- the !roceeds of !roducts sold or ser,ices rendered, or !er unit of !roduct or ser,ices handled. .he %oard of directors shall issue
re,ol,ing ca!ital certificates with serial nu-%er, na-e, a-ount, and rate of interest to %e !aid and shall distinctly set forth the ti-e of retire-ent of
such certificates and the a-ounts to %e returned.+
S%C. 9. Articles )1, )2, )3, )4 and )5 of ha!ter /I on Audit, /n6uiry and Me-%ersE $ight to 17a-ine of the sa-e ode are here%y renu-%ered and a-ended to
read, as follows:
+A$.. )?. $nnual $udit. = oo!erati,es registered under this ode shall %e su%3ect to an annual financial, !erfor-ance and social audit. .he financial
audit shall %e conducted %y an e7ternal auditor who satisfies all the following 6ualifications:
+819 He is inde!endent of the coo!erati,e or any of its su%sidiary that he is auditing: and
+829 He is a -e-%er in good standing of the #hili!!ine /nstitute of ertified #u%lic Accountants 8#/#A9 and is accredited %y %oth the
Board and Accountancy and the Authority.
+.he social audit shall %e conducted %y an inde!endent social auditor accredited %y the Authority.
+#erfor-ance and social audit re!orts which contain the findings and reco--endations of the auditor shall %e su%-itted to the %oard of directors.
+.he Authority, in consultation with the coo!erati,e sector, shall !ro-ulgate the rules and standards for the social audit of coo!erati,es.
+A$.. )1. $udit Report. = .he auditor shall su%-it to the %oard of directors and to the audit co--ittee the financial audit re!ort which shall %e in
accordance with the generally acce!ted auditing standards for coo!erati,es as 3ointly !ro-ulgated %y the #hili!!ine /nstitute of ertified #u%lic
Accountants 8#/#A9 and the Authority.
+.hereafter, the %oard of directors shall !resent the co-!lete audit re!ort to the general asse-%ly in its ne7t -eeting.
+A$.. )2. ,onliability for Defamations. = .he auditor is not lia%le to any !erson in an action for defa-ation %ased on any act, done, or any state-ent
-ade %y hi- in good faith in connection with any -atter he is authori4ed or re6uired to do !ursuant to this ode.
+A$.. )3. Right to #.amine. = A -e-%er shall ha,e the right to e7a-ine the records re6uired to %e *e!t %y the coo!erati,e under Article 52 of this
ode during reasona%le hours on %usiness days and he -ay de-and, in writing, for a co!y of e7cer!ts fro- said records without charge e7ce!t the
cost of !roduction.
+Any officer of the coo!erati,e who shall refuse to allow any -e-%er of the coo!erati,e to e7a-ine and co!y e7cer!ts fro- its records shall %e lia%le
to such -e-%er for da-ages and shall %e guilty of an offense which shall %e !unisha%le under Article 14? of this ode: Provided, .hat if such refusal
is !ursuant to a resolution or order of the %oard of directors, the lia%ility under this article shall %e i-!osed u!on the directors who ,oted for such
refusal: Provided, further, .hat it shall %e a defense to any action under this article that the -e-%er de-anding to e7a-ine and co!y e7cer!ts fro-
the coo!erati,e records has i-!ro!erly used any infor-ation secured through any !rior e7a-ination of the records of such coo!erati,e or was not
acting in good faith or for a legiti-ate !ur!ose in -a*ing his de-and.
+A$.. )4. Safety of Records. = 1,ery coo!erati,e shall, at its !rinci!al office, *ee! and carefully !reser,e the records re6uired %y this ode to %e
!re!ared and -aintained. /t shall ta*e all necessary !recaution to !re,ent its loss, destruction or falsification.+
S%C. 0. Articles )' and )< of ha!ter I on Allocation and >istri%ution of &et 2ur!lus of the sa-e ode are here%y renu-%ered and a-ended to read, as follows:
C)AP#%R 8
A,,*CA#'*N AN& &'S#R'-7#'*N *F N%# S7RP,7S
+A$.. )5. ,et Surplus. = &otwithstanding the !ro,isions of e7isting laws, the net sur!lus of coo!erati,es shall %e deter-ined in accordance with its
%ylaws. 1,ery coo!erati,e shall deter-ine its net sur!lus at the close of e,ery fiscal year and at such other ti-es as -ay %e !rescri%ed %y the
%ylaws.
+Any !ro,ision of law to the contrary notwithstanding, the net sur!lus shall not %e construed as !rofit %ut as an e7cess of !ay-ents -ade %y the
-e-%ers for the loans %orrowed, or the goods and ser,ices a,ailed %y the- fro- the coo!erati,e or the difference of the rightful a-ount due to the
-e-%ers for their !roducts sold or ser,ices rendered to the coo!erati,e including other inflows of assets resulting fro- its other o!erating acti,ities
and which shall %e dee-ed to ha,e %een returned to the- if the sa-e is distri%uted as !rescri%ed herein.
+A$.. )'. !rder of Distribution. = .he net sur!lus of e,ery coo!erati,e shall %e distri%uted as follows:
+819 An a-ount for the reser,e fund which shall %e at least ten per centum 81?C9 of net sur!lus:Provided, .hat, in the first fi,e 859 years
of o!eration after registration, this a-ount shall not %e less than fifty per centum 85?C9 of the net sur!lus:
+8a9 .he reser,e fund shall %e used for the sta%ility of the coo!erati,e and to -eet net losses in its o!erations. .he general
asse-%ly -ay decrease the a-ount allocated to the reser,e fund when the reser,e fund already e7ceeds the share
ca!ital.
+Any su- reco,ered on ite-s !re,iously charged to the reser,e fund shall %e credited to such fund.
+8%9 .he reser,e fund shall not %e utili4ed for in,est-ent, other than those allowed in this ode. 2uch su- of the reser,e
fund in e7cess of the share ca!ital -ay %e used at anyti-e for any !ro3ect that would e7!and the o!erations of the
coo!erati,e u!on the resolution of the general asse-%ly.
+8c9 D!on the dissolution of the coo!erati,e, the reser,e fund shall not %e distri%uted a-ong the -e-%ers. .he general
asse-%ly -ay resol,es:
+8i9 .o esta%lish a usufructuary trust fund for the %enefit of any federation or union to which the coo!erati,e is
affiliated: and
+8ii9 .o donate, contri%ute, or otherwise dis!ose of the a-ount for the %enefit of the co--unity where the
coo!erati,e o!erates. /f the -e-%ers cannot decide u!on the dis!osal of the reser,e fund, the sa-e shall
go to the federation or union to which the coo!erati,e is affiliated.
+829 An a-ount for the education and training fund, shall not %e -ore than ten per centum 81?C9 of the net sur!lus. .he %ylaws -ay
!ro,ide that certain fees or a !ortion thereof %e credited to such fund. .he fund shall !ro,ide for the training, de,elo!-ent and si-ilar
other coo!erati,e acti,ities geared towards the growth of the coo!erati,e -o,e-ent:
+8a9 Half of the a-ounts transferred to the education and training fund annually under this su%section shall %e s!ent %y the
coo!erati,e for education and training !ur!oses: while the other half -ay %e re-itted to a union or federation chosen %y
the coo!erati,e or of which it is a -e-%er. .he said union or federation shall su%-it to the Authority and to its contri%uting
coo!erati,es the following schedules:
+8i9 0ist of coo!erati,es which ha,e re-itted their res!ecti,e oo!erati,e 1ducation and .raining 5unds
81.59:
+8ii9 Business consultancy assistance to include the nature and cost: and
+8iii9 Ather training acti,ities underta*en s!ecifying therein the nature, !artici!ants and cost of each acti,ity.
+8%9 D!on the dissolution of the coo!erati,e, the une7!ended %alance of the education and training fund a!!ertaining to
the coo!erati,e shall %e credited to the coo!erati,e education and training fund of the chosen union or federation.
+839 An a-ount for the co--unity de,elo!-ent fund, which shall not %e less than three per centum83C9 of the net sur!lus. .he
co--unity de,elo!-ent fund shall %e used for !ro3ects or acti,ities that will %enefit the co--unity where the coo!erati,e o!erates.
+849 An o!tional fund, a land and %uilding, and any other necessary fund the total of which shall not e7ceed se,en per centum 8<C9.
+859 .he re-aining net sur!lus shall %e -ade a,aila%le to the -e-%ers in the for- of interest on share ca!ital not to e7ceed the nor-al
rate of return our in,est-ents and !atronage refunds: Provided, .hat any a-ount re-aining after the allowa%le interest and the
!atronage refund ha,e %een deducted shall %e credited to the reser,e fund.
+.he su- allocated for !atronage refunds shall %e -ade a,aila%le at the sa-e rate to all !atrons of the coo!erati,e in !ro!ortion to their indi,idual
!atronage: Provided, .hat:
+8a9 /n the case of a -e-%er !atron with !aid-u! share ca!ital contri%ution, his !ro!ortionate a-ount of !atronage refund shall %e !aid
to hi- unless he agrees to credit the a-ount to his account as additional share ca!ital contri%ution:
+8%9 /n the case of a -e-%er !atron with un!aid share ca!ital contri%ution, his !ro!ortionate a-ount of !atronage refund shall %e
credited to his account until his account until his share ca!ital contri%ution has %een fully !aid:
+8c9 /n the case of a non--e-%er !atron, his !ro!ortionate a-ount of !atronage refund shall %e set aside in a general fund for such
!atrons and shall %e allocated to indi,idual non--e-%er !atrons only u!on re6uest and !resentation of e,idence of the a-ount of his
!atronage. .he a-ount so allocated shall %e credited to such !atron toward !ay-ent of the -ini-u- ca!ital contri%ution for
-e-%ershi!. Fhen a su- e6ual to this a-ount has accu-ulated at any ti-e within a !eriod s!ecified in the %ylaws, such !atron shall
%e dee-ed and %eco-e a -e-%er of the coo!erati,e if he so agrees or re6uests and co-!lies with the !ro,isions of the %ylaws for
ad-ission to -e-%ershi!: and
+8d9 /f within any !eriod of ti-e s!ecified in the %ylaws, any su%scri%er who has not fully !aid his su%scri%ed share ca!ital or any non-
-e-%er !atron who has accu-ulated the su- necessary for -e-%ershi! %ut who does not re6uest nor agree to %eco-e a -e-%er or
fails to co-!ly with the !ro,isions of the %ylaws for ad-ission to -e-%ershi!, the a-ount so accu-ulated or credited to their account
together with any !art of the general fund for non-e-%er !atrons shall %e credited to the reser,e fund or to the education and training
fund of the coo!erati,e, at the o!tion of the coo!erati,e.+
S%C. . Articles )), )(, (?, (1, (2, (3, (4 and (5 of ha!ter I/ on the 2!ecial #ro,isions $elating to Agrarian $efor- oo!erati,es of the sa-e ode are here%y
renu-%ered retitled and a-ended to read, as follows:
C)AP#%R 8'
A(RAR'AN R%F*R$ C**P%RA#'+%S
+A$.. )<. Coverage. = .he !ro,isions of this ha!ter shall !ri-arily go,ern agrarian refor- coo!erati,es:Provided, .hat the !ro,isions of the other
cha!ters of this ode shall a!!ly su!!letorily e7ce!t insofar as this ha!ter otherwise !ro,ides.
+A$.. )). Definition and Purpose. = An agrarian refor- coo!erati,e is one organi4ed %y -arginal far-ers, -a3ority of which are agrarian refor-
%eneficiaries, for the !ur!ose of de,elo!ing an a!!ro!riate syste- of land tenure, land de,elo!-ent, land consolidation or land -anage-ent in areas
co,ered %y agrarian refor-.
+An agrarian refor- coo!erati,e as defined shall %e organi4ed for any or all of the following !ur!oses:
+819 .o de,elo! an a!!ro!riate syste- of land tenure, land de,elo!-ent, land consolidation or land -anage-ent in areas co,ered %y
agrarian refor-:
+829 .o coordinate and facilitate the disse-ination of scientific -ethods of !roduction, and !ro,ide assistance in the storage, trans!ort,
and -ar*eting of far- !roducts for agrarian refor- %eneficiaries and their i--ediate fa-ily, hereinafter referred to as +%eneficiaries+:
+839 .o !ro,ide financial facilities to %eneficiaries for !ro,ident or !roducti,e !ur!oses at reasona%le costs:
+849 .o arrange and facilitate the e7!editious transfer of a!!ro!riate and suita%le technology to %eneficiaries and -arginal far-ers at the
lowest !ossi%le cost:
+859 .o !ro,ide social security %enefits, health, -edical and social insurance %enefits and other social and econo-ic %enefits that
!ro-ote the general welfare of the agrarian refor- %eneficiaries and -arginal far-ers:
+8'9 .o !ro,ide non-for-al education, ,ocationalBtechnical training, and li,elihood !rogra-s to %eneficiaries and -arginal far-ers:
+8<9 .o act as conduits for e7ternal assistance and ser,ices to the %eneficiaries and -arginal far-ers:
+8)9 .o underta*e a co-!rehensi,e and integrated de,elo!-ent !rogra- in agrarian refor- and resettle-ent areas with s!ecial
concern for the de,elo!-ent of agro-%ased, -arine-%ased, and cottage-%ased industries:
+8(9 .o re!resent the %eneficiaries on any or all -atters that affect their interest: and
+81?9 .o underta*e such other econo-ic or social acti,ities as -ay %e necessary or incidental in the !ursuit of the foregoing !ur!oses.
+A$.. )(. Cooperative #state. = 0andholdings li*e !lantations, estates or haciendas ac6uired %y the 2tate for the %enefit of the wor*ers in
accordance with the o-!rehensi,e Agrarian $efor- #rogra- which shall %e collecti,ely owned %y the wor*er-%eneficiaries under a coo!erati,e
set-u!.
+A$.. (?. %nfrastructure. = /n agrarian refor- and resettle-ent areas, the "o,ern-ent shall grant to agrarian refor- coo!erati,es !referential
treat-ent in the construction, -aintenance and -anage-ent of roads, %ridges, canals, whar,es, !orts, reser,oirs, irrigation syste-s, waterwor*s
syste-s, and other infrastructures with go,ern-ent funding. 5or this !ur!ose, the "o,ern-ent shall !ro,ide technical assistance, facilities and
e6ui!-ent to such agrarian refor- coo!erati,es.
+A$.. (1. *ease of Public *ands. = .he "o,ern-ent -ay lease !u%lic lands to any agrarian refor- coo!erati,e for a !eriod not e7ceeding twenty-fi,e
825C9 years, su%3ect to renewal for another twenty-fi,e 8259 years only: Provided, .hat the a!!lication for renewal shall %e -ade one 819 year %efore
the e7!iration of the lease: Provided, further, .hat such lease shall %e for the e7clusi,e use and %enefit of the %eneficiaries and -arginal far-ers
su%3ect to the !ro,isions of the o-!rehensi,e Agrarian $efor- #rogra-.
+A$.. (2. Preferential Right. = /n agrarian refor- areas, an agrarian refor- coo!erati,e shall ha,e the !referential right in the grant of franchise and
certificate of !u%lic con,enience and necessity for the o!eration of !u%lic utilities and ser,ices: Provided, .hat it -eets the re6uire-ents and
conditions i-!osed %y the a!!ro!riate go,ern-ent agency granting the franchise or certificate of !u%lic con,enience and necessity. /f there is an
electric ser,ice !ro,ider in the area, it shall u!on the re6uest of an agrarian refor- coo!erati,e, i--ediately !ro,ide electric ser,ices to the agrarian
refor- areas. /f the electric ser,ice !ro,ider fails to !ro,ide the ser,ices re6uested within a !eriod of one 819 year, the agrarian refor- coo!erati,e
concerned -ay underta*e to !ro,ide the electric ser,ices in the area through its own resources. All in,est-ents -ade %y the said agrarian refor-
coo!erati,e for the electrification of the agrarian refor- resettle-ent areas shall %e the su%3ect of sale to the electric ser,ice !ro,ider once it ta*es on
the ser,ice.
+A$.. (3. Privileges. = 2u%3ect to such reasona%le ter-s and conditions as the >e!art-ent of Agrarian $efor- 8>A$9 and the Authority -ay i-!ose,
agrarian refor- coo!erati,es -ay %e gi,en the e7clusi,e right to do any or all of the following econo-ic acti,ities in agrarian refor- and resettle-ent
areas:
+819 2u!!ly and distri%ution of consu-er, agricultural, a6ua-cultural, and industrial goods, !roduction in!uts, and raw -aterials and
su!!lies, -achinery, e6ui!-ent, facilities and other ser,ices and re6uire-ents of the %eneficiaries and -arginal far-ers at reasona%le
!rices:
+829 Mar*eting of the !roducts and ser,ices of the %eneficiaries in local and foreign -ar*ets:
+839 #rocessing of the -e-%ersE !roducts into finished consu-er or industrial goods for do-estic consu-!tion or for e7!ort:
+849 #ro,ision of essential !u%lic ser,ices at cost such as !ower, irrigation, !ota%le water, !assenger andBor cargo trans!ortation %y land
or sea, co--unication ser,ices, and !u%lic health and -edical care ser,ices:
+859 Manage-ent, conser,ation, and co--ercial de,elo!-ent of -arine, forestry, -ineral, water, and other natural resources su%3ect to
co-!liance with the laws and regulations on en,iron-ental and ecological controls: and
+8'9 #ro,ision of financial, technological, and other ser,ices and facilities re6uired %y the %eneficiaries in their daily li,es and li,elihood.
+.he "o,ern-ent shall !ro,ide the necessary financial and technical assistance to agrarian refor- coo!erati,es to ena%le the- to discharge
effecti,ely their !ur!oses under this article. .he >A$, the Authority and the B2# shall draw u! a 3oint !rogra- for the organi4ation and financing of
the agrarian refor- coo!erati,es su%3ect of this ha!ter. .he 3oint !rogra- shall %e geared towards the %eneficiaries gradual assu-!tion of full
ownershi! and -anage-ent control of the agrarian refor- coo!erati,es.
+A$.. (4. !rgani-ation and Registration. = Agrarian refor- coo!erati,es -ay %e organi4ed and registered under this ode only u!on !rior written
,erification %y the >A$ to the effect that the sa-e is needed and desired %y the %eneficiaries: results of a study that has %een conducted fairly
indicate the econo-ic feasi%ility of organi4ing the sa-e and that it will %e econo-ically ,ia%le in its o!erations: and that the sa-e -ay now %e
organi4ed and registered in accordance with re6uire-ents of this ode.
+.he Authority, in consultation with the concerned go,ern-ent agencies and coo!erati,e sector, shall issue a!!ro!riate rules and regulations
!ertaining to the !ro,isions of this ha!ter.+
S%C. 2. Articles (', (< and () of ha!ter I// on the 2!ecial #ro,isions on #u%lic 2er,ices oo!erati,es of the sa-e ode are here%y transferred to another
cha!ter. ha!ter I// as a-ended shall now read, as follows:
C)AP#%R 8''
C**P%RA#'+% -AN.S
+A$.. (5. Governing *a'. = .he !ro,isions of this ha!ter shall !ri-arily go,ern coo!erati,e %an*s registered under this ode and the other
!ro,isions of this ode shall a!!ly to the- only insofar as they are not inconsistent with the !ro,isions contained in this ha!ter.
+A$.. ('. Supervision. = .he coo!erati,e %an*s registered under this ode shall %e under the su!er,ision of the B2#. .he B2#, u!on consultation
with the Authority and the concerned coo!erati,e sector, shall for-ulate guidelines regarding the o!erations and the go,ernance of coo!erati,e
%an*s. .hese guidelines shall gi,e due recognition to the uni6ue nature and character of coo!erati,e %an*s. .o this end, coo!erati,e %an*s shall
!ro,ide financial and %an*ing ser,ices to its -e-%ers.
+A$.. (<. !rgani-ation& "embership and #stablishment of a Cooperative Ban/. = 819 oo!erati,e organi4ations duly esta%lished and registered
under this ode -ay organi4e a coo!erati,e %an*, which shall li*ewise %e considered a coo!erati,e registra%le under !ro,isions of this ode su%3ect
to the re6uire-ents and re6uisite authori4ation fro- the B2#. Anly one coo!erati,e %an* -ay %e esta%lished in each !ro,ince:Provided, .hat an
additional coo!erati,e %an* -ay %e esta%lished in the sa-e !ro,ince to cater to the needs in the sa-e !ro,ince to cater to the needs of the locality
de!ending on the econo-ic conditions of the !ro,ince as -ay %e deter-ined %y the B2#: Provided, further, .hat the additional coo!erati,e %an*
shall %e located in the ity or -unici!ality other that the city or -unici!ality where the first coo!erati,e %an* is located.
+829 Me-%ershi! in a coo!erati,e %an* shall either %e regular or associate. $egular -e-%ershi! shall %e li-ited to coo!erati,e organi4ations which
are holders of co--on shares of the %an*. Associate -e-%ers are those su%scri%ing and holding !referred shares of the %an*, which -ay include
%ut are not li-ited to the following:
+8a9 /ndi,idual -e-%ers of the %an*Es -e-%er-!ri-ary coo!erati,es: and
+8%9 2a-ahang &ayon and Munici!al Jati!unan ng -ga 2a-ahang &ayon 8MJ2&9 which held co--on shares of coo!erati,e %an*s
!rior to the effecti,ity of this Act shall a!!ly for con,ersion to full-!ledged coo!erati,es in order to -aintain their status as regular
-e-%ers of coo!erati,e %an*s: Provided, .hat they shall notify the coo!erati,e %an* concerned their intention to con,ert within a
!eriod of ninety 8(?9 days fro- the effecti,ity of this Act. 2a-ahang &ayon and MJ2& are here%y gi,en a !eriod of one 819 year fro-
the effecti,ity of this Act to co-!lete their con,ersion as coo!erati,es. oo!erati,e %an* shall e7ert reasona%le efforts to infor- their
-e-%er 2a-ahang &ayon and MJ2& to finally con,ert or to gi,e the notice of con,ersion within the !rescri%ed !eriod. D!on the failure
of the 2a-ahang &ayon and MJ2& to finally con,ert to a full-!ledged coo!erati,e within the -a7i-u- !eriod of one 819 year, the
coo!erati,e %an* concerned -ay con,ert the co--on shares held %y such associations to !referred shares.
+839 .he articles of coo!erati,e and %ylaws of a coo!erati,e %an*, or any a-end-ent thereto, shall %e registered with the Authority only when
acco-!anied %y a certificate of authority issued %y the B2#, under its official seal.
+A$.. (). $dministration of Cooperative Ban/s. = .o -aintain the 6uality of %an* -anage-ent and accord a!!ro!riate !rotection to de!ositors and
the !u%lic in general, the B2# shall !rescri%ed the fit and !ro!er 6ualifications of %an* directors and officers for the !ur!oses of this article, gi,ing due
recognition to the uni6ue nature and character of coo!erati,e %an*s.
+&otwithstanding the !ro,isions of this ode, the nu-%er, co-!utation and ter- of the %oard of directors shall %e defined in the articles of
coo!eration and %ylaws of the coo!erati,e %an*.
+A$.. ((. 3uorum and oting Rights. = .he 6uoru- re6uire-ent for general asse-%ly -eetings, whether s!ecial or regular, shall %e one half !lus
one of the nu-%er of ,oting shares of all the -e-%ers in good standing. /n the -eetings of the %oard of directors, whether s!ecial or regular, the
6uoru- re6uire-ent shall %e one-half !lus one of all the -e-%ers of the %oard of directors. 1ach director shall only ha,e one ,ote.
+&otwithstanding the !ro,isions of this ode to the contrary, the 6uoru- re6uire-ent for a-end-ents of articles of coo!eration and %ylaws shall %e
three-fourths 83B49 ,ote of all the -e-%ers with ,oting rights, !resent and constituting a 6uoru-. All other ,oting re6uire-ents shall %e as !rescri%ed
%y the B2#.
+.he ,oting rights of the -e-%ers shall %e !ro!ortionate to the nu-%er of their !aid-u! shares.
+A$.. 1??. Po'ers& 0unctions and $llied (nderta/ings of Cooperative Ban/s. = A coo!erati,e %an* shall !ri-arily !ro,ide financial, %an*ing and
credit ser,ices to coo!erati,e organi4ations and their -e-%ers. Howe,er, the B2# -ay !rescri%e a!!ro!riate guidelines, ceilings and conditions on
%orrowing of a coo!erati,e organi4ation fro- a coo!erati,e %an*.
+.he !owers and functions of a coo!erati,e %an* shall %e su%3ect to such rules and regulations as -ay %e !ro-ulgated %y the B2#.
+/n addition to the !owers granted %y this ode and other e7isting laws, any coo!erati,e %an* -ay !erfor- any or all of the %an*ing ser,ices offered
%y other ty!es of %an*s su%3ect to the !rior a!!ro,al of the B2#.
+A$.. 1?1. Capital Re4uirements of Cooperative Ban/s. = 819 A coo!erati,e %an* shall ha,e a -ini-u- !aid-u! ca!ital in such a-ount as -ay %e
re6uired %y the B2#.
+.he B2# -ay !rescri%e rules and regulations on the ty!es of shares a coo!erati,e %an* -ay issue, including the ter-s thereof and rights
a!!urtenant thereto to deter-ine co-!liance with laws and regulations go,erning ca!ital and e6uity structure of %an*s: #ro,ided, .hat coo!erati,e
%an*s shall issue !ar ,alue shares only.
+829 .he Barrio 2a,ings 5und 8B259 and Barrio "uarantee 5und 8B"59 collectedBdeducted %y ,arious %an*s throughout the country fro- the loan
!roceeds of far-er-%orrowers who were -e-%ers of coo!erati,es and 2a-ahang &ayon in co-!liance with #residential >ecree &o. 1<5 and
acco-!anying letters of instruction, which are still floating and outstanding either as acti,e or dor-ant de!osit accounts in the %oo*s of those %an*s,
shall %e de!osited to the coo!erati,e %an* located in the !ro,ince where the de!ository %an*s of B25 and B"5 are located, or if there is no
coo!erati,e %an* in the !ro,ince. .he B2#, in coordination with the Authority, shall co-e u! with the i-!le-enting guidelines on how to credit the
owners of the funds.
+.hose funds whose owners could not %e located or identified shall %e su%3ect to escheat.
+A$.. 1?2. Privileges and %ncentives of Cooperative Ban/s. = .he coo!erati,e %an*s registered under this ode shall %e gi,en the sa-e !ri,ileges
and incenti,es granted to the rural %an*s, !ri,ate de,elo!-ent %an*, co--ercial %an*s, and all other %an*s to rediscount notes with the B2#, the
0and Ban* of the #hili!!ines, and other go,ern-ent %an*s without affecting in any way the !ro,isions of this ode.
+819 2u%3ect to the a!!ro,al of the B2#, a coo!erati,e %an* shall !u%lish a state-ent of its financial state-ent of its financial condition, including
those of its su%sidiaries and affiliates in such ter-s understanda%le to the lay-an and in such fre6uency as -ay %e !rescri%ed %y the B2#, in 1nglish
or 5ili!ino, at least once e,ery 6uarter in a news!a!er of local circulation in the city or !ro,ince where the !rinci!al office is located or, if no
news!a!er is !u%lished in the sa-e !ro,inces, then in a news!a!er !u%lished in the nearest city or !ro,ince or in a news!a!er of general circulation.
.he B2#, howe,er, -ay allow the !osting of the financial state-ents of the coo!erati,e %an* in cons!icuous !laces it -ay deter-ine in lieu of the
!u%lication re6uired in the !receding sentence when warranted %y the circu-stances.
+Howe,er, in cases of foreclosure of -ortgages co,ering loans granted %y a coo!erati,e %an*, and the e7ecution of 3udg-ents thereon in,ol,ing real
!ro!erties and le,ied u!on %y a sheriff, it shall %e e7e-!t fro- !u%lication re6uire-ent where the total a-ount of the loan, e7cluding interest and
other charges due and un!aid, does not e7ceed .wo hundred fifty thousand 8#25?,???.??9 or such a-ount as the B2# -ay !rescri%e, as -ay %e
warranted %y the !re,ailing econo-ic conditions and %y the nature and character of the coo!erati,e %an*s. /t shall %e sufficient !u%lication in such
cases if the notice of foreclosure and e7ecution of 3udg-ent are !osted in cons!icuous areas in the coo!erati,e %an*Es !re-ises, the -unici!al hall,
the -unici!al !u%lic -ar*et, the %arangay hall, or the %arangay !u%lic -ar*et, if there %e any where the !ro!erty -ortgaged is situated, within a
!eriod of si7ty 8'?9 days i--ediately !receding the !u%lic auction or the e7ecution of 3udg-ent. #roof of !u%lication as re6uired herein shall %e
acco-!lished %y an affida,it of the sheriff or officer conducting the foreclosure sale or e7ecution of 3udg-ent, and shall %e attached to the record of
the case.
+829 A coo!erati,e %an* shall %e allowed to foreclosure lands -ortgaged to its su%3ect to the !ro,isions of $e!u%lic Act &o. ''5<, otherwise *nown as
o-!rehensi,e Agrarian $efor- 0aw of 1()).
+A$.. 1?3. $ssistance to Cooperative Ban/s. = /n accordance with e7isting !olicies, go,ern-ent agencies, go,ern-ent-owned or controlled
cor!orations and financial institutions shall !ro,ide assistance, technical or otherwise, to coo!erati,e %an*s to !er-it the- to grow, de,elo! and
!erfor- their role in countryside de,elo!-ent towards a sustaina%le national econo-ic de,elo!-ent. Fhene,er a coo!erati,e %an* organi4ed under
this ode is in a state of continuing ina%ility or unwillingness to -aintain a !eriod of li6uidity, the B2# -ay designate one of its officials or a !erson of
recogni4ed co-!etence, !refera%ly with e7!erience in coo!erati,e %an*ing and finance, as conser,ator of the said %an* !ursuant to the a!!ro!riate
!ro,isions of e7isting %an*ing laws.
+A$.. 1?4. $pplicability of Ban/ing *a's and Regulations. = Fith res!ect to the !ro,isions and go,ernance of the coo!erati,e %an*s, the !ro,isions
of the %an*ing laws, rules and regulations shall !re,ail, notwithstanding 2ection <1 of $e!u%lic Act &o. )<(1, otherwise *nown as the "eneral
Ban*ing Act of 2???.
+.he B2# and the Authority, in consultation with the concerned coo!erati,e sector, shall issue a!!ro!riate rules and regulations
!ertaining to the !ro,isions of this ha!ter.+
S%C. 3. Articles ((, 1??, 1?1, 1?2, 1?3, 1?4, 1?5, 1?', 1?<, 1?) and 1?( of ha!ter I/// on 2!ecial #ro,isions $elating to oo!erati,e Ban*s of the sa-e ode
are here%y transferred to another cha!ter. ha!ter I/// as a-ended shall now read, as follows
C)AP#%R 8'''
'NS7RANC% C**P%RA#'+%
+A$.. 1?5. Cooperative %nsurance Societies. = 17isting coo!erati,es -ay organi4e the-sel,es into a coo!erati,e insurance entity for the !ur!ose of
engaging in the %usiness of insuring life and !ro!erty of coo!erati,es and their -e-%ers.
+A$.. 1?'. Types of %nsurance Provided. = Dnder the coo!erati,e insurance !rogra- esta%lished and for-ed %y the ,irtue of the !ro,isions of this
ode, the coo!erati,e insurance societies shall !ro,ide its constituting -e-%ers different ty!es of insurance co,erage consisting of, %ut not li-ited
to, life insurance with s!ecial grou! co,erage, loan !rotection, retire-ent !lans, endow-ent, -otor ,ehicle co,erage, %onding, cro! and li,estoc*
!rotection and e6ui!-ent insurance.
+A$.. 1?<. $pplicability of %nsurance *a's. = .he !ro,isions of the /nsurance ode and all other laws and regulations relati,e to the organi4ation and
o!eration of an insurance co-!any shall a!!ly to coo!erati,e insurance entities organi4ed under this ode. .he re6uire-ents on ca!itali4ation,
in,est-ents and reser,es of insurance fir-s -ay %e li%erally -odified u!on consultation with the Authority and the coo!erati,e sector, %ut in no case
-ay %e re6uire-ent to %e reduced to less than half of those !ro,ided for under the /nsurance ode and other related laws.
+A$.. 1?). %mplementing Rules. = .he /nsurance o--ission and the Authority, in consultation with the concerned coo!erati,e sector, shall issue the
a!!ro!riate rules and regulations i-!le-enting the !ro,isions of this ha!ter.+
S%C. 4. Articles 11?, 111, 112, 113 and 114 of ha!ter I/G on 2!ecial #ro,isions relating to redit oo!erati,e of this ode are here%y transferred to another
cha!ter. ha!ter I/G as a-ended shall now read, as follows:
C)AP#%R 8'+
P7-,'C S%R+'C% C**P%RA#'+%S
+A$.. 1?(. Definition and Coverage. = A !u%lic ser,ice coo!erati,e, within the -eaning of this ode, is one organi4ed to render !u%lic ser,ices as
authori4ed under a franchise or certificate of !u%lic con,enience and necessity duly issued %y the a!!ro!riate go,ern-ent agency. 2uch ser,ices
-ay include the following:
+819 #ower generation, trans-ission, andBor distri%ution:
+829 /ce !lants and cold storage ser,ices:
+839 o--unication ser,ices including tele!hone, telegra!h, and co--unications:
+849 0and and sea trans!ortation coo!erati,es for !assenger andBor cargo. .rans!ort coo!erati,es organi4ed under the !ro,isions of
17ecuti,e Arder &o. )(), 2eries of 1()3, shall %e go,erned %y this ha!ter.
+859 #u%lic -ar*ets, slaughterhouses and other si-ilar ser,ices: and
+8'9 2uch other ty!es of !u%lic ser,ices as -ay %e engaged in %y any coo!erati,e. 2uch coo!erati,e shall %e !ri-arily go,erned %y this
ha!ter and the general !ro,isions of this ode insofar as they -ay %e a!!lica%le unless they are inconsistent herewith.
+A$.. 11?. Registration Re4uirements. = Dnless otherwise !ro,ided in this ode, no !u%lic ser,ice coo!erati,e shall %e registered unless it satisfies
the following re6uire-ents.
+819 /ts articles of coo!eration and %ylaws !ro,ide for the -e-%ershi! of the users andBor !roducers of the ser,ice of such coo!erati,es:
and
+829 2uch other re6uire-ents as -ay %e i-!osed %y the other !ertinent go,ern-ent agencies concerned. /n case there are two 829 or
-ore a!!licants for the sa-e !u%lic ser,ice franchise or certificate of !u%lic con,enience and necessity, all things %eing e6ual,
!reference shall %e gi,en to a !u%lic ser,ice coo!erati,e.
+A$.. 111. Regulation of Public Service Cooperatives. = 819 .he internal affairs of !u%lic ser,ice coo!erati,es such as the rights and !ri,ileges of
-e-%ers, the rules and !rocedures for -eetings of the general asse-%ly, %oard of directors and co--ittees: for the election and 6ualifications of
officers, directors, and co--ittee -e-%ers: allocation and distri%ution of sur!luses: and all other -atters relating to their internal affairs shall %e
go,erned %y this ode.
+829 All -atters relating to the franchise or certificate of !u%lic con,enience and necessity of !u%lic ser,ice coo!erati,es such as ca!itali4ation and
in,est-ent re6uire-ents, e6ui!-ent and facilities, fre6uencies, rate-fi7ing and such other -atters affecting their !u%lic ser,ice o!erations shall %e
go,erned %y the !ro!er go,ern-ent agency concerned.
+839 .he Authority and the !ro!er go,ern-ent agency concerned shall 3ointly issue the necessary rules and regulations to i-!le-ent this ha!ter.
+849 .he Authority shall esta%lish a co--ittee for the -onitoring of trans!ortation ser,ice coo!erati,es co-!osed of re!resentati,es fro- the
Authority, the 0and .rans!ortation 5ranchising and $egulatory Board 80.5$B9, the 0and .rans!ortation Affice 80.A9, Affice of .rans!ort
oo!erati,es 8A.9, other concerned go,ern-ent agencies, as -ay %e necessary, and the &ational 5ederation of .rans!ortation oo!erati,es. A
local -onitoring co--ittee shall li*ewise %e esta%lished at the e7tension offices of the Authority to facilitate the -onitoring of trans!ortation
coo!erati,es.
+A$.. 112. #ngagement in $llied Business by Transportation Service Cooperatives. = 2u%3ect to !ertinent national laws and local ordinances, !ri-ary
trans!ortation ser,ice coo!erati,es including secondary and tertiary federation of coo!erati,es -ay engage in a %usiness related to trans!ortation
ser,ice, including %ut not li-ited to:
+819 /-!ortation, distri%ution and, -ar*eting of !etroleu- !roducts in accordance with e7isting laws:
+829 A!eration of gasoline stations and trans!ortation ser,ice centers:
+839 /-!ortation, distri%ution and -ar*eting of s!are !arts and su!!lies: and
+849 Mar*eting of ,ehicleBdri,ers insurance !olicies.
