TRAINING

1. ANIBONG AGRARIAN REFORM COOPERATIVE
(ANARECO)
Anibong, Magallanes, Sorsogon

2. governance and management in the
cooperative, thereby enabling them to
contribute to the effective operation of
the cooperative as an economic enterprise
and social enterprise.
COURSE DESCRIPTION:
This course is designed to enhance the
knowledge of the Board of Directors and
the General Manager in practice of good
TARGET GROUP:
Members, Board of
Directors and
General Manager
COURSE TITLE:
COOPERATIVE
GOVERNANCE
&
MANAGEMENT
TOPIC TO BE DISCUSSED
Philippine Cooperative Code of 2008 (R.A.
9520)

3. ORIGIN OF COOPERATIVE

5. • Amended Republic Act 6938 (Cooperative Code of
the Philippines)
• Signed into law on February 17, 2009
• Published in Daily Tribune On March 7, 2009
• Effectively Date: 15 days after publication (March 22,
2009)
• The state recognizes the principle of subsidiarity under
which the cooperative sector will initiate and regulate
within its own ranks the promotion and organization,
training and research, audit and support services
relating to cooperatives with government assistance
where necessary. (Art. 2)
Philippine Cooperative Code of
2008

6. Rule I. Representative
Assembly
Applicability
•Applies to all coops, by reason of having numerous and
dispersed membership, the conduct of the GA meeting
becomes extremely difficult;
•Provided, that this is stipulated in the coop by-laws.
Basis of Division of Coops into Sector, Chapter, or
District:
•The Number of members of the cooperative is at least
1,000;
•Cluster;
•Work shift;
•

7. ELIGIBILITY OF REPRESENTATIVES OR DELEGATE TO
BE ELECTED AS OFFICERS THE COOPERATIVE
•Officers of the coop shall come from the Rep/s or
Delegate/s of the sector
, chapter
, or district.
•These officers shall be elected during the representative
assembly meeting;
•For a term fixed in the by-laws but not to exceed 2 years. . .
Number of Sector, Chapter, or District
•Number shall be provided in the by-laws;
•But in no case, shall be less than 10% of the total number of
regular members entitled to vote of the sector, chapter
, or
district.

8. Social Audit is a procedure wherein the cooperative assesses
its social impact and ethical performance vis-à-vis its
stated mission, vision, goals and code of social
responsibility for cooperatives to be established by the
Authority in consultation with the cooperative sector. It
enables the cooperatives to develop a process whereby it
can account for its social performance and evaluate its
impact in the community and be accountable for its
decisions and actions to the regular members;
Officers of the Cooperatives shall include the members of
the board of directors, members of the different
committees created by the general assembly, general
manager or chief executive officer, secretary, treasurer
, and
members holding other positions as may be provided for
in their bylaws;

9. Section 2. COVERAGE
•All registered cooperatives regardless of types and categories.
Section 3. SOCIAL AUDIT
•It is a procedure where the coop assesses its social impact and
ethical performances vis-à-vis its state mission, vision, goals
and code of social responsibility;
•It is a process to assess the coop’s contribution for the
upliftment of the status not only to its members’ economic
needs but also social needs and the community where it
operates.
Rule I
I. Social Audit of
Cooperatives

10. □ Information accessing and dissemination
• To determine the capability of the coop to access, process
and disseminate information from/to its members and
community;
□ Gender
, Youth, Elderly, Children, and Person
with Disability
• To determine how the coop has contributed in the social
capital development for the welfare of the youth, elderly,
children, and person with disability;
• The promotion of the gender fair culture and practices
□ Leadership and Organizational Management
• To highlight the attributes of the leaders/ officers of the
coop.

11. Section 8. SANCTIONS
•Failure to submit to CDA of social audit report (SAR)
conducted by independent Social Auditors shall mean non-
compliance with required reports;
•Corresponding penalties in accordance with RA9520 will be
imposed

12. A Single-line or Single-Purpose Cooperative shall include
cooperative undertaking activities which are related to its
main line of business or purpose
Performance Audit shall refer to an audit on the efficiency
and effectiveness of the cooperatives as a whole; its
management and officers and its various responsibility
centers as basis for improving individual, team or overall
performance and for objectively informing the general
membership on such performance;

13. Federation of
Cooperatives
• refers to three or more primary cooperatives, doing the
same line of business, organized at the municipal,
provincial, city, special metropolitan political
subdivision, or economic zones created by law,
registered with the Authority to undertake business
activities in support of its member-cooperatives.
• Functions should complement, augment or supplement
but does not conflict, compete with, nor supplant the
business or economic activities of its members.
• Registered cooperatives may organize a federation
according to the type of business activity engaged in
by the cooperatives.