+A$.. 113. Rene'al of 0ranchise and ehicle Registration. = $enewals of franchise and ,ehicle registration shall %e granted to trans!ortation ser,ice
coo!erati,es: Provided, .hat such coo!erati,e !resents a certificate of good standing issued %y the Authority, A., and the local go,ern-ent unit
concerned as !roof that it has continuously !ro,ided the re6uired !u%lic trans!ortation ser,ices.
+.he Authority, in consultation with the concerned go,ern-ent agencies and coo!erati,e sector, shall issue a!!ro!riate rules and regulations
!ertaining to the !ro,isions of this ha!ter.+
S%C. 5. Articles 115, 11', 11< and 11) of ha!ter IG on 2!ecial #ro,isions relating to oo!erati,e /nsurance 2ocieties of the sa-e ode are here%y transferred
to another cha!ter. ha!ter IG as a-ended shall now read, as follows:
C)AP#%R 8+
CR%&'# C**P%RA#'+%S
+A$.. 114. Coverage. = .his ha!ter shall a!!ly to credit coo!erati,es and other coo!erati,es, including -ulti!ur!ose coo!erati,es, that !ro,ide
sa,ings and credit to their -e-%ers only. .he rest of the !ro,isions of this ode shall a!!ly to the- insofar as the sa-e are not inconsistent with the
!ro,isions of this ha!ter.
+A$.. 115. Definition and !b+ectives. = A credit coo!erati,e is a financial organi4ation owned and o!erated %y its -e-%ers with the following
o%3ecti,es:
+819 .o encourage sa,ings a-ong its -e-%ers:
+829 .o create a !ool of such sa,ings for which loans for !roducti,e or !ro,ident !ur!ose -ay %e granted to its -e-%ers: and
+839 .o !ro,ide related ser,ices to ena%le its -e-%ers to -a7i-i4e the %enefit fro- such loans.
+A$.. 11'. !rgani-ation and Registration.- redit coo!erati,es shall %e organi4ed and registered in accordance with the general !ro,isions of this
ode.
+A$.. 11<. !rgani-ational *in/age. = redit coo!erati,es -ay organi4e cha!ters or su%sidiaries, or 3oin leagues and federations for the !ur!ose of
!ro,iding co--only needed essential ser,ices including %ut not li-ited to the following:
+819 /nterlending of sur!lus fund:+829 Mutual %enefits:+839 >e!osit guarantee:+849 Bonding:+859 1ducation and training:+8'9 #rofessional and technical
assistance:+8<9 $esearch and de,elo!-ent:+8)9 $e!resentation: and +8(9 Ather ser,ices needed to i-!ro,e their !erfor-ance.
+17isting su!!ort organi4ations such as federations of credit coo!erati,es, credit coo!erati,es at the !ro,incial, regional and national le,els -ay
continue as such under this ode.+
S%C. 5. A new Article is inserted in ha!ter IG on redit oo!erati,es and shall now read, as follows:
+A$.. 11). Conversion of Credit Cooperatives to 0inancial Service Cooperatives. = 17isting credit and -ulti!ur!ose coo!erati,es with sa,ings and
credit facilities shall for-ally infor- the Authority of its intention to continue !erfor-ing its !resent functions. 2hould the said coo!erati,es decide to
e7ercise enhanced functions, it shall notify the Authority and satisfy the re6uire-ents for con,ersion to financial ser,ice coo!erati,e.+
S%C. !. A new ha!ter on 5inancial 2er,ice oo!erati,es shall %e inserted in this ha!ter and shall read, as follows:
C)AP#%R 8+'
F'NANC'A, S%R+'C% C**P%RA#'+%S
+A$.. 11(. Definition and 0unctions of 0inancial Services Cooperatives. = A financial ser,ice coo!erati,e is a financial organi4ation owned and
o!erated %y its -e-%ers and authori4ed to !ro,ide the following ser,ice, e7clusi,ely to its -e-%ers:
+8a9 .he functions of credit coo!erati,es and other coo!erati,es, including -ulti!ur!ose coo!erati,es, that !ro,ide sa,ings and credit to their
-e-%ers, and+8%9 Ather financial ser,ices su%3ect to regulation %y the B2#.
+.he articles of coo!eration and %ylaws of any financial ser,ice coo!erati,e, or any a-end-ent thereto, shall %e registered with the Authority only if
acco-!anied %y a certificate of authority issued %y the B2#, under its official seal.
+.he authority granted this !ro,ision -ay %e re,o*ed %y the B2# if any of the grounds for recei,ershi! -entioned under 2ection 53 and 5' of
$e!u%lic Act &o. )<(1 is !resent or if the financial ser,ice coo!erati,e has willfully ,iolated this ode of any of the related rules and regulations.
+.he B2# shall issue a cease and desist order to coo!erati,es e7ercising the function of a financial ser,ice coo!erati,e without authority fro- the
B2#.
+.he B2# -ay charge e6uita%le rates or fees, as -ay %e !rescri%ed %y the Monetary Board for licensing, e7a-ination and other ser,ices which it
renders under this ode.
+D!on the fa,ora%le certification of the B2# and the !rior a!!ro,al of the Authority, a coo!erati,e, the -ain !ur!ose of which is to !erfor- sa,ings
and credit functions, -ay con,ert to financial ser,ice coo!erati,e su%3ect to the re6uired 6ualifications and !rocedures !ro,ided under this ode and
in the i-!le-enting rules and regulations.
+A$.. 12?. "embership and $ffiliation. = A financial ser,ice coo!erati,e shall ha,e the two 829 ty!es of -e-%ers:
+819 $egular -e-%ers, who are natural !ersons: and
+829 Associate -e-%ers, who are natural !ersons %ut who do not i--ediately 6ualify under the re6uire-ents for -e-%ershi! set out in the %ylaws of
the coo!erati,e. All associate -e-%ers who are natural !ersons shall %e gi,en two 829 years to %eco-e regular -e-%ers. 5ailure to con,ert within
the said !eriod shall -ean auto-atic withdrawal of their associate -e-%ershi!. .hey -ay, howe,er, re-a!!ly as regular -e-%ers after two 829 years.
+Minors who are de!endents of regular -e-%ers can 6ualify as associate -e-%ers. Fhen they reach the age of -a3ority and within two 829 years
fro- acce!tances of their associate -e-%ershi!, they ha,e the o!tion to con,ert into regular -e-%ers. As associate -e-%ers, they -ay o!en
accounts, de!osit funds and withdraw fro- their account, su%3ect to the %ylaws and rules of the coo!erati,e, and the rules and regulations of the
Authority, notwithstanding the !ro,isions of e7isting laws to the contrary.
+A$.. 121. Regulation and Supervision. = .he Authority shall e7ercise lead regulatory !owers and su!er,ision o,er the o!erations of the financial
ser,ice coo!erati,es, to wit:
+819 /ssue rules and regulations for the safe and sound conduct of o!erations of financial ser,ice coo!erati,es:
+829 1sta%lish standards of o!eration for unifor- a!!lication to all financial ser,ice coo!erati,es:
+839 #rescri%e ratios, ceilings, li-itations, or other for-s of regulation on the different ty!es of accounts and !ractices of financial ser,ice
coo!erati,es which shall, confor- to internationally acce!ted standards:
+849 /n,estigate to deter-ine whether a financial ser,ice coo!erati,e is conducting its %usiness in a safe and sound -anner:
+859 onduct regular e7a-ination of the %oo*s of accounts, records and other docu-ents of financial ser,ice coo!erati,es:
+8'9 /n6uire into the sol,ency and li6uidity of a financial ser,ice coo!erati,es:
+8<9 #rescri%e a!!ro!riate fees for su!er,ision and e7a-ination of financial ser,ice coo!erati,es to a-ong others, -onitor and o,ersee
that e7isting laws and regulations are co-!lied with:
+8)9 #ass u!on and re,iew the 6ualifications and dis6ualifications of indi,iduals elected or a!!ointed directors or officers and dis6ualify
those found unfit:
+8(9 >is6ualify, sus!end or re-o,e any director or officer who co--its or o-its an act which render hi- unfit for the !osition:
+81?9 2elect, designate and de!uti4e federations, through an a!!ro,ed accreditation criteria, that will su!er,ise !ri-ary financial ser,ice
coo!erati,es and issue %asic guidelines therefor:
+8119 $e6uire the su%-ission of rele,ant re!orts fro- the de!uti4ed su!er,isor:
+8129 #ro,ide re-edial -easures in the o!erations of financial ser,ice coo!erati,es that are in a state of continuing ina%ility or
unwillingness to -aintain a !eriod of li6uidity at the re6uest of the de!uti4ed su!er,isor or when the de!uti4ed su!er,isor fails to
!erfor- its functions:
+8139 Accredit e7ternal auditors in accordance with standards for audit and financial re!orting in coo!eration with the #/#A: and
+8149 A!!oint a conser,ator or a recei,er as -ay %e necessary su%3ect to the rules and regulations to %e !ro-ulgated %y the Authority in
coordination with the B2#, ta*ing into consideration the grounds, !owers and !rocedures under 2ections 2( and 3? of $e!u%lic Act &o.
<'53 as -ay %e dee-ed a!!ro!riate to financial ser,ice coo!erati,es.
+.he Authority shall include in its rules and regulations, a!!ro!riate sanctions and !enalties, on the financial ser,ice coo!erati,es, its -e-%ers,
officers and res!onsi%le !ersons, for any action that fails to adhere to sound and !rudent -anage-ent !ractices or are inconsistent with the
!ro,isions of this ode, other a!!lica%le laws on coo!erati,es, rules, regulations, circulars or orders issued %y the Authority, and re6uire the
coo!erati,e to underta*e correcti,e or re-edial -easures relati,e thereto.
+.he B2# is authori4ed to conduct ris*-%ased su!er,ision and e7a-ination of financial ser,ice coo!erati,es as it -ay dee- necessary.
+A$.. 122. Promulgation of Rules and Regulations. = .he B2#, in coordination with the Authority, shall !rescri%e the a!!ro!riate !rudential rules and
regulations a!!lica%le to the financial ser,ice coo!erati,es.
+2u%3ect to the regulations of the B2#, the %an*ing laws, rules and regulations shall ha,e su!!letory a!!lication to financial ser,ices
coo!erati,es: Provided, ho'ever, .hat the !ro,isions on access to %orrowing or financial assistance to %e e7tended %y the B2# of the #hili!!ine
>e!osit /nsurance or!oration 8#/>9 shall not a!!ly to financial ser,ice coo!erati,es: Provided, further, .hat the de!osit lia%ilities of the financial
ser,ice coo!erati,es shall not %e insured %y the #>/.
+A$.. 123. 0inancial Service Cooperative 0ederations. = 5inancial ser,ice coo!erati,es -ay organi4e the-sel,es into financial ser,ice coo!erati,e
-ay organi4e the-sel,es into financial ser,ice coo!erati,e federations, and register their federation with the Authority. .hese financial ser,ice
coo!erati,e federations -ay %e de!uti4ed %y the Authority as the su!er,isor of their -e-%ers, and they shall ha,e the following functions:
+8a9 >e,elo! standards and !ro,ide ser,ices for the %enefit of its affiliates and their -e-%ers in accordance with the rules and
regulations of the Authority:
+8%9 >efine co--on o%3ecti,es and coordinate acti,ities for the financial ser,ice coo!erati,e federation:
+8c9 1sta%lish and ad-inister funds such as li6uidity fund, loan fund, in,est-ent fund, sta%ili4ation fund and such other funds:
+8d9 1sta%lish a sa,ings guarantee syste- for the !rotection of their affiliates; -e-%er-de!ositors within three 839 years fro- the
a!!ro,al of this ode:
+8e9 17ercise on-site and off-site su!er,isory !ower o,er its -e-%ers:
+8f9 #ro,ide re-edial assistance to its -e-%ers concerning their o!erations and -anage-ent:
+8g9 Act as the li6uidator and when a!!lica%le, se6uester !ro!erties to satisfy an o%ligation secured %y a -ortgage when authori4ed %y
the Authority: and
+8h9 .rans-it rele,ant and re6uired infor-ation regarding the o!erations and !erfor-ance of -e-%er-coo!erati,es to the Authority.
+.he Authority and other go,ern-ent agencies, go,ern-ent-owned or controlled cor!orations and go,ern-ent financial institutions shall !ro,ide
technical and such other assistance that -ay %e allowed %y their charters to financial ser,ice coo!erati,e federations for the esta%lish-ent andBor
strengthening of their res!ecti,e coo!erati,e sa,ings guarantee syste-. .he technical assistance to %e !ro,ided shall include, a-ong others, training
su!er,ision and e7a-ination.
+A$.. 124. Designation of #.isting (nit at the Cooperative Development $uthority to Perform Regulatory and Supervisory 0unctions. = Fithin si7 8'9
-onths fro- the a!!ro,al of this ode, the Authority shall designate the unit to for-ulate and i-!le-ent the necessary regulations, rules, !olicies,
guidelines and standards a!!lica%le solely to financial ser,ice coo!erati,es and de!uti4ed federations in the !erfor-ance of their sa,ings, credit and
such other related enhanced financial ser,ice o!erations.
+.he >e!art-ent of 5inance, the B2# and other concerned go,ern-ent agencies shall !ro,ide technical and training su!!ort for the effecti,e and
efficient i-!le-entation of the regulatory and su!er,isory functions and res!onsi%ilities of the Authority.
+A$.. 125. Prohibition. = .he ter-s credit coo!erati,e, financial ser,ice coo!erati,e and financial ser,ice coo!erati,e federation shall %e used
e7clusi,ely %y those who are duly registered under this ode, and no !erson, grou! of !ersons, or organi4ations shall use the said ter-s unless duly
registered with the Authority. Giolations of this !rohi%ition shall %e !unisha%le in accordance with Article 14? of this ode.+
S%C. 1. A new ha!ter on 1lectric oo!erati,es shall %e inserted and shall read, as follows:
C)AP#%R 8+''
%,%C#R'C C**P%RA#'+%
+A$.. 12'. Coverage. = .he !ro,isions of this ode shall a!!ly to all electric coo!erati,es registered with the Authority. .his shall also co,er new
distri%ution utilities that will register with the Authority.
+1lectric coo!erati,es -ay underta*e !ower generation utili4ing renewa%le energy sources, including hy%rid syste-s, ac6uisition and o!eration of
su%trans-ission or distri%ution as its !ri-ary !ur!oses.
+A$.. 12<. Registration of #lectric Cooperatives. = .he registration of an electric coo!erati,e with the Authority under this ode shall %e su%-itted for
a!!ro,al to the -e-%ers through a referendu-, called for the !ur!ose as !ro,ided for under Articles 1)3 and 12( of this ode.
+A$.. 12). oting Re4uirement for Registration. = /n co-!liance with the referendu- as a ,oting !rocedure, the re6uired nu-%er of ,otes for
registration with the Authority shall %e twenty !ercent 82?C9 of all -e-%ers in good standing.
+A$.. 12(. Documents to be Submitted for Registration 'ith the $uthority. = 5or !ur!oses of registration, electric coo!erati,es shall su%-it the
following docu-ents:
+8a9 o!y of the %oard resolution certifying to the result of the ,ote a!!ro,ed through a referendu- a!!ro,ing the registration of the
coo!erati,e with the Authority in co-!liance with Article 12):
+8%9 ertified co!y of the articles of incor!orationBcoo!eration and %ylaws as re6uired %y the Authority:
+8c9 >uly audited financial state-ents for the !ast two 829 years:
+8d9 0ist of na-es of incu-%ent %oard of directors and their addresses certified %y the %oard secretary and attested %y the chair!erson:
+8e9 Fithin si7 8'9 -onths fro- the registration, the treasurer shall su%-it a sworn state-ent of the authori4ed share ca!ital, the
su%scri%ed share ca!ital of -e-%ers and the a-ount of !aid-u! share ca!ital recei,ed %y the treasurer: and
+8f9 Bonds of accounta%le officers.
+A$.. 13?. Registration !ptions of #lectric Cooperatives. = 1lectric oo!erati,es registered with the &ational 1lectrification Ad-inistration 8&1A9
under #residential >ecree &o. 2'(, as a-ended which o!t not to register with the Authority are allowed to retain the word Kcoo!erati,eE in their
registered na-es: Provided, .hat they shall not %e entitled to the %enefits and !ri,ileges under this ode.
+A$.. 131. Role of the #nergy Regulatory Commission. = All rates and tariffs of electric coo!erati,es registered under the Authority shall %e su%3ect to
the rules on a!!lication and a!!ro,al of and %y the 1nergy $egulatory o--ission for distri%ution utilities.
+A$.. 132. #ffects of Registration 'ith the $uthority. = 819 D!on the effecti,ity of this ode, electric coo!erati,es that are duly registered with the
Authority, and issued a certificate of registration, shall no longer %e co,ered %y #residential >ecree &o. 2'(, as a-ended %y #residential >ecree &o.
1'45: Provided, .hat electric coo!erati,es registered with the Authority shall now %e co,ered %y the !ro,isions of this ode as well as future rules
and issuances of the Authority: Provided, ho'ever, .hat the security of tenure and the collecti,e %argaining agree-ent %etween the coo!erati,e
-anage-ent and the e-!loyees shall %e res!ected, with no di-inution of their e7isting salaries, e-olu-ents, ran*s and other %enefits:
+829 .he electric coo!erati,es registered with the Authority with e7isting loans o%tained fro- &1A after June 2', 2??1 shall continue to o%ser,e the
ter-s of such loans until full !ay-ent or settle-ent thereof:
+839 17ce!t as !ro,ided in the i--ediately !receding !aragra!h, the &1A shall no longer e7ercise regulatory or su!er,isory !owers on electric
coo!erati,es duly registered with the Authority:
+849 1lectric coo!erati,es registered with the Authority are entitled to congressional allocations, grants, su%sidiaries and other financial assistance for
rural electrification which can %e coursed through the >e!art-ent of 1nergy, the Authority andBor local go,ern-ent units. .he electric coo!erati,es
registered under this ode can a,ail of the financial ser,ices and technical assistance !ro,ided %y the go,ern-ent financial institutions and technical
de,elo!-ent agencies on ter-s res!ecting their inde!endence as autono-ous coo!erati,es:
+859 All condoned loans, su%sidies, grants and other assistance shall for- !art of the donated ca!ital and funds of the electric coo!erati,es and as
such, it shall not %e sold, traded nor %e di,ided into shareholdings at any ti-e: these donated ca!italBfund shall %e ,aluated for the sole !ur!ose of
deter-ining the e6uity !artici!ation of the -e-%ers: Provided, .hat in the case of dissolution of the coo!erati,e, said donated ca!ital shall %e su%3ect
to escheat: and
+8'9 1lectric coo!erati,es registered and confir-ed with the Authority under $e!u%lic Act &o. '(3) and $e!u%lic Act &o. '(3( are here%y dee-ed
registered under this ode.
+A$.. 133. Share Capital in the #lectric Cooperatives. = .he electric coo!erati,e shall issue and distri%ute share certificates under the na-e of their
-e-%ers, ta*ing into consideration their !re,ious e6uity contri%utions, the a-orti4ation co-!onent through the !ay-ents -ade, ca!ital %uild-u! and
other ca!ital contri%utions.
+A$.. 134. Cancellation of Registration 'ith the $uthority. = .he cancellation of the registration of an electric coo!erati,e shall %e granted %y the
Authority as !ro,ided under Articles '4 to <? of this ode.
+.he Authority, in consultation with the concerned coo!erati,e sector, shall issue a!!ro!riate rules and regulations !ertaining to the !ro,isions of this
ha!ter.+
S%C.9. Articles 11(, 12? and 121 of ha!ter IG/ on Miscellaneous #ro,isions of the sa-e ode are here%y a-ended and shall now read, as follows:
C)AP#%R 8+'''
$'SC%,,AN%*7S PR*+'S'*NS
+A$.. 135. Compliance 1ith !ther *a's. = .he 0a%or ode and all other la%or laws, the 2ocial 2ecurity Act, the Medical are Act, and all other
social legislations, and all other laws and e7ecuti,e orders shall a!!ly to coo!erati,es duly registered under this ode.
+A$.. 13'. Register of Cooperatives. = .he Authority shall esta%lish a register which shall contain a chronological entry of the na-e of e,ery
coo!erati,e registered or dissol,ed under this ode together with the %asic infor-ation re6uired for registration or dissolution and any other
infor-ation considered useful. .he Authority shall !u%lish annually a list of e7isting coo!erati,es, coo!erati,es under dissolution and those whose
registration are cancelled during the year together with such infor-ation on each of the- as -ay %e !rescri%ed in the rules and regulations.
+A$.. 13<. Settlement of Disputes& Conciliation& and "ediation Proceedings. = >is!utes a-ong -e-%ers, officers, directors, and co--ittee
-e-%ers, and intra-coo!erati,e, inter-coo!erati,e, intra-federation or inter-federation dis!utes shall, as far as !ractica%le, %e settled a-ica%ly in
accordance with the conciliation or -ediation -echanis-s e-%odied in the %ylaws of coo!erati,es and in such other a!!lica%le laws.
+.he conciliation and -ediation co--ittee of the coo!erati,e shall facilitate the a-ica%le settle-ent of intra-coo!erati,e dis!utes and dis!utes
a-ong -e-%ers, officers, directors, and co--ittee -e-%ers.
+2hould such conciliation or -ediation !roceeding fail, the -atter shall %e settled through ,oluntary ar%itration:Provided, ho'ever, .hat %efore any
!arty can ,alidly file a co-!laint with the Authority for ,oluntary ar%itration, it -ust first secure a certification fro- its conciliation and -ediation
co--ittee and fro- its conciliation and -ediation co--ittee and fro- the coo!erati,e union or federation to which it %elongs that des!ite all efforts
to settle the issues, the sa-e ha,e failed.
+.he 3urisdiction of the ,oluntary ar%itrators shall %e e7clusi,e and original and their decisions shall %e a!!eala%le to the Affice of the #resident. .he
Authority shall issue and ado!t the !ro!er rules of !rocedure go,erning ar%itration as the !ri-ary and e7clusi,e -ode for dis!ute resolution in
accordance with the Alternati,e >is!ute $esolution Act of 2??4.
+5or this !ur!ose, the Authority shall constitute a list of 6ualified ,oluntary ar%itrators.+
S%C. 20. A new article is inserted in ha!ter IG/// on the Miscellaneous #ro,isions of the sa-e ode and shall read, as follows:
+A$.. 13). 5oint Congressional !versight Committee on Cooperative 65C!CC7. = .here is here%y created a Joint ongressional A,ersight
o--ittee co-!osed of the hair-an of the 2enate o--ittee on oo!erati,es and the hair-an of the House o--ittee on oo!erati,es
>e,elo!-ent, with four 849 -e-%ers each fro- %oth Houses. .he said -e-%ers shall %e duly a!!ointed %y the 2enate #resident and the 2!ea*er of
the House of $e!resentati,es fro- the -e-%ers of the res!ecti,e co--ittee %ased on the !ro!ortional re!resentation of the !arties or coalition
therein.
+.he Joint A,ersight o--ittee shall re,iew and a!!ro,e the i-!le-enting rules and regulations of this ode and -onitor its !ro!er i-!le-entation.
+.he annual a!!ro!riate for the o,ersight co--ittee shall %e charged to the %udget of %oth Houses of ongress in the "eneral A!!ro!riations Act
8"AA9.+
S%C. 2. Article 122 is here%y deleted. Articles 123, 124, 125, 12', 12<, 12), 12( and 13? of ha!ter IG// on 5inal #ro,isions of this ode are a-ended to read,
as follows:
C)AP#%R 8'8
F'NA, PR*+'S'*NS
+A$.. 13(. %mplementing Rules and Regulations. = .he Authority shall issue rules and regulations to i-!le-ent those !ro,isions of this ode which
e7!ressly call for the issuance thereof. .his !aragra!h shall not a!!ly to those cases wherein a s!ecific !ro,ision of this ode e7!ressly designates
!articular go,ern-ent agencies which shall issue the regulations called for %y any !ro,ision of this ode.
+A$.. 14?. Penal Provisions. = .he following acts or o-issions affecting coo!erati,es are here%y !rohi%ited:
+819 .he use of the word Kcoo!erati,eE %y any !erson or of !ersons or organi4ations, unless duly registered as a coo!erati,e under this
ode e7ce!t as !ro,ided for under Article 13? hereof. /n case of ,iolation, the indi,idual or indi,iduals concerned, or in the case of an
organi4ation, its officers and directors shall, u!on con,iction, each suffer the !enalty of i-!rison-ent of not less than two 829 years nor
-ore than fi,e 859 years and a fine not e7ceeding .wenty thousand !esos 8#2?,???.??9 or %oth at the discretion of the court:
+.he Authority -ay -otu !ro!rio, initiate co-!laints for ,iolations of this !ro,ision.
+829 Any !erson who willfully atte-!ts in any -anner to e,ade or defeat ta7 in ,iolation of the !ro,isions of Articles '? and '1 of this
ode shall in addition thereof, %e !unished %y a fine of not less than .hirty thousand !esos 8#3?,???.??9 %ut not -ore than Ane
hundred thousand !esos 8#1??,???.??9 and suffer i-!rison-ent of not less than two 829 years %ut not -ore than four 849 years:
#ro,ided, .hat the con,iction or ac6uittal o%tained under this Article shall not %e a %ar to the filing of a ci,il suit for the collection of
ta7es:
+839 >irect or indirect ,iolation or circu-,ention of the !ro,isions of Articles '? and '1 of this ode co--ittee %y any !u%lic official or
e-!loyee of any %ureau, office or agency of the go,ern-ent that de!ri,es, di-inishes or in any -anner hinders or restricts any duly
registered coo!erati,e fro- the full en3oy-ent of the e7e-!tion fro- the !ay-ent of the ta7es, fees and charges enu-erated therein,
shall u!on con,iction, suffer a !enalty of not less that one 819 year %ut not -ore than fi,e 859 years i-!rison-ent or a fine in the a-ount
of not less than 5i,e thousand !esos 8#5,???.??9 or %oth at the discretion of the court and shall further %e dis6ualified to hold any other
office:
+849 >irect or indirect interference or inter,ention %y any !u%lic official or e-!loyee into the internal affairs of a coo!erati,e of which he
is not a -e-%er, such as, %ut not li-ited to, the following:
+8a9 /nfluencing the election or a!!oint-ent of officers, directors, co--ittee -e-%ers and e-!loyees through !u%lic or
!ri,ate endorse-ent or ca-!aign for or against any !erson or grou! of !ersons:
+8%9 $e6uiring !rior clearances for any !olicy or decision within the coo!erati,e:
+8c9 $e6uesting or de-anding for the creation of !ositions or organi4ational units, or reco--ending any !erson for
a!!oint-ent, transfer, or re-o,al fro- his !osition: or
+8d9 Any other acts ini-ical or ad,erse to the autono-y and inde!endence of coo!erati,es.
+859 A director, officer or co--ittee -e-%er who ,iolated the !ro,isions of Article 45 on the 0ia%ility of >irectors, Afficers and
o--ittee Me-%ers, Article 4) on the >isloyalty of a >irector, and Article 4( on the /llegal Dse of onfidential /nfor-ation shall u!on
con,iction suffer a fine of not less than 5i,e hundred thousand !esos 8#5??,???.??9 nor -ore than 5i,e hundred thousand !esos
8#5??,???.??9 or i-!rison-ent of not less than fi,e 859 years %ut not -ore than ten 81?9 years or %oth at the courtEs discretion:
+8'9 .he following are considered offenses !unisha%le %y a !enalty of i-!rison-ent of not less than one 819 year nor -ore than fi,e 859
years or a fine of not -ore than 5ifty thousand !esos 8#5?,???.??9 or %oth at the discretion of the court:
+8a9 A-ission or refusal to furnish any infor-ation, re!ort or other docu-ent that is re6uired under this ode:
+8%9 #ro,iding infor-ation, re!orts or other docu-ents to the Authority that are re6uired under this ode which the !erson
*nows to %e false or -isleading:
+8c9 A-ission or refusal to *ee! a %oo* or register under this ode or to -a*e the re6uired entry therein:
+8d9 Ma*ing an entry re6uired under this ode in a %oo* or register, which the !erson *nows to %e false or -isleading:
+8e9 Hindering an authori4ed !erson fro- -a*ing an ins!ection, audit, e7a-ination or in,estigation re6uired under this
ode:
+8f9 5ailure to co-!ly with an order or written instructions issued or gi,en %y the Authority:
+8g9 Giolation of the !ro,isions regarding transactions with a restricted !arty: and
+8h9 A%etting, counseling, allowing, authori4ing or co--anding another !erson to co--it an offense !unisha%le %y this
ode: Provided, .hat in case the ,iolator is a coo!erati,e or 3uridical !erson, the !enalty shall %e i-!osed on its directors
and officers.
+8<9 Any ,iolation of any !ro,ision of this ode for which no !enalty is i-!osed shall %e !unished %y i-!rison-ent of not less than si7
8'9 -onths nor -ore than one 819 year and a fine of not less than Ane thousand !esos 8#1,???.??9, or %oth at the discretion of the
court.
+/n case of ,iolation of any !ro,ision of this ode, the indi,idual or indi,iduals, and in the case of organi4ations or go,ern-ent agencies, its officers,
and directors shall, u!on con,iction %y a ourt, each suffer a !enalty of not less than two 829 years %ut not -ore than fi,e 859 years i-!rison-ent or a
fine in the a-ount of not less than .wenty thousand !esos 8#2?,???.??9, or %oth at the discretion of the court. /n the case of a !u%lic official or
e-!loyee, the offender shall u!on con,iction, suffer the accessory !enalty of te-!orary a%solute dis6ualification.
+A$.. 141. Printing and Distribution. = 819 .he &ational #rinting Affice shall !u%lish this ode in the !fficial Ga-ette in full within si7ty 8'?9 days fro-
the date of a!!ro,al thereof. o!ies of this ode shall %e gi,en to e,ery de!art-ent, agency and instru-entality of the &ational "o,ern-ent,
including regional, !ro,incial offices and local go,ern-ents including go,ern-ent-owned and controlled cor!orations.
+829 All duly registered coo!erati,es and their federations, unions and associations, and coo!erati,e cor!orations shall %e gi,en one 819 co!y each at
cost. .hereafter, e,ery newly registered coo!erati,e shall %e issued at cost a co!y of this ode and the regulations !ro-ulgated thereon together
with its certificate of registration.
+A$.. 142. %nterpretation and Construction. = /n case of dou%t as to the -eaning of any !ro,ision of his ode or the regulations issued in !ursuance
thereof, the sa-e shall %e resol,ed li%erally in fa,or of the coo!erati,es and their -e-%ers.
+A$.. 143. Repealing Clause. = 17ce!t as e7!ressly !ro,ided %y this ode, #residential >ecree &o. 1<5 and all other laws, or !arts thereof,
inconsistent with any !ro,ision of this ode shall %e dee-ed re!ealed:Provided, .hat the !ro,isions of 2ections 3, 5, and < of #residential >ecree
&o. 1'45, 17ecuti,e Arder &o. '23, series of 2??<. $e,enue $egulation &o. 2?-2??1, and all laws, decrees, e7ecuti,e orders, i-!le-enting rules
and regulations, B/$ circulars, -e-orandu- orders, letters of instruction, local go,ern-ent ordinances, or !arts thereof inconsistent with any of the
!ro,isions of this Act are here%y re!ealed, a-ended or -odified accordingly.
+A$..144. Transitory Provisions.- 819 All coo!erati,es registered and confir-ed with the Authority under $e!u%lic Act &o. '(3) and $e!u%lic Act &o.
'(3(, are here%y dee-ed registered under this code, and a new certificate of registration shall %e issued %y the authority: Provided, .hat such
coo!erati,e shall su%-it to the nearest office of the authority a co!y of their certificate of registration or certificate of confir-ation, the articles of
coo!eration, their %ylaws, and their latest audited financial state-ent within one 819 year fro- the effecti,ity of this code, otherwise the shall %e
dee-ed cancelled motu proprio.
+829 5ollowing the issuance of the new certificate of registration, the registered coo!erati,es shall secured their certificate of ta7 e7e-!tion fro- the
nearest office of the Bureau of /nternal $e,enue 8B/$9: Provided, .hat such e7e-!tions shall %e ,alid of fi,e 859 years fro- the date of
issue: Provided, further, .hat all un!aid assess-ents of !re,iously registered coo!erati,e shall %e the su%3ect of co-!ro-ise settle-ent on ter-s
fa,ora%le to such coo!erati,e: and: Provided, finally, .hat the B/$ and the authority shall %e 3ointly issue the necessary regulations on this e7e-!tion
and co-!ro-ise within ninety 8(?9 days fro- the effecti,ity fro- this ode.
+839 $egistration of electric coo!erati,es with the Authority shall not %e considered as a transferred of ownershi! of its assets and lia%ilities nor shall it
constitute a change in the nature, structure, and status of the coo!erati,e. 2aid registration shall not result in the re,ocation of the condoned loans
under $e!u%lic Act &o. (13', otherwise *nown as the 1lectric #ower /ndustry $efor- Act: Provided, .hat electric coo!erati,es with e7isting loans
shall not %e su%3ect to the control and su!er,isions of its creditors and shall only %e li-ited to the fulfill-ent of each ci,il o%ligations.
+A$..145. Separabilty Clause. - 2hould any !art of this code %e declared unconstitutional, the ,alidity of re-aining !ro,ision hereof shall re-ain in
full and effect.
+A$..14'. #ffectivity Clause. - .his code shall ta*e effect fifteen 8159 days fro- its !u%lication in a news!a!er of general circulation.
A!!ro,ed,
82gd.9 PR*SP%R* C. N*(RA,%S
2!ea*er of the House of $e!resentati,es
82gd.9 97AN P*NC% %NR',%
#resident of the 2enate
.his Act which is a consolidation of 2enate Bill &o. 22'4 and House Bill &o. 4312 was finally !assed %y the 2enate and the House of $e!resentati,es on
>ece-%er 1', 2??).
82gd.9 $AR',6N -. -AR7A:6AP
2ecretary "eneral
House of $e!resenati,es
82gd.9 %$$A ,'R'*:R%6%S
2ecretary of 2enate
A!!ro,ed: F%- !" 2009
82gd.9 (,*R'A $ACAPA(A,:ARR*6*
President of the Philippines
The Lawphil Project - Arellano Law Foundation
R7,%S AN& R%(7,A#'*N '$P,%$%N#'N( C%R#A'N PR*+'S'*NS
*F #)% P)','PP'N% C**P%RA#'+% C*&% *F 2001
;R%P7-,'C AC# N*. 9520<
#ursuant to the !ro,ision of Art. 13( of $e!u%lic Act &o. (52 otherwise *nown as the #hili!!ine oo!erati,e ode of 2??), the oo!erati,e >e,elo!-ent Authority
here%y issues the following rules and regulations i-!le-enting certain !ro,isions of the said ode.
#'#,%S AN& &%F'N'#'*NS
Section . Title8 .hese $ules shall %e *nown as the "Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008."
Section 2. Definition of Terms8 5or the !ur!ose of these $ules and regulations, the following ter-s are defined as follows:
819 Alternati=e &ispute Resolution - shall refer to any !rocess or !rocedure used to resol,e a dis!ute or contro,ersy, other than %y ad3udication of a
!residing Judge of ourt or an officer of a go,ern-ent agency, in which a neutral third !arty !artici!ates to assist in the resolution of issue, which
includes ar%itration, -ediation, conciliation, early neutral e,aluation, -ini trial, or any co-%ination thereof.
829 Arbitrator - shall refer to the !erson a!!ointed to render an AwardB>ecision, alone or with others, in a dis!ute that is the su%3ect of an Ar%itration
Agree-ent.
839 Area of -usiness *peration - shall refer to the !rinci!al !lace of %usiness of a coo!erati,e where the coo!erati,e conducts its %usiness as
!ro,ided for in their Articles of oo!erati,e and By-laws.
849 Area of *peration - shall refer to the area where the coo!erati,e -e-%ers co-e fro- as !ro,ided for in their Articles of oo!eration and By-
laws.
859 Articles of Cooperation - shall refer to the Articles of oo!eration registered under the ode, with includes a registered a-end-ent thereto, if
a!!lica%le.
8'9 Associate $e>ber - shall refer to -e-%er of a coo!erati,e who has no right to ,ote or %e ,oted u!on and shall %e entitled only to such rights
and !ri,ileges as the By-laws -ay !ro,ide.
8<9 Authority - shall refer to the oo!erati,e >e,elo!-ent Authority 8>A9.
8)9 Authori?ed Share Capital - shall refer to the ca!itali4ation of the coo!erati,e as !rescri%ed in the Articles of oo!eration
8(9 A@ardA&ecision - shall refer to any !artial or final decision %y an Ar%itrator in resol,ing the issue in a contro,ersy.
81?9 -oard of ,iBuidatorsA#rustees - shall refer to the %ody a!!ointed %y the Board of >irectors or elected %y the "eneral Asse-%ly that shall
cause the li6uidation of the coo!erati,e in case of ,oluntary dissolution or a!!ointed %y the AuthorityBourt in case of in,oluntary dissolution of a
coo!erati,e.