14. Section 2. COVERAGE
•All types of newly organized primary coops with combined
2 or more business activities of diff. types of coops;
•A single-purpose coop desiring to transform itself into MPC
after at least of 2 years’ operation.
Section 3. MINIMUM CAPITALIZATION
of
Php
•Only those coop with a minimum paid-up
capital 100,000.00; or
•As required in the feasibility study whichever is
higher
.
Rule I
I
I. Multi-Purpose Coop

15. Cooperative Term (Art
13)
□ Life of cooperative is 50 years (or less as provide for
in the by-laws)
• From the date of registration
• Unless sooner dissolve or
• Unless said period is extended
□ Extendible for another 50 years
• Not earlier than 5 years prior to the original or
subsequent expiry date/s
□ Registered Cooperatives at their option and as their
operation may require can;
• Divide into two or more cooperatives (Art 20)
• Merge or consolidate with another cooperative (Art 21)

16. Vote Requirements (Arts. 18, 20, 21, 64,
65)
• Amendments need 2/3 vote of members with voting
rights
• Merger
, consolidation, division and voluntary
dissolution of cooperatives required ¾ of all members
with voting rights present and constituting a
quorum.

17. □ Advocay Cooperative
□ Agrarian Reform Cooperative
□ Agriculture Cooperative
□ Consumer Cooperative
□ Cooperative Bank
□ Credit Cooperative
□ Dairy Cooperative
□ Education Cooperative
□ Electric Cooperative
□ Financial Service
Type
of
Cooperatives

18. □ Housing Cooperative
□ Insurance Cooperative
□ Labor Service Cooperative
□ Marketing Cooperative
□ Multipurpose Bank
□ Producers Cooperative
□ Professional Service
Cooperative
□ Small Scale Mining Cooperative
□ Transport Service Cooperative
□ Water Service Service
□ Workers Cooperative
Type
of
Cooperatives

19. Membership of cooperatives (Art
26)
•Legal age, Filipino citizens
•Capable and willing to perform the responsibilities of a
member
•Associate members who meets minimum requirements of
regular membership, continues to patronize the
cooperative for 2 years, and signifies his intention to
remain a member shall be considered a member.

20. Appeals on membership (Arts 23,
30)
The GA may opt to create an appeal and
committee, the members of which, shall serve for a
period of one (1) year and shall decide
appeals on membership application and termination
within thirty (30) days upon receipt thereof. If the
committeefails to decide within the prescribedperiod,
the appeal is deemed approved in favor of the applicant.

21. Disqualifications for Officers (Art
27)
•All elective officials are ineligible to be officers or
directors of cooperatives except party-list representatives
•Any officer or employee of the Authority shall be
disqualified to be elected or appointed toany
position in a cooperative: Provided,That the
disqualification does not extend to a
cooperative organized by the officers or employee of
the Authority;
Liability of Members
•A member shall be liable for the debts of the cooperative
to the extent of his contribution to the share capital of
the cooperative. (Art.29)

22. Termination of Membership (Art
30)
•Death, insanity (primary cooperatives)
•Insolvency, dissolution (secondary or tertiary cooperatives)
•Voluntary, for a valid reason
- 60 days’ notice to the BOD
•Involuntary
- By a vote of the majority of all the members
of the board of directors
Grounds for termination
•Non-patronage of coop services
•Continuous non-compliance with obligations violation of
bylaws and the rules of the cooperative; and
•For any act or omission injurious or prejudicial to the
interest or the welfare of the cooperative.

23. Refund of Interests (Art
31)
•All sums computed in accordance with the bylaws to be
due from a cooperative to a former member
•No refund if upon such payment the value of the assets of
the cooperative would be less than the aggregate amount
of its debts and liabilities exclusive of his share capital
contribution.

24. General
Assembly
• Composed of such members who are entitled to vote
under the articles of cooperation and bylaws of the
cooperative (Art. 32)
• Powers that can’t be delegated
- Determination and approve amendments to the
articles of cooperation and bylaws;
- To elect or appoint the members of the
board of directors, and to remove them
for cause;
- To approve development plans of the
cooperative;
• ¾ vote of members entitled to vote, present &
constituting a quorum can delegate some powers to a
smaller group as provided for in the by-laws.