8119 -ond of $e>bership - shall refer to the conditions where -e-%ers associate the-sel,es to attain their co--on goals and o%3ecti,es which
-ay either %e residential, occu!ational, associational, and institutional.
8129 -y:,a@s - shall refer to the By-laws registered under the ode which includes any registered a-end-ents thereto.
8139 Capital - shall refer to the su- total of -e-%er;s share ca!ital including de!osits, re,ol,ing ca!ital, su%sidies, donations, legacies, grants, aids,
land structures, !lants, e6ui!-ent facilities, -achines and other assets of a coo!erati,e.
8149 Certificate of $erger - shall refer to the docu-ent issued %y the Authority e,idencing registration of -erger.
8159 Code - shall refer to the $e!u%lic Acts &o. (52?, otherwise *nown as the #hili!!ine oo!erati,e ode of 2??).
81'9 Conciliation - shall refer to the !rocess where%y a neutral third !arty ta*es a ,igorous and acti,e role in assisting dis!utants to for-ulate
%etween and a-ong the- an acce!ta%le solution in order to reach an a-ica%le settle-ent.
81<9 Conser=ator - shall refer to any !erson a!!ointed %y the Authority e-!owered to ta*e charge of the assets, lia%ilities, and the -anage-ent of
the coo!erati,e, after finding that the coo!erati,e is in the state of continuing illi6uidity or unwillingness to -aintain a condition of li6uidity which is
dee-ed ade6uate to !rotect the interest of -e-%ers and creditors of the coo!erati,e.
81)9 Consolidation - shall refer to a union of two or -ore e7isting coo!erati,es %elonging to the sa-e category to a for- a new coo!erati,e called
the consolidated coo!erati,e.
81(9 Constituent Cooperati=es - shall refer to two or -ore e7isting coo!erati,es which are !arties to a -erger or consolidation.
82?9 Credit Cooperati=e - shall refer to one that !ro-otes and underta*es sa,ings and lending ser,ices a-ong its -e-%ers. /t generates a co--on
!ool of funds in order to !ro,ide financial assistance and other related financial ser,ices to its -e-%ers for !roducti,e and !ro,ident !ur!oses.
8219 Cu>ulati=e 'nterest - shall refer to the interest due to a -e-%er that -ust %e added to in future interest if it is not !aid when due.
8229 &elay in the sub>ission of reports - shall refer to the failure of the coo!erati,es to su%-it a re!ort on ti-e.
8239 &ispute - shall refer to intraBinter coo!erati,e contro,ersy or grie,ance fro- any ,iolation or disagree-ent o,er any !ro,isions, including any
,iolations of the rights and conditions of -e-%ershi! !ro,ided in the coo!erati,e By-laws andBor in the oo!erati,e ode, which -ay %e the su%3ect
of a for-al or infor-al re6uest for conciliationB-ediation or ar%itration assistance sought %y either one or %oth !arties.
8249 &issenting $e>ber - shall refer to a -e-%er !resent during the -eeting and who actually ,oted against the !ro!osed acti,ityB!ro3ect of a
coo!erati,e.
8259 &i=ision - shall refer to the act of s!iting a single coo!erati,e into two or -ore coo!erati,es, wherein the original coo!erati,e shall %e dissol,ed
and the resulting coo!erati,es shall ac6uire se!arate and distinct 3uridical !ersonalities.
82'9 &onated Capital - shall refer to the su%sidies, grants, donations and aids recei,ed %y the coo!erati,e fro- any !erson, whether natural or
3uridical, local or foreign %oth go,ern-ent and !ri,ate.
82<9 %scheat - shall refer to the right of the 2tate to succeed to !ro!erty either real or !ersonal, when no heir or rightful clai-ant can %e found
through an a!!ro!riate legal !roceeding.
82)9 %Buity - shall refer to the e7cess of coo!erati,e assets o,er lia%ilities.
82(9 Financial State>ents - shall refer to the -eans i.e. 2tate-ent of 5inancial ondition 8Balance 2heet9, 2tate-ent of A!eration 82tate-ent of
&et 2ur!lus9 and 2tate-ent of ash 5lows, %y which the financial infor-ation accu-ulated and !rocessed in financial accounting, is !eriodically
co--unicated to those who use it.
83?9 Financial Ser=ice Cooperati=e ;FSC< - shall refer to one organi4ed for the !ri-ary !ur!ose of engaging in sa,ing and credit ser,ices and other
financial ser,ices regulated %y the Bang*o 2entral ng #ili!inas 8B2#9.
8319 (eneral Asse>bly - shall refer to the full -e-%ershi! of the coo!erati,e duly asse-%led for the !ur!ose of e7ercising all the rights and
!erfor-ing all the o%ligations !ertaining to coo!erati,es, as !ro,ided %y this ode, its oo!eration and By-laws.
8329 (uardian Cooperati=e - shall refer to duly registered coo!erati,e to which a la%oratory coo!erati,e is affiliated with.
8339 'nternal Control - shall refer to all the syste- and !rocedures ado!ted to safeguard the coo!erati,e;s assets, chec* the accuracy and relia%ility
of its accounting data, !ro-ote o!erational efficiency and encourage adherence to !rescri%ed -anagerial !olicies.
8349 'n=oluntary &issolution - shall refer to the ter-ination of the 3uridical !ersonality of the coo!erati,e through an a!!ro!riate 3udicial !roceeding
or %y Arder of the Authority.
8359 ,aboratory Cooperati=e - shall refer to a coo!erati,e duly recogni4ed %y the Authority, for-ed and -anaged !rinci!ally %y -inors and is
affiliated with another registered coo!erati,e which is called the guardian coo!erati,e.
83'9 ,iBuidation - shall refer to the !rocess of settle-ent and closure of the coo!erati,e affairs, dis!osition, con,eyance and distri%ution of its assets.
83<9 $ediation - shall refer to the !rocess in which a -ediator, selected %y the dis!uting !arties, facilities a co--unication and negotiation, and
assists the !arties in reaching a ,oluntary agree-ent regarding a dis!ute.
83)9 $erger - shall refer to a union of two or -ore e7isting coo!erati,es %elonging to the sa-e category where%y the sur,i,ing coo!erati,e, retaining
its identity, a%sor%s one or -ore constituent coo!erati,esBs.
83(9 $inor - shall refer to an indi,idual %elow eighteen 81)9 years of age %ut at least se,en 8<9 years old.
84?9 $ultipurpose Cooperati=e - shall refer to a coo!erati,e, which co-%ines two 829 or -ore of the %usiness acti,ities of the different ty!es of
coo!erati,es as enu-erated under Art. 23 of the ode.
8419 Net @orth - shall refer to e6uity inclusi,e of -e-%er;s e6uity, donations, grants and reser,e funds less un-%oo*ed allowance for !ro%a%le losses
on loans, in,est-ent and other assets and other ca!ital ad3ust-ents as -ay %e re6uired %y the >A.
8429 Nu>erous and &ispersed $e>bership - shall refer to a coo!erati,e whose -e-%ershi! are in large nu-%er and geogra!hically
scatteredBdistri%uted %y reason of geogra!hical location, wor* shift or other si-ilar conditions -a*ing it i-!ossi%le and difficult to conduct their
general asse-%ly -eeting.
8439 Paid:up Share Capital - shall refer to the !ortion of the su%scri%ed share ca!ital, which has %een !aid %y the -e-%ers of the coo!erati,e.
8449 Parent Cooperati=e - shall refer to a coo!erati,e, which initiates the organi4ational of another coo!erati,e called a su%sidiary coo!erati,e and
!ro,ides technical, -anagerial, and financial assistance thereto.
8459 Patronage Refund - shall refer to the a-ount returned to indi,idual -e-%ers who !atroni4e the goods and ser,ices of the coo!erati,e in
!ro!ortion to their indi,idual !atronage.
84'9 Plan of $erger or Consolidation - shall refer to a written docu-ent containing the !ro!osed -erger or consolidation of coo!erati,es duly
a!!ro,ed %y the "eneral Asse-%ly of each of the constituent coo!erati,es at se!arate "eneralB$e!resentati,e Asse-%ly Meetings.
84<9 Pri>ary Cooperati=e - shall refer to a coo!erati,e, the -e-%ers of which are natural !ersons.
84)9 Recei=er - shall refer to any !erson of recogni4ed co-!etence a!!ointed %y the Authority e-!owered to ta*e charge of all the assets and
lia%ilities of the coo!erati,e ad-inister the sa-e for the %enefit of its creditors and e7ercise such other !owers as !ro,ided under the $e,ised $ules
of ourt.
84(9 Registration - shall refer to the o!erati,e act gaining 3uridical !ersonality to a !ro!osed coo!erati,e as e,idenced %y a ertificate of
$egistration.
85?9 Representati=e Asse>bly - shall refer to the full -e-%ershi! of the %ody of re!resentati,es elected %y each of the sectors, cha!ters or districts
of the coo!erati,e duly asse-%led for the !ur!ose of e7ercising such !owers lawfully delegated unto the- %y the general asse-%ly in accordance
with its By-laws.
8519 Reports - shall refer to any docu-ents or state-ent re6uired fro- coo!erati,es to %e su%-itted to the Authority on a regular %asis.
8529 Representati=eA&elegate - shall refer to a -e-%er duly elected during the sector, cha!ter or district -eetings who shall re!resent hisBher
sector, cha!ter or district to the re!resentati,e asse-%ly -eeting.
8539 Re=ol=ing Capital - shall refer to the a-ount a,aila%le out of the deferred !ay-ent of the !atronage refund and interest on share ca!ital of the
-e-%ers or %y authori4ed deduction of a !ercentage fro- the !roduct sold or !er unit of !roduct handled %y the coo!erati,e. .he Board of >irector
shall issue re,ol,ing ca!ital certificates with serial nu-%er, na-e, a-ount, and rate of interest to %e !aid and shall distinctly set forth the ti-e of
retire-ent of such certificates and the a-ounts to %e returned.
8549 RisC Asset - shall refer to the total assets -inus cash on hand, e,idences of inde%tedness, loans to the e7tent co,ered %y hold-outs or
assign-ents of de!osits, lands owned used for o!erations, %uildings and land i-!ro,e-ents net of de!reciation, furniture and fi7tures and e6ui!-ent
net of de!reciation, real estate -ortgage loan and other non-ris* ite-s as the Authority -ay, fro- ti-e to ti-e, authori4ed to %e deducted fro- total
assets.
8559 Sanctions - shall refer to the !enalties !ro,ided for in the coo!erati,e %ylaws, these rules, and other ad-inistrati,e issuances, the ode and
other related laws
85'9 Secondary Cooperati=e - shall refer to a coo!erati,e the -e-%ers of which are !ri-aries.
85<9 Sector" Chapter or &istrict - shall refer to a di,ision of a coo!erati,e, which -ay %e %y reason of geogra!hical location, sco!e of o!eration,
cluster, wor* shift or such other si-ilar su%-grou!ings.
85)9 Settle>ent - shall refer to any co-!ro-ise or arrange-ents %etween the dis!utants to settle the -atters in dis!ute and thus dis!ose of
contro,ersy. .he ter- -ay %e used in the sense of +!ay-ent+ or +ad3ust-ent+ de!ending u!on the circu-stances under which, and the connection in
which, use of the ter- is -ade.
85(9 SeBuential %lection of Representati=eA&elegate - shall refer to the election of the re!resentati,es during the -eetings held, one after the
other, in different days andBor at ,arious ,enues, %y se,eral sectors, cha!ters or districts of a coo!erati,e for the !ur!ose of electing their res!ecti,e
$e!resentati,esB>elegates to the re!resentati,e asse-%ly -eeting.
8'?9 Share Capital - shall refer to the -oney !aid or re6uired to %e !aid %y the -e-%ers for the conduct of the o!erations of the coo!erati,e.
8'19 Si>ultaneous %lection of Representati=esA&elegates - shall refer to the election of the re!resentati,es during the -eetings held, on the sa-e
day and at ,arious ,enues, %y se,eral sectors, cha!ters, or districts of a coo!erati,e for the !ur!ose of electing their res!ecti,e
$e!resentati,esB>elegates to the re!resentati,e asse-%ly -eeting.
8'29 Sub>ission Agree>ent - shall refer to the written agree-ent signed %y the dis!uting !arties to su%-it the dis!ute to ,oluntary ar%itration.
8'39 Subsidiary Cooperati=e - shall refer to any organi4ation all or -inority of whose -e-%ershi! or shareholders co-e fro- a coo!erati,e called a
!arent coo!erati,e, organi4ed for any other !ur!ose different fro- that of, and recei,es technical, -anagerial, and financial assistance fro- the said
!arent coo!erati,e.
8'49 #ertiary Cooperati=e - shall refer to a coo!erati,e, the -e-%ers of which are secondary coo!erati,e.
8'59 #otal A=erage Share $onth - shall refer to the su- total of the a,erage share -onth, which is deter-ined %y adding the -onthly ending
%alances of the -e-%er;s share ca!ital and di,iding the su- %y twel,e 8129 -onths.9avvphi 9
8''9 7npaid Subscription - shall refer to the su%scri%ed share ca!ital, which is not yet fully !aid %y a -e-%er.
8'<9 +oluntary Arbitration - shall refer to a dis!ute resolution !rocess wherein any intraBinter coo!erati,e dis!ute is settled %y a ,oluntary ar%itratorBs
chosen %y the dis!uting !arties fro- a list of 6ualified and accredited ar%itrators, who shall decide on the -erits of the case %y rendering an award.
8')9 +oluntary ArbitratorAArbitrators - shall refer to any authori4ed e-!loyee of the Authority or an accredited !ri,ate indi,idual chosen %y the
!arties to hear, decide, and render an award in a dis!ute.
8'(9 +oluntary &issolution - shall refer to the ter-ination of the 3uridical !ersonality of the coo!erati,e at its own initiati,e or instance after co-!lying
with the re6uire-ents set forth in the ode and these rules.
R7,%
R%PR%S%N##A#'+% ASS%$-,6
Section . *egal Basis8 .he 0egal %asis for this rule is Art. 5 829, 81?9 of the ode, 6uoted as follows:
+829 "eneral Asse-%ly shall -ean the full -e-%ershi! of the coo!erati,e duly asse-%led for the !ur!ose of e7ercising all rights and !erfor-ing all the o%ligations
!ertaining to coo!erati,es, as !ro,ided %y this ode, its articles of coo!eration and %y-laws. #ro,ided: that for coo!erati,es with nu-erous and dis!ersed
-e-%ershi!, the district of the coo!erati,e and in accordance with the rules and regulations of the oo!erati,e >e,elo!-ent Authority.+
+81?9 $e!resentati,e Asse-%ly shall refer to the full -e-%ershi! of the %ody of re!resentati,e elected %y each of the sector, cha!ter, or district of the coo!erati,e
duly asse-%led for the !ur!ose of e7ercising such !owers lawfully delegated unto the- %y the general asse-%ly in accordance with its %y-laws+
Section 2. $pplicability - .his rule shall a!!ly to coo!erati,es, which %y reason of ha,ing nu-erous and dis!ersed -e-%ershi!, the conduct of the general
asse-%ly -eetings %eco-es e7tre-ely difficult: #ro,ided, .hat the ado!tion of re!resentati,e asse-%ly shall %e sti!ulated in the coo!erati,e By-laws, which shall
s!ecify the following -atters:
a. .he %asis for di,iding the coo!erati,e into sector, cha!ter, or district:
%. .he -ini-u- nu-%er of regular -e-%ers to co-!ose each sector, cha!ter, or district:
c. .he 6uoru- re6uired in the sector, cha!ter, or district asse-%ly -eeting:
d. .he nu-%er of $e!resentati,eBs or >elegateBs to %e elected to re!resent the total nu-%er of the regular -e-%ers in the sector, cha!ter, or district:
e. .he ter- of office of the $e!resentati,e or >elegate:
f. .he 6ualification and dis6ualification of the $e!resentati,e or >elegate:
g. .he !owers, function and res!onsi%ilities of the $e!resentati,e or >elegate:
h. .he election of the sector, cha!ter, or district $e!resentati,e or >elegate:
i. Gacancy in the sector, cha!ter, or district $e!resentati,e or >elegate:
3. .he resignation or re-o,al as well as the a!!eal of the sector, cha!ter, or district $e!resentati,e or >elegate
*. .he sector, cha!ter, or district asse-%ly -eetings:
l. .he 6uoru- re6uired in the re!resentati,e asse-%ly -eeting:
-. .he !owers of the $e!resentati,e Asse-%ly:
n. .he conduct of the re!resentati,e -eeting:
o. .he eligi%ility of the $e!resentati,eB>elegate to %e elected as Afficers of the coo!erati,e: and
!. Ather -atters rele,ant to the conduct or re!resentati,e asse-%ly -eeting.
Section 3. Division of Cooperative into Sector& Chapter& or District8 .he &u-%er of the -e-%ers of the coo!erati,e, which shall %e at least Ane .housand 81,???9
and the geogra!hical location, sco!e of o!eration cluster, wor* shift, or other si-ilar conditions shall %e the %asis in di,iding the coo!erati,e into sector, cha!ter, or
district.
Section 4. Composition of the Regular "embers of #ach Sector& Chapter& or District8 .he Bylaws shall !ro,ide for the nu-%er of the regular -e-%ers to co-!ose
each sector, cha!ter, or district, which shall not %e less than one hundred 81??9 -e-%ers.
Section 5. 3uorum Re4uirement for Sector& Chapter& or District8 At least twenty-fi,e !er centu- 825C9 of the -e-%ers entitled to ,ote in each sector, cha!ter, or
district shall constitute a 6uoru-.
Section 5. ,umber of Sector& Chapter& or District Representative8 .he nu-%er of sector, cha!ter, or district $e!resentati,e or >elegate to %e elected shall %e
!ro,ided in the By-laws %ut in no case, shall %e less than ten !ercent 81?C9 of the total nu-%er of the regular -e-%ers entitled to ,ote of the sector, cha!ter, or
district.
Section !. Term of !ffice of the Sector& Chapter& or District Representatives8 .he ter- of office of the $e!resentati,e or >elegate shall %e !ro,ided in the By-laws
%ut not e7ceed two 829 years, which shall co--ence on the first regular re!resentati,e asse-%ly -eeting.
Section 1. 3ualifications and Dis4ualifications of the Representative or Delegate8 .he sector, cha!ter, or district re!resentati,e or delegate shall !ossess all the
6ualifications and none of the dis6ualifications as !ro,ided in the coo!erati,e By-laws.
Section 9. Po'ers& 0unctions& and Responsibilities of the Representative or Delegate8 .he $e!resentati,e or >elegate shall ha,e the following !owers, functions,
and res!onsi%ilities:
819 .o re!resent the sector, cha!ter, or district in the $e!resentati,e Asse-%ly Meeting:
829 .o decided for and in %ehalf of the sector, cha!ter, or district heBshe re!resents in the $e!resentati,e Asse-%ly Meeting: and
839 .o infor- hisBher sector, cha!ter, or district of what trans!ired during the $e!resentati,e Asse-%ly Meeting.
Section 0. #lection of Sector& Chapter& or District Representative or Delegate8 1ach sector, cha!ter, or district during the "eneral Asse-%ly -eeting a!!ro,ing
the ado!tion of the $e!resentati,e Asse-%ly shall elect its 0ocal election o--ittee that will conduct the election of sector, cha!ter, or district
$e!resentati,eB>elegate to %e held no later than si7ty 8'?9 days %efore the schedule date of the regular re!resentati,e asse-%ly -eeting as !ro,ided for in the By-
laws.
.he Board of >irectors shall direct sector, cha!ter, or district 0ocal 1lection o--ittee to conduct the sector, cha!ter, or district asse-%ly -eeting to elect its
$e!resentati,eBs or >elegateBs, which -ay %e held either si-ultaneously or se6uentially.
/n case the sector, cha!ter, or district failed to elect its $e!resentati,eBs or >elegateBs, the right to send its $e!resentati,eBs or >elegateBs on that !articular
re!resentati,e or asse-%ly -eeting shall %e dee-ed and wai,ed.
Section . acancy in the Sector& Chapter& or District Representative or Delegate8 Any ,acancy shall %e filled u! in accordance with the !ro,isions of the
coo!erati,e By-laws. .he >elegate or $e!resentati,e electedBa!!ointed to fill a ,acancy shall ser,e only the une7!ired ter- of hisBher !redecessor.
Section 2. Resignation and Removal of Sector& Chapter& or District Representative or Delegate8 .he sector, cha!ter, or district $e!resentati,e or >elegate -ay
resign, for ,alid reason, as $e!resentati,e or >elegate of his sector, cha!ter, or district. D!on the recei!t of the notice, the Board of >irectors shall act on the
resignation letter within si7ty 8'?9 days otherwise, the resignation shall %e dee-ed a!!ro,ed. Any sector, cha!ter, or district $e!resentati,eB>elegate -ay %e
re-o,ed %y a ,ote of three-fourths 83B49 of all the -e-%ers with ,oting rights !resent and constituting a 6uoru- at a sector, cha!ter, or district -eeting called for
the !ur!ose on the following grounds:
1. 5ailure to attend the i--ediate !receding re!resentati,e asse-%ly -eeting for un3ustifia%le reason:
2. &on-!erfor-ance of any functions and res!onsi%ilities stated in the By-laws:
3. Any ,iolation of the !ro,isions of the ode, the By-laws of the coo!erati,e and other issuances of the Authority: and
4. Any acts or o-issions ini-ical or !re3udicial to the interest of the coo!erati,e.
>uring the sa-e -eeting, the sector, cha!ter, or district shall fill the ,acancy. /n case the re-o,ed $e!resentati,e or >elegate is an incu-%ent Afficer of the
oo!erati,e, hisBher !osition shall %e declared ,acant and shall %e filled u! in accordance with the $ule of 2uccession as !ro,ided for in the By-laws of the
oo!erati,e. Dnless otherwise !ro,ided for in their By-laws, such successor shall not necessarily assu-e the !osition of hisBher !redecessor. Howe,er, in the
case of the -e-%ershi! in the co--ittee, the ,acated -e-%ershi! shall %e filled u! %y the Board of >irectors of the oo!erati,e fro- a-ong the
$e!resentati,esB>elegates.
Section 3. Sector& Chapter& or District $ssembly "eeting8 .he sector, cha!ter, or district -eetings of the coo!erati,e ado!ting this sche-e shall %e as follows:
a. $egular
%. 2!ecial
.he regular -eeting shall %e conducted to elect the sector, cha!ter, or district $e!resentati,es or >elegates and for such other !ur!oses as -ay%e !ro,ided in the
Bylaws.
.he s!ecial -eeting shall %e conducted to re!ort what has trans!ired during the re!resentati,e asse-%ly -eeting and for such other !ur!oses as -ay%e !ro,ided
in the By-laws.
/n either case, the conduct of the -eeting shall %e called and !resided %y the 0ead $e!resentati,e of >elegate. 2uch 0ead $e!resentati,e or >elegate shall %e
$e!resentati,e or >elegate who o%tained the highest nu-%er of ,otes during the last sector, cha!ter, or district election.
Section 4. 3uorum Re4uirements for Representative $ssembly8 At least twenty-fi,e !er centu- 825C9 of all $e!resentati,esB>elegates shall constitute a 6uoru-
for the re!resentati,e asse-%ly -eeting.
Section 5. Po'er of the Representative $ssembly8 .he $e!resentati,e Asse-%ly shall e7ercise the !owers as !ro,ided for in the By-laws.
Section 5. Conduct of Representative $ssembly "eeting8 $e!resentati,e Asse-%ly Meeting shall %e conducted in accordance with the !ro,ision of the
coo!erati,e By-laws. /n the a%sence thereof, the following shall %e o%ser,ed:
1. .he re!resentati,e asse-%ly -eeting shall %e held in accordance with the order of %usiness addressing the agenda !re!ared %y the Board of
>irectors:
2. .he chair!erson or in hisBher a%sence, the Gice hair!erson or any -e-%er of the Board of >irectors shall !reside o,er the -eeting:
3. .he 1lection o--ittee shall su!er,ise the election of the Board of >irectors and co--ittee -e-%ers of the coo!erati,e: and
4. 1ach $e!resentati,e or >elegate shall %e entitled to one 819 ,ote. .he Gotes of the sector, cha!ter, or district $e!resentati,es or >elegates shall
%e considered the ,otes of all the -e-%ers of the sector, cha!ter, or district they re!resent.
.he decision of the $e!resentati,e Asse-%ly shall %e considered a ,alid coo!erati,e act.
Section !. #ligibility of the Representative or Delegate to be elected as !fficers of the Cooperative8 .he Afficers of the coo!erati,e shall co-e fro- the
$e!resentati,eBs or >elegateBs of the sector, cha!ter, or district. .hese Afficer shall %e elected during the $e!resentati,e Asse-%ly Meeting for a ter- fi7ed in the
By-laws %ut not e7ceeding a ter- of two 829 years and shall hold office until their successor are duly elected and 6ualified, or until duly re-o,ed for cause.
.he ter- of office of the Afficer of the oo!erati,e at the ti-e of ado!tion of the $e!resentati,e Asse-%ly shall e7!ire on the first re!resentati,e asse-%ly
-eeting.
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S7-S'&'AR6 C**P%RA#'+%
Section . *egal Basis8 .he legal %asis for this $ule is Art. 5 81'9 of the ode, 6uoted as follows:
+Art. 5 81'9 2u%sidiary oo!erati,e refers to any organi4ation all or -a3ority of whose -e-%ershi! or shareholders co-e fro- a coo!erati,e, organi4ed for any
other !ur!ose different fro- that of, and recei,es technical, -anagerial and financial assistance fro-, a coo!erati,e, in accordance with the rules and regulations
of the Authority.+
Section 2. General Re4uirements8 A !arent coo!erati,e -ay organi4e a su%sidiary coo!erati,e !ro,ided that:
1. /t has %een in o!eration for at least two 829 years and has incurred no losses for the two 829 !receding years of o!eration.
2. /t has a net worth of at least .en Million #esos 8#h! 1?,???,???.??9 as shown in its latest Audited 5inancial 2tate-ents.
3. All or -a3ority of the Me-%ers of the #arent oo!erati,e are willing to %eco-e -e-%ers of the 2u%sidiary oo!erati,e.
4. .he %usiness of the 2u%sidiary oo!erati,e shall %e different fro- that of the #arent oo!erati,e.
5. .he creation of a 2u%sidiary oo!erati,e and the technical, -anagerial and financial assistance to %e !ro,ided shall %e a!!ro,ed %y at least three-
fourths 83B49 ,ote of -e-%ers of #arents oo!erati,e with ,oting rights !resent and constituting a 6uoru- in a regular s!ecial general
asse-%lyBre!resentati,e asse-%ly -eeting called for the !ur!ose.
Section 3. Documentary Re4uirements for Registration of Subsidiary Cooperatives8 /n addition to the re6uire-ents for registration of a new coo!erati,e, an
a!!licant 2u%sidiary oo!erati,e shall su%-it a resolution fro- the #arent oo!erati,e a!!ro,ing the creation of such 2u%sidiary oo!erati,e and acce!ting the
res!onsi%ilities therewith.
Section 4. Conditions8 .he following conditions shall %e considered in the registration and o!eration of 2u%sidiary oo!erati,e:
1. Anly assistance in the for- of technical, -anagerial and financial assistance shall %e !ro,ided %y the #arent oo!erati,e to its 2u%sidiary
oo!erati,e:
2. >irectors or Afficers of the #arent oo!erati,e cannot %e elected or a!!ointed as Afficers of the 2u%sidiary oo!erati,e. Howe,er, the #arent
oo!erati,e through its "eneral Asse-%ly -ay a!!oint its $e!resentati,e to act as 17-Afficio -e-%er of the Board of >irectors of the 2u%sidiary
oo!erati,e:
3. .he Manage-ent 2taff of the #arent oo!erati,e cannot %e at the ti-e the Manage-ent 2taff of the 2u%sidiary oo!erati,e:
4. .ransfer of shares of -e-%ers and other related interests fro- #arent oo!erati,e to 2u%sidiary oo!erati,e and ,ice ,ersa are !rohi%ited: and
5. /n case of dissolution of the #arent oo!erati,e, the 2u%sidiary oo!erati,e cannot %e a reci!ient of any grant, donations or other interests fro-
the #arent oo!erati,e and ,ice ,ersa.
Section 5. ,ame of Subsidiary Cooperative8 .he su%sidiary oo!erati,e shall include in its na-e the word +2u%sidiary oo!erati,e of 8&a-e of #arent
oo!erati,e9+.
Section 5. $ssistance for Parent Cooperative8 .he financial assistance to %e !ro,ided shall not e7ceed ten 81?C9 of the net worth of the #arent oo!erati,e. .he
technical and -anagerial assistance shall de!end u!on the needs of the 2u%sidiary oo!erati,e and ca!acity of the #arent oo!erati,e, which shall %e ta*en u!
in the %oo* at actual cost.
.he ter-s and conditions of the financial assistance !ro,ided %y the #arent oo!erati,e to the 2u%sidiary oo!erati,e shall %e go,erned %y a Me-orandu- of
Agree-ent entered into %y %oth !arties.
Section !. #ffect of Dissolution of Parent or Subsidiary Cooperative8 .he dissolution of either coo!erati,e shall not affect the e7istence of the other.
R7,% 3
$7,#':P7RP*S% C**P%RA#'+%
Section . *egal Basis8 .he legal %asis for this $ule is Article 1? of the ode 6uoted as follows:
+Art. 1?. !rgani-ing a Primary Cooperative8 - Any newly organi4ed !ri-ary coo!erati,e -ay %e registered as -ulti-!ur!ose coo!erati,e only after co-!liance with
the -ini-u- re6uire-ents for -ulti-!ur!ose coo!erati,es to %e set %y the Authority. A single-!ur!ose coo!erati,e -ay transfor- into a -ulti-!ur!ose or -ay
create su%sidiaries only after at least two 829 years of o!eration.+
Section 2. Coverage8 .his $ule shall co,er 8a9 all ty!es of newly organi4ed !ri-ary coo!erati,e with co-%ined two 829 or -ore %usiness acti,ities of different ty!es
of coo!erati,e as !ro,ided for in Art. 23 of the ode, 8%9 a single-!ur!ose coo!erati,e desiring to transfor- itself into a -ulti-!ur!ose coo!erati,e after at least two
829 years of o!eration.
Section 3. "inimum Capitali-ation Re4uirements8 Anly those coo!erati,e with a -ini-u- !aid-u! ca!ital of Ane Hundred .housand #esos 8#1??,??.??9 or as
re6uired in the feasi%ility study whiche,er is higher shall 6ualified to register as a -ulti-!ur!ose coo!erati,e or can transfor- into a -ulti-!ur!ose coo!erati,e.
Section 4. Re4uirements for registration8 .he following docu-ents shall %e su%-itted to the Authority:
819 5or a newly organi4ed Multi-#ur!ose oo!erati,e:
1. &a-e Gerification 2li!:
2. Articles of oo!erati,e and By-0aws:
3. .reasurer;s Affida,it:
4. 2urety Bond of Accounta%le Afficers:
5. ertificates of #re-Me-%ershi! 1ducation 2e-inar 8#M129:
'. 1cono-ic 2ur,ey:
<. Dnderta*ing to hange &a-e in the e,ent that another coo!erati,e has ac6uired !rior right to the use of the !ro!osed na-e:
). 5a,ora%le 1ndorse-ent fro- Ather go,ern-ent Agencies, if a!!lica%le:
(. >etailed 5easi%ility 2tudy indicating ,ia%ility of the !ro!osed %usiness acti,ity:
1?. Dnderta*ing to co-!ly with the auditing and accounting standards !rescri%ed %y the Authority: and
11. $egistration fee.
829 5or e7isting coo!erati,es desiring to %e transfor-ed into a Multi-#ur!ose oo!erati,e:
1. &a-e Gerification 2li!, in case of change of na-e:
2. A-ended Articles of oo!erati,e and By-0aws:
3. A $esolution certified %y the coo!erati,e;s 2ecretary and %y the -a3ority of the Board of >irectors stating the fact that said
a-end-ents ha,e %een duly a!!ro,ed %y at least two-thirds 82B39 ,ote of all the -e-%ers with ,oting rights:
4. 2urety Bond of Accounta%le Afficers:
5. Audited 5inancial 2tate-ent showing !rofita%le o!erations for the !ast two 829 years:
'. Dnderta*ing to hange &a-e in the e,ent that another coo!erati,e has ac6uired a !rior right to the use of the !ro!osed na-e:
<. 5a,ora%le 1ndorse-ent fro- Ather "o,ern-ent Agencies, if a!!lica%le:
). >etailed 5easi%ility 2tudy indicating ,ia%ility of the !ro!osed %usiness acti,ities:
(. ertificate that the coo!erati,e has co-!lied with the auditing and accounting standards !rescri%ed %y the Authority:
1?. #roof of %usiness trac* records of the coo!erati,e: and
11. A-end-ent 5ee.
Section 5. Boo/ of $ccounts8 .he new and e7isting coo!erati,es transfor-ed into a Multi-#ur!ose oo!erati,e are re6uired to -aintain se!arate Boo* of
Accounts for each %usiness acti,ity.
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&'+'S'*N *F C**P%RA#'+%S
Section . *egal Basis8 .he legal %asis for this $ule is Art. 2? of the ode, 6uoted as follows:
+Art. 2?. Division of Cooperatives8 - Any registered coo!erati,e, -ay %y a resolution a!!ro,ed %y a ,ote of three-fourths 83B49 of all the -e-%ers with ,oting rights,
!resent and constituting a 6uoru-, resol,e to di,ide itself into two 829 or -ore coo!erati,es. .he !rocedure for such di,ision shall %e !rescri%ed in the regulations
of the Authority. .he new coo!erati,es shall %eco-e legally esta%lished u!on registration with the Authority: #ro,ided, .hat all the re6uire-ents set forth in this
ode ha,e %een co-!lied with %y the new coo!erati,es: #ro,ided, further, .hat no di,ision of coo!erati,e in fraud of creditors shall %e ,alid.+
Section 2. Procedures8 .he following !rocedures shall %e o%ser,ed in the di,ision of coo!erati,es:
1. A!!ro,al of #ro!osal to >i,ide:
2. 5or-ulation of #lan of >i,ision:
3. #resentation and A!!ro,al of the #lan of >i,ision to the "eneral Asse-%ly:
4. #osting and #u%lication of the &otice of >i,ision:
5. Fritten &otification to reditors:
'. 5iling with the Authority of the $e6uired >ocu-ents for the $egistration of >i,ision: and
<. /ssuance of the ertificate of $egistration.
Section 3. Proposal of Division8 .he -a3ority -e-%ers of the Board of >irectors or at least ten !ercent 81?C9 of -e-%ers with ,oting rights -ay !ro!ose for
di,ision, which -ust %e a!!ro,ed %y at least -a3ority of the -e-%ers of the coo!erati,e with ,oting rights !resent and constituting a 6uoru- in a
generalBre!resentati,e asse-%ly -eeting called for the !ur!ose. D!on a!!ro,al of the !ro!osal to di,ide, a co--ittee to for-ulate the #lan of >i,ision shall %e
constituted %y the "eneralB$e!resentati,e Asse-%ly.
Section 4. Preference of "embers8 D!on a!!ro,al %y the "eneralB$e!resentati,e Asse-%ly in the -eeting called for the !ur!ose, -e-%ers of the original
coo!erati,e shall %e allowed within two 829 wee*s to choose the new coo!erati,e they !refer to 3oin. .he -anage-ent of the original coo!erati,e shall then transfer
the -e-%er;s share and all other interests to hisBher chosen coo!erati,e.
Section 5. Presentation and $pproval of the Plan of Division8 .he Board of >irectors shall call a "eneralB$e!resentati,e Asse-%ly -eeting to action such #lan of
>i,ision with notice to all -e-%ers of record and reditors at least thirty 83?9 days !rior to the scheduled -eeting. .he #lan of >i,ision shall %e a!!ro,ed %y a ,ote
of three-fourths 83B49 of all -e-%ers with ,oting rights, !resent and constituting a 6uoru- in such generalBre!resentati,e asse-%ly -eeting.
Section 5. Right of a Dissenting "ember8 A dissenting -e-%er shall %e entitled to a refund of hisBher share ca!ital and all other interests under Art. 3? of the
ode.
Section !. Contents of the Plan of Division8 .he #lan of >i,ision -ust include the following:
1. .he rationale or 3ustification for the di,ision of the coo!erati,e:
2. A 5inancial 2tate-ent duly certified %y an inde!endent ertified #u%lic Accountant including a schedule of assets, lia%ilities and share ca!ital of the
coo!erati,e intending to di,ide:
3. A !ro!osed re,aluation of assets, deter-ination of lia%ilities, statutory reser,es, undi,ided net sur!lus and -e-%ers; share ca!ital:
4. 0ist of all the recei,a%les of the coo!erati,e:
5. 0ist of all the reditors and their res!ecti,e clai-s against the coo!erati,e:
'. #rocedure for the di,ision of assets, allocation and settle-ent of the o%ligations and the collection of recei,a%les of the coo!erati,e:
<. 5easi%ility study ensuring the ,ia%ility and sustaina%ility of %oth coo!erati,es:
). 0ist of -e-%ers showing their share ca!ital contri%utions certified %y the 2ecretary and attested %y the Board hair!erson of the coo!erati,e:
(. .he !ro!osed na-e, address and area of o!eration of the new coo!erati,es: and
1?. Benefit !ac*age for Manage-ent 2taff to %e affected %y the !lan.