25. • Quorum is at least 25% of all members entitled
to vote
• For electric coops – 5% or as provided in the
by-laws

26. Voting
Rights
□ PRIMARY Cooperatives
• 1 member : 1 vote
• No proxy voting
□ Secondary/tertiary cooperatives
• 1 basic voting
• As many incentive votes as provided in the
by-laws
• Not to exceed 5 votes
• Allows proxy voting

27. Conduct of General Assembly Meeting (Art
34)
□ Annual regular meeting
• On a date fixed in the by-laws or within 90 days after
close of fiscal year
• Reporting of the coop operations, financial statement,
election of officers, plans and budget, other important
matters are discussed and properly acted upon.
□ Special General Assembly
• Anytime as needed
• By a majority vote of the BOD
• Only the agenda specified in the notice of meeting
shall be discussed

28. □ Written notice of regular meetings shall be sent in
writing, by posting or publication, or through other
electronic means to all members of record;
□ 10% of members entitled to vote may petition the BOD
for a Special GA meeting
□ If the BOD fails to act on the petition, 10% of members
are entitled to vote may file a petition with the CDA
for a Special GA meeting

29. Board of
Directors
□ Responsible for strategic planning, direction setting and
policy formulation
□ Maximum term is 2 years; no limitation as to number
of terms unless otherwise provided in the by-laws
□ Prohibition against holding any other position
involved in day-to-day operations and management
□ Disqualification of persons engaged in business similar
or those with conflict of interest
□ A representative from a funding institution may be
admitted as member of the Bod or committee
• Through a BOD resolution
• Solely to provide technical knowledge not available
within its membership

30. □ Vacancy in the Board of Directors (Art 41)
• With quorum – by appointment
• Without quorum – election in a regular or special GA
meeting
• For vacancy due to expiration of term-election in a
regular or special meeting
• A
director
so elected to fill a vacancy shall
be
his
elected/appointedonly for the unexpired term
of predecessor in office

31. COMMITTEE
□Mandatory
Committees
•Audit
•Election
•Mediation and
conciliation
•Ethics
□Elected by GA
•Audit
•Election
□Appointed by the BOD
•Other committees

32. Committee Members and
Officers
Functions, responsibilities and training requirements shall
be in accordance with the rules and regulations issued by
CDA
All officers and committee members required to
undergo trainings conducted by accredited institutions by
the CDA.
□Compensation
□Directors
• During the 1st
year
, per diems only
• For succeeding years, per diems and additional
compensation if provided in the by-laws, or by a
majority vote of members during regular or
special meeting.

33. □ For the other officers and committee
members
• Fixed in the bylaws
□ For employees
• Fixed in the bylaws
• Determined by the board of directors (Art
47)
But if cooperative reports a net loss for the preceding year,
or had a dividend rate less than the official inflation rate
for the
same year, officers are not entitled to per diems

34. Removal of Elective Officers (Art
50)
•Filled with the board of directors
•Officers should be given the opportunity to be heard
•Majority of the board of directors may place the
officers concerned under preventive suspension
•Upon finding of a prima facie evidence of guilt, the
board shall present its recommendation for removal to
the general of assembly
•Opportunity to be heard during assembly
•(3/4) of the regular members present and
constituting a quorum may remove the officer

35. Responsibilities of
Cooperatives
•An official postal address which shall be registered
with the Authority (Art 51)
•A copy of the articles of the cooperation and bylaws
of the cooperative
•A copy of the regulations of the Authority
•A register of members
•The books of the minutes of the meetings of the
general assembly, board of directors and
committees
•Share books, where applicable
•Financial statements; and

36. • Such other documents as may be prescribed by laws or
the bylaws
• Accountant or bookkeeper is responsible for
maintenance and safekeeping of books of accounts
• Audit committee responsible for continuous and
periodic review of books of accounts; monitor
adequacy and effectiveness of management’s control
system and audit the performance of the cooperative
• Audited financial statements shall be published annually
and required to be posted in principal office

37. Annual Reports (Art
53)
•Annual report on regular activities including socio civic
undertaking showing their progress and achievements
•Provided to members
•Made accessible to members
•Filed with CDA within 120 days from close of calendar year;
•In case of non-submission
- Accountable officers can be fined until the
cooperative has complied
-Other penalties imposable as may be prescribed
by CDA
-
Ground for revocation of authority of
cooperative to operate

38. Bond of Accountable
Officers
•Any and all directors, officers and employee handling
funds, securities or property on behalf of any
cooperative
•Covered by a surety bond
•Required for registration of a cooperative
•Renewed annually and the authority shall
accordingly be informed of such renewal