Section 1. Publication8 Fithin se,en 8<9 days after the date of a!!ro,al of the di,ision of the coo!erati,e, the 2ecretary of the coo!erati,e, duly noted %y the
hair!erson, shall !u%lish such !lan of di,ision once a wee* for three 839 consecuti,e wee*s in a news!a!er of general circulation within its area of o!eration. 2aid
!u%lication -ay also %e su!!le-ented %y radio and tele,ision announce-ents.
Alternati,ely, the announce-ent of the di,ision -ay also %e done %y !osting in at least three 839 cons!icuous !u%lic !laces for three 839 consecuti,e wee*s within
its area of o!eration.
0i*ewise, lettersBnotices duly signed %y the hair!erson announcing such di,ision shall %e sent %y the 2ecretary of the coo!erati,e through registered -ails to
their creditors.
Section 9. !b+ection by a Third Party8 Fithin fifteen 8159 days fro- the day of !osting or fro- the last day of !u%lication, a !arty -ay file an o%3ection or o!!osition
to the #lan of >i,ision %efore the Authority, co!y furnished the coo!erati,e concerned, which shall %e decided within si7ty 8'?9 days fro- recei!t of the o%3ection or
o!!osition. /f the o%3ection or o!!osition is -eritorious, in order not to !re3udice the interest of the third !arty, the Authority shall cause the defer-ent or disa!!ro,al
of the registration of the new coo!erati,es.
After the la!se of the !eriod to file an o%3ectionBo!!osition and no o%3ectionBo!!osition has %een filed or after all o%3ectionsBo!!ositions ha,e %een resol,ed, the
coo!erati,e can file its a!!lication for registration.
Section 0. $dditional Re4uirements for Registration8 /n addition to the regular re6uire-ents for registration of coo!erati,es, the following docu-ents shall %e filed
with the Authority:
1. .he resolution of di,ision as a!!ro,ed %y the "eneralB$e!resentati,e Asse-%ly duly certified %y the 2ecretary and duly noted %y the hair!erson:
2. .he #lan of >i,ision including all its attach-ents:
3. .he Minutes of the "eneralB$e!resentati,e Asse-%ly Meeting a!!ro,ing the #lan of >i,ision:
4. .he 5inancial 2tate-ents of each of the new coo!erati,es duly certified %y the res!ecti,e .reasurers and hair!ersons:
5. #roof of &otice of #u%lication andBor !osting of the announce-ent of such di,ision:
'. #roof of &otice to the reditors:
<. Fritten Agree-ent to 2ettle A%ligation: and
). Ariginal ertificate of $egistration.
Section . %ssuance of Certificate8 Ance the registration re6uire-ents are found to %e co-!leted and in order, the Authority shall issue the ertificates of
$egistration to the new coo!erati,es. .he ertificate of $egistration of the original coo!erati,e shall %e surrendered to the Authority for cancellation.
Section 2. #ffect of Registration8 oo!erati,es for-ed and organi4ed under this $ule shall ac6uire 3uridical !ersonality fro- the date the Authority issues a
ertificates of $egistration under the Authority;s official seal.
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(7'&%,'N%S (*+%RN'N( #)% PR*C%&7R% F*R
$%R(%R *R C*NS*,'&A#'*N
Section . *egal Basis8 .he legal %ases for this $ule are Articles 21 and 22 of the ode, 6uoted as follows:
+Art. 21. Merger and onsolidation of oo!erati,es. -
.wo 829 or -ore coo!erati,es -ay -erge into a single coo!erati,e, which shall %e either one of the constituent coo!erati,es or the consolidated coo!erati,es.
&o -erger or consolidation shall %e ,alid unless a!!ro,ed %y three-fourths 83B49 ,ote of all -e-%ers with ,oting rights, !resent and constituting a 6uoru- of each
of the constituent coo!erati,es at se!arate general asse-%ly -eetings. .he dissenting -e-%ers shall ha,e the right to e7ercise their right to withdraw their
-e-%ershi! !ursuant to Article 3?.
839 .he Authority shall issue the guidelines go,erning the !rocedure of -erger or consolidation of coo!erati,es. /n any case, the -erger or consolidation shall %e
effecti,e u!on the issuance of the ertificate of Merger or onsolidation %y the Authority.
Art. 22. 1ffects of Merger and onsolidation. - .he -erger or consolidation of the coo!erati,es shall ha,e the following effects:
819 .he constituent coo!erati,es shall %eco-e a single coo!erati,e, which in case of -erger shall %e the sur,i,ing coo!erati,e, and in case of
consolidation, shall %e the consolidated coo!erati,e.
829 .he se!arate e7istence of the constituent coo!erati,es shall cease, e7ce!t that of the sur,i,ing or the consolidated coo!erati,e.
839 .he sur,i,ing or the consolidated coo!erati,e shall !ossess all rights, !ri,ileges, i--unities and !owers and shall %e su%3ect to all the duties and
lia%ilities of a coo!erati,e organi4ed under this ode:
849 .he sur,i,ing or the consolidated coo!erati,e shall !ossess all the assets, rights, !ri,ileges, i--unities and franchises of each of the constituent
coo!erati,es: and
859 .he sur,i,ing or the consolidated coo!erati,e shall %e res!onsi%le for all the lia%ilities and o%ligations of each of the constituent coo!erati,es in
the sa-e -anner as if the sur,i,ing or consolidated coo!erati,e had itself incurred such lia%ilities or o%ligations. Any clai-, action, or !roceeding
!ending %y or against any such constituent coo!erati,es -ay %e !rosecuted %y or against the sur,i,ing or consolidated coo!erati,e, as the case -ay
%e. &either the rights of creditors nor any lien u!on the !ro!erty of any of such constituent shall %e i-!aired %y such -erger or consolidation.+
Section 2. Parties to the "erger or Consolidation8 Anly coo!erati,es %elonging to the sa-e category can %e !arties to Merger or onsolidation. A !ri-ary
coo!erati,e can only -erge or consolidate with a !ri-ary coo!erati,e, a secondary with a secondary coo!erati,e, and a tertiary with a tertiary coo!erati,e.
Section 3. Procedures8 .he following are the !rocedures to the Merger or onsolidation of coo!erati,es:
1. A!!ro,al of the !ro!osal to -erge or consolidate %y the "eneralB$e!resentati,e Asse-%ly of each constituent coo!erati,es:
2. 5or-ulation of #lan of Merger or onsolidation %y the re!resentati,es of the constituent coo!erati,es:
3. #resentation to and A!!ro,al of the #lan of Merger or onsolidation %y the "eneralB$e!resentati,e Asse-%ly of each constituent coo!erati,es:
4. 5or-ulation of the A-end-entB&ew Articles of oo!eration and By-laws:
5. #ostingB#u%lication of Merger or onsolidation:
'. Fritten &otification to reditors through registered -ail with return card and other a!!lica%le electronic -eans:
<. 5iling with the Authority the re6uired docu-ents for the registration of -erger or consolidation: and
). /ssuance of ertificate of $egistration of MergerBonsolidation %y the Authority.
Section 4. Contents of Plan of "erger or Consolidation8 .he #lan of Merger or onsolidation shall include the following:
1. 2tate-ent of #ur!ose of such Merger or onsolidation:
2. .he $egistered &a-es, Addresses and $egistrationBonfir-ation &u-%ers, ontact >etails and $es!ecti,e Areas of A!eration of the onstituent
oo!erati,es:
3. .he #ro!osed A-end-ents to the 2ur,i,ing oo!erati,e;s Articles of oo!eration and By-laws, in case of Merger and with res!ect to
onsolidation, the #ro!osed Articles of oo!eration and By-laws:
4. 0ist of Me-%ers of each onstituent oo!erati,es showing their 2hare a!ital ontri%ution duly certified %y the res!ecti,e Board 2ecretaries and
attested %y the res!ecti,e Board hair!ersons:
5. .he &a-e, Address and Area of A!eration of the 2ur,i,ing oo!erati,e, in case of Merger, the #ro!osed &a-e, Address and Area of A!eration,
in case of onsolidation:
'. 5easi%ility 2tudy indicating the Gia%ility and 2ustaina%ility of the MergingBonsolidating oo!erati,es:
<. .he Audited 5inancial 2tate-ents as of the i--ediate !receding year including the schedule of assets, lia%ilities and ca!ital of the -erging or
consolidating coo!erati,es: and
). #ac*age Benefits of the Manage-ent 2taff to %e affected %y the #lan.
Section 5. Proposal of "erger or Consolidation8 .he #ro!osal to Merge or onsolidate -ay %e -ade %y the Board of >irectors or %y at least ten !ercent 81?C9 of
the -e-%ers with ,oting rights. /t shall %e a!!ro,ed %y at least -a3ority of the -e-%ers of each of the constituent coo!erati,es with ,oting rights, !resent and
constituting a 6uoru- in se!arate generalBre!resentati,e asse-%ly -eetings called for the !ur!ose.
>uring the sa-e -eeting, the "eneralB$e!resentati,e Asse-%ly shall a!!oint or elect the re!resentati,es to the 3oint co--ittee to draft the #lan of Merger or
onsolidation.
Section 5. $pproval of the Plan of "erger or Consolidation8 .he #lan of Merger or onsolidation 3ointly !re!ared %y re!resentati,es fro- the constituent
coo!erati,es shall %e su%-itted for a!!ro,al to the -e-%ers of each constituent coo!erati,e at se!arate generalBre!resentati,e asse-%ly -eetings duly called for
the !ur!ose. &otice of such -eeting shall %e gi,en to all -e-%ers of the res!ecti,e coo!erati,e, ser,ed either !ersonally, or %y registered -ail with return card or
electronic -eans within the !eriod as indicated in their By-laws.
.he affir-ati,e ,ote of -e-%ers re!resenting at least three-fourths 83B49 of all -e-%ers with ,oting rights, !resent and constituting a 6uoru- of each of the
constituent coo!erati,es at se!arate generalBre!resentati,e asse-%ly -eetings shall %e necessary for the a!!ro,al of the #lan of Merger or onsolidation, or
a-end-ents thereto, if any.
Section !. The $rticles of Cooperation and By)*a's8 /n case of Merger, the A-ended Articles of oo!eration and By-0aws, if a!!lica%le, shall %e attested %y the
/ncu-%ent >irectors of the 2ur,i,ing oo!erati,e while in onsolidation, the Articles and By-0aws shall %e signed %y the oo!erating >irectors.
Section 1. Posting:Publication8 Announce-ent of the Merger or onsolidation -ay %e done %y !osting in at least three 839 cons!icuous !laces in their res!ecti,e
areas of o!eration: or !u%lication in a news!a!er of general circulation once a wee* for three 839 consecuti,e wee*s. 2aid !u%lication -ay also %e su!!le-ented
%y radio and tele,ision announce-ents or any other electronic -eans of co--unication.
Section 9. ,otice to Creditors and %nvestors8 .he Afficers of the Merging or onsolidating oo!erati,es shall also send letters %y registered -ail with return card
to the reditors and in,estors of their res!ecti,e coo!erati,es announcing such Merger or onsolidation.
Section 0. !b+ection:s by a Third Party8 Fithin fifteen 8159 days after the date of !osting or fro- the last day of !u%lication, a third !arty -ay file an o%3ection or
o!!osition to the #lan of Merger or onsolidation %efore the Authority which shall %e decided within si7ty 8'?9 days fro- recei!t of the o%3ection or o!!osition.
5inding the o%3ection or o!!osition -eritorious, in order not to !re3udice the interest of the third !arty, the Authority will cause the defer-ent or disa!!ro,al of the
registration of the Merger or onsolidation.
After the la!se of the !eriod to file an o%3ectionBo!!osition and no o%3ectionBo!!osition has %een filed or after all o%3ectionsBo!!ositions ha,e %een resol,ed, the
coo!erati,e can file its a!!lication for registration.
Section . $dditional Re4uirements for Registration8 .he Afficers of the -erged or consolidated coo!erati,es shall file with the Authority the following additional
re6uire-ents for registration:
A. 5or Merger
1. .he Ariginal ertificate of $egistration of the a%sor%ed coo!erati,e:
2. .he "eneralB$e!resentati,e Asse-%ly resolutions of %oth constituent coo!erati,es a!!ro,ing the #lan of Merger duly certified %y the 2ecretaries
and attested %y the res!ecti,e hair!ersons:
3. .he e7cer!ts fro- the -inutes of the generalBre!resentati,e asse-%ly -eeting stating a-ong others the a!!ro,al of the Merger:
4. ertification of the 2ecretaries duly attested %y the hair!ersons of the constituent coo!erati,es that there was a 6uoru- and the re6uired nu-%er
of ,otes for the a!!ro,al was -et:
5. .he a!!ro,ed #lan of Merger and all its attach-ents as re6uired under 2ection 4 of this $ule:
'. .he !ro!osed a-end-ent to the Articles of oo!eration and By-laws of the 2ur,i,ing oo!erati,e, if necessary:
<. 2urety Bond of Accounta%le Afficers:
). #roof of #u%licationB#osting of the Announce-ent of Merger:
(. #roof of &otice to reditors:
1?. Fritten Agree-ent to settle A%ligations
11. .he original ertificate of $egistration of the 2ur,i,ing oo!erati,e:
12. 5a,ora%le endorse-ent fro- the concerned go,ern-ent agency if necessaryBa!!lica%le: and
13. $egistration fee in accordance with the 2chedule of 5ees !rescri%ed %y the Authority.
B. 5or onsolidation
1. .he Ariginal ertificate of $egistration of %oth constituent coo!erati,es:
2. .he "eneralB$e!resentati,e Asse-%ly resolutions a!!ro,ing the consolidation of the coo!erati,e duly certified %y the 2ecretaries and attested %y
the hair!ersons of the onsolidating oo!erati,es:
3. .he e7cer!ts fro- the -inutes of the "eneralB$e!resentati,e Asse-%ly -eetings of the onsolidating oo!erati,es with their res!ecti,e
attendance sheets duly certified %y the 2ecretary and hair!erson or #residing Afficer:
4. ertification of the 2ecretaries duly attested %y the hair!ersons of the onstituent oo!erati,es that there was a 6uoru- and the re6uired
nu-%er of ,otes for the a!!ro,al was -et:
5. .he a!!ro,ed #lan of onsolidation and all its attach-ents as re6uired under 2ection 4 of this $ule:
'. .he 1cono-ic 2ur,ey:
<. .he !ro!osed Articles of oo!eration and By-laws of the onsolidated oo!erati,e:
). 2urety Bond of Accounta%le Afficers:
(. #roof of #u%licationB#osting of the announce-ent of consolidation:
1?. #roof of &otice to reditors:
11. Fritten Agree-ent to settle A%ligations:
12. .he original ertificates of $egistration of the onsolidating oo!erati,es:
13. Dnderta*ing to hange &a-e in the e,ent that another coo!erati,e has ac6uired !rior right to the use of the !ro!osed na-e: and
14. $egistration fee in accordance with the 2chedule of 5ees !rescri%ed %y the Authority.
Section 2. %ssuance of Certificate8 Ance the registration re6uire-ents are co-!lied with, the Authority shall issue the ertificate of Merger, or new ertificate of
$egistration in case of consolidation. .he ertificate of $egistration of the original coo!erati,es shall %e surrendered to the Authority.
R7,% 5
(7'&%,'N%S F*R ,A-*RA#*R6 C**P%RA#'+%S
Section . *egal Basis8 .he legal %asis for this $ule is the third !aragra!h of Art. 2' of the ode, 6uoted as follows:
+Art. 2'. 2inds of "embership8 - A coo!erati,e organi4ed %y -inors shall %e considered a la%oratory coo!erati,e and -ust %e affiliated with a registered
coo!erati,e. A la%oratory coo!erati,e shall %e go,erned %y s!ecial guidelines to %e !ro-ulgated %y the Authority.+
Section 2. !rgani-ation of *aboratory Cooperative8 5ifteen 8159 or -ore -inors who are 5ili!ino citi4ens, actually residing in the co--unity or enrolled in an
educational institution within or near the area of o!eration of the "uardian oo!erati,e or out of school -inor actually residing in the co--unity, -ay organi4e a
0a%oratory oo!erati,e co-!osed of -inors, which shall %e se,en 8<9 years old %ut %elow eighteen 81)9 years of age.
Section 3. Purposes of *aboratory Cooperatives8 A 0a%oratory oo!erati,e shall %e organi4ed for any or all of the following !ur!oses:
1. .o ser,e as a training ground for its -e-%ers to !re!are the- for -e-%ershi! in regular coo!erati,es:
2. .o teach the ,alue of thrift and sa,ing -o%ili4ation a-ong its -e-%ers:
3. .o instill coo!erati,e ,alues, !rinci!les, financial disci!line and leadershi! s*ills a-ong its -e-%ers:
4. .o !ro-ote and ad,ance 5ili!ino social and cultural ,alues, ecological awareness and sustaina%le de,elo!-ent.
Section 4. Contents of the $rticles of Cooperation8 .he Articles of oo!eration of a 0a%oratory oo!erati,e signed %y each of the organi4ers shall !ro,ide the
following:
1. .he na-e of the coo!erati,e which shall include the words +0a%oratory oo!erati,e+:
2. .he !ur!ose or !ur!oses for which it is organi4ed:
3. .he ter- of e7istence:
4. .he area of o!erations and the !ostal address of the !rinci!al office of the la%oratory coo!erati,e:
5. .he area of o!erations and the !ostal address of the !rinci!al office of the guardian coo!erati,e:
'. .he na-es, nationality, %irthdates, and !ostal addresses of the coo!erators:
<. .he na-es, and !ostal addresses of -e-%ers of the %oard of directors of its guardian coo!erati,e: and
). .he a-ount of its share ca!ital, the na-es, and addresses of its -e-%ers.
Section 5. Contents of the By)*a's8 .he By-laws of a 0a%oratory oo!erati,e shall !ro,ide for the following:
1. .he 6ualifications for ad-ission to -e-%ershi! and the !ay-ent to %e -ade or interest to %e ac6uired as a condition to the e7ercise of the right of
-e-%ershi!:
2. .he rights and lia%ilities of -e-%ershi!:
3. .he circu-stances under which -e-%ershi! is ac6uired, -aintained and lost:
4. .he !rocedures to %e followed in cases of ter-ination of -e-%ershi!:
5. .he conditions under which the transfer of a share or interest of the -e-%ers shall %e !er-itted:
'. .he rules and !rocedures on the agenda, ti-e, !lace and -anner of calling, con,ening, conducting -eetings, 6uoru- re6uire-ents, ,oting
syste-s, and other -atters relati,e to the %usiness affairs of the general asse-%ly, %oard of directors, and co--ittees:
<. .he general conduct of the affairs of the coo!erati,e, including the !owers and duties of the "eneral Asse-%ly, the %oard of directors, co--ittees
and, officers, and their 6ualifications and dis6ualifications:
). .he -anner in which the ca!ital -ay %e raised and the !ur!oses for which it can %e utili4ed:
(. .he accounting and auditing syste-s:
1?. .he -ethod of distri%ution of net sur!lus:
11. .he -anner of ado!ting and a-ending %y-laws:
12. Ather -atters incident to the !ur!oses and acti,ities of the coo!erati,e.
Section 5. Capitali-ation Re4uirements8 .he 0a%oratory oo!erati,e shall include in its Bylaws a !rogra- on continuous a!ital Build-D!.
Section !. $ffiliation8 A 0a%oratory oo!erati,e -ust %e affiliated with a duly registered coo!erati,e, to %e *nown as the "uardian oo!erati,e, %efore the
authority shall issue a ertificate of $ecognition.
A 0a%oratory oo!erati,e !ri-arily co-!osed of students fro- a !articular school shall %e affiliated with the school;s coo!erati,e, if any. /f the 0a%oratory
oo!erati,e is co-!osed !ri-arily of out-of-school -inors, it shall %e affiliated with a coo!erati,e of its choice within or nearest its area of o!eration.
/n the a%sence of a duly registered coo!erati,e in the area or refusal of a duly registered coo!erati,e to acce!t the affiliation of a 0a%oratory oo!erati,e, the said
0a%oratory oo!erati,e -ay re6uest assistance fro- the nearest >A Affice in identifying a !ossi%le "uardian oo!erati,e.
Section 1. Responsibility of the Guardian Cooperative8 .he "uardian oo!erati,e shall su!er,ise, -onitor, and act for and in %ehalf of the 0a%oratory oo!erati,e
in their dealings, transactions with third !arties when ca!acity to contract is re6uired.
/t shall %e res!onsi%le for the coo!erati,e education and training of all officers and -e-%ers of the la%oratory coo!erati,e.
2u%-ission of re!orts to the Authority on the acti,ities and econo-ic o!erations of the 0a%oratory oo!erati,e shall li*ewise %e the res!onsi%ility of the "uardian
oo!erati,e.
Section 9. *iability of the Guardian Cooperative8 - .he "uardian oo!erati,e e7ercising !arental authority -ay %e lia%le for any ,iolations in the coo!erati,e;s
o!eration.
Section 0. Re4uirements for Recognition of *aboratory Cooperative8 A 0a%oratory oo!erati,e see*ing recognition as such shall su%-it, through the "uardian
oo!erati,e, the following re6uire-ents to the Authority for the issuance of a ertificate of $ecognition:
1. Articles of oo!eration and By-laws: and
2. $esolution of the Board of >irectors of the "uardian oo!erati,e acce!ting its res!onsi%ility and lia%ility as "uardian of the 0a%oratory
oo!erati,e.
Section . %ssuance of Certificate of Recognition8 A ertificate of $ecognition shall %e issued %y the Authority under its official seal u!on co-!liance with all the
re6uire-ents set forth %y this rule. .he ertificate shall %e conclusi,e e,idence that the 0a%oratory oo!erati,e therein -entioned is duly recogni4ed unless such
recognition has %een earlier re,o*ed.
.he issuance of the ertificate of $ecognition does not %estow u!on a 0a%oratory oo!erati,e with a 3uridical !ersonality.
Section 2. Termination of "embership8 .he following shall %e conditions for ter-ination of -e-%ershi! in a 0a%oratory oo!erati,e:
1. D!on reaching the age of -a3ority 81) years of age9:
2. .hose !ro,ided under Art. 3? of the ode: and
3. 2uch other conditions as -ay %e !ro,ided for in the By-laws.
Section 3. Refund of Share Capital8 D!on ter-ination of -e-%ershi!, the for-er -e-%er shall %e entitled to a refund of his share ca!ital contri%ution and all
other interests in the 0a%oratory oo!erati,e in accordance with Art. 31 of the ode.
Section 4. !ption of "ember 1ho Reaches the $ge of "a+ority8 Any -e-%er reaching the age of -a3ority -ay o!t to 3oin the "uardian oo!erati,e u!on
co-!liance of all the re6uire-ents for -e-%ershi!.
Section 5. *imitation8 A "uardian oo!erati,e shall su!er,ise only one 819 la%oratory coo!erati,e.
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Section . *egal Basis8 .he legal %asis for this $ule is Art. 44 of the ode, 6uoted as follows:
+Art. 44. 5unctions, $es!onsi%ilities, and .raining $e6uire-ents of >irectors, Afficers, and o--ittee Me-%ers. .he functions and res!onsi%ilities of the directors,
officers and co--ittee -e-%ers, as well as their training re6uire-ents shall %e in accordance with the rules and regulations issued %y the Authority.+
Section 2. !fficers of the Cooperative8 .he Afficers of the coo!erati,e shall include the Me-%ers of the Board of >irectors, Me-%ers of the >ifferent o--ittees
created %y the "eneral Asse-%ly, "eneral Manager or hief 17ecuti,e Afficer, 2ecretary, .reasurer and Me-%ers holding other !ositions as -ay%e !ro,ided for in
their By-laws. As such they are entrusted with the !ower of e7ercising authority within the sco!e of their defined functions which is !er-anent in nature and include
the e7ercise of control and discretion in the !erfor-ance of their duly.
Section 3. Committees of Cooperatives8 .he By-laws shall !ro,ide for the creation of the following co--ittees:
1. Audit o--ittee:
2. 1lection o--ittee:
3. Mediation and onciliation o--ittee:
4. 1thics o--ittee: and
5. Ather o--ittees as -ay %e necessary for the conduct of the affairs of the coo!erati,e.
.he -e-%ers of Audit 1lection o--ittees shall %e elected %y the "eneral Asse-%ly while the Board of >irectors shall a!!oint the rest.
Section 4. 0unctions and Responsibilities of the !fficers of the Cooperative8
4.1 Board of >irectors.
4.1.1 .he Board of >irectors shall ha,e the following functions and res!onsi%ilities:
a. #ro,ide general !olicy direction:
%. 5or-ulate the strategic de,elo!-ent !lan:
c. >eter-ine and !rescri%e the organi4ational and o!erational structure:
d. $e,iew the Annual #lan and Budget and reco--end for the a!!ro,al of the "eneralB$e!resentati,e Asse-%ly:
e. 1sta%lish !olicies and !rocedures for the effecti,e o!eration and ensure !ro!er i-!le-entation of such:
f. 1,aluate the ca!a%ility and 6ualification and reco--ended to the "eneralB$e!resentati,e Asse-%ly the engage-ent of the ser,ices of an 17ternal
Auditor:
g. A!!oint the -e-%ers of the MediationBonciliation and 1thics o--ittees and other Afficers as s!ecified in the ode and coo!erati,e By-laws:
h. >ecide election related cases in,ol,ing the 1lection o--ittee or its -e-%ers:
i. Act on the reco--endation of the 1thics o--ittee on cases in,ol,ing ,iolations of ode of "o,ernance and 1thical 2tandards: and
3. #erfor- such other functions as -ay %e !rescri%ed in the By-laws or authori4ed %y the "eneralB$e!resentati,e Asse-%ly.
4.1.2 .he hair!erson shall:
a. 2et the agenda foe %oard -eetings in coordination with the other -e-%ers of the Board of >irectors:
%. #reside o,er all -eetings of the Board of >irectors and of the "eneralB$e!resentati,e asse-%ly:
c. 2ign contracts, agree-ents, certificates and other docu-ents on %ehalf of the coo!erati,e as authori4ed %y the Board of >irectors or %y the
"eneralB$e!resentati,e Asse-%ly:
d. /ssue ertificate of &on-Affiliation with any 5ederation or Dnion: and
e. #erfor- such other functions as -ay %e authori4ed %y the Board of >irectors or %y the "eneralB$e!resentati,e Asse-%ly.
4.1.3 .he Gice hair!erson shall:
a. #erfor- all duties and functions of the hair!erson in the a%sence of the latter:
%. .o act as e7-officio hair!erson of the 1ducation and .raining o--ittee: and
c. #erfor- such other duties as -ay %e delegated to hi-Bher %y the Board of >irectors.
4.2 .reasurer. .he .reasurer shall:
a. 1nsure that all cash collections are de!osited in accordance with the !olicies set %y the Board of >irectors:
%. Ha,e custody of all funds, securities, and docu-entation;s relating to all assets, lia%ilities, inco-e and e7!enditures:
c. Monitor and re,iew the financial -anage-ent o!erations of the coo!erati,e, su%3ect to such li-itations and control as -ay %e !rescri%ed %y the
Board of >irectors:
d. Maintain full and co-!lete records of cash transactions:
e. Maintain a #etty ash 5und and >aily ash #osition $e!ort: and #erfor- such other functions as -ay %e !rescri%ed in the By-laws or authori4ed
%y the "eneralB$e!resentati,e Asse-%ly.
4.3 2ecretary. .he 2ecretary shall:
a. Jee! an u!dated and co-!lete registry of all -e-%ers:
%. $ecord, !re!are and -aintain records of all -inutes of -eetings of the Board of >irectors and the "eneralB$e!resentati,e Asse-%ly:
c. 1nsure that necessary Board of >irectors actions and decisions are trans-itted to the -anage-ent for co-!liance and i-!le-entation:
d. /ssue and certify the list of -e-%ers who are in good standing entitled to ,ote as deter-ined %y the Board of >irectors:
e. #re!are and issue 2hare ertificates:
f. 2er,e notice of all -eetings called and certify the !resence of 6uoru- of all -eetings of the Board of >irectors and the "eneralB$e!resentati,e
Asse-%ly:
g. Jee! co!y .reasure;s re!orts and other re!orts:
h. Jee! and -aintain the 2hare and .ransfer Boo*:
i. 2er,e as custodian of the coo!erati,e seal: and
#erfor- such other functions as -ay %e !rescri%ed in the By-laws or authori4ed %y the "eneralB $e!resentati,e Asse-%ly.
4.4 1lection o--ittee. .he 1lection o--ittee shall:
a. 5or-ulate election rules and guidelines and reco--ended to the "eneralB$e!resentati,e Asse-%ly for a!!ro,al:
%. /-!le-ent election rules and guidelines duly a!!ro,ed %y the "eneralB$e!resentati,e Asse-%ly:
c. $eco--ended necessary a-end-ents to the election rules and guidelines, in consultation with the Board of >irectors, for the
"eneralB$e!resentati,es Asse-%ly;s a!!ro,al:
d. 2u!er,ise the conduct, -anner and !rocedure of election and other election related acti,ities and act on the changes thereto:
e. an,ass and certify the results of the election:
f. #roclai- the winning candidates:
g. >ecide election and other election related cases e7ce!t those in,ol,ing the 1lection o--ittee or its -e-%ers: and
h. #erfor- such other functions as !rescri%ed in the By-laws or authori4ed %y the "eneralB$e!resentati,e Asse-%ly.
4.5 Audit o--ittee. .he co--ittee shall:
a. Monitor the ade6uacy and effecti,eness of the coo!erati,e;s -anage-ent and control syste-:
%. Audit the !erfor-ance of the coo!erati,e and its ,arious res!onsi%ility centers:
c. $e,iew continuously and !eriodically the %oo*s of account and other financial records to ensure that these are in accordance with the coo!erati,e
!rinci!les and generally acce!ted accounting !rocedures:
d. 2u%-it re!orts on the result of the internal audit and reco--end necessary changes on !olicies and other related -atters on o!eration to the
Board of >irectors and "eneralB$e!resentati,e Asse-%ly:
e. #erfor- such other functions as -ay %e !rescri%ed in the By-laws or authori4ed %y the "eneralB$e!resentati,e Asse-%ly.
4.' Mediation and onciliation o--ittee. .he co--ittee shall:
a. 5or-ulate and de,elo! the onciliation-Mediation #rogra- and ensure that it is !ro!erly i-!le-ented:
%. Monitor onciliation-Mediation !rogra- and !rocesses:
c. 2u%-it se-i-annual re!orts of coo!erati,e cases to the Authority within fifteen 8159 days after the end of e,ery se-ester:
d. Acce!t and file 1,aluation $e!orts:
e. 2u%-it reco--endations for i-!ro,e-ent to the Board of >irectors:
f. $eco--end to the Board of >irectors any -e-%er of the coo!erati,e for onciliation-Mediation .rainings as oo!erati,e onciliator-Mediator:
g. /ssue the ertificate of &on-2ettle-ent 8&29:
h. #erfor- such other functions as -ay %e !rescri%ed in the By-laws or authori4ed %y the "eneralB$e!resentati,e Asse-%ly.
4.< 1thics o--ittee. .he co--ittee shall:
a. >e,elo! ode of "o,ernance and 1thical 2tandards to %e o%ser,ed %y the -e-%ers, officers and e-!loyees of the coo!erati,e su%3ect to the
a!!ro,al of the Board of >irectors and ratification of the "eneralB$e!resentati,e Asse-%ly:
%. >isse-inate, !ro-ote and i-!le-ent the a!!ro,ed ode of "o,ernance and 1thical standards:
c. Monitor co-!liance with the ode of "o,ernance and 1thical 2tandards and reco--end to the Board of >irectors -easures to address the ga!, if
any:
d. onduct initial in,estigation or in6uiry u!on recei!t of a co-!laint in,ol,ing ode of "o,ernance and 1thical 2tandards and su%-it re!ort to the
Board of >irectors together with the a!!ro!riate sanctions.
e. $eco--end ethical rules and !olicy to the Board of >irectors:
f. #erfor- such other functions as -ay %e !rescri%ed in the By-laws or authori4ed %y the "eneralB$e!resentati,e Asse-%ly.
4.) Ather o--ittees. Ather o--ittees that -ay %e created shall assist in the for-ulation of !olicies and rules and in the i-!le-entation of the ser,ice of the
coo!erati,e. .heir !owers, functions, and res!onsi%ilities shall %e defined in the By-laws.
4.( "eneral Manager. .he "eneral Manager shall:
a. A,ersee the o,erall day to day %usiness o!erations of the coo!erati,e %y !ro,iding general direction, su!er,ision, -anage-ent and ad-inistrati,e
control o,er all the o!erating de!art-ents su%3ect to such li-itations as -ay %e set forth %y the Board of >irectors or the "eneralB$e!resentati,e
Asse-%ly:
%. 5or-ulate and reco--end in coordination with the o!erating de!art-ents under hisBher su!er,ision, the oo!erati,e;s Annual and Mediu- .er-
>e,elo!-ent #lan, !rogra-s and !ro3ects, for a!!ro,al of the Board of >irectors and ratification of the "eneralB$e!resentati,e Asse-%ly:
c. /-!le-ent the duly a!!ro,ed !lans and !rogra-s of the oo!erati,e and any other directi,e or instruction of the Board of >irectors.
d. #ro,ide and su%-it to the Board of >irectors -onthly re!orts on the status of the oo!erati,e;s o!eration ,is-@-,is its targets and reco--end
a!!ro!riate !olicy or o!erational changes, if necessary:
e. $e!resent the oo!erati,e in any agree-ent, contract, %usiness dealing, and in any other official %usiness transaction as -ay %e authori4ed %y
the Board of >irectors:
f. 1nsure co-!liance with all ad-inistrati,e and other re6uire-ents of regulatory %odies: and
g. #erfor- such other functions as -ay %e !rescri%ed in the By-laws or authori4ed %y the "eneralB$e!resentati,e Asse-%ly.
Section 5. Training Re4uirements for the !fficers of the Cooperative8 Afficers of the coo!erati,e shall %e re6uired to undergo necessary training conducted %y
coo!erati,es, 5ederations andBor other trainers or training institutions duly accredited %y the Authority. .he training !rogra- should contain the -ini-u-
re6uire-ents in the -oduleBcurriculu- as !rescri%ed %y the Authority. .he initial courses or any e6ui,alent su%stitute thereof -ust %e underta*en.
A. Board of >irectors
1. Basic oo!erati,e ourse !ri-arily on:
a. Articles of oo!erati,e and By-laws:
%. oo!erati,e Gision:
c. oo!erati,e Mission:
d. oo!erati,e 2trategic #lan:
e. 5unda-entals of oo!erati,e:
f. #olicies and #rogra-s of oo!erati,es:
g. oo!erati,e ode of 2??) 8$A (52?9:
h. /-!le-enting $ules and $egulations of $A (52?:
2. oo!erati,e Manage-ent and "o,ernance.
3. #olicy >e,elo!-ent.
4. 5inancial Manage-ent.
5. onflict Manage-ent.
'. #arlia-entary #rocedure
<. 0eadershi! and Galues $e-orientation
). 2trategic #lanning
(. Arientation on 0a%or and Ather $elated 0aws
B. 2ecretary
1. Basic oo!erati,e ourse
2. $ecords Manage-ent for &on 5inancial .ransaction
3. #arlia-entary #rocedure
4. Basic o-!uter #rogra-
. .reasurer
1. Basic oo!erati,e ourse
2. $ecords Manage-ent 85inancial .ransaction9
3. Basic Accounting for &on-Accountants
4. oo!erati,e 2tandards
5. /n,est-ent and Ban*ing #rocedures
'. 5inancial Manage-ent
>. Audit o--ittee
1. Basic oo!erati,e ourse
2. Audit Manage-ent
3. $ecords Manage-ent
4. Basic Accounting for &on-Accountant
5. oo!erati,e 2tandards
'. /nternal ontrol including /n,entory 2yste-
<. Basic o-!uter #rogra-
1. 1lection o--ittee
1. Basic oo!erati,e ourse
2. $ecords Manage-ent
3. $ules 5or-ulation
4. 0eadershi! and Galue $e-orientation
5. Basic o-!uter #rogra-
5. 1thics o--ittee
1. Basic oo!erati,e ourse
2. 0eadershi! and Galues $e-orientation
3. onflict Manage-ent
4. $ecords Manage-ent
5. Basic o-!uter #rogra-
". MediationBonciliation o--ittee
1. Basic oo!erati,e ourse
2. 0eadershi! and Galues $e-orientation
3. onflict Manage-ent
4. $ecords Manage-ent
5. 1ffecti,e o--unication
'. Basic o-!uter #rogra-
H. "eneral Manager B hief 17ecuti,e Afficer
1. Basic oo!erati,e ourse
2. oo!erati,e Manage-ent and "o,ernance
3. oo!erati,e 2tandards
4. Hu-an $esource Manage-ent
5. 1ffecti,e o--unication 2*ills
'. 1ntre!reneurial and Business Manage-ent ourse
<. 0a%or and other related 0aws
). 0eadershi! and Galues $e-orientation
(. o-!uter 0iteracy ourse
1?. 2trategic #lanning and Manage-ent
Section 5. Compliance8 .he training is re6uired for all coo!erati,e officers. /n cases where the incu-%ent has not undergone the re6uired training !rogra-, heBshe
shall undergo such training within twel,e 8129 -onths fro- the effecti,ity of this $ule. &on-co-!liance with the re6uired trainings shall %e considered grounds for
dis6ualification for future election or a!!oint-ent until such ti-e that heBshe has co-!lied with all the trainings re6uired for the !osition.
Section !. Duration of Trainings $ttended8 All trainings attended %y coo!erati,e officers shall %e considered ,alid co-!liance with the intent of this $ule for a
!eriod of fi,e 859 years fro- date of issuance of the ertificate of .raining. After which, they shall %e re6uired to undergo re-training of the sa-e.
Section 1. Transitory Period8 All coo!erati,es are here%y gi,en two 829 years fro- effecti,ity of this $ule to co-!ly with the .raining $e6uire-ents as !ro,ided
a%o,e.
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Section . *egal Basis8 .he legal %asis for this rule is Art. 53 of this ode, 6uoted as follows:
+Art. 53. $e!ort.
819 1,ery coo!erati,e shall draw u! regular re!orts of its !rogra- of acti,ities, including those in !ursuance of their socio-ci,ic underta*ings, showing
their !rogress and achie,e-ents at the end of e,ery fiscal year. .he re!orts shall %e -ade accessi%le to its -e-%ers of record. .hese re!orts shall
%e filed with the Authority within one hundred twenty 812?9 days fro- the end of the calendar year. .he for- and contents of the re!orts shall %e
!rescri%ed %y the rules of Authority. 5ailure to file the re6uired re!orts shall su%3ect the accounta%le officerBs to fines and !enalties as -ay %e
!rescri%ed %y the Authority, and shall %e a ground for the re,ocation of authority of the coo!erati,e to o!erate as such. .he fiscal year of e,ery
coo!erati,e shall %e the calendar year, e7ce!t as -ay %e otherwise !ro,ided in the %y-laws.
829 /f a coo!erati,e fails to -a*e, !u%lish and file the re!orts re6uired herein, or fails to include therein any -atter re6uired %y this ode, the Authority
within fifteen 8159 days fro- the e7!iration of the !rescri%ed !eriod, send such coo!erati,e a written notice stating its non-co-!liance and the
co--ensurate fines and !enalties that will %e i-!osed until such ti-e that the coo!erati,e has co-!lied with the re6uire-ent.+
Section 2. Re4uired Regular Reports8 .he following re!orts shall su%-itted to the Authority:
1. oo!erati,e Annual #erfor-ance $e!ort 8A#$9:
2. 2ocial Audit $e!ort including its !rogra- of acti,ities in !ursuance of its socio-ci,ic underta*ings showing its achie,e-ents and end of e,ery fiscal
year:
3. #erfor-ance $e!ort:
4. Audited 5inancial 2tate-ents duly sta-!ed +$ecei,ed + %y the B/$: and
5. 0ist of Afficers and .rainings Dnderta*en Bo-!leted.
Section 3. $dditional Reports for 0ederations and (nions8 5ederations and Dnions shall su%-it to the Authority the following additional re!orts:
1. 0ist of coo!erati,es which ha,e re-itted their res!ecti,e oo!erati,e 1ducation and .raining 5unds 81.59:
2. Business consultancy assistance to include the nature and cost: and
3. Ather training acti,ities underta*en s!ecifying therein the nature, !artici!ants, and cost of each acti,ity.
Section 4. 0illing8 All registered coo!erati,es shall file with the Authority a co!y of the re6uired re!orts either through !ersonal, registered -ail courier, or
electronic -eans, within one hundred twenty 812?9days fro- the end of e,ery year calendar year.
Section 5. Preparation of the Re4uired Reports8 .he re!orts shall %e ty!ewritten or !rinted in a for- !rescri%ed %y the Authority. .he hair!erson and the "eneral
Manager shall certify to the truthfulness of the state-ent contained in the re!orts.
Section 5. Preparation of the Submit Reports on Time8 5ailure to su%-it re!orts on ti-e shall %e considered as >elay or >efault. Howe,er, if the failure to su%-it
re!orts on ti-e is due to fortuitous e,ents: such as fire and other natural cala-ities and !u%lic disorders including stri*e or loc*-out or a national e-ergency which
affects the o!eration of the coo!erati,e, the failure shall not %e considered a delay. #ro,ided, .hat the Authority shall %e officially notified of the occurrence of such
fortuitous e,ents.
>elay or default shall co--ence on the day following the last day re6uired for the su%-ission of re!orts. Howe,er, should the last day of filing falls on a non-
wor*ing day in the locality where the re!orting coo!erati,e is situated. >elay or >efault shall start to runLon the day following the ne7t wor*ing day.
5or the !ur!ose of esta%lishing >elay or >efault, the date of ac*nowledge-ent %y the Authority a!!earing on the co!ies of such re!orts filed or su%-itted or
-ailing !ost-ar*ed on the en,elo!eBthe date of registry or s!ecial deli,ery recei!t, or the date the electronic -ail was sent as the case -ay %e shall %e considered
as the date of filing.
Section !. Sanction 0or Delayed Submission8 5ailure to file the re6uired re!orts on ti-e shall su%3ect the Accounta%le Afficer to !ay a fine of #h! 1??.?? !er day
of delay.
Fithin thirty 83?9 calendar days u!on recei!t of 2tate-ent of Accounts, the Accounta%le Afficer -ay re6uest for $econsideration of such fine on the grounds of
fortuitous e,ent and court litigationBorder, which the Authority shall act u!on within si7ty 8'?9 calendar days otherwise the sanctions, shall %e dee-ed lifted. .he
decision of the Authority shall %eco-e final and e7ecutory.
Ather than the i-!osition of -onetary !enalties, the Authority -ay dissol,eBre,o*e, after due !rocess, the authority of the coo!erati,e to o!erate as such.
R7,% 9
(7'&%,'N%S F*R #)% ,'D7'&A#'*N *F C**P%RA#'+%S
Section . *egal Basis8 .he legal %ases for the $ule are Art. '(,<? and !ar. 2, Art. <2 849 of the code, 6uoted as follows:
+Art. '(. *i4uidation of a Cooperative8 - 1,ery coo!erati,e whose charter e7!ires %y its own li-itation or whose e7istence is ter-inated %y ,oluntary dissolution or
through an a!!ro!riate 3udicial !roceeding shall ne,ertheless continue to e7ist for three 839 years after the ti-e it is dissol,ed, not to continue the %usiness for
which was esta%lished %ut for the !ur!ose of !rosecuting and defending suits %y or against it: settle-ent' and closure of its affairs, dis!osition, con,eyance and
distri%ution of its !ro!erties and asset.
At any ti-e during the said three 839 years, the coo!erati,e is authori4ed and e-!owered to con,ey all its !ro!erties to trustees for the %enefit of its -e-%ers,
creditors and other !ersons in interest. 5ro- and after any such con,eyance, all interests which the coo!erati,e had in the !ro!erties are ter-inated.
D!on the winding u! the coo!erati,e affairs, any' asset distri%uta%le to any creditor, shareholder or -e-%er8s9 who is un*nown or cannot %e found shall %e gi,en
to the federation or union to which the coo!erati,e is affiliated with.
A coo!erati,e shall only distri%ute its assets or !ro!erties u!on unlawful dissolution and after !ay-ent of all its de%ts and lia%ilities, e7ce!t in the case of decrease
of share ca!ital of the coo!erati,e and as otherwise allowed %y this ode.+
+Art. <?. Rules and Regulations on *i4uidation8 - .he Authority shall issue the a!!ro!riate i-!le-enting guidelines for the li6uidation of coo!erati,es.+
+Art. <2. a!ital 2ources.-777
8%9 2u%sidies, donations, legacies, grants, aids and such other assistance fro- any local or foreign institution whether !u%lic or !ri,ate: #ro,ided, .hat ca!ital
co-ing fro- such su%sidies, donations, legacies, grants, aids and other assistance shall not %e di,ided into indi,idual share ca!ital holding at any ti-e %ut shall
instead fro- !art of the donated ca!ital or fund of the coo!erati,e.
D!on dissolution, such donated ca!ital shall %e su%3ect to escheat.+
Section 2. Coverage of *i4uidation8 .hese "uidelines shall co,er the following:
1. oo!erati,es whose charter e7!ires %y its own li-itation.
2. oo!erati,es whose e7istence is ter-inated %y ,oluntary dissolution.
3. oo!erati,es whose e7istence is ter-inated %y a!!ro!riate 3udicial !roceedings.
Section 3. "ode of *i4uidation8 .he -anner of li6uidation or winding u! -ay %e !ro,ided for in the coo!erati,e By-laws and this would !re,ail unless it is
inconsistent with law. /n this 3urisdiction, the coo!erati,e -ay a,ail of the following -odes of li6uidation:
819 0i6uidation %y coo!erati,e itself through a Board of 0i6uidators. .he -e-%ers of coo!erati,e entitled to ,ote shall elect fro- a-ong the-sel,es their Board
0i6uidators: andBor
By con,eying all the coo!erati,e assets to .rustee or .rustees who will ta*e charge of li6uidation.
Section 4. Procedure of *i4uidation8 .he following !rocedure shall %e o%ser,ed in li6uidation:
1. onstitution of the Board of 0i6uidatorsB.rustees.
2. /n,entory of Assets and 0ia%ilities of the oo!erati,e.
3. #ay-ents of reditors in accordance with the #ro,isions of the &ew i,il ode on the #reference and oncurrence of redits.
4. .ransfer of the 2tatutory 5unds to the intended %eneficiaries.
5. >istri%ution of the re-aining assets.
'. 2u%-ission of the Board of 0i6uidatorsB.rustees of the 0i6uidation;s 5inal $e!ort.
<. ancellation of the ertificates of $egistration and delisting of the na-e of the coo!erati,e in the oo!erati,e $egistry.
Section 5. Board of *i4uidators:Trustees8
Fithin si7ty 8'?9 days fro- recei!t of the Arder of >issolution fro- the Authority or co-!etent ourt, the %oard of >irectors shall selectBconstitute the Board of
0i6uidatorsB.rustees. /n the e,ent the Board of >irectors fails or refuses to constitute the Board of 0i6uidatorsB.rustees, at least twenty fi,e !ercent 825C9 of the
-e-%ers entitled to ,ote shall con,ene and selectBa!!oint the 0i6uidatorsB.rustees. /n case the Board of >irectors and the "eneralB$e!resentati,e Asse-%ly fail
to select the Board of 0i6uidatorsB.rustees, the Authority shall a!!oint the sa-e.
.he Board of 0i6uidatorsB.rustees shall not %e less than three 839 %ut not -ore than fi,e 859 -e-%ers. .hey shall ta*e their oath of office %efore the Authority !rior
to assu-!tion of their functions and res!onsi%ilities.
.he Board of 0i6uidatorsB.rustees shall !ost an ade6uate %ond as -ay %e fi7ed %y the Authority during the !eriod of li6uidation, to %e !aid out of the funds of the
coo!erati,e.
.he Board of 0i6uidatorsB.rustees shall %e allowed to recei,e a reasona%le honorariu- to %e !aid out fro- the funds of the coo!erati,e which shall %e e6ual to %ut
not less than the honorariu- %eing recei,ed %y the Board of >irectors of the coo!erati,e %efore its dissolution.
Section 5. 0unctions& Po'ers and !bligations of the Board of *i4uidators:Trustees8 .he Board of 0i6uidatorsB.rustees shall:
1. Ma*e an in,entory of all assets and to %e deter-ine all lia%ilities including 2hare a!ital holdings:
2. #reser,e the e7isting assets of the coo!erati,e:
3. on,ert all assets of the coo!erati,e into cash:
4. #ay the outstanding o%ligations including any and all ,alid clai-s against the coo!erati,e:
5. >istri%ute re-aining assets !ursuant to the !ro,ision of the ode and this $ules: and
'. Ma*e final re!ort on the li6uidation and su%-it the sa-e to the Authority.
Section !. Po'er to Sue and Be Sued8 /n the discharge of the a%o,e--entioned functions, the Board of 0i6uidatorsB.rustees -ay sue and %e sued under the
na-e of the coo!erati,e in order to !rotects and defend its rights and interests.
Section 1. Payment of Creditors8 #ay-ent of creditors shall %e in accordance with the contract u!on which it is %ased and the !ro,ision of the &ew i,il ode on
the #reference and oncurrence of redits.
Section 9. Statutory 0unds8 All the statutory funds esta%lished %y the coo!erati,e shall %e dis!osed of in accordance with the !ro,ision for Art. )' of the ode.
Section 0. Treatment of Donated Capital8 All studies, donations, legacies, grants, aids and such other assistance fro- any local or foreign institutions whether
!u%lic or !ri,ate shall %e su%3ected to escheat.
Section . Distribution of $ssets8 2u%3ect to the !receding sections and u!on written authority fro- the Authority, any assets re-aining after the !ay-ents of the
coo!erati,e;s o%ligations to its creditors shall %e distri%uted to the -e-%ers in !ay-ents of their res!ecti,e share ca!ital. /f the re-aining assets is not sufficient to
!ay the full share ca!ital contri%ution of the -e-%ers, the distri%ution shall %e done in !ro!ortion to their ca!ital.
Section 2. (ndistributed $ssets8 After the winding u! of the affairs of the coo!erati,e, the assets distri%uta%le to creditor or -e-%er whose whereas a%out is
un*nown or cannot %e found shall %e gi,en to the federationBunion to which the coo!erati,e is affiliated with, for coo!erati,e de,elo!-ent, at the o!tion of the
Board of 0i6uidatorsB.rustees. /n case of non-affiliation, the undistri%uted assets shall %e gi,en to the co--unity where the coo!erati,e o!erated.
Section 3. Periods $llo'ed for the 1inding (p of the $ffairs of the Cooperative8 .he dissol,ed coo!erati,e shall continue to e7ist for three 839 years fro- the
issuance of the Arder of >issolution. .he !ur!ose of which is not to continue the %usiness for which it was esta%lished %ut for !ur!ose of !rosecuting and
defending suits filed or against the coo!erati,e, settle-ent and closure of its affairs, distri%ution of its assets.
&e,ertheless, at any ti-e during the said three 839 year !eriod, the coo!erati,e is authori4ed and e-!owered to con,ey all its !ro!erties to .rustees for the
%enefits of its -e-%ers, creditors and other !ersons in interest, after which, all interest which the coo!erati,e had in !ro!erties are ter-inated.
Section 4. Submission of the Board of *i4uidators:Trustees; 0inancial Report8 .he oo!erati,e Board of 0i6uidatorsB.rustees shall su%-it a final re!ort to the
-e-%ers of the li6uidated coo!erati,e and to the Authority, 5ederation, or Dnion to which the coo!erati,e is affiliated with.
D!on recei!t of the 5inal $e!ort of the Board of 0i6uidatorsB.rustees and finding that said final re!ort is co-!lete and in order, the Authority shall release the
0i6uidatorsB.rustees fro- their duties and functions. .hereafter shall effect the cancellation of the ertificate of $egistration of the su%3ect coo!erati,e and delisting
of the na-e of the coo!erati,e in the oo!erati,e $egistry.
5or failure to su%-it the 5inal $e!ort the Board of 0i6uidatorsB.rustees shall not %e released fro- their duties and functions, hence no clearance shall %e issued %y
the Authority.
Section 5. Summary Proceedings8 5or coo!erati,e with assets of not -ore that Ane Hundred .housand #esos 8#1??,???.??9 as shown in the Audited 5inancial
2tate-ents and with no *nown creditors, the Authority -ay choose to initiate su--ary !roceedings.
.he following docu-ents shall %e re6uired to %e su%-itted %y the Board of >irectors to the Authority:
1. 2chedule of Assets:
2. #ro!osal of >istri%ution of Assets to its -e-%ers:
3. 0ist of intended %eneficiaries of the 2tatutory 5unds:
4. Affida,it of &o reditors: and
5. Audited 5inancial 2tate-ent:
After due e,aluation %y the Authority, the sa-e shall issues a written authority to the Board of >irectors to distri%uted the assets of the coo!erati,e. After which, the
Board of >irectors shall su%-it a final re!ort.
Section 5. Suppletory *a's8 .he !ro,isions of ha!ter .wo 829 and .hree 839 of title 1( on the oncurrence and #reference of redit under the &ew i,il ode
and the !ro,isions of $ule 1?4 of the $e,ised $ules of ourt on the Goluntary >issolution of or!orations shall %e used as su!!letory rules.
Section !. #.ception8 .he Authority, at its own discretion, -ay outrightly cancel the ertificate of $egistration of a coo!eration of a coo!erati,e which has %een
!ro,en to ha,e no assets, or in case the coo!erati,e can no longer %e located des!ite the %est to locate it. 2uch facts shall %e stated in the Arder of ancellation.
R7,% 0
CAP'#A,'2A#'*N AN& ACC*7N#'N( PR*C%&7R%S *F C**P%RA#'+%S
Section . *egal Basis8 .he legal %asis for this $ule is Art. <1 of the ode, 6uoted as follows:
+Art. <1. a!ital. - .he a!itali4ation of coo!erati,es and the accounting !rocedures shall %e go,erned %y the !ro,isions of this ode and the regulations which
shall %e issued.+
Section 2. Capital Sources8 a!itali4ation of a duly registered coo!erati,e -ay %e deri,ed fro- any or all of the following sources:
1. Me-%ers; 2hare a!ital:
2. 0oans and Borrowing /ncluding >e!osits:
3. $e,ol,ing a!ital which consist of the deferred !ay-ent of !atronage refunds, or interest on share ca!ital: and
4. 2u%sidies, donations, legacies, grants, aids and such other assistance fro- any local or foreign institution whether !u%lic or !ri,ate: #ro,ided, .hat
ca!ital co-ing fro- such su%sidies, donations, legacies, grants, aids and other assistance shall not %e di,ided into indi,idual share ca!ital holdings
at any ti-e %ut shall instead for- !art of the donated ca!ital or fund of the coo!erati,e.
Section 3. Share Capital8 .he 2hare a!ital of a coo!erati,e, the !er ,alue of which -ay %e fi7ed at any figure not -ore than Ane .housand #esos 8#1,???.??9,
-ay consist of co--on share ca!ital and !referred share ca!ital if the latter is !ro,ided for under the coo!erati,e;s Articles of oo!eration and By-laws. .he share
ca!ital contri%ution of the -e-%ers shall %e considered as e6uity. #ro,ided, that it shall not %e withdrawn and should not %e used in offsetting o%ligations whether
!ast due or current while the -e-%ershi! su%sists.
8a9 Common Share Capital shall be issued only to regular members8 /ts holders shall %e entitled to ,ote and %e ,oted under the !rinci!le of one--an,
one ,ote !rinci!le, and shall recei,e interest, the rate which should not e7ceeded the nor-al rate on in,est-ent.
8%9 Preferred Share Capital may be issued to regular and associate members8 Howe,er, associate Me-%ers shall not %e eligi%le to ,ote nor %e ,oted
on account of such shareholdings %ut shall %e entitled to, a-ong others the following:
1. #reference in the !ay-ent of interest as !ro,ided for in the Bylaws of the coo!erati,e: and
2. /n case of li6uidation, !riority in the distri%ution on #referred 2hare a!ital shall %e !rescri%ed in the By-laws of the coo!erati,e.
Section 4. Preferred Shares8 /ssuance and li-itation on #referred 2hare a!ital shall %e !rescri%ed in the By-laws of the coo!erati,e.
Section 5. Capital Build)(p8 .he By-laws of e,ery coo!erati,e shall !ro,ide for a reasona%le and realistic -e-%er ca!ital %uild-u! !rogra- to allow the continuing
growth of the -e-%ers; in,est-ent in their coo!erati,e as their own econo-ic conditions continue to i-!ro,e.
Section 5. *imitation on Share Capital Holdings8 &o -e-%er of a !ri-ary coo!erati,e other that a coo!erati,e itself shall own or hold -ere than ten !ercent 81?C9
of the share ca!ital of the coo!erati,e. /n the case of 2econdary and .ertiary oo!erati,es, -e-%ers should own not -ore that ten !ercent 81?C9 of the share
ca!ital of the coo!erati,e.
Section !. 0ines on (npaid Subscribed Share capital8 .he By-laws of a coo!erati,e shall !rescri%e a fine on un!aid su%scri%ed share ca!ital. #ro,ided, that such
fine is fair and reasona%le under the circu-stances as deter-ined %y the Board of >irectors.
Section 1. $ssignment of Share Capital Contribution or %nterest8 2u%3ect to the !ro,ision of $.A. (52?, no -e-%er shall transfer hisBher shares or interest in the
coo!erati,e or any !art thereof unless:
1. HeB2he has held such share ca!ital contri%ution or interest for not less than one 819 year:
2. .he assign-ent is -ade to the coo!erati,e or to a !erson who falls within the field of -e-%ershi! of the coo!erati,e: and
3. .he Board of >irectors has a!!ro,ed such assign-ent.
Section 9. %nterest on Share Capital8 /nterest on 2hare a!ital shall not e7ceed the $ate of $eturn on /n,est-ent.
Dnless otherwise !ro,ided for in the By-laws of the coo!erati,e, share ca!ital shall earn interest: the $ate of /nterest shall %e co-!uted as follows:
$ate of /nterest M
I 8&et 2ur!lus less 2tatutory $eser,es9
.otal A,erage 2hare Month
Fhere: I shall %e a !ercentage to %e deter-ined %y the Board of >irectors allocated for interest on share ca!ital.
&o allocation of interest on share ca!ital shall %e -ade without the a!!ro,al of the Board of >irectors which -ay increase or decrease any or %oth.
#ay-ent of interest, unless otherwise !ro,ided for in the By-laws, -ust %e -ade on such date as -ay %e deter-ined %y the Board of >irectors. .he
"eneralB$e!resentati,e Asse-%ly ;,owe,er, u!on the reco--endation of the Board of >irectors, -ay defer the !ay-ent of such interest including #atronage
$efund to raise $e,ol,ing a!ital.
&o cu-ulati,e interest shall %e allowed for any *ind or class of share issued %y the coo!erati,e.
2hare a!ital shall recei,e a strictly li-ited $ate of /nterest.
Section 0. 1ithdra'al of Share Capital8 A -e-%er of a coo!erati,e -ay, for any ,alid reason, withdraw hisBher -e-%ershi! fro- the coo!erati,e %y gi,ing a
si7ty 8'?9 days notice to the Board of >irectors. 2u%3ect to the By-laws of the coo!erati,e, the withdrawing -e-%er shall %e entitled to a refund of hisBher share
ca!ital contri%ution and all other interests in the coo!erati,e. #ro,ided, .hat such refund shall not %e -ade if u!on such !ay-ent the ,alue of the assets of the
coo!erati,e would %e less than the aggregate a-ount of its de%ts and lia%ilities e7clusi,e of hisBher share ca!ital contri%ution.
Section . Patronage Refund8 .he !rinci!le of #atronage $efund is a !rinci!le of a e6uity wherein an e6ual right of -e-%ers to !artici!ate in the organi4ation
and to e6uita%ly share in the %enefits accruing is esta%lished. Dnder the !rinci!le, the &et 2ur!lus shall not %e construed as !rofit, %ut as e7cess !ay-ents -ade
%y the- fro- the coo!erati,e and which shall %e dee-ed to ha,e %een returned to the- if the sa-e is distri%uted as !rescri%ed %y the ode and %y this $ule.
#ro,ided, howe,er, .hat the a-ount allocated for !atronage refund shall not %e less than thirty !ercent 83?C9 of the net sur!lus after deducting the statutory
reser,es %ased on the !rinci!le of e6uity. #ro,ided, further, that in no case shall the rate of !atronage refund %e -ore than twice the rate of interest on share
ca!ital.
Section 2. $ccounting Procedure8 .he accounting syste- to %e installedB-aintained in the coo!erati,e shall %e in accordance with the generally acce!ted
accounting !rinci!les and !ractices, ta*ing into consideration coo!erati,e !rinci!les and !ractices. .he coo!erati,e shall use the 2tandard hart of Accounts and
its acco-!anying Accounting Manual !rescri%ed %y the Authority.
R7,%
S*C'A, A7&'# *F C**P%RA#'+%
Section . *egal Basis8 .he legal %asis for this $ule is Art. )?, !aragra!h 4, 5 and ' of the ode, 6uoted as follows:
+Art. )?. $nnual $udit8 - oo!erati,es registered under this ode shall %e su%3ect to an annual financial, !erfor-ance and social audit.+
+.he social audit shall %e conducted %y an inde!endent social auditor accredited %y the Authority.+
+.he Authority in consultation with the coo!erati,e sector, shall !ro-ulgated the rules and standards for the social audit of coo!erati,es.+
Section 2. Coverage8 All registered coo!erati,es regardless of ty!es and categories shall %e su%3ect to social audit.
Section 3. Social $udit8 /t is a !rocedure where the coo!erati,e assesses its social i-!act and ethical !erfor-ance ,is-@-,is its stated -ission, ,ision, goals and
code of social res!onsi%ility. /t is a !rocess to assess the coo!erati,e;s contri%ution for the u!lift-ent of the status not only to its -e-%ers; econo-ic needs %ut
also social needs and the co--unity where it o!erates. .he coo!erati,e;s actual !erfor-ance and acco-!lish-ent are co-!ared to its ,ision, goals, and social
res!onsi%ility as it relates to the i-!act not only to the co--unity %ut to its regular -e-%ers as the i--ediate %eneficiary of the decisions and actions it
!ro-ulgated, !assed and i-!le-ented. 2ocial Audit will ser,e as control -echanis- to account for its social !erfor-ance and e,aluate its i-!act in the
co--unity ta*ing into account the co--unity de,elo!-ent fund which shall %e used for !ro3ects or acti,ities that will %enefit the co--unity where the coo!erati,e
o!erates.
Section 4. !b+ectives:(ses of Social $udit8 2ocial Audit ,alidates the su!!ort of the coo!erati,e to the se,enth coo!erati,e !rinci!les on the +oncern o--unity+
and deter-ines whether the coo!erati,e wor* for the co--unity;s sustaina%le de,elo!-ent through !olicies a!!ro,ed %y their -e-%ers. .he audit focuses not
only to the econo-ic side of the coo!erati,e %ut also the social as!ect of the organi4ation and a!!raises the coo!erati,e !erfor-ance as ,alue%ased organi4ation
usually !artici!ati,e, user and co--unity oriented and non-!rofit %ut ser,ice organi4ation and how its social res!onsi%ility for its -e-%ers and the co--unity as a
whole was fulfilled. 2ocial Auditing is the syste-atic re,iew of the attitudes, ,alues, %eha,ior, and degree of interaction of !eo!le within the coo!erati,e as well as
the !olicies, !rogra-s and acti,ities %eing i-!le-ented %y the coo!erati,e.
Section 5. Components and Social $udit %ndicators8 .he 2ocial Audit of the coo!erati,e shall consists of %ut not li-ited to the following -a3or
co-!onentsBcategories with its o%3ecti,es:
1. "embership8 .o deter-ine the effecti,eness of the coo!erati,e in -eeting the needs of its -e-%ers ,is-@-,is the socio-econo-ic u!lift-ent and e-!ower-ent
of the -e-%ers.
2. $ssets building8 .o deter-ine the coo!erati,es; !erfor-ance in %uilding u! its econo-ic ca!acity to res!ond to its social res!onsi%ility and de,elo!-ent inco-e
generating underta*ings for its -e-%ers.
3. Community %nvolvement and Solidarity8 .o deter-ine the degree of co--unity, social, en,iron-ental in,ol,e-ent and solidarity of the coo!erati,e. /n relation to
this, all coo!erati,es are encourage to !ro-ote en,iron-ental awareness and instill en,iron-ental !rotection and conser,ation to their -e-%ers and the
co--unity where they o!erate, and as far as !ractica%le to conduct tree-!lanting acti,ities in the co--unity where they o!erate or its i--ediate en,irons.
4. %nformation accessing and dissemination8 .o deter-ine the ca!a%ility of the coo!erati,e to access, !rocess and disse-inate infor-ation fro-Bto its -e-%ers
and co--unity. /t loo*s into the function of the organi4ation as an e-!owering and res!onsi,e -echanis-.
5. Gender& <outh& #lderly& Children& and Persons 'ith Disability8 .o deter-ine how the coo!erati,e has contri%uted in the social ca!ital de,elo!-ent for the welfare
of the youth, the elderly, children, and !ersons with disa%ility and the !ro-otion of the gender fair culture and !ractices.
'. *eadership and !rgani-ational "anagement8 .o highlight the attri%utes of the leadersBofficers of the coo!erati,e and efficiency in -anaging the affairs of the
organi4ation as it relates with its -e-%ers and with go,ern-ent.
Section 5. Social $udit "anual8 .he Authority shall de,elo! a 2ocial Audit Manual that will %e used for the !ur!ose.
Section !. $pplicability8 All registered coo!erati,es shall su%-it to the Authority the Annual social Audit $e!ort as conducted %y an /nde!endent 2ocial Auditor
accredited %y the Authority.
Section 1. Sanctions8 .he failure of the coo!erati,es to the Authority of the re6uired 2ocial Audit $e!ort conducted %y the Accredited /nde!endent 2ocial Auditor
shall -ean non-co-!liance with the re6uired re!orts and will %e -eted with corres!onding !enalties in accordance with $.A. (52?.
Section 9. Transitory Period8 All coo!erati,e are here%y gi,en two 829 years fro- effecti,ity of this $ule to co-!ly with the 2ocial Audit $e6uire-ents as !ro,ided
a%o,e.
R7,% 2
F'NANC'A, S%R+'C% C**P%RA#'+% ;FSC<
Section . *egal Basis8 .he legal %asis for this $ule is Art. 121 819 and 8149 of the ode, 6uoted as follows:
+Art. 121. $egulation and 2u!er,ision. - .he Authority shall e7ercise lead regularity !owers and su!er,ision o,er the o!erations of the financial ser,ice
coo!erati,es, to wit:
819 /ssue rules and regulations for the safe and sound o!erations of financial ser,ice coo!erati,es. 777
8149 A!!oint a conser,ator or a recei,er as -ay %e necessary su%3ect to the rules and regulations to %e !ro-ulgated %y the Authority in coordination with the B2#,
ta*ing into consideration the grounds, !owers and !rocedures under 2ections 2( and 3? of $e!u%lic Act. &o. <'53 as -ay %e dee-ed a!!ro!riate to financial
ser,ice coo!erati,es.
.he Authority shall include in its rules and regulation a!!ro!riate sanctions and !enalties, on the financial ser,ice coo!erati,es, its -e-%ers, and officers and
res!onsi%le, its -e-%ers, officers and res!onsi%le !ersons, for any action that fails to adhere to sound and !rudent -anage-ent !ractices or are inconsistent with
the !ro,isions of this ode 777.+
Section 2. 0unctions of 0SC8 A 52 is a financial organi4ation owned and o!erated %y its -e-%ers and authori4ed to !ro,ide the following ser,ices, e7clusi,ely to
its -e-%ers: 8a9 the functions of credit coo!erati,es and other coo!erati,es, including -ulti!ur!ose coo!erati,es, that !ro,ide sa,ings and credit to their -e-%ers:
and 8%9 other financial ser,ices su%3ect to regulation %y the B2#.
Section 3. Coverage8 819 All 5inancial 2er,ice oo!erati,e organi4ed for the !ri-ary !ur!ose of engaging in sa,ings and credit ser,ices and other financial
ser,ices, and 829 17isting coo!erati,es with sa,ings and credit facilities which has for-ally notified the Authority of their intention to e7ercise enhanced functions
and satisfied the re6uire-ents of >A for con,ersion to 5inancial 2er,ice oo!erati,e.
Section 4. Registration8 .he Articles of oo!eration and By-laws of any 52, or any a-end-ent thereto, shall %e registered with the Authority only if acco-!anied
%y a ertificate of Authority issued %y the B2#, under its official seal. 17isting coo!erati,e engaged in credit and -ulti !ur!ose acti,ities, after it has notified the
Authority of its decision to e7ercise enhanced functions and satisfied the re6uire-ents for the con,ersion to 5inancial 2er,ice oo!erati,e, shall register its
a-ended Articles of oo!eration and By-laws to the Authority u!on a!!ro,al of the Authority and fa,ora%le certification of the B2#.
Section 5. Revocation of $uthority8 .he authority granted, -ay %e re,o*ed %y the B2# if any of the grounds for recei,ershi! -entioned under 2ection 3? of
$e!u%lic Act. &o. <'53, otherwise *nown as .he &ew entral Ban* Act and sections 53 and 5' of $e!u%lic Act &o. )<(1, otherwise *nown as An Act #ro,iding for
the $egulation of the Argani4ation and A!erations of Ban*s, Nuasi-Ban*s, .rust 1ntities and for Ather #ur!oses are !resent or if the 52 has willfully ,iolated the
ode or any of the related rules and regulations.
Section 5. "inimum Capitali-ation Re4uirements8 Anly those coo!erati,es with -ini-u- #aid-u! ca!ital of at least .en Million !esos 8#h! 1?,???,???.??9 shall
6ualify to register as 52 without !re3udice to additional ca!ital re6uire-ents that -ay%e !rescri%ed %y the B2# for a !articular financial ser,ice regulated %y the
B2# that will %e offered %y the 52.
Section !. Documentary Re4uirements8 /n addition to the docu-ents re6uired %y the authority for registration of new coo!erati,eBa-end-ents, the following shall
%e li*ewise su%-itted:
1. ertificate of Authority fro- B2#:
2. $esolution of the Board stating that:
2.1 .he function or one of the functions of the coo!erati,e shall %e sa,ings, credit and other financial ser,ices:
2.2 .he a-ount of !aid-u! ca!ital allocated for such !ur!oses shall %e at least .en Million #esos 8#h! 1?,???,???.??9:
3. Dnderta*ing to acco-!lish within a year fro- the issuance of ertificate of $egistration to esta%lish the %usiness site e6ui!!ed with facilities,
for-s, stationeries, and ,ault and !ro,ide re6uired s!ecial trainingBse-inar for officers of the coo!erati,e:
4. Audited 5inancial 2tate-ent of the i--ediately !receding year in case of e7isting coo!erati,e:
5. Ather !a!ers, which -ay %e re6uired %y Authority.
Section 1. Reportorial Re4uirements8 .he 52 shall su%-it the regular re!orts as !ro,ided under 2ection 2 of $ule ) of this $ule.
Section 9. "embership and $ffiliation8 A 52 shall ha,e two 829 ty!es of -e-%ers: 819 $egular -e-%ers, who are natural !ersons: and 829 Associate -e-%ers
who are natural !ersons %ut who do not i--ediately 6ualify under the re6uire-ents for -e-%ershi! set out in the By-laws of the coo!erati,e. All associate
-e-%ers who are natural !ersons shall %e gi,en two 829 years to %eco-e regular -e-%ers. 5ailure to con,ert within said !eriod shall -ean auto-atic withdrawal
of their associate -e-%ershi!. .hey -ay, howe,er, re-a!!ly as regular -e-%ers after two 829 years. Minors who are de!endents of regular -e-%ers can 6ualify
as associate -e-%ers. Fhen they reach the age of -a3ority and within two 829 years fro- acce!tance of their associate -e-%ershi!, they ha,e the o!tion to
con,ert into regular -e-%ers. As associate -e-%ers, they -ay o!en accounts, de!osit funds, and withdraw fro- their account, su%3ect to the By-laws and rules
of the coo!erati,e, and the rules and regulations of the Authority, notwithstanding the !ro,isions of e7isting laws to the contrary.
Section 0. !fficers8 .he officers of the 52 shall %e co-!osed of the Me-%ers of the Board of >irectors, o--ittee Me-%ers, "eneral Manager or hief
17ecuti,e Afficer, 2ecretary, .reasurer and Me-%ers holding other !ositions as -ay %e !ro,ided for in their By-laws.
Section . Bonding of $ccountable !fficers8 1,ery >irector, Afficer, and 1-!loyees handling funds, securities, or !ro!erty on %ehalf of the 52 shall %e co,ered
%y a surety %ond to %e issued %y a duly registered insurance or %onding co-!any for the faithful !erfor-ance of their res!ecti,e duties and o%ligations. .he Board
of >irectors shall deter-ine the ade6uacy of such %onds.