39. Dissolution of Cooperatives (Arts. 64, 65, 66, 67, 68)
□Dissolution of cooperatives may be voluntary or
involuntary
•Voluntary- Through a majority vote of directors and a
resolution duly adopted by the affirmative vote of at
least ¾ of members entitled to vote present and
constituting a quorum
•Involuntary- By order of a component court or the
Authority

40. □ By a competent court
• Violation of any law, regulation or its by-laws
• Insolvency
□ By the Authority
• Obtaining registration by fraud
• Existing for an illegal purpose
• Willful violation, despite notice of the coop code
and the by-laws
• Willful failure to operate on a cooperative basis
• Failure to meet required minimum number of
members
Dissolution/ Revocation of Certificate of
Registration

41. • Failure to commence business within 2 years
after registration
• Failure to operate for 2 consecutive years
• Failure to meet the required number of
members
• Non-commencement of business within 2 years
after registration (newly registered
cooperatives)
• No business for 2 consecutive years
• Failure to file required annual report
• Non-compliance with administrative
requirements

42. Cooperative Liquidation (Art
69)
□ Expiration of character
□ By voluntary dissolution
□ By appropriate judicial proceedings
•Shall continue as cooperative for 3 years after
dissolution for the purpose of:
-Prosecuting and defending suits by and
against it
-Enabling it to settle and close its affairs
-To dispose of and convey its property
and to distribute its assets
-But not for the purpose of continuing the
business for which it was established

43. □ A cooperative shall only have distributed its assets or
properties upon lawful dissolution and after
payment of all its debts and liabilities

44. Capital (Art
71)
coo
p
•Member’s share capital
•Loans and borrowings including deposits
•Revolving capital (deferred payment of patronage
refund/ interest on capital)
•Subsidies, donations, legacies, grants and aids
- Shall form part of donated capital/fund of
the
-Shall not be divided into individual share
capital holding anytime
-Subject to escheat proceedings upon
dissolution
•Limitation on share capital held by one member
should not exceed 10% (Art 73)

45. • Reasonable and realistic continuing member capital
build-up program (Art 75)
• Par value of share shall not exceed Php 1,000 (Art 76)
• By-laws may provide reasonable fines on unpaid
subscription (Art 77)
• Revolving capital (Art 79)
• To strengthen its capital structure
• Through a GA resolution
interest
on
loans
or
-Deferring the payment of patronage
refunds and share capital
-Deduction of a percentage from the
proceeds of sales

46. • The BOD shall issue
- Revolving capital certificates
Serial number
, name, amount, and
rate of interest to be paid
The time of retirement by such
certificates and the amounts to be returned

47. • The BOD shall issue
-Revolving capital certificates
*Serial number
, name, amount, and
rate of interest to be paid
*The time of retirement by such certificates
and the amounts to be returned

48. • Financial audit conducted by external auditor in good
standing with PICPA and accredited by board of
accountancy and CDA
• Social and performance audits may be conducted
internally by audit committee, paid staff, volunteer
members, or by qualified external auditors
accredited by CDA
• Members has the right to examine books and
records
• During reasonable hours on business days
• May demand for a copy of excerpts from said
records paying for its cost (Art. 84)
Annual Audits (Art
80)

49. • Refusal of officer
-Liable for damages
-Imprisonment of 6 months to 1 year and/or
-Fine for not less than 1,000.00 (Art. 124)
-Except if the member requesting had improperly
used any information secured through any prior
examination of the records of such cooperation or
was not acting in good faith or for a legitimate
purpose in making his demand

50. Distribution of Net Surplus (Art
86)
• At least 10% of net surplus for reserve fund; however
, in
first 5 years after registration, this should not less
than 50% of the net surplus.
• Not more than 10% for the CETF; half to be used by the
cooperative; other half may be remitted to the
federation/ union chosen by the cooperative;
□ Federation/union should submit
• List of contributing cooperatives;
• Business consultancy assistance with
nature and cost
• Training activities specifying the
nature, participants, and cost

51. • Not less than 3% for community development fund for
projects/activities for the benefit of the community
where the cooperative operates.
• Not more than 7% for optional fund, land and
building and other funds.
• The remaining net surplus shall be made available to
the members in the form of interest on share capital
not exceed the normal rate of return on investments
and patronage funds.
• That any amount remaining after the allowable interest
and the patronage refund have been deducted shall be
credited to the reserved fund

52. THANK
YOU!