Section 2. Compensation8 /n the a%sence of any !ro,ision in the By-laws fi7ing their co-!ensation, the >irectors, shall not recei,e any co-!ensation e7ce!t for
reasona%le !er die-s: #ro,ided, howe,er, .hat the >irectors and Afficers shall not %e entitled to any !er die- when, in the !receding calendar year, the
coo!erati,e re!orted a net loss or had di,idend rate less than the official inflation rate for the year. Any co-!ensation other than !er die-s -ay %e granted to
>irectors %y a -a3ority ,ote of the -e-%ers with ,oting rights at a regular or s!ecial general asse-%ly -eeting s!ecifically called for the !ur!ose: #ro,ided further,
.hat no additional co-!ensation other than !er die-s shall %e !aid during the first year of e7istence of the 52. #ro,ided finally, .hat the i--ediately !receding
!ro,iso shall not a!!ly to coo!erati,es which con,erted into 5inancial 2er,ice oo!erati,e. .he co-!ensation of Afficers as well as the Me-%ers of the
o--ittee created !ursuant to the ode or its By-laws -ay%e fi7ed in By-laws.
Section 3. Removal of !fficers8 All co-!laints for the re-o,al of any elected Afficer shall %e filed with the Board of >irectors. 2uch Afficer shall %e gi,en the
o!!ortunity to %e heard. Ma3ority of the Board of >irectors -ay !lace the Afficer concerned under !re,enti,e sus!ension !ending the resolution of the in,estigation
which !eriod shall %e s!ecified in the By-laws or !olicies of the coo!erati,e duly a!!ro,ed %y the "eneralB$e!resentati,e Asse-%ly. D!on finding of a !ri-a facie
e,idence of guilt, the Board of >irectors shall !resent its reco--endation for re-o,al to the "eneralB$e!resentati,e Asse-%ly.
An 1lecti,e Afficer -ay %e re-o,ed %y three-fourths 83B49 ,ote of the regular -e-%ers !resent and constituting a 6uoru- in a regular or s!ecial general asse-%ly
-eeting called for the !ur!ose. .he Afficer concerned shall %e gi,en an o!!ortunity to %e heard at said asse-%ly.
Section 4. ,et 'orth8 .he &et Forth of the 52 shall, at all ti-es, not %e less than an a-ount e6ual to eight !ercent 8)C9 of its ris* assets. .he net worth
!ositions should %e sufficient to -eet co-!etiti,e !ressure and ad,erse econo-ic conditions as they arise. /t should enhance the safety of the -e-%ers; share
and *ee! !ace with growth in 52 assets.
Section 5. Deposit and Borro'ing !perations8 2a,ings and .i-e >e!osits with 52 -ay %e o!ened with a -ini-u- a-ount to %e deter-ined %y the Board of
>irectors. Anly -e-%ers and its affiliate la%oratory coo!erati,e -ay o!en sa,ings andBor ti-e de!osit accounts. .he 52, through the Board of >irectors as
authori4ed %y the "eneral Asse-%ly, -ay %orrow fro- any source at the %est ter-s or conditions a,aila%le and in such a-ount that -ay %e needed.
Section 5. Reserve Re4uirements against Deposit *iabilities8 52 shall -aintain a 0i6uidity $eser,e 5und that will %e restricted in nature e6ui,alent to at least
two !ercent 82C9 of their sa,ings and ti-e de!osit lia%ilities.
Section !. *oans8 .he Board of >irectors shall %e res!onsi%le for setting loan !olicies and lending !rocedures. /t shall co-!ly with the !ro,isions of $.A. 3<'5,
otherwise *nown as the +.ruth in 0ending Act+ and shall -a*e the true and effecti,e cost of %orrowing, an integral !art of e,ery loan contract.
Section 1. %nvestment Program8 A sound in,est-ent !rogra- shall %e the sole res!onsi%ility and accounta%ility of the Board of >irectors. .he sco!e of the
!rogra- will de!end largely on the 52 si4e and the e7tent of its sur!lus funds. /n,est-ent !olicies should %e in writing and should address the safety, li6uidity
and yield, di,ersification, delegation of authority, and ,aluationBassess-ent of securities. .he 52 shall not in,est in any single entity -ore than 2?C of its net
worth.
Section 9. %nternal Control8 .he 52 shall ado!t a !ro!er !lan of organi4ation, accounting control, accounting syste-, ad-inistrati,e control, internal control
standards, accounting records !rocedures and other -easures to safeguard the 52;s assets, chec* the accuracy and relia%ility of accounting data, !ro-ote
o!erational efficiency, and encourage adherence to !rescri%ed -anagerial !olicies.
Section 20. Performance Standards8 A !olicy of trans!arency and o!enness -ust %e always -aintained where%y the Boo*s of Accounts, "eneralB$e!resentati,e
Asse-%ly, Board $esolutions and o--ittee $e!orts are !ro!erly *e!t and -ade accessi%le to -e-%ers, and the regular financial state-ents are !eriodically
!re!ared and -ade *nown to the -e-%ers, to the Authority and to other !arties interested in the 52;s o!erations.
Section 2. Standard Chart of $ccounts8 All 52s shall ado!t the 2tandard hart of Accounts and its acco-!anying Accounting Manual for redit and Ather
.y!es of oo!erati,es with redit 2er,ice issued %y the Authority.
Section 22. "anual of Rules and Regulations8 .he Authority shall de,elo! a Manual that will co,er: 819 the $ules and $egulations for the safe and sound conduct
of o!erations of 5inancial 2er,ice oo!erati,es: 829 $ules and $egulations for the a!!oint-ent of a onser,ator or a $ecei,er as -ay %e necessary in
coordination with the B2#, ta*ing into consideration the grounds, !owers and !rocedures under 2ection 2( and 3? of $e!u%lic Act &o. <'53 as -ay dee-ed
a!!ro!riate to 5inancial 2er,ice oo!erati,es: and 839 the a!!ro!riate sanctions and !enalties on the 5inancial 2er,ice oo!erati,es, its Me-%ers, Afficers and
$es!onsi%le #ersons, for any action that fails to adhere to sound and !rudent -anage-ent !ractices or are inconsistent with the !ro,isions of the ode, other
a!!lica%le laws on coo!erati,es, rules, regulations, circulars or orders issued %y the Authority, and re6uire the coo!erati,e to underta*e correcti,e or re-edial
-easures relati,e thereto.
.he a!!ro!riate !rudential $ules and $egulations a!!lica%le to the 5inancial 2er,ice oo!erati,es will %e de,elo!ed %y the B2#, in coordination with the Authority.
Section 23. Prohibition8 .he ter-s ;redit oo!erati,es;, ;5inancial 2er,ice oo!erati,e;, and ;5inancial 2er,ice oo!erati,e 5ederation; shall %e used e7clusi,ely
%y those who are duly registered under the ode, and no !erson, grou! of !ersons, or organi4ation shall use the said ter-s unless duly registered with the
Authority. Giolations of this !rohi%ition shall %e !unisha%le in accordance with Art. 14? of the ode.
R7,% 3
+*,7N#AR6 AR-'#RA#'*N
Section . *egal Basis8 .he legal %asis for this $ule is Art. 13< of the ode 6uoted as follows:
+Art. 13<. 2ettle-ent of >is!utes, onciliation, and Mediation #roceedings. - >is!utes a-ong -e-%ers, officers, directors, and co--ittee -e-%ers, and intra-
coo!erati,e, inter-coo!erati,e, intra-federation or intra-federation dis!utes shall, as far as !ractica%le, %e settled a-ica%ly in accordance with the conciliation or
-ediation -echanis- e-%odied in the %ylaws of coo!erati,es and in such other a!!lica%le laws.
.he conciliation and -ediation co--ittee of the coo!erati,e shall facilitate the a-ica%le settle-ent of intra-coo!erati,e dis!utes and dis!utes a-ong -e-%ers,
officers, directors, and co--ittee -e-%ers.
2hould such conciliation and -ediation !roceedings fail, the -atter shall %e settled through ,oluntary ar%itration: #ro,ided, howe,er, .hat %efore any !arty can
,alidly file a co-!laint with the Authority for ,oluntary ar%itration, it -ust first secure a certification fro- its conciliation and -ediation co--ittee and fro- the
coo!erati,e union or federation to which it %elongs that des!ite all efforts to settle the issues, the sa-e ha,e failed.
.he 3urisdiction of the ,oluntary ar%itration shall %e e7clusi,e and original and their decisions shall %e a!!eala%le to the Affice of the #resident. .he Authority shall
issue and ado!t the !ro!er rules of !rocedure go,erning ar%itration as the !ri-ary and e7clusi,e -ode for dis!ute resolution in accordance with the Alternati,e
>is!ute $esolution Act of 2??4.
5or this !ur!ose, the Authority shall constitute a list of Nualified Goluntary Ar%itrators.+
Section 2. #.clusive and !riginal 5urisdiction of the oluntary $rbitrator:$rbitrator8 .he Goluntary Ar%itratorBAr%itrator -utually chosen %y the !arties shall ha,e
e7clusi,e and original 3urisdiction o,er the dis!ute, and their decision shall %e a!!eala%le to the Affice of the #resident of the $e!u%lic of the #hili!!ines.
Section 3. Po'ers:$uthority of the oluntary $rbitrator:s8 .he Goluntary Ar%itratorBs shall ha,e the following !owersBauthority:
a. .o hold hearings and to recei,e e,idence necessary to resol,e the issueBs su%3ect of the dis!ute.
%. .o re6uire any !erson to attend hearingBs as witness or to cause !roduction of docu-ents when the rele,ancy and the -ateriality thereof are ,ital
to the resolution of the case.
c. .o ad-inister oath.
d. .o cite conte-!t any !erson distur%ing the !roceeding andBor who willfully defy lawful orders of the Goluntary Ar%itratorBAr%itrators.
e. .o issue a Frit of 17ecution, if necessary.
f. .o e7ercise such other !owers and functions as -ay %e necessary to resol,e the dis!ute.
Section 4. ,ature of Proceedings8 Goluntary Ar%itration is an ad-inistrati,e !roceeding. .he technical rules a!!lica%le to court or 3udicial !roceedings -ay not
a!!ly strictly. Howe,er, the re6uire-ents of due !rocess -ust %e o%ser,ed at all ti-es. .he hearing -ay !roceed e,en in the a%sence of any !arty, !ro,ided the
!arties were duly notified and their failure to a!!ear in such scheduled -eeting is un3ustified as deter-ined %y the Goluntary Ar%itratorBs handling the !roceedings.
Section 5. Coverage8 All intraBinter coo!erati,e dis!utes not resol,ed a-ica%ly in accordance with the onciliationBMediation Mechanis-s e-%odied in the By-
laws of a coo!erati,e shall %e go,erned %y this $ule.
Section 5. Commencement of $ction8 Any !arty of a dis!ute not resol,ed through onciliationBMediation #roceeding in the !ri-ary and unionBfederation le,el can
co--ence an action for Goluntary Ar%itration %y filing a Gerified o-!laint with the Authority.
/n the case of a !ri-ary coo!erati,e affiliated with any federationBunion, the co-!laint shall %e acco-!anied %y a ertificate of &on-2ettle-ent issued %y the said
federationBunion to which the !ri-ary coo!erati,e is affiliated with.
/n the case of a !ri-ary coo!erati,e not affiliated with any federation or union, the co-!laint shall %e acco-!anied %y a ertificate of &on-2ettle-ent issued %y the
onciliationBMediation o--ittee of such !ri-ary coo!erati,e together with a ertificate of &on-Affiliation with any 5ederationBDnion signed %y the hair!erson of
the Board of >irectors of the sa-e coo!erati,e.
Section !. enue of $ction8 All co-!laints shall %e filed with >A-17tension Affice ha,ing ad-inistrati,e 3urisdiction o,er the coo!erati,es. Howe,er, for
co-!laints in,ol,ing coo!erati,es registered with the entral Affice such co-!laint shall %e filed with the latter.
Section 1. Contents of the Complaint8 .he co-!laint shall contain:
1. .he &a-es and Addresses of the o-!lainantBs and $es!ondentBs:
2. A Brief >escri!tion of the o-!laint and the >ocu-entary 1,idences, if any: and
3. .he $elief #rayed 5or.
Section 9. Parties to the Dispute8 .he #arty who filed the co-!laint shall %e called the +o-!lainantBs+ and the #arty co-!lained of shall %e called the
+$es!ondentBs+.
Section 0. Procedures8 D!on recei!t of the o-!laint, the Authority shall issue a &oticeB2u--ons to the $es!ondentBs to file AnswerBo--ent. D!on recei!t of
the AnswerBo--ent, a #reli-inary onference shall %e scheduled.
Section . Preliminary Conference8 A &otice shall %e sent to all !arties concerned, indicating the ti-e and date of the conference. .he &otice shall %e ser,ed on
ounsel, or on the !arty who has no ounsel. /t shall %e the duty of the !arties or their ounsel to a!!ear at the #reli-inary onference. .he non-a!!earance of a
!arty -ay %e e7cused only if a ,alid cause is shown therefore or if a $e!resentati,e shall a!!ear in hisBher %ehalf fully authori4ed in writing. .he un3ustified failure
of the o-!laint to a!!ear in the #reli-inary onference shall %e cause for dis-issal of the co-!laint. A si-ilar failure on the !art of the $es!ondent at the first
instance, a second &oticeB2u--ons shall %e issued. &on-co-!liance with the second &oticeB2u--ons %y the $es!ondentBs shall %e cause for the dis-issal of
the co-!laint. Howe,er, a ertificate of &on-$esolution -ay %e issued u!on re6uest of the o-!lainant.
Fhene,er the $es!ondent;s wherea%outs are un*nown or cannot %e ascertained %y diligent in6uiry, the notice -ay %e effected %y !u%lication in a news!a!er of
general circulation at the e7!ense of the co-!lainant, otherwise the co-!laint shall %e dis-issed. Howe,er, a ertificate of &on-$esolution -ay %e issued to the
o-!lainant.
2hould the !arties a!!ear in the #reli-inary onference, the !arties shall %e re6uired to sign a 2u%-ission Agree-ent.
Section 2. Contents of the Submission $greement8 .he Agree-ent shall contain, a-ong other things, the following -atters:
1. .he agree-ent to su%-it to Goluntary Ar%itration:
2. .he s!ecific issueBs or dis!uteBs to %e su%-itted for resolution:
3. .he na-e of the Goluntary Ar%itratorBs chosen %y the !arties:
4. .he -anner of !aying the cost of ar%itration !roceedings including the Ar%itrator;s fee:
5. .he na-e of the !u%lic official who- the !arties -ay designate to e7ecute the final decision or award, if necessary: and
'. .he Agree-ent to !erfor- or a%ide %y the >ecisionBAward.
Section 3. $rbitration Proceedings8 All !arties to the dis!ute shall attend the ar%itration !roceedings. .he attendance of any third !arty or the e7clusion of any
witness in the !roceeding shall %e deter-ined %y the Goluntary Ar%itratorBs. Hearings -ay %e ad3ourned for a ,alid cause or u!on agree-ent of the !arties. Dnless
the !arties agree otherwise, it is -andatory for the Goluntary Ar%itratorBs to render a >ecision or Award within thirty 83?9 calendar days fro- the date the !arties
agreed to su%-it the case for resolution.
Section 4. Decision:$'ard8 .he final dis!osition of the issueBs su%-itted to Goluntary Ar%itration is the >ecisionBAward.
.he >ecision or Award -ust %e stated in clear, concise and definite ter-s. /t shall include the facts and the law andBor contract u!on which the >ecisionBAward is
%ased and shall %e signed %y the Goluntary Ar%itratorBs. A co!y of this >ecisionBAward shall %e furnished the Authority.
Section 5. #.tent of Decision:$'ard8 .he Goluntary Ar%itratorBs shall ha,e the !ower to decide only the -atters which ha,e %een su%-itted for ar%itration.
Section 5. #nforcement:#.ecution of Decision:$'ard8 .he !arties shall co-!ly ,oluntarily and faithfully the >ecisionBAward. /n instances of non-co-!liance, a
Motion to 1nforce or 17ecute -ay %e filed with the Goluntary Ar%itratorBs who -ay issue a Frit 17ecution re6uiring either the sheriff of the Authority, if any, or the
regular courts or any !u%lic official who- the !arties -ay designate in the su%-ission agree-ent to e7ecute the final decision or award.
Section !. $ppeal to the !ffice of the President of the Republic of the Philippines8 .he >ecisionBAward rendered shall %e a!!eala%le to the Affice of the
#resident of the $e!u%lic of the #hili!!ines. .he A!!eal is ta*en %y filing a &otice of A!!eal within fifteen 8159 days after recei!t of the co!y of the >ecisionBAward
a!!ealed fro-. /f no a!!eal is filed within the ti-e as !ro,ided herein, such >ecisionBAward %eco-es final and e7ecutory.
Section 1. Stenographic ,otes:Transcript8 .he Goluntary Ar%itratorBAr%itrator shall arrange the ta*ing of stenogra!hic notesBtranscri!t of the testi-ony when one
or -ore !arties re6uest such a record, and such !arty or !arties thereof assu-e !ay-ent of the cost.
Section 9. Cost of $rbitration and $rbitrator;s 0ee8 Dnless agreed otherwise, the !arties shall e6ually share the cost of the !roceedings including the Ar%itrator;s
5ee.
Section 20. $ccreditation of oluntary $rbitrator:s8 .he Authority shall issue guidelines concerning the accreditation and de-listing of Goluntary Ar%itratorBs as well
as the list of 6ualified Goluntary Ar%itratorBs.
C*$$*N PR*+'S'*NS
Section . Re4uirements8 A co!y of these $ules shall %e a-ong the docu-ents re6uired to %e *e!t ready and accessi%le for ins!ection and e7a-ination %y the
-e-%ers of the coo!erati,e and the Authority in accordance with Art. 52 of the ode.
Section 2. %nterpretation8 Dnless otherwise stated in these $ules, in case of dou%t as to the -eaning of any !ro,ision of these $ules, the sa-e shall %e resol,ed
and inter!reted li%erally in fa,or of the coo!erati,es and their -e-%ers.
Section 3. Suppletory Rule8 Bureau of 0ocal "o,ern-ent 5inance Me-orandu- ircular &o. OOOO and Bang*o 2entral ng #ili!inas ircular &o. ')2, 2-2?1? shall
fro- !art of these $ules. 2!ecial $ules, irculars, Arders and other issuances %y a!!ro!riate go,ern-ent agencies in !ursuance of the !ro,isions of the ode
and these $ules, and not inconsistent thereto, shall ha,e su!!letoy a!!lication to these $ules.
Section 4. "andate8 .he Authority is -andated to i-!le-ent and enforce these $ules and $egulations.
Section 5. $pplicability8 .he !ro,isions of this $ule shall a!!ly to $ules 1 to 13.
Section 5. Separability8 /f any !ro,ision of these $ules and $egulations is declared null and ,oid or unconstitutional, the other !ro,isions not affected there%y shall
continue to %e in force and effect.
Section !. $mendment8 .hese $ules and $egulations shall %e su%3ect to auto-atic re,iew three 839 years after the effecti,ity thereof. Any a-end-ent thereto,
shall %e su%3ect to the re,iew and a!!ro,al of the JA.
Section 1. #ffectivity8 .hese $ules and $egulations shall ta*e effect fifteen 8159 days after !u%lication in the Afficial "a4ette or in a news!a!er or general
circulation.
R%C*$$%N&'N( APPR*+A,E
F*R #)% -*AR& *F A&$'N'S#RA#*RS
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.his /-!le-enting $ules and $egulations 8#art /9 was a!!ro,ed %y the Joint ongressional A,ersight o--ittee on oo!erati,es during its -eeting on 5e%ruary
1', 2?1? at the 2enate of the #hili!!ines, #asay ity !ursuant to Article 13) of $A (52?.
For 9oint Congressional *=ersight Co>>ittee on Cooperati=es
5or the 2enate of the #hili!!ines:
Sen. 97AN $'(7%, F. 27-'R'
hair, 2enate #anel
5or the House of the $e!resentati,es:
Rep. %RN%S#* C. PA-,*
hair, House #anel
The Lawphil Project - Arellano Law Foundation
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Section . Title8 .hese $ules shall %e *nown as the +$ules and $egulations /-!le-enting the 2!ecial #ro,isions of the #hili!!ine oo!erati,e ode of 2??).+
Section 2. Definition of Terms8 5or the !ur!ose of these $ules and $egulations, the following ter-s are defined as follows:
1. Accreditation - shall refer to the act of the A. Board of >irectors recogni4e the .rans!ortation 2er,ice oo!erati,es and which shall ta*e !lace
after registration with the >A as e,idenced %y a ertificate of Accreditation.
2. Agrarian Refor> Area - shall refer to the area su%3ect to the co,erage of o-!rehensi,e Agrarian $efor- #rogra- 8A$#9Bo-!rehensi,e
Agrarian $efor- #rogra- 17tension with $efor- 8A$#1$9.
3. Agrarian Refor> -eneficiaries ;AR-s< - shall refer to the 6ualified %eneficiaries of o-!rehensi,e Agrarian $efor- #rogra- 8A$#9 as defined
under 2ection 22, ha!ter G// of $.A. ''5<.
4. Agrarian Refor> Co>>unity ;ARC< - shall refer to a co--unity co-!osed and -anaged %y A$Bs who are willing to %e organi4ed and to
underta*e the integrated de,elo!-ent of an area andBor their organi4ations or coo!erati,es as defined under $A (<??, otherwise *nown as the
o-!rehensi,e Agrarian $efor- #rogra- 17tension with $efor- 8A$#1$9 Act.
5. Agrarian Refor> Cooperati=e - shall refer to one organi4ed %y -arginal far-ers -a3ority of which are Agrarian $efor- Beneficiaries duly
registered with the Authority for the !ur!ose of de,elo!ing an a!!ro!riate syste- of land tenure, land de,elo!-ent, land consolidation or land
-anage-ent in areas co,ered %y agrarian refor- and for other !ur!oses as !ro,ided %y law. .he sa-e shall also refer to Agrarian $efor-
Beneficiaries oo!erati,e 8A$B oo!9 as defined in >A$ Ad-inistrati,e Arder &o. ?5, 2eries of 2??(.
'. Authority - shall refer to oo!erati,e >e,elo!-ent Authority 8>A9.
<. -FA& - shall refer to Bureau of 5ood and >rugs.
). -lanCet ,oanA/holesale ,oan - shall refer to a housing loan contractedBo%tained %y a housing coo!erati,e intended to identify -e-%er-
%eneficiaries for land ac6uisition, land i-!ro,e-ent, house construction, ho-e i-!ro,e-ent, or reno,ation and other si-ilar !ur!oses.
(. -SP - shall refer to Bang*o 2entral #ili!inas.
1?. C(S - shall refer to the ertificate of "ood 2tanding issued %y the Authority to all ty!es of coo!erati,es. .rans!ortation 2er,ice oo!erati,e shall
also secure another "2 fro- A. or 0"D, whiche,er is a!!lica%le.
11. C,*A - shall refer to the ertificate of 0and Awnershi! Award.
12. Co>>ission - shall refer to the /nsurance o--ission.
13. Cooperati=e %ducation and #ransport *peration Se>inar ;C%#*S< - shall refer to se-inars conducted %y >A andBor A. for the !ur!ose of
!ro,iding continuing education on coo!erati,e and trans!ort o!eration to enhance the *nowledge and ca!a%ility of the officers as well as the
-e-%ers of the .rans!ortation 2er,ice oo!erati,e.
14. Cooperati=e )ousing Progra> - shall refer to an alternati,e housing a!!roach, in !artnershi! with go,ern-entBnon-go,ern-ent agencies
in,ol,ed in a housing !rogra-, underta*en %y a financially and organi4ationally sta%le coo!erati,e to address the housing !ro%le-s of its -e-%ers
!ri-arily the low-inco-e earners through its own coo!erati,e efforts in !lanning and direct !roduction of afforda%le, decent and ade6uate housing
units.
15. CPCNAFranchiseAPer>it - shall refer to the ertificate of #u%lic on,enience and &ecessity issued %y the a!!ro!riate go,ern-ent agencies
which authori4es the grantee thereof to render the a!!ro!riate !u%lic ser,ice.
1'. &airy Cooperati=e - shall refer to one whose -e-%ers are engaged in the !roduction of fresh -il* which -ay %e !rocessed andBor -ar*eted as
dairy !roducts.
1<. &istribution of %lectricity - shall refer to the con,eyance of electric !ower %y a distri%ution utility through its distri%ution syste- !ursuant to the
!ro,isions of the 1#/$A 0aw.
1). &istribution of 7tility - shall refer to any 1lectric oo!erati,e, !ri,ate cor!oration, go,ern-ent-owned utility, or e7isting local go,ern-ent unit
which has an e7clusi,e franchise to o!erate a distri%ution syste- in accordance with the 1#/$A 0aw.
1(. &AR - shall refer to the >e!art-ent of Agrarian $efor-.
2?. &*) - shall refer to >e!art-ent of Health.
21. &*#C - shall refer to >e!art-ent of .rans!ortation and o--unications.
22. %lectric Cooperati=e - shall refer to one organi4ed for the !ri-ary !ur!ose of underta*ing !ower generation, utili4ing renewa%le energy sources,
including hy%rid syste-, ac6uisition and o!eration of su%trans-ission or distri%ution to its household -e-%ers.
23. %Ftension *ffices - shall refer to the offices of the Authority co,ering one geo-!olitical region each as their area of 3urisdiction.
24. %P'RA - shall refer to the 1lectric #ower /ndustry $efor- Act of 2??1.
25. (S'S - shall refer to the "o,ern-ent 2er,ice /nsurance 2yste-.
2'. )igh RiseACondo>iniu> )ousing - shall refer to the construction of at least fi,e 859 storey residential %uilding in high density ur%an and rural
areas to !ro,ide housing to low inco-e earners.
2<. )&$F - shall refer to the Ho-e >e,elo!-ent Mutual 5und or #ag-/B/" 5und.
2). ),7R- - shall refer to the Housing and 0and Dse $egulatory Board.
2(. )ousing -eneficiaries - shall refer to regular -e-%ers in good standing of the Housing oo!erati,e who acti,ely in the By-laws and duly
a!!ro,ed internal !olicies of the coo!erati,e.
3?. )ousing Cooperati=e - shall refer to one organi4ed to assist or !ro,ide access to housing for the %enefit of its regular -e-%ers who acti,ely
!artici!ate in the sa,ings !rogra- for housing. /t is co-owned and controlled %y its -e-%ers.
31. 'nsurance Cooperati=e - shall refer to one engaged in the %usiness of insuring life and !ro!erty of coo!erati,es and their -e-%ers. /t shall also
refer to oo!erati,e /nsurance 2ocieties 8/29.
32. 'nsurance ,iCe Acti=ity - shall refer to any acti,ity in,ol,ing regular collection of !re-iu-s, fees, contri%utions, or charges !rior to the
occurrence of contingent e,ent and the !ay-ent of guaranteed %enefits u!on the occurrence of such e,ent.
33. ,-P - shall refer to the 0and Ban* of the #hili!!ines.
34. ,(7 - shall refer to 0ocal "o,ern-ent Dnit.
35. ,#FR- - shall refer to the 0and .rans!ortation 5ranchising and $egulatory Board.
3'. ,#* - shall refer to the 0and .rans!ortation Affice.
3<. ,/7A - shall refer to the 0ocal Fater Dtilities Ad-inistration, created under #> 1(), as a-ended.
3). $AR'NA - shall refer to Mariti-e /ndustry Authority.
3(. $arginal Far>ers - shall refer to far-ers who are tilling an area of not -ore than three 839 hectares.
4?. $ediu> Rise )ousing - shall refer to the construction of a -a7i-u- of four 849 storey residential %uilding in high density ur%an and rural areas
to !ro,ide housing to low inco-e earners.
41. $e>ber in (ood Standing - shall refer to one who is a regular -e-%er and has co-!lied with all the re6uisites for -e-%ershi!. Ane who
!ossesses all the 6ualifications and none of the dis6ualifications !ro,ided in the oo!erati,e By-laws as ascertained %y the Board of >irectors and
has the right to ,ote and %e ,oted u!on.
42. $icro:'nsurance - shall refer to an acti,ity !ro,iding s!ecific insurance, insurance-li*e, and other si-ilar !roducts and ser,ices that -eet the
needs of the low-inco-e sector for ris* !rotection and relief against distress, -isfortune and other contingent e,ents. .his shall include all for-s of
insurance, insurance-li*e and other si-ilar acti,ities, as -ay %e defined %y concerned regulatory %odies with features such as: !re-iu-s,
contri%utions, fees or charges collectedBdeducted !rior to the occurrence of a contingent e,ent and guaranteed %enefits !ro,ided u!on occurrence of
a contingent e,ent.
43. $icro:'nsurance Product - shall refer to a financial !roduct or ser,ice that -eets the ris* !rotection needs of the !oor where the a-ount of
!re-iu-s, contri%utions, fees or charges co-!uted on a daily %asis does not e7ceed fi,e !ercent 85C9 of the current daily -ini-u- wage rate for
non-agricultural wor*ers in Metro Manila, as a!!ro,ed %y the &ational Fages #roducti,ity Board 8&F#B9B$egional .ri!artite Fages #roducti,ity
Board 8$.F#B9 and the -a7i-u- su- of guaranteed %enefits is not -ore than 5?? ti-es the daily -ini-u- wage rate for non-agricultural wor*ers
in Metro Manila.
44. N&A - shall refer to &ational >airy Authority.
45. NeFt of .in - shall, for !ur!oses of succession, refer to an natural !erson who is an heir of an agrarian refor- %eneficiary and who is 6ualified to
%e a -e-%er of the coo!erati,e as A$B under its By-laws and as deter-ined %y >A$.
4'. N)A - shall refer to the &ational Housing Authority.
4<. N/R- - shall refer to the &ational Fater $esources Board, created under #> 424.
4). *#C - shall refer to the Affice of .rans!ortation oo!erati,es.
4(. PC( - shall refer to the #hili!!ine oast "uard.
5?. Referendu> - shall refer to a -echanis- of securing the a!!ro,al of the general -e-%ershi! of an 1lectric oo!erati,e on issues affecting its
registration, o!eration, and -anage-ent.
51. Regular 'nsurance Product - shall refer to all other insurance !olicies not co,ered %y Micro-/nsurance #roduct.
52. Rene@able %nergy Resources - shall refer to energy resources that do no ha,e an u!!er li-it on the total 6uality to %e used. 2uch resources
are renewa%le on a regular %asis and the renewa%le rate is ra!id enough to consider a,aila%ility o,er an infinite ti-e. .hese include a-ong others,
%io-ass, solar, wind, hydro and ocean energy.
53. R#/P- - shall refer to the $egional .ri!artite Fages #roducti,ity Board.
54. SSS - shall refer to the 2ocial 2ecurity 2yste-.
55. Sociali?ed )ousing - shall refer to the housing !rogra- and !ro3ect underta*en %y the go,ern-ent and !ri,ate sector for the under!ri,ileged
and ho-eless which -ay also %e underta*en %y a Housing oo!erati,e. .his includes sites and ser,ices de,elo!-ent, long-ter- financing and
li%erali4ed ter-s on interest !ay-ents.
5'. Sub:trans>ission Assets - shall refer to the facilities related to the !ower deli,ery ser,ice %elow the trans-ission ,oltages and %ased on the
functional assign-ent of assets, including, %ut not li-ited to ste!down transfor-ers used solely %y load custo-ers, associated switchyardBsu%station,
control and !rotecti,e e6ui!-ent, reacti,e co-!ensation e6ui!-ent to i-!ro,e custo-er !ower factor, o,erhead lines, and the land where such
facilitiesBe6ui!-ent are located. .hese include &# assets lin*ing trans-ission syste- and the distri%ution syste- which are neither classified as
generation nor trans-ission.
5<. Supply of %lectricity - shall refer to the sale of electricity %y a !arty other than a generator or a distri%utor in the franchise area of a distri%ution
utility using the wires of the distri%ution utility concerned.
5). #echnical Plan - shall refer to all technical docu-ents re6uired in !lanning a housing !ro3ect na-ely, the %ar chart and construction schedule,
syste-atic de,elo!-ent !lan, the architectural and detailed engineering and housing design, contract docu-ents, technical and -aterial
s!ecification.
5(. #rans>ission of %lectricity - shall refer to the con,eyance of electricity through the high ,oltage syste-.
'?. #ransportation Ser=ice Cooperati=e - shall refer to one which engages in land and sea trans!ortation, li-ited to s-all ,essels, as defined or
classified under the #hili!!ine Mariti-e laws, organi4ed under the !ro,ision of the ode.
'1. 7rban Areas - shall refer to all cities regardless of their !o!ulation density and to -unici!alities with a !o!ulation density of at least 5?? !ersons
!er s6uare *ilo-eter.
'2. 7rbani?able Areas - shall refer to the sites and lands within dis!lay -ar*ed and great !otential of %eco-ing ur%an areas within the !eriod of fi,e
859 years.
'3. /ater #ariff - shall refer to the water rate charged to custo-ersB-e-%ers for water consu-!tion as deter-ined %y the coo!erati,e and a!!ro,ed
%y the &F$B.
'4. /ater Per>it - shall refer to the authority to a!!ro!riate and use water.
'5. /ater Right - shall refer to the !ri,ilege granted %y the go,ern-ent to a!!ro!riate and use water.
''. /ater Ser=ice Cooperati=e - shall refer to a duly registered coo!erati,e organi4ed to own, o!erate, and -anage water su!!ly syste-s for the
!ro,ision and distri%ution of !ota%le water for its -e-%ersBconsu-ers.
'<. /ater Supply - shall refer to the su!!ly of !ota%le water as !ro,ided %y the coo!erati,e for do-estic, industrial, co--ercial, and other uses.
'). /orCer -eneficiaries - shall refer to a natural !erson who renders ser,ice for a ,alue as an e-!loyee or la%orer in an agricultural enter!rise or
far- within an A$, regardless of whether his co-!ensation is !aid on a daily, wee*ly, -onthly or +!a*yaw+ %asis.
R7,% ' : )*7S'N( C**P%RA#'+%S
#ursuant to the !ro,isions of Art. '28139 8!ar.29 under ha!ter G of $e!u%lic Act &o. (52?, otherwise *nown as the #hili!!ine oo!erati,e ode of 2??), the
oo!erati,e >e,elo!-ent Authority in consultation with &HA, H>M5, 222, 0B#, and concerned coo!erati,e sector here%y !ro-ulgates the following rules and
$egulations for the !ro!er guidance and co-!liance of Housing oo!erati,es.
Section . Coverage8 .his $ule shall co,er all coo!erati,es duly registered with the Authority under $.A. (52? organi4ed to assist or !ro,ide access to housing for
the %enefit of its regular -e-%ers.
Section 2. !rgani-ation8 5ifteen 8159 or -ore natural !ersons who are 5ili!ino citi4ens, of legal age, ha,ing a co--on %ond of interest and actually residing or
wor*ing in the intended area of o!eration, -ay organi4e a housing coo!erati,e.
Section 3. Purpose and !b+ectives8 A Housing oo!erati,e shall %e organi4ed for any or all of the following !ur!oses:
819 .o facilitate access andBor !ro,ide afforda%le housing units to its -e-%ers:
829 .o create a resource -o%ili4ation !rogra- to ensure financial sta%ility for the coo!erati,e:
839 .o foster and strengthen the !rinci!les of coo!erati,is- %y !ro-oting a co-!rehensi,e and integrated co--unity de,elo!-ent !rogra- which
are !lanned and -anaged %y the coo!erati,e -e-%ers there%y ensuring a sustained and self-reliant coo!erati,e co--unity.
849 .o de,elo! colla%orati,e efforts and !artnershi! with other coo!erati,es, >A, &HA, "2/2, H>M5, 222, 0B#, >B#, H0D$B and other go,ern-ent
agencies, financial institutions and entities there%y assuring a,aila%ility of resources and lower cost of housing de,elo!-ent.
859 .o e7!and the coo!erati,es %usiness o!erations %y sta%ili4ing the a,aila%le resources for the continuing !roduction of housing units for its
-e-%ers.
8'9 .o underta*e such other econo-ic or social acti,ities as -ay %e necessary or incidental in the !ursuit of the foregoing !ur!oses.
Section 4. Housing Programs and activities8 Housing oo!erati,es -ay engage in the following acti,ities:
a. 2ociali4ed Housing:
%. Mediu- $ise #u%lic and #ri,ate Housing:
c. High $iseBondo-iniu- Housing:
d. 2tudentB5aculty >or-itory Housing:
e. #roduction and >istri%ution of Housing Materials:
f. 1state Manage-ent: and
g. Ather si-ilar acti,ities.
Section 5. Registration 5urisdiction8 Housing oo!erati,es shall file their a!!lication for registration with the >A 17tension Affice, which shall ha,e 3urisdiction
o,er the said coo!erati,es.
Section 5. Capitali-ation8 5or !ur!oses of registration with the Authority, a housing coo!erati,e shall ha,e a -ini-u- !aid-u! ca!itali4ation of 5ifteen .housand
#esos 8# 15, ???.??9.
Section !. Re4uirements for Registration8 .he following shall %e co-!lied with u!on filing of a!!lication:
A. &ew A!!licant
819 &a-e Gerification 2li!:
829 Articles of oo!eration and %y-0aws:
839 2worn 2tate-ent of the treasurer elected %y the su%scri%ers showing that at least P twenty-fi,e !er centu- 825C9 of the authori4ed
share ca!ital has %een su%scri%ed and at least twenty-fi,e !er centu- 825C9 of the total su%scri!tion has %een !aid: #ro,ided, .hat in
no case shall the !aid-u! share ca!ital %e less than 5ifteen .housand #esos 815,???.??9:
849 2urely Bond of Accounta%le Afficers handling funds, !ro!erties and securities:
859 #re-Me-%ershi! 1ducation 2e-inar 8#M129:
8'9 1cono-ic 2ur,ey:
8<9 #re-5easi%ility 2tudy of the housing !ro3ects underta*ing as re,iewed %y &HA:
8)9 Dnderta*ing to hange &a-e in the e,ent that another coo!erati,e has ac6uired !rior right to the use of the !ro!osed na-e: and
8(9 $egistration 5ee.
B. 17isting oo!erati,e
819 A-ended Articles of oo!eration and By-laws:
829 A $esolution certified %y the Board 2ecretary and %y the -a3ority of the Board of >irectors stating that the said a-end-ents ha,e
%een duly a!!ro,ed %y at least two-thirds 82B39 ,ote of the -e-%ers with ,oting rights:
839 Audited 5inancial 2tate-ents showing !rofita%le o!erations for the !ast two 829 years:
849 #re-feasi%ility study of the housing !ro3ects underta*ing as re,iewed %y &HA:
859 #roof of %usiness trac* record of the coo!erati,e: and
8'9 A-end-ent 5ee.
Section 1. 0inancing and Technical $ssistance8 .he Authority, in coordination with a!!ro!riate go,ern-ent agencies and financial institutions, shall assist the
housing coo!erati,e in a,ailing technical and financial assistance for its housing !ro3ects.
5or this !ur!ose, a s!ecial window for the financing of the housing !ro3ects shall %e created %y the a!!ro!riate housing agencies and go,ern-ent financial
institutions. .he financing shall %e in the for- of %lan*et loans or wholesale loans to 6ualified housing coo!erati,es, with interest rates and ter-s e6ual to, or %etter
than those gi,en for sociali4ed housing !ro3ects without need for indi,idual !rocessing.
Section 9. Documentary Re4uirements in $vailing for Technical and:or 0inancial $ssistance8 .he coo!erati,e in a,ailing technical andBor financial assistance shall
file its a!!lication with the a!!ro!riate go,ern-ent financial institutions.
5or this !ur!ose, the a!!licant coo!erati,e shall co-!ly with the docu-entary re6uire-ents as -ay%e re6uired %y such a!!ro!riate go,ern-ent financial
institution.
Section 0. Conditions for the Proposed Housing Pro+ect8 .he !ro!osed housing !ro3ect of the coo!erati,e shall ha,e the following features as certified %y the
&HA:
1. $vailability of *and Suitable for Housing8 .he land !ro!osed for housing is classified as a safe and %uilda%le area and not affected %y any
go,ern-ent infrastructure !ro3ect, agricultural or industrial reser,e.
2. *and !'nership8 .he land is owned %y the coo!erati,e or there is an on-going negotiation %etween the landowner and coo!erati,e through a
ontract to 2ell or $eser,ation Agree-ent %etween the landowner and the coo!erati,e and that the land is free fro- any liens and encu-%rances.
3. Target Beneficiaries8 .he !ro!osed housing !ro3ect should ha,e at least 3? initial target -e-%er-%eneficiaries.
Section . "embership8 Me-%ershi! in Housing oo!erati,es shall %e o!en to all natural !ersons who -eet the 6ualifications for -e-%ershi! !rescri%ed in the
coo!erati,e By-laws.
Section 2. Regulatory Po'er8 .he Authority shall ha,e the !ower to regulate the internal affairs of Housing oo!erati,e such as:
a. 17ercise of rights and !ri,ileges of -e-%ers:
%. 5or-ulation of rules and !rocedures and the conduct of -eetings of "eneral Asse-%ly, Board of >irectors and o--ittees.
c. Manner of election and 6ualifications of Afficers, >irectors and o--ittee Me-%ers:
d. Allocation and distri%ution of sur!lus: and
e. Ather -atters relating to the internal affairs of Housing oo!erati,es.
All -atters relating to the technical as!ects of the housing !rogra- and such other si-ilar -atters affecting the Housing oo!erati,es shall %e regulated %y the
&HA or H0D$B as the case -ay%e.
Section 3. 5oint "onitoring and #valuation Committee8 .he Joint Monitoring and 1,aluation o--ittee shall %e co-!osed of >A, as the lead agency, &HA,
H0D$B, H>M5, 222, "2/2, 0B#, >B#, concerned coo!erati,e sector and other a!!ro!riate go,ern-ent agencies and financial institutions.
.he o--ittee shall ha,e the following functions:
1. .o for-ulate 3oint standards for the !ro!er i-!le-entation, -onitoring, organi4ation, -anage-ent, and de,elo!-ent of coo!erati,e housing
!ro3ect all -atters relating to the organi4ations, -anage-ent, and de,elo!-ent of the coo!erati,e housing !ro3ects.
2. .o reco--end changes to this /$$ fro- ti-e to ti-e if the need arises.
3. .o assist in settling interBintra coo!erati,e dis!utes.
4. .o su%-it annual acco-!lish-ent re!ort to the Authority.
Section 4. Settlement of Disputes8 /ntraBinter coo!erati,e dis!utes shall, as far as i-!ractica%le, %e settled a-ica%ly through the conciliation and -ediation
-echanis- e-%odied in the By-laws of the coo!erati,e, which shall %e in accordance with the >A "uidelines for the /-!le-entation of onciliation-Mediation for
oo!erati,e >is!utes, and in a!!lica%le laws.
2hould such conciliation--ediation !roceedings fail, the -atter -ay %e settled through ,oluntary ar%itration or in court of co-!etent 3urisdiction.
Howe,er, in cases where the dis!uteBs fall within the 3urisdiction of the &HA or H0D$B, the sa-e shall %e referred to the said agency and it shall %e resol,ed in
accordance with the &HA or H0D$B regulations.
R7,% '' : A(RAR'AN R%F*R$ C**P%RA#'+%S
#ursuant to the !ro,isions of Art. (3 8'9 and Art. (4 8!ar. 29 under ha!ter I/ of $e!u%lic Act. &o. (52?, otherwise *nown as the #hili!!ine oo!erati,e ode of
2??), the Authority in consultation with the >A$, B2#, 0B#, and the concerned coo!erati,e sector here%y !ro-ulgates the following rules and regulations for
!ro!er guidance and co-!liance of Agrarian $efor- oo!erati,es.
Section . Coverage8 .his $ule shall co,er all Agrarian $efor- oo!erati,es duly registered with the Authority under $.A. &o. (52?.
Section 2. !rgani-ation8 At least fifteen 8159 -arginal far-ers -a3ority of which are Agrarian $efor- Beneficiaries in an agrarian refor- areas -ay organi4ed an
Agrarian $efor- oo!erati,e.
Section 3. Purposes and !b+ectives8 Agrarian $efor- oo!erati,es shall %e organi4ed for any or all of the following !ur!oses:
819 .o de,elo! an a!!ro!riate syste- of land tenure, land de,elo!-ent, land consolidation or land -anage-ent in areas co,ered %y agrarian refor-:
829 .o coordinate and facilitate the disse-ination of scientific -ethods of !roduction and !ro,ide assistance in the !rocessing, storage, trans!ort, and
-ar*eting of far- !roducts for Agrarian $efor- Beneficiaries and their i--ediate fa-ilies, hereinafter referred to as +%eneficiaries+:
839 .o !ro,ide financial facilities to %eneficiaries for !ro,ident or !roduction !ur!oses at reasona%le costs:
849 .o arrange and facilitate the e7!editious transfer of a!!ro!riate and suita%le technology to %eneficiaries and -arginal far-ers at the lowest
!ossi%le costs:
859 .o !ro,ide social security %enefits, health, -edical and social insurance %enefits and other social and econo-ic %enefits that !ro-ote the general
welfare of the agrarian refor- %eneficiaries and -arginal far-ers:
8'9 .o !ro,ide a non-for-al education, ,ocationalBtechnical training and li,elihood !rogra- to %eneficiaries and -arginal far-ers:
8<9 .o act as channels for e7ternal assistance and ser,ices to the %eneficiaries and -arginal far-ers:
8)9 .o underta*e a co-!rehensi,e and integrated de,elo!-ent !rogra- in agrarian refor- and resettle-ent areas with s!ecial concern for the
de,elo!-ent of agro-%ased, -arine-%ased, and cottage-%ased industries:
8(9 .o re!resent the %eneficiaries on any or all -atters that affect their interest: and
81?9 .o underta*e such other econo-ic or social acti,ities as -ay %e necessary or incidental in the !ursuit of the foregoing !ur!oses.9avvphi
Section 4. Registration 5urisdiction8 Agrarian $efor- oo!erati,es shall file their duly acco-!lished a!!lication for registration with the >A 17tension Affice,
which shall ha,e 3urisdiction o,er the said coo!erati,es.
Section 5. Registration Re4uirements8 .he following shall %e co-!lied with u!on filing of a!!lication:
819 &a-e Gerification 2li!:
829 Articles of oo!eration and By-0aws:
839 2worn 2tate-ent of the .reasurer elected %y the su%scri%ers showing that at least twenty-fi,e !er centu- 825C9 of the authori4ed share ca!ital
has %een su%scri%ed and at least twenty-fi,e !er centu- 825C9 of the total su%scri!tion has %een !aid: #ro,ided, .hat in no case shall the !aid-u!
share ca!ital %e less than 5ifteen .housand #esos 8#15,???.??9:
849 2urety Bond of Accounta%le Afficers:
859 #re-Me-%ershi! 1ducation 2e-inar 8#M129:
8'9 1cono-ic 2ur,ey:
8<9 Dnderta*ing to hange &a-e in the e,ent that another coo!erati,e has ac6uired !rior right to the use of the !ro!osed na-e:
8)9 Mother 0AA in case of !lantation %ased A$Bs:
8(9 Fritten ,erification fro- the >A$ to the effect that the coo!erati,e organi4ation is needed and desired %y the %eneficiaries: results of a study that
has %ee conducted fairly indicate the econo-ic feasi%ility of organi4ing the sa-e and that will %e econo-ically ,ia%le in the o!erations: that at least
-a3ority of the -e-%ers are Agrarian $efor- Beneficiaries, and the sa-e -ay now %e organi4ed and registered in accordance with the re6uire-ents
of the #hili!!ine oo!erati,e ode of 2??): and
81?9 $egistration fee.
Section 5. Cooperative ,ame8 All coo!erati,es organi4ed for any or all of the !ur!osesBo%3ecti,es enu-erated under 2ection 3 of this $ule shall always %ear the
word +Agrarian $efor-+ whether engaged in the o!eration of !u%lic utilities and ser,ices andBor other %usiness acti,itiesBser,ices.
17isting A$B oo!s shall a-end their coo!erati,e na-e to confor- to this 2ection.
Section !. $mendments of $rticles of Cooperation and By)la's8 Agrarian $efor- oo!erati,e intending to engage in the o!eration of !u%lic utilities and ser,ices
shall a-end its Articles of oo!eration and By-0aws to legally !ro,ide for such ser,ices. /. shall also co-!ly with the other re6uire-ents i-!osed %y the Authority
and the a!!ro!riate go,ern-ent agencies for coo!erati,es engaged in !u%lic utilities and ser,ices.
Section 1. Capitali-ation8 5or !ur!oses of registration with the Authority, Agrarian $efor- oo!erati,es shall ha,e a -ini-u- !aid u! ca!itali4ation of 5ifteen
.housand #esos 8#15,???.??9.
Howe,er, to engage in the o!eration of !u%lic utilities and ser,ices, the -ini-u- ca!itali4ation shall %e in accordance with the $ules and $egulations !rescri%ed
%y the Authority for Multi-#ur!ose coo!erati,es under $ule 3 of the $ules and $egulations /-!le-enting ertain #ro,isions of the #hili!!ine oo!erati,e ode of
2??) 8$e!u%lic Act &o. (52?9 and %y the concerned go,ern-ent agency.
/n case the A$B oo! engages in .rans!ort 2er,ice, it shall co-!ly with the other re6uire-ents !rescri%ed in 2ection 5, $ule 5 of these $ules and $egulation.
Section 9. "embership Termination and aluation and:or Transfer of Share Capital8 Agrarian $efor- oo!erati,e, other than !lantation-%ased Agrarian $efor-
oo!erati,e shall %e go,erned %y Articles 3?,31 and <4 of $A (52? and the By-laws of the oo!erati,e.
Howe,er, !lantation-%ased Agrarian $efor- oo!erati,e which is co,ered %y collecti,e ertificate of 0and Awnershi! Award 80AA9, shall %e go,erned %y the
3oint >A$->A Ad-inistrati,e Arder &o. ?(, 2eries of 2??) entitled +$e,ised $ules and $egulations on A$B Me-%ershi! 2tatus and Galuation andBor .ransfer of
#aid-D! 2hare a!ital in Agrarian $efor- #lantation-Based oo!erati,es dated 2e!te-%er 4, 2??)+ including any a-end-ents thereto or su%se6uent issuances.
Section 0. Privileges8 2u%3ect to reasona%le ter-s and conditions that -ay %e i-!osed %y the >A$ and the Authority, an Agrarian $efor- oo!erati,es duly
registered with the Authority -ay %e gi,en e7clusi,e right to do any or all of the following econo-ic acti,ities in agrarian refor- and resettle-ent areas:
819 2u!!ly and distri%ution of consu-er, agricultural, a6ua-cultural, and industrial good, !roduction in!uts, and raw -aterial and su!!lies, -achinery,
e6ui!-ent, facilities and other ser,ices and other ser,ices and re6uire-ents of the %eneficiaries and -arginal far-ers at reasona%le !rices:
829 Mar*eting of the !roducts and ser,ices of the %eneficiaries in local and foreign -ar*ets:
839 #ro,ision of essential !u%lic ser,ices at cost such as !ower, irrigation, !ota%le water, !assenger andBor cargo trans!ortation %y land or sea,
co--unication ser,ices, and !u%lic health and -edical care ser,ices:
849 Manage-ent, conser,ation, and co--ercial de,elo!-ent of -arine, forestry, -ineral, water and other natural resources su%3ect to co-!liance
with the laws and regulations on en,iron-ental and ecological controls: and
859 #ro,ision of financial, technological, and other ser,ices and facilities re6uires %y the %eneficiaries in their daily li,es and li,elihood. 2uch ter-s
and conditions shall %e 3ointly for-ulated %y the >A$ and the Authority.
Section . Preferential Right:Treatment8 /n an agrarian refor- and resettle-ent areas, a duly registered Agrarian $efor- oo!erati,es shall ha,e !referential
rightBtreat-ent for- the go,ern-ent in the following -atters:
819 /n the construction, -aintenance and -anage-ent of roads, %ridges, canals, whar,es, !orts, reser,oirs, irrigation syste-s, waterwor*s syste-s,
and other infrastructures with go,ern-ent funding
.he technical assistance, facilities and e6ui!-ents to such agrarian refor- coo!erati,es shall %e !ro,ided %y the "o,ern-ent.
829 /n the grant of 5ranchise and ertificate of #u%lic on,enience and &ecessity for the o!eration of !u%lic utilities and ser,ices: #ro,ided, that it
-eets the re6uire-ents and conditions i-!osed %y the a!!ro!riate go,ern-ent agency granting the 5ranchise or ertificate of #u%lic on,enience
and &ecessity,
/n case of electric ser,ice !ro,ider in the area, it shall, u!on the re6uest of an Agrarian $efor- oo!erati,e, i--ediately !ro,ide electric ser,ices to the agrarian
refor- areas. /f the electric ser,ice !ro,ided fails to !ro,ide the ser,ices re6uested within a !eriod of one 819 year, the Agrarian $efor- oo!erati,e -ay underta*e
to !ro,ide the electric ser,ices in the area through its own resources. All in,est-ents -ade %y the said Agrarian $efor- oo!erati,e for the electrification of the
agrarian refor- resettle-ent areas shall %e su%3ect to the electric ser,ices !ro,ider once it ta*es on the ser,ice.
Section 2. *ease of Public *ands8 Agrarian $efor- oo!erati,e -ay lease !u%lic lands for a !eriod not e7ceeding twenty fi,e 8259 years, su%3ect to renewal for
another twenty fi,e 8259 years only, !ro,ided the a!!lication for renewal shall %e -ade one 819 year %efore the e7!iration of the lease and such lease shall %e for
the e7clusi,e use and %enefit of the %eneficiaries and -arginal far-ers su%3ect to the !ro,isions of the A$#, as a-ended..
Section 3. Cooperative #states8 0andholdings li*e !lantations, estates, or haciendas ac6uired %y the 2tate in accordance with the A$#, as a-ended, for the
%enefit of the wor*ers shall %e collecti,ely owned through a Mother 0AA %y the wor*er %eneficiaries under a coo!erati,e set-u!.
Section 4. $ssistance8 .he "o,ern-ent shall !ro,ide the necessary financial and technical assistance to Agrarian $efor- oo!erati,es to ena%le the- to
discharge the !ur!oses and o%3ecti,es under 2ection 3 of this $ule which shall %e in accordance with a 3oint !rogra- for the organi4ation and financing of the
Agrarian $efor- oo!erati,es. .he 3oint !rogra- shall %e geared towards the gradual assu-!tion of full ownershi! and -anage-ent control of the coo!erati,e
estate %y the Agrarian $efor- oo!erati,es.
Section 5. Regulatory Po'er8 .he Authority shall ha,e the !ower to regulate the internal affairs of Agrarian $efor- oo!erati,e such as:
a. 17ercise of rights and !ri,ileges of -e-%ers:
%. 5or-ulation of rules and !rocedures and the conduct of -eetings of "eneral Asse-%le, Board of >irectors and o--ittees:
c. Manner of election and 6ualifications of Afficers, >irectors, and o--ittee Me-%ers:
d. Allocation and distri%ution of sur!lus: and
e. Ather -atters relating to the internal affairs of Agrarian $efor- oo!erati,es.
All -atters relating to land ac6uisition, de,elo!-ent of an a!!ro!riate syste- of land tenure, land de,elo!-ent, land consolidation, or land -anage-ent in areas
co,ered %y agrarian refor- and such other si-ilar -atters affecting the Agrarian $efor- oo!erati,es shall %e regulated %y the >A$.
All -atters relating to land ,aluation and assess-ent shall %e regulated %y the 0B#.
Section 5. 0inancing Program8 Any 5inancing #rogra- to %e a,ailed of %y A$B oo!s shall %e in accordance with the 3oint !rogra- to %e de,elo!ed %y the >A$,
the B2#, and the Authority.
Section !. Settlement of Disputes8 /ntraBinter coo!erati,e dis!utes shall other than land dis!utes, as far as !ractica%le, %e settled a-ica%ly through the
conciliation and -ediation -echanis- e-%odied in the By-laws of the coo!erati,e, which shall %e in accordance with the >A "uidelines for the /-!le-entation
of onciliation- Mediation for oo!erati,e >is!utes and in a!!lica%le laws.
2hould such conciliation - -ediation !roceedings fail, the -atter -ay %e settled through ,oluntary ar%itration or in court of co-!etent 3urisdiction.
Howe,er, in cases where the dis!uteBs fall within the 3urisdiction of the >A$, the sa-e shall %e referred to the said agency and it shall %e resol,ed in accordance
with the >A$ regulation.
R7,% ''': 'NS7RANC% C**P%RA#'+%S
#ursuant to the !ro,isions of Art. 1?) under ha!ter I/// of $e!u%lic Act. &o. (52?, otherwise *nown as the #hili!!ine oo!erati,e ode of 2??), the o--ission
and the Authority in consultation with the concerned coo!erati,e sector here%y !ro-ulgate the following rules and regulations for the !ro!er guidance and
co-!liance of the /nsurance oo!erati,es.
Section . Coverage8 .his $ules shall co,er all /nsurance oo!erati,es duly registered under $.A. (52? organi4ed for the !ur!ose of engaging in the %usiness of
insuring life and !ro!erty of coo!erati,es and their -e-%ers.
Section 2. !rgani-ation8 5ifteen 8159 or -ore duly registered coo!erati,es -ay organi4e as /nsurance oo!erati,e.
Section 3. Purposes and !b+ectives8 An /nsurance oo!erati,e shall !ro,ide its constituting -e-%ers different ty!es of insurance co,erage consisting of, %ut not
li-ited to, life insurance with s!ecial grou! co,erage, loan !rotection, retire-ent !lans, endow-ent with health and accident co,erage, fire insurance, -otor
,ehicle co,erage, %onding, cro!, li,estoc* !rotection and e6ui!-ent insurance.
/t -ay also !ro,ide +-icro-insurance !roducts+ and regular insurance to coo!erati,es and its -e-%ers.
Section 4. "embership8 Me-%ershi! in /nsurance oo!erati,e shall %e o!en to all duly registered coo!erati,es of all ty!es and categories
Section 5. Registration 5urisdiction8 Any a!!licant coo!erati,e !ro!osing to engage into the %usiness of insuring life and !ro!erty of coo!erati,es and their
-e-%ers shall file their duly acco-!lished a!!lication for registration with the >A entral Affice $egistration >i,ision.
Section 5. Capitali-ation8 An /nsurance oo!erati,e registered with the Authority !ursuant to this $ule shall secure a ertificate of Authority fro- the o--ission
within two 829 years fro- the date of its registration. 5ailure to secure the sa-e shall %e a ground for the re,ocationBcancellation of the certificate of $egistration.
2aid ertificate of Authority shall %e ,alid until the 3?th day of June of the year following its issuance.
Section 1. Suspension or Revocation of Certificate of $uthority8 .he o--ission -ay, after due notice and hearing, sus!end or re,o*e the ertificate of Authority
issued to an /nsurance coo!erati,e for ,iolation of any e7isting laws, rules or regulations, or any !ro,isions of the /nsurance ode.
Section 9. Regulatory Po'er8 .he Authority shall ha,e the !ower to regulate the internal affairs of /nsurance oo!erati,e such as:
a. 17ercise of rights and !ri,ileges of -e-%ers:
%. 5or-ulation of rules and !rocedures and the conduct of -eetings of the "eneral Asse-%ly, Board of >irectors and o--ittees:
c. Manner of election and 6ualifications of Afficers, >irectors, and o--ittee Me-%ers:
d. Allocation and distri%ution of net sur!lus: and
e. Ather -atters relating to the internal affairs of /nsurance oo!erati,es.
All -atters relating to the organi4ation and o!erations concerning insurance %usiness of such /nsurance oo!erati,e shall %e regulated %y the o--ission as
!ro,ided for in the /nsurance ode and other related laws.
Section 0. 5oint Committee8 /n order to fully i-!le-ent the !ro,isions of this $ule, a Joint o--ittee, to %e co-!osed of two 829 re!resentati,es each fro- the
Authority and the o--ission and a re!resentati,e fro- the /nsurance oo!erati,es shall %e for-ed. .he re!resentati,e fro- the Authority shall hair of the
o--ittee.
.he Joint o--ittee shall %e constituted within thirty 83?9 days u!on effecti,ity of these $ules and $egulations.
Section . 0unctions of the 5oint Committee8 .he Joint o--ittee shall ha,e the following functions:
1. .o o,ersee the i-!le-entation of this $ule:
2. .o ensure co-!liance with the ad-inistrati,e and other re6uire-ents of the Authority and the o--ission:
3. .o -a*e reco--endation on the a-end-ent of this $ule as -ay%e necessary: and
4. 2uch other function as the need arises.
Section 2. *imitation8 oo!erati,es intending to engage in insurance, insurance li*e, and other si-ilar acti,ities shall register with the Authority and secure a
ertificate of Authority fro- the o--ission.
Howe,er, /2 are not allowed to ser,e the insurance needs of other coo!erati,es that are not -e-%er-owners of the /2. A /2 ser,ing the insurance needs of
non--e-%er coo!erati,es and the general !u%lic shall %e re6uired to get a co--ercial insurance license fro- the /nsurance o--ission.
#ri-ary oo!erati,es which are not registered and licensed to o!erate as /nsurance oo!erati,e, are !rohi%ited to engage in insurance, insurance li*e and other
si-ilar acti,ities with their -e-%ers. Howe,er, those already engaging in such shall %e gi,en two 829 years transition !eriod to underta*e any of the following
o!tions:
.o organi4e an insurance coo!erati,e with other !ri-ary coo!erati,es that ha,e the sa-e insurance-li*e %usiness acti,ity:
829 .o 3oin an e7isting /nsurance oo!erati,e:
839 .o !artner with licensed -icro-insurance !ro,iders: and
849 .o %uy a -icro-/nsurance !roduct through a licensed agent or %ro*er.
All e7isting /nsurance oo!erati,e with -e-%ers which are non-coo!erati,e andBor coo!erati,e oriented societies and organi4ations are here%y gi,en fi,e 859 year
!eriod to ter-inate and re-o,e such entities fro- their -e-%er registry. 5ailure to co-!ly within the gi,en !eriod shall constitute a ,iolation of this $ule and shall
%e dealt with accordance with the !ro,ision of $A (52? and other a!!lica%le laws.
Section 3. Settlement of Disputes8 /ntraBinter coo!erati,e dis!utes shall %e settled as far as !ractica%le through conciliation--ediation -echanis- e-%odied in
the coo!erati,e %y-laws, which shall %e in accordance with the >A "uidelines for the /-!le-entation of onciliation of oo!erati,e >is!utes, and a!!lica%le
laws. 2hould such conciliation--ediation !roceedings fail, the -atter -ay %e settled through ,oluntary ar%itration %y the Authority or in court of co-!etent
3urisdiction.
Howe,er, in cases where the dis!uteBs fall within the 3urisdiction of the o--ission, the sa-e shall %e referred to the said agency and it shall %e resol,ed in
accordance with the o--ission regulation.
R7,% '+:/A#%R S%R+'C% C**P%RA#'+%S
#ursuant to the !ro,isions of Art. 111 839 under ha!ter I/G of $e!u%lic Act. &o. (52?, otherwise *nown as the #hili!!ine oo!erati,e ode of 2??), the Authority
in consultation with the &F$B, the 0FDA, and concerned coo!erati,e here%y !ro-ulgates the following rules and regulations for the !ro!er guidance and
co-!liance of the Fater 2er,ice oo!erati,e.
Section . Coverage8 .his $ule shall a!!ly to all coo!erati,e duly registered with the Authority under $.A. (52? whose -ain !ur!ose or one of its !ur!oses is to
own, o!erate, and -anage water su!!ly syste-s for the !ro,ision and distri%ution of !ota%le water to its -e-%ers and other custo-ers.
Section 2. !rgani-ation8 5ifteen 8159 or -ore natural !erson who are 5ili!ino citi4ens, of legal age, ha,ing a co--on %ond of interest and actually residing or
wor*ing in the intended area of o!eration, -ay organi4e a Fater 2er,ice oo!erati,e.
Section 3. "embership in 1ater Service Cooperative8 Me-%ershi! in Fater 2er,ice oo!erati,e is co-!osed of two *inds:
a. Regular "ember - refers to a natural !erson 8-e-%er-consu-er9 with water ser,ice connection with the right to ,oted u!on and entitled to all the
rights and !ri,ileges of -e-%ershi! under the ode.
%. $ssociate "ember - refers to a natural !erson other than a regular -e-%er of the household. /t shall also refer to -e-%er- institution or entity
a,ailing of the ser,ices of Fater ser,ice oo!erati,e, such as, %ut not li-ited to: cor!oration, industrial and co--ercial esta%lish-ent, 3oint ,enture,
other coo!erati,e, !lace worshi!, local go,ern-ent %uilding or facility, etc, as -ay%e re!resented %y the head of such esta%lish-ent or entity, %ut is
not entitled to ,ote and %e ,oted u!on. Howe,er, shall %e entitled to the !referential rights and !ri,ileges as indicated in the oo!erati,e By-laws and
under the ode.
Section 4. Re4uirements for Registration8 .he following shall %e co-!lied with u!on filing of a!!lication:
819 &a-e Gerification 2li!:
829 Articles of oo!eration and By-laws:
839 2worn state-ent of the treasurer elected %y the su%scri%ers showing that at least twenty-fi,e !er centu- 825C9 of the authori4ed share ca!ital %e
less than 5ifteen .housand #esos 8#15,???.??9:
849 2urely Bond of Accounta%le Afficers handling funds !ro!erties and securities:
859 ertificate of #re-Me-%ershi! 1ducation 2e-inar 8#M129:
8'9 1cono-ic 2ur,ey:
8<9 Dnderta*ing to hange &a-e in the e,ent that another coo!erati,e has ac6uired !rior right to the use of the !ro!osed na-e:
8)9 0and Awnershi! 8any of the following: ertificate of .itle >eclaration. 0ease Agree-ent, >eed of >onation, >eed of 2ale, etc.9
8(9 Fell >rilling >ata 8in case of e7isting groundwater source 9 including #hysical Q he-ical Analysis of water: and
81?9 $egistration fee.
Section 5. Registration 5urisdiction8 Fater 2er,ice oo!erati,es shall file their a!!lication with the >A 17tension Affice, which shall ha,e 3urisdiction o,er the
said coo!erati,es.
Section 5. Capitali-ation8 5or !ur!oses of registration with the Authority, a Fater 2er,ice oo!erati,e shall ha,e a -ini-u- !aid-u! ca!itali4ation of 5ifteen
.housand #esos 8#15,???.??9.
Section !. Service $rea8 .he coo!erati,e shall only !ro,ide ser,ices within the area s!ecified in the #. /n case of e7!ansion, the coo!erati,e shall a!!ly for an
e7tension of ser,ice area with the &F$B.
Section 1. 1ater Permit8 1,ery Fater 2er,ice oo!erati,e shall secure a water !er-it fro- the &F$B in accordance with the !ro,isions of the Fater ode of the
#hili!!ines.
Section 9. Re4uirements for 0iling 1ater Permit $pplications8 All a!!lications shall %e filed in the !rescri%ed for-, sworn to %y the a!!licants and su!!orted %y the
following docu-ents:
1. 5or do-estic !ur!ose
1. >uly acco-!lished Fater #er-it A!!lication and &otices:
2. 0and Awnershi! 8any of the following: ertificate of .itle, .a7 >eclaration, 0ease Agree-ent, >eed of >onation, >eed of 2ale, etc:
3. ertificate of onfor-ance fro- the 0FDA:
4. Gicinity -a!B0ocation #lan with scale : 1:1?,??? or scale 1:5?? showing the e7act location of the !oint of di,ersion:
5. 2u%di,ision #lan 8if a!!lica%le9:
'. Fell drilling >ata 8in case of e7isting ground water source9: and
<. learance fro- >AH, if reuse of wastewater for hu-an consu-!tion.
2. 5or Munici!al Dse
1. #roof of land ownershi! of, legal title to, or right to use, the !ro!erty on which the water source is situated:
2. ertificate of $egistration with the Authority:
3. ertificate of onfor-ance fro- 0FDA:
4. Gicinity -a!B0ocation #lan with scale : 1:1?,??? or scale 1:5?? showing the e7act location of the !oint of di,ersion:
5. 2u%-ission #lan 8if a!!lica%le9:
'. Fell >rilling >ata 8in case of e7isting groundwater source authenticated %y the well driller9 including #hysical and he-ical, Analysis
water:
<. 1n,iron-ental o-!liance ertificate 8for !ro3ects considered as 1n,iron-entally ritical #ro3ects Areas9 or ertificate of &on-
o,erage fro- the >e!art-ent of 1n,iron-ent and &atural $esources- $egional Affice: and
). 2uch other docu-ents that -ay %e re6uired %y the &F$B.
Section 0. Re4uirements for the %ssuance of CPC and Tariff $pproval8 .he following docu-ents are re6uired to %e su%-itted for an A!!lication for a # and
A!!ro,al of .ariff:
1. ertificate of $egistration fro- the Authority:
2. Articles of oo!eration and By-0aws:
3. 2!ecial #ower of Attorney authori4ing the signatory to sign and file the a!!lication:
4. 5a,ora%le 1ndorse-ent fro- 0FDA:
5. A!!ro,ed water !er-its andBor MAA with water ser,ice !ro,ider, in case of %ul* water su!!ly:
'. Afficial recei!t of annual water charge8s9:
<. learance that a!!licant has no un!aid fees and charges fro- &F$B:
). #lan of water distri%ution syste-:
(. #lan ele,ation and cross-sectional ,iews of tan*Breser,oir:
1?. #lan ele,ation and cross-sectional ,iews of !u-! house, -achinery and e6ui!-ent:
11. ertificate of #ota%ility:
12. 0atest Audited 5inancial 2tate-ents for the last two years, if a!!lica%le:
13. Actual Balance sheet showing Balance 2heet ite-s for water o!erations for the last 2 years, if not a,aila%le, su%-it the following:
a. Accounts recei,a%le -Fater 2u!!ly
%. Materials /n,entory
c. #ro!erty and 16ui!-ent in 2er,ice, at cost
d. Accu-ulated >e!reciation
e. usto-ers >e!osits
14. /te-i4ed list of assets entitled to return as of the end of the last historical year. .his should su!!ort the #ro!erty and 16ui!-ent in 2er,ice
referred to in ite- 1? a%o,e:
15. Actual /nco-e 2tate-ent showing /nco-e 2tate-ent ite-s for water o!erations for the last 2 years, if a!!lica%le:
1'. Business !lan for the ne7t 5 years:
1<. #ro3ected 5inancial 2tate-ent for fi,e years with the following:
a. /nco-e 2tate-ent
%. Balance 2heet
c. Assu-!tions
1). /te-i4ed list of new in,est-ents for the ne7t 5 years:
1(. #ro!osed schedule of water rates: and
2?. 0e,els of 2er,ice agreed with consu-ers co--ensurate with !ro!osed rates.
Section . Regulatory Po'er8 .he Authority shall ha,e the !ower to regulate the internal affairs of Fater 2er,ice oo!erati,e, such as:
a. 17ercise of rights and !ri,ileges of -e-%ers:
%. 5or-ulation of rules and !rocedures and the conduct of -eetings of the "eneral Asse-%ly, Board of >irectors and o--ittees:
c. Manner of election and 6ualifications of Afficers, >irectors, and o--ittee Me-%ers:
d. Allocation and >istri%ution of sur!lus: and
e. Ather -atters relating to the internal affairs of Fater 2er,ice oo!erati,es.
All -atters relating to the ertificate of #u%lic on,enience such as ca!itali4ation
and in,est-ent re6uire-ents, e6ui!-ent and facilities, water tariff, and such other -atters affecting their water ser,ice o!erations shall %e go,erned %y the
&F$B.
Section 2. R!*# !0 *1($8 .he 0FDA shall ha,e the following roles relating to Fater 2er,ice oo!erati,e:
1. .o !ro,ide technical assistance such as ca!acity %uilding:
2. .o assist in the deter-ination of water !ota%ility: and
3. 2uch other assistance as -ay%e re6uested %y the coo!erati,es.
Section 3. Preferential Rights8 Fhene,er two or -ore !u%lic ser,ice entities ha,e co-!eting interests with res!ect to the granting and renewal of # and one is
an Fater 2er,ice oo!erati,e duly registered with the Authority under $.A. (52?, the &F$B shall accord !reference to the latter o,er any ty!e of !u%lic ser,ice
entity.
Section 4. Responsibility of 1ater Service Cooperative8 1,ery Fater 2er,ice oo!erati,e shall o!erate, -aintain, and !ro,ide safe and ade6uate !ota%le water
ser,ice. /n all cases where !ractica%le, the concerned Fater 2er,ice oo!erati,e shall gi,e notice to its -e-%er-consu-ers in ad,ance of any conte-!lated
interru!tion of water su!!ly and the !ro%a%le duration thereof in the area8s9 affected. /n addition, the Fater 2er,ice oo!erati,e;s res!onsi%ilities shall include:
1. 2er,ice 2tandards
a. 2er,ice o,erage
%. Fater Nuality
c. $elia%ility of 2u!!ly
2. A!erational #erfor-ance
a. A!erational 1fficiency
%. 5inancial Gia%ility
3. usto-er 2er,ice
a. 2er,ice $e6uest and o-!laints
%. 2tandard $es!onse .i-e
4. A!erating #olicies and #rocedures on Billing and ollection
5. #rotection of Me-%er-onsu-ers
/n relation to this 2ection, the coo!erati,e shall de,elo! its own usto-er 2er,ice ode consistent with its By-laws and in co-!liance with the &F$B 1cono-ic
$egulatory "uidelines.
Section 5. Reporting Re4uirements8 All Fater 2er,ice oo!erati,es shall su%-it re!orts to the Authority as re6uired under $ule ) of the $ules and $egulations
/-!le-enting ertain #ro,isions of the #hili!!ine oo!erati,e ode of 2??) 8$A (25?9. Ather re!orts re6uired %y the &F$B, the >AH and other go,ern-ent
agencies shall li*ewise %e su%-itted to the concerned agency.
Section 5. Sanctions and Penalties8 All Fater 2er,ice oo!erati,e shall %e su%3ected to corres!onding 2anctions and #enalties as -ay%e i-!osed %y the
Authority and the &F$B for ,iolation or non-co-!liance with ad-inistrati,e and statutory re6uire-ents.
Section !. Re4uirements for Rene'al of CPC8 .he # shall %e ,alid for fi,e 859 years and renewa%le !rior to its e7!iry date. .he following re6uire-ents to %e
su%-itted:
1. Board $esolution authori4ing the signatory to sign and file the a!!lication:
2. ertificate of "ood 2tanding issued %y the Authority:
3. A!!ro,ed Fater #er-its:
4. Afficial recei!ts of Annual Fater change:
5. Afficial recei!t of 2u!er,ision and $egulation 5ee:
'. learance that a!!licant has no un!aid fees and charges fro- the &F$B:
<. #lan of Fater >istri%ution 2yste-:
). #lan ele,ation and cross-sectional ,iews of tan*Breser,oir:
(. #lan ele,ation and cross-sectional ,iews of !u-! house, -achinery and e6ui!-ent:
1?. ertificate of #ota%ility:
11. Annual $e!orts for the last fi,e years:
12. 0atest Audited 5inancial 2tate-ent for the last fi,e years:
13. Actual Balance 2heet showing Balance 2heet ite-s for water o!erations for the last 5 years, if not a,aila%le, su%-it the following:
a. Account $ecei,a%le - Fater 2u!!ly
%. Materials /n,entory
c. #ro!erty and 16ui!-ent in 2er,ice, at cost
d. Accu-ulated >e!reciation
e. usto-ers; >e!osits
14. /te-i4ed list of assets entitled to return as of the end of the last historical year. .his should su!!ort the #ro!erty and 16ui!-ent in 2er,ice
referred to in ite- 13 8c9 a%o,e:
15. Actual /nco-e 2tate-ent showing /nco-e 2tate-ent ite-s for water o!erations for the last 5 years:
1'. Business !lan for the ne7t 5 years:
1<. #ro3ected 5inancial 2tate-ent for fi,e years with the following:
a. /nco-e 2tate-ent
%. Balance 2heet
c. Assu-!tions
1). /te-i4ed list of new in,est-ents for the ne7t 5 years:
1(. #ro!osed 2chedule of Fater .ariff: and
2?. 0e,els of 2er,ice agreed with consu-ers co--ensurate with !ro!osed rates.
Section 1. Securing of 1ater Permit and:or CPC8 Fater 2er,ice oo!erati,e including Multi-#ur!ose oo!erati,e with water ser,ice o!eration is re6uired to
secure water !er-it fro- the &F$B.
5or Fater 2er,ice oo!erati,e o!erating without water !er-it andBor #, the Authority shall re!ort the -atter to the &F$B for a!!ro!riate action. .he &F$B
shall notify the Authority of whate,er action ta*en on the -atter. Henceforth, failure of the coo!erati,e to legali4e its o!eration within two 829 years fro- the date of
referral to the &F$B, the sa-e shall %e considered a ,alid ground for the re,ocation of its ertificate of $egistration, after due !rocess.
Section 9. $ction on the $pplication for CPC8 D!on su%-ission of the co-!lete re6uire-ents for the issuance of #, the &F$B shall a!!ro,e or re3ect the
sa-e within si7 8'9 -onths fro- date of recei!t thereof.
Section 20. Settlement of Disputes8 /ntraBinter coo!erati,e dis!utes shall %e settled as far as !ractica%le through conciliation--ediation -echanis- e-%odied in
the coo!erati,e %y-laws, which shall %e in accordance with the >A "uidelines for the /-!le-entation of onciliation-Mediation of oo!erati,e >is!utes, and
a!!lica%le laws.
2hould such conciliation--ediation !roceedings fail, the -atter -ay %e settled through ,oluntary ar%itration or in court of co-!etent 3urisdiction.
Howe,er, in cases where the issueBs fall within the 3urisdiction of the &F$B, the sa-e shall %e referred to the said agency and it shall %e resol,ed in accordance
with the &F$B regulation.
R7,% + : #RANSP*R#A#'*N SR%+'C% C**P%RA#'+%S
#ursuant to the !ro,isions of Art. 113 8!ar. 29 under ha!ter I/G of $e!u%lic Act. &o. (52?, otherwise *nown as the #hili!!ine oo!erati,e ode of 2??), the
Authority in consultation with the >A., 0.A, 0.5$B, MA$/&A, A. and the concerned coo!erati,e sector, here%y !ro-ulgates the following rules and
regulations for the !ro!er guidance and co-!liance of .rans!ortation 2er,ice oo!erati,es.
Section . Coverage8 .his $ule shall co,er all .rans!ortation 2er,ice oo!erati,es duly registered with the Authority under $A (52? which are organi4ed to
render !u%lic ser,ices such as land and seaBwater trans!ortation ser,ices, li-ited to s-all ,essels, for the safe con,eyance of !assengers andBor cargo.
.rans!ortation 2er,ice oo!erati,e organi4ed under the !ro,isions of 17ecuti,e Arder &o. )(), 2eries of 1()3, shall %e go,erned %y ha!ter I/G of $A (52?, and
%y this $ule.
Section 2. $llied Businesses by Transportation Service Cooperative8 2u%3ect to !ertinent national laws and local ordinances, !ri-ary .rans!ortation 2er,ice
oo!erati,es including secondary and tertiary federation of coo!erati,es, -ay engage in a %usiness related to trans!ortation ser,ice, including %ut not li-ited to:
819 /-!ortation, distri%ution and -ar*eting of !etroleu- !roducts in accordance with e7isting laws:
829 A!eration of gasoline stations and trans!ortation ser,ice centers:
839 /-!ortation, distri%ution and -ar*eting of s!are !arts and su!!lies: and
849 Mar*eting of ,ehicleBdri,ers insurance !olicies.
Section 3. "ulti)purpose Cooperatives intending to engage in Transportation Service8 Multi-!ur!ose coo!erati,es intending to engage in regular !assenger andBor
cargo ser,ices as an additional acti,ity shall co-!ly with the foregoing re6uire-ents:
1. A-ended Article of oo!eration and By-0aws:
2. 1.A2:
3. 5ranchise and ,ehicle units re6uire-ent, as !ro,ided in this $ule and other re6uire-ents as -ay %e !rescri%ed %y a!!ro!riate regulatory
agencies: and
4. A-end-ent 5ee.
Section 4. Registration 5urisdiction8 .rans!ortation 2er,ice oo!erati,e shall file its duly acco-!lished registration docu-ents with the >A-17tension Affice
where its !rinci!al office is located, which shall ha,e 3urisdiction o,er the said coo!erati,e.
Section 5. Capitali-ation8 5or !ur!oses of registration with >A, .rans!ortation 2er,ice oo!erati,es shall ha,e a -ini-u- !aid u! ca!itali4ation of 5ifteen
.housand #esos 8#15,???.??9.
Howe,er, to o!erate as such, the -ini-u- ca!itali4ation and nu-%er of coo!erati,ely owned units shall %e in accordance with the rules and regulations !rescri%ed
%y the concerned go,ern-ent agency as shown %elow:
#6P% *F #RANSP*R#A#'*N S%R+'C%
C**P%RA#'+%
$'N'$7$
CAP'#A,'2A#'*N
$'N'$7$ N*.
*F 7N'#S
A. ,AN&
.ricycle # 15,???.?? 5
Jee!ney # 3?,???.?? 5
.a7i # 3?,???.?? 5
ADGB5IBGan # 3?,???.?? 5
Mini BusBBus # 5?, ???.?? 2
.ruc*s for Hire # 5?, ???.?? 2
-. /A#%R
2hi! # 1?,???,???.?? 1
5erry Boat # 5,???,???.?? 1
Motori4ed Banca # 1??,???.?? 1
Section 5. Registration Re4uirements8 .he following shall %e co-!lied with u!on filing of a!!lication:
819 &a-e Gerification 2li!:
829 Articles of oo!eration and By-laws:
839 2worn 2tate-ent of the treasurer elected %y the su%scri%ers showing that at least twenty-fi,e !er centu- 825C9 of the authori4ed share ca!ital
has %een su%scri%ed and least twenty-fi,e !er centu- 825C9 of the total su%scri!tion has %een !aid: #ro,ided, .hat in no case shall the !aid-u!
share ca!ital %e less than 5ifteen .housand #esos 8#15,???.??9:
849 #re-Me-%ershi! 1ducation se-inar 8#M129:
859 oo!erati,e 1ducation and .rans!ort A!eration 2e-inar 81.A29:
8'9 2urety Bond Af Accounta%le Afficers handling funds, !ro!erties and sureties:
8<9 1cono-ic 2ur,ey:
8)9 Dnderta*ing to hange &a-e in the e,ent that another coo!erati,e has ac6uired !rior right to the use of the !ro!osed na-e:
8(9 Dnderta*ing to co-!ly with the auditing and accounting standards !rescri%ed %y the Authority:
81?9 Ather re6uire-ents as -ay %e re6uired %y law: and
8119 $egistration 5ee.
Section !. Regulatory Po'er8 .he Authority shall ha,e the !ower to regulate the internal affairs of .rans!ortation 2er,ice oo!erati,e, such as:
a. 17ercise of rights and !ri,ileges of -e-%ers:
%. 5or-ulation of rules and !rocedures and the conduct of -eetings of the "eneral Asse-%ly, Board of >irectors and o--ittees:
c. Manner of election and 6ualifications of Afficers, >irectors, and o--ittee Me-%ers:
d. Allocation and distri%ution of sur!lus: and
e. Ather -atters relating to their internal affairs of .rans!ortation 2er,ice oo!erati,es.
All -atters relating to the 5ranchise or ertificate of #u%lic on,enience and &ecessity of .rans!ortation 2er,ice oo!erati,es such as ca!itali4ation and
in,est-ent re6uire-ents, e6ui!-ent and facilities, fre6uencies, rate-fi7ing, registration, dro!!ing and su%stitution of units, and such other -atters affecting their
trans!ortation ser,ice o!erations shall %e go,erned %y the following go,ern-ent agency:
8a9 5or land trans!ortation - 0.5$BB0.ABA.
8%9 5or water trans!ortation - MA$/&AB#"
8c9 5or tricycle - 0"DB0.ABA.
/n case there are two 829 or -ore a!!licants for the sa-e !u%lic ser,ice 5ranchise or ertificate of #u%lic on,enience and &ecessity, all things %eing e6ual,
!reference shall %e gi,en to a .rans!ortation 2er,ice oo!erati,e %y the concerned go,ern-ent agency.
Section 1. "onitoring Committee8 .he Authority shall esta%lish a co--ittee for the -onitoring of .rans!ortation 2er,ice oo!erati,e co-!osed of re!resentati,e
fro- the Authority, who shall %e 17-Afficio hair!erson thereof, the 0.A, 0.5$B, A., 0"D, and other concerned go,ern-ent agencies as -ay %e necessary, and
the &ational 5ederation of .rans!ortation oo!erati,es. 2aid o--ittee shall %e organi4ed within thirty 83?9 days fro- the effecti,ity of this $ule and esta%lish its
own internal rules as to its o!eration, conduct of -eeting, and other -atters necessary to e7ercise such functions.
.he Authority shall li*ewise create a 0ocal Monitoring o--ittee in its e7tension offices to facilitate the -onitoring of these .rans!ortation 2er,ice oo!erati,es.
2aid o--ittee shall li*ewise %e organi4ed within ninety 8(?9 days fro- the recei!t of the rules and functions for-ulated %y the &ational o--ittee con,ene
e,ery 6uarter to discharge its functions and a!!oint a 2ecretary fro- a-ong its -e-%ers.
.he !er-anent 2ecretariat shall co-e fro- the Authority.
.he o--ittee shall ha,e the following functions:
819 .o o,ersee the i-!le-entation of this $ule:
829 .o reco--end changes on this $ule fro- ti-e to ti-e if a need arises:
839 .o assist as far as !ractica%le the coo!erati,e in settling inter and intra coo!erati,e dis!utes:
849 .o su%-it 6uarterly acco-!lish-ent re!ort including reco--endationBresolution to %e ado!ted in the settle-ent of the aforesaid dis!utes to the
>A Board of Ad-inistrators through the 17ecuti,e >irector and to the A. Board of >irectors through its 17ecuti,e >irector co!y furnished all
agencies in,ol,ed.
Section 9. Continuing #ducation and Training8 .he concerned go,ern-ent agencies shall coordinate to su!!ort registered coo!erati,es %y e7tending se-inars for
the !ur!ose of continuing education on coo!erati,e and other related trainings in order to enhance the *nowledge and ca!a%ility of the officers as well as -e-%ers
of the coo!erati,e. .he concerned agencies in,ol,ed in the .rans!ortation 2er,ice oo!erati,e shall for- a trainer;s tea- which shall for-ulated educational
!rogra-B-odule to %e used in the training se-inar.
Section 0. Rene'al of 0ranchise and ehicle Registration8 $enewals of franchise and ,ehicle registration shall %e granted to .rans!ortation 2er,ice
oo!erati,es !ro,ided such coo!erati,e !resents a ertificate of "ood 2tanding fro- the Authority and the A.. /n the case of .ricycle .rans!ortation 2er,ice
oo!erati,e, a ertificate of A!eration fro- the 0ocal "o,ern-ent Dnit concerned shall %e re6uired as !roof that it has continuously !ro,ided the re6uired !u%lic
trans!ortation ser,ices.
Section . Settlement of Disputes8 /ntraB/nter coo!erati,e dis!ute shall %e settled as far as !ractica%le through conciliation--ediation -echanis- e-%odied in the
coo!erati,e %y-laws, which shall %e in accordance with the >A "uidelines for the /-!le-entation of onciliation-Mediation of oo!erati,e >is!utes, and
a!!lica%le laws.
2hould such conciliation--ediation !roceedings fail, the -atter -ay %e settled through ,oluntary ar%itration or in court of co-!etent 3urisdiction.
Howe,er, in cases where the issueBs fall within the 3urisdiction of the >A., 0.5$B, 0.A, MA$/&A, and A. the sa-e shall %e referred to the said agencies and
shall %e resol,ed in accordance with their regulations.
R7,% +' : %,%C#R'C C**P%RA#'+%S
#ursuant to the !ro,isions of Art. 134 8!ar.29 under ha!ter IG// of $e!u%lic Act &o. (52?, otherwise *nown as the #hili!!ine oo!erati,e ode of 2??), the
Authority in consultation with the concerned coo!erati,e sector here%y !ro-ulgates the following rules and regulations for the !ro!er guidance and co-!liance of
1lectric oo!erati,es.
Section . Purposes and !b+ectives8 1lectric oo!erati,es shall %e organi4ed to underta*e !ower generation utili4ing new and renewa%le energy sources,
including hy%rid syste-s, ac6uisition, and o!eration of su%-trans-ission andBor distri%ution and su!!ly of electricity as its !ri-ary !ur!oses. Howe,er, it shall not
%e !recluded to ,enture into any other !ur!ose that other laws, rules, regulations, and their own By-laws -ay allow as long as it is related to the !ri-ary !ur!ose
and o%3ecti,e of the coo!erati,e. /t shall also continue to underta*e the i-!le-entation of the $ural 1lectrification #rogra- in their res!ecti,e areas of co,erage in
consonance with the ter-s and conditions a!!urtenant to their ertificates of 5ranchise: !ro,ided the right of the 1lectric oo!erati,es to e7ercise the !ower of
e-inent do-ain in furtherance of the rural electrification !rogra-, shall not %e di-inished, instead it shall %e in full force and effect, su%3ect to the re6uire-ents of
the onstitution and e7isting rele,ant laws.
Section 2. Coverage8 .his $ule shall a!!ly to all 1lectric oo!erati,es registered with the Authority under $.A. (52? that -ay underta*e !ower generation utili4ing
renewa%le energy sources, including hy%rid syste-s, ac6uisition and o!eration of su% trans-ission or distri%ution as its !ri-ary !ur!oses. .his $ule shall also
co,er new distri%ution utilities that will register with the Authority.
Section 3. Cooperative Principles and Practices8 1lectric oo!erati,es registered with the Authority shall conduct their affairs in accordance with 5ili!ino culture,
good ,alues and e7!erience and the uni,ersally-acce!ted !rinci!les of coo!eration which include, %ut are not li-ited to, the following:
1. +oluntary and *pen $e>bership - 1lectric oo!erati,es are ,oluntary organi4ations, o!en to all !ersons a%le to use their ser,ices and willing to
acce!t the res!onsi%ilities of -e-%ershi!, without gender, social, racial, !olitical or religious discri-ination:
2. &e>ocratic $e>ber Control - 1lectric oo!erati,es are de-ocratic organi4ations that are controlled %y their -e-%ers who acti,ely !artici!ate in
setting their !olicies and -a*ing decisions. Men and wo-en ser,ing as elected re!resentati,es, directors, or officers are accounta%le to the
-e-%ershi!. /n !ri-ary coo!erati,es, -e-%ers ha,e e6ual ,oting rights of one--e-%er, one-,ote. oo!erati,es at other le,els are organi4ed in the
sa-e de-ocratic -anner:
3. $e>ber %cono>ic Participation - Me-%ers of the 1lectric oo!erati,es contri%ute e6uita%ly to, and de-ocratically control, the ca!ital of their
coo!erati,e. At least !art of that ca!ital is the co--on !ro!erty of the coo!erati,e. .hey shall recei,e li-ited co-!ensation or li-ited interest, if any,
on ca!ital su%scri%ed and !aid as a condition of -e-%ershi!. Me-%ers allocate sur!luses for any or all of the following !ur!oses: de,elo!ing the
coo!erati,e %y setting-u! reser,es, !art of which should at least %e indi,isi%le: %enefiting -e-%ers in !ro!ortion to their !atronage of the
coo!erati,e;s %usiness: and su!!orting other acti,ities a!!ro,ed %y the -e-%ershi!:
4. Autono>y and 'ndependence - 1lectric oo!erati,es are autono-ous, self-hel! organi4ations controlled %y their -e-%ers. /f they enter into
agree-ents with other organi4ations, including go,ern-ent, or raise ca!ital fro- e7ternal sources, they shall do so on ter-s that ensure de-ocratic
control of their -e-%ers and -aintain their coo!erati,e autono-y:
5. %ducation" #raining and 'nfor>ation - 1lectric oo!erati,es shall !ro,ide education, training and infor-ation for their -e-%ers, elected and
a!!ointed re!resentati,es, -anagers, and e-!loyees so that they can contri%ute effecti,ely and efficiently to the de,elo!-ent of their coo!erati,es:
'. Cooperation A>ong Cooperati=es - 1lectric oo!erati,es ser,e their -e-%ers -ost effecti,ely and strengthen the coo!erati,e -o,e-ent %y
wor*ing together through local, national, regional and international structures: and
<. Concern for Co>>unity - 1lectric oo!erati,es wor* for the sustaina%le de,elo!-ent of their co--unities through !olicies a!!ro,ed %y their
-e-%ers.
Section 4. "embership in the #lectric Cooperatives8 Me-%ershi! in 1lectric oo!erati,es registered with the Authority shall ha,e the following ty!es:
a. Regular "ember - refers to a natural !erson 8-e-%er-consu-er9 with electrical ser,ice connection who has the right to ,ote and %e ,oted u!on
and entitled to all the rights and !ri,ileges of -e-%ershi! under the ode.
%. $ssociate "ember - refers to a -e-%er-institution or entity a,ailing of the ser,ices of electric coo!erati,e, such as, %ut not li-ited to: cor!oration,
industrial and co--ercial esta%lish-ent, 3oint ,enture, other coo!erati,e, !lace of worshi!, local go,ern-ent %uilding or facility, etc, as re!resented
%y its head of such esta%lish-ent or entity, %ut is not entitled to ,ote and %e ,oted u!on. Howe,er, shall %e entitled to the !referential rights and
!ri,ileges as indicated in the %y-laws and under the ode.
Section 5. Registration Re4uirements8 .he following are the re6uire-ents for the registration of electric coo!erati,es which shall %e su%-itted in four 849 co!ies to
the Authority:
A. Registration &ocu>entsE
a.1 5or e7isting electric coo!erati,e not registered with the Authority:
1. certificate true co!y of the %oard resolution certifying the result of the ,ote a!!ro,ed through a referendu- a!!ro,ing the registration
of the coo!erati,e with the Authority in co-!liance with Article 12):
2. ertified co!y of Articles of oo!eration and By-0aws:
3. >uly audited financial state-ent for the !ast two 829 i--ediately !receding years:
4. 0ist of na-es of incu-%ent Board of >irectors and their addresses certified %y the Board 2ecretary and attested to %y the
hair!erson:
5. 2worn 2tate-ent of the .reasurer of the authori4ed share ca!ital, the su%scri%ed share ca!ital of the -e-%ers, and the a-ount of
!aid-u! share ca!ital of -e-%ers and the a-ount of !aid-u! share ca!ital recei,ed %y the .reasurer, to %e su%-itted within si7 8'9
-onths fro- the registration: and
'. 2urety Bond of Accounta%le Afficers handling funds, !ro!erties and sureties:
a.2 5or new electric coo!erati,es:
1. &a-e Gerification 2li!:
2. ertified true co!y of the "rant 5ranchise:
3. Articles of oo!eration and By-laws:
4. 2worn 2tate-ent of the treasurers elected %y the su%scri%ers showing that at least twenty-fi,e !er centu- 825C9 of the authori4ed
share ca!ital has %een su%scri%ed and at least twenty-fi,e !er centu- 825C9 of the total su%scri!tion has %een !aid: #ro,ided, .hat in
no case shall the !aid-u! share ca!ital %e less than 5ifteen .housand #esos 8#15,???.??9:
5. 2urely Bond Accounta%le Afficers handling funds, !ro!erties and sureties:
'. ertificate of #re-Me-%ershi! 1ducation se-inar 8#M129:
<. 1cono-ic 2ur,ey:
). Dnderta*ing to hange &a-e in the e,ent that another coo!erati,e has ac6uired !rior right to the use of the !ro!osed na-e:
(. >etailed feasi%ility study indicating ,ia%ility of the !ro!osed %usiness acti,ity: and
1?. Dnderta*ing to co-!ly with the auditing and accounting standards !rescri%ed %y the Authority.
a.3. 1lectric oo!erati,e >ee-ed $egistered under Art. 144 of the ode:
1. ertificate of $egistration andBor ertificate of onfir-ation:
2. Articles of oo!eration and By-laws: and
3. 0atest audited financial state-ent.
.he said docu-ents shall %e su%-itted to the nearest office of the Authority of to the >A entral Affice, at the o!tion of the oo!erati,e. D!on su%-ission of the
a%o,e-entioned docu-ents, the Authority shall issue the new certificate of registration to the oo!erati,e.
-. Registration fee as prescribed by the Authority.
Section 5. 5urisdiction (pon Registration8 1lectric oo!erati,e intending to register with the Authority shall file their a!!lication with the >A 17tension Affice,
which shall ha,e 3urisdiction o,er the said coo!erati,es u!on a!!ro,al of their registration. Howe,er, if an electric coo!erati,e o!ted to register with the >A
entral Affice as !ro,ided for in the !receding 2ection, and such registration has %een !rocessed and a!!ro,ed %y the >A entral Affice, such registration shall
%e forwarded to the >A 17tension Affice where the coo!erati,e is located and the sa-e 17tension Affice shall assu-e 3urisdiction o,er the said coo!erati,e.
Section !. Registration !ptions8 1lectric oo!erati,es registered with the &ational 1lectrification Ad-inistration 8&1A9 under #residential >ecree &o. 2'(, as
a-ended, which o!t not to register with the Authority, are allowed to retain the world +coo!erati,e+ in their registered na-es, %ut they shall not %e entitled to the
%enefits and !ri,ileges !ro,ided under $.A. (52?.
Section 1. Registration of #lectric Cooperatives8 .he registration on an 1lectric oo!erati,e with the Authority under Article 12< of the ode shall %e su%-itted for
a!!ro,al to the -e-%ers through a referendu-, as a ,oting !rocedure, s!ecially called for such !ur!ose.
.he re6uired nu-%er of ,otes for registration with the Authority shall %e twenty !ercent 82?C9 of all -e-%ers in good standing within the area of co,erage. &o
!ro7y ,oting shall %e allowed.
Dnless otherwise !ro,ided in the By-laws of the coo!erati,e, the ter- -e-%er in good standing shall %e as defined in the ode of in this $ule.
Section 9. Procedure in the Conduct of Referendum for registration 'ith the $uthority8 /n co-!liance with Art. 12) of $A (52? hereunder are the !rocedures in
conducting the sa-e:
A. -*& 'nitiated Referendu>. .he Board of >irectors shall underta*e the following:
1. /ssue &otice referendu- indicating the following:
a. >ate of $eferendu-:
%. Mode of onduct of the $eferendu- which -ay either %e:
%.1 sur,ey 5or-: and
%.2 Asse-%ly Meeting in the res!ecti,e districts which -ay%e si-ultaneous se6uential.
2. #ostingB#u%lication of &otice of referendu- shall %e done not later than 3? days !rior to the scheduled conduct of referendu-.
3. /dentification of -e-%ers in good standing %ased on the 6ualification and dis6ualification !ro,isions in the By-laws.
4. #ro,ision of $eferendu- Nuestionnaire 5or- to 6ualified -e-%ers to ,ote whether to register or not to register with the Authority.
5. ollection of Nuestionnaire for-s and can,assing of Gotes %y the coo!erati,e;s 1lection o--ittee.
'. $e!orting of the results of the can,assing, i.e. fa,or or not fa,or.
<. ertification %y the 1lection o--ittee as to the result of the referendu- duly noted %y the -a3ority of the Board of >irectors.
B. $e>ber:Consu>er 'nitiated referendu>. /n case the Board of >irectors shall refuse to conduct a referendu-, the Me-%er-onsu-ers -ay initiate a
referendu- through a !etition duly signed %y at least three hundred 83??9 -e-%ers of each district of the coo!eration who are entitled to ,ote %y filling the sa-e to
the Board of >irectors. .he Board of >irectors shall act within thirty 83?9 days fro- recei!t thereof whether to grant or deny said !etition. 5ailure of the Board of
>irectors to act within the gi,en !eriod or the denial of the !etition, the !etitioners -ay conduct -otu !ro!rio the said referendu- through the !rocedures a%o,e
!rescri%ed. .he result of the referendu- shall %e certified %y a co--ittee designated during the conduct of a referendu- to su!er,ise the sa-e.
.he general -e-%ershi! through their !ro!onents for referendu- shall su%-it all the docu-entary re6uire-ents for resignation to the concerned >A 17tension
Affice, which -ay register the a!!licant 1lectric oo!erati,e u!on finding that all the docu-ents for registration are co-!lete and in order.
Section 0. $mendments of #.isting $rticles of Cooperation and By)la's8 Any !ro,ision or any !art thereof in the e7isting Articles of oo!eration and By-laws of
the coo!erati,e, which are found to %e inconsistent or contrary to the !ro,isions of the ode and of this $ule shall %e a-ended accordingly. 2uch a-end-ents
shall confor- to the !ro,ision of Art. 1) of the ode. 2aid a!!lication for a-end-ents shall %e filed with the concerned >A 17tension Affice or the >A entral
Affice, at the o!tion of the oo!erati,e, in four 849 co!ies for registration.
Section . Capitali-ation8 An electric coo!erati,e shall not %e registered with the Authority unless it co-!lies with the financial re6uire-ents of -ini-u- !aid u!
ca!itali4ation of 5i,e Million #esos 8#5,???,???.??9.
Section 2. Share Capital in the #lectric Cooperatives8 1lectric oo!erati,es shall issue and distri%ute share certificates under the na-e of each of their -e-%ers.
2aid share certificates shall ta*e into consideration, a-ong others, the !re,ious e6uity contri%utions, and the a-orti4ation co-!onent, through the !ay-ents
-ade, ca!ital %uild-u! and other ca!ital contri%utions. .he interest on share ca!ital shall %e !aid to the -e-%ers in accordance with the !ro,ision of 2ec. (, $ule
1? of the $ules and $egulations /-!le-enting ertain #ro,isions of the #hili!!ine oo!erati,e ode of 2??) 8$A (52?9.
Section 3. 3uorum Re4uirement8 Dnless otherwise !ro,ided in the By-laws of the 1lectric oo!erati,e, 6uoru- shall %e fi,e !er centu- 85C9 of all the -e-%ers
entitled to ,ote.
Section 4. Term of !ffice8 Dnless otherwise !ro,ided in the By-laws of the 1lectric oo!erati,e, the ter- of office of the -e-%ers of the Board shall not e7ceed
two 829 years, howe,er, they shall %e eligi%le for re-election.
Section 5. rates and Tariffs8 All electricity rates and tariffs of electric coo!erati,es registered under the Authority shall %e su%3ect to the rules on a!!lication and
a!!ro,al of and %y the 1nergy $egulatory o--ission.
Section 5. Settlement of Disputes8 /ntraBinter coo!erati,e dis!utes shall %e settled as far as !ractica%le through conciliation--ediation -echanis- e-%odied in
the coo!erati,e %y-laws, which shall %e in accordance with the >A "uidelines for the /-!le-entation of onciliation of oo!erati,e >is!utes, and a!!lica%le
laws.
2hould such conciliation--ediation !roceedings fail, the -atter -ay %e settled through ,oluntary ar%itration or in court of co-!etent 3urisdiction.
Howe,er, in cases where the issueBs fall within the 3urisdiction of the 1nergy $egulatory o--ission, the sa-e shall %e referred to the said agency and shall %e
resol,e in accordance with this regulation.
R7,% +'':&A'R6 C**P%RA#'+%S
#ursuant to the !ro,isions of $e!u%lic Act. &o. (52?, otherwise *nown as the #hili!!ine oo!erati,e ode of 2??), the oo!erati,e de,elo!-ent Authority and
&ational >airy Authority here%y !ro-ulgated the following rules and regulations for the guidance and co-!liance of the >airy oo!erati,es.
Section . Coverage8 .his $ule shall co,er all dairy oo!erati,es duly registered under $.A. (52? organi4ed for the !ur!ose of engaging in the !rocure-ent,
!rocessing and -ar*eting of -il* and dairy !roducts.
Section 2. !rgani-ation8 5ifteen 8159 or -ore natural !ersons who are 5ili!ino citi4ens, of legal age, ha,ing a co--on %ond interest and actually residing or
wor*ing in the intended area of o!eration, -ay organi4e a dairy coo!erati,e.
Section 3. Purposes and !b+ectives8 A >airy oo!erati,e shall %e organi4ed for any or all of the following !ur!ose:
1. .o standardi4e the 6uality, unifor-ly of grade of -il*, and other dairy !roducts:
2. .o assist its -e-%ers a guaranteed -ar*et outlet, to %argain for the %est !rice ter-s !ossi%le in the -ar*et !lace, including o,er-order !re-iu-s
in -il* -ar*eting orders, and to -ar*et the -il* efficiently, i.e., %alancing !lant needs, di,erting -il* sur!luses, and asse-%ling !roducer -il* and to
ha,e the highest 6uality !roducer -il* !ossi%le in the -ar*et: and
3. .o effecti,ely re!resent their constituting -e-%ers in the legislati,e, regulatory and !u%lic relations arenas.
Section 4. "embership8 Me-%ershi! in >airy oo!erati,e shall %e o!en to all dairy far-ers.
Section 5. Registration 5urisdiction8 Any a!!licant >airy oo!erati,e shall file its duly acco-!lished a!!lication for registration with the G>A 17tension Affice,
which shall ha,e 3urisdiction o,er the said coo!erati,e.
Section 5. Registration Re4uirements8 .he following shall %e co-!iled with u!on filing of a!!lication:
1. &a-e Gerification:
2. Articles of oo!eration and By-laws:
3. 2worn 2tate-ent of the treasurer elected %y the su%scri%ers showing that the least twenty-fi,e !er centu- 825C9 of the authori4ed share ca!ital
has %een su%scri%ed and at least twenty-fi,e !er centu- 825C9 of the total su%scri!tion has %een !aid: #ro,ided, .hat in no case shall the !aid-u!
share ca!ital %e less than 5ifteen .housand #esos 8#15,???.??9:
4. #re--e-%ershi! 1ducation 2e-inar 8#M129:
5. 2urety Bond Accounta%le Affices handling funds, !ro!erties and sureties:
'. 1cono-ic 2ur,ey:
<. Dnderta*ing to hange &a-e in the e,ent that another coo!erati,e ac6uired !rior right to the use of the !ro!osed na-e:
). Dnderta*ing to co-!ly with the auditing and accounting standards !rescri%ed %y the Authority:
(. Ather re6uire-ents as -ay %e re6uired %y law: and
1?. $egistration fee.
Section !. Capitali-ation8 A >airy oo!erati,e shall ha,e a -ini-u- !aid-u! ca!itali4ation of at least 5ifteen .housand #esos 8#15,???.??9.
Section 1. Regulatory Po'er8 .he Authority shall ha,e the !ower to regulate the internal affairs of >airy oo!erati,e, such as:
a. 17ercise of rights and !ri,ileges of -e-%ers:
%. 5or-ulation of $ules and !rocedures and the conduct of -eetings of the "eneral Asse-%ly, Board of >irectors and o--ittees:
c. Manner of election and 6ualifications of Afficers, >irectors, and o--ittee Me-%ers:
d. Allocation and distri%ution of net sur!lus: and
e. Ather -atters relating to the internal affairs of >airy oo!erati,es.
All -atters relating to the technical and o!erations concerning dairy %usiness of such >airy oo!erati,e shall %e regulated %y &>A, >AH-B5A> and other
concerned go,ern-ent agency.
Section 9. Settlement of Disputes8 /ntraBinter coo!erati,e dis!utes shall %e settled as far as !ractica%le through conciliation--ediation -echanis- e-%odied in the
coo!erati,e %y-laws and in a!!lica%le laws.
2hould such conciliation--ediation !roceedings fail, the -atter -ay %e settled through ,oluntary ar%itration %y the Authority or ad3udication %y the o--ission or
in a ourt of co-!etent 3urisdiction.
Howe,er, in cases where the issueBs fall within the 3urisdiction of the &>A, >AH-B5A> the sa-e shall %e referred to the said agencies and shall %e resol,ed in
accordance with their regulations.
AMMA& #$AG/2/A&2
Section . Re4uirements8 A co!y of these $ules shall %e a-ong the docu-ents re6uired to %e *e!t ready and accessi%le for ins!ection and e7a-ination %y the
-e-%ers of the coo!erati,e and the Authority in accordance with Art. 52 of the ode.
Section 2. %nterpretation8 Dnless otherwise stated in these $ules, /n case of dou%t as to the -eaning of any !ro,ision of these $ules, the sa-e shall %e resol,ed
and inter!reted li%erally in fa,or of the coo!erati,es and their -e-%ers.
Section 3. Suppletory Rule8 2!ecial $ules, irculars, Arders and other issuances %y the a!!ro!riate go,ern-ent agencies in !ursuance of the !ro,isions of the
ode and these $ules, and not inconsistent thereto, shall ha,e su!!letory a!!lication to these $ules.
Section 4. "andate8 .he Authority is -andated to i-!le-ent and enforce these $ules and $egulations.
Section 5. Separability8 /f any !ro,ision of these $ules and $egulations is declared null and ,oid or unconstitutional, the other !ro,isions not affected there%y shall
continue to %e in force and effect.
Section 5. $mendment8 .hese $ules and $egulations shall %e su%3ect to auto-atic re,iew three 839 years after the effecti,ity thereof. Any a-end-ent thereto,
shall %e su%3ect to the re,iew and a!!ro,al of the JA.
Section !. #ffectivity8 .hese $ules and $egulations shall ta*e effect fifteen 8159 days after !u%lication in the Afficial "a4ette or in a news!a!er of general
circulation.
R%C*$$%N&'N( APPR*+A,E
#)% -*AR& *F A&$'N'S#RA#*RS C**P%RA#'+% &%+%,*P%$N# A7#)*R'#6
,%C'RA +. 97AR%2
hair-an
.his /-!le-enting $ules and $egulations 8#art /9 was a!!ro,ed %y the Joint ongressional A,ersight o--ittee on oo!erati,es during its -eeting on 5e%ruary
1', 2?1? at the 2enate of the #hili!!ines, #asay ity !ursuant to Article 13) of $A (52?.
$e>bers of the 9oint Congressional *=ersight Co>>ittee on Cooperati=es.
5or the 2enate of the #hili!!ines:
Sen. 97AN $'(7%, F. 27-'R'
hair, 2enate #anel
5or the House of the $e!resentati,es:
Rep. %RN%S#* C. PA-,*
hair, House #anel