Cooperative Marketing Chapter 3-4

1. CHAPTER VII:
DISSOLUTION
OF
COOPERATIVES
GROUP 4

2. The dissolution of a cooperative can take
place if it does not harm the rights of any creditor.
It requires a majority vote from the board of
directors and a resolution passed by at least three-
fourths of all members with voting rights present at
a meeting. The meeting must be announced in a
local newspaper for three consecutive weeks or in a
widely circulated newspaper if none is available
locally. Additionally, notice of the meeting should
be sent to each member at least 30 days before the
meeting, either by registered mail or personal
delivery. After the resolution is certified by a
majority of the board and signed by the board
secretary, the Authority issues a certificate of
dissolution.
ART. 64
Voluntary
Dissolution
Where no
Creditors are
Affected

3. If a cooperative's dissolution could harm creditors, a
petition must be filed with the Authority. It should be
signed by a majority of the board, verified by the
chairperson or board secretary, and detail claims. The
dissolution must be approved by at least three-fourths
of voting members present at a specially convened
meeting.
If the petition is deemed sufficient, the Authority will
issue an order stating its purpose and setting a date
within 30 to 60 days. Before that date, the order will
be published in a local newspaper for three
consecutive weeks and posted in three public places
in the municipality or city where the cooperative's
office is located.
ART. 65
Voluntary
Dissolution
Where
Creditors Are
Affected

4. After the five-day objection period, the
Authority will conduct a hearing on the petition. If
objections are valid and the petition's allegations
are proven, the Authority will issue an order to
dissolve the cooperative and guide the asset
disposition in line with existing regulations.
1 2
The assets and
liabilities of the
cooperative;
3 4
ART. 65
The claim of
any creditor;
The number of
members; and
The nature and
extent of the
interests of the
members of the
cooperative.

5. A cooperative may be
dissolved by order of a
competent court after due
hearing on the ground of:
ART. 66
Involuntary
Dissolution
1
Violation of
any law,
regulation or
provisions of
its bylaws; or
2
Insolvency.

6. The authority may suspend or revoke,
after due notice and hearing, the
certificate of registration of a cooperative
on any of the following grounds:
ART. 67
Dissolution by
Order of the
Authority
1
Having
obtained its
registration
by fraud;
Insolvency.
2
Existing for
an illegal
purpose;
3
Willful violation,
despite notice
by the Authority,
of the provisions
of this Code or
its bylaws;
4
Willful failure
to operate on
a cooperative
basis; and
5
Failure to meet
the required
minimum
number of
members in the
cooperative.

7. If a cooperative fails to start or
operate within two years of
registration, the Authority will
issue a notice to show cause. If
the cooperative doesn't justify its
inactivity, the Authority will
remove it from the registered
list, considering it dissolved.
ART. 68
Dissolution by
Failure to Organize
and Operate

8. A cooperative, upon expiration or
voluntary dissolution, continues to exist for
three years to conclude legal matters,
settle affairs, and distribute assets,
without engaging in its original business.
ART. 69
Liquidation of
a Cooperative Within the three-year period, the
cooperative can transfer all its properties
to trustees for the benefit of members,
creditors, and other stakeholders,
terminating its interests in those
properties.

9. In the event of a cooperative winding up,
assets meant for unknown or unlocatable
creditors, shareholders, or members will be
allocated to the affiliated federation or
union.
ART. 69
Liquidation of
a Cooperative A cooperative shall only distribute its
assets or properties upon lawful
dissolution and after payment of all its
debts and liabilities, except in the case of
decrease of share capital of the
cooperative and as otherwise allowed by
this Code.

10. The Authority shall issue the appropriate
implementing guidelines for the liquidation
of cooperatives."
ART. 70
Rules and
Regulations on
Liquidation SEC. 8. Articles 72, 73, 74, 75, 76, 77, 78, 79
and 80 of Chapter VIII on Capital,
Property, and Funds of the same Code are
hereby renumbered and amended to read,
as follows:

11. CHAPTER VIII:
CAPITAL,
PROPERTY,
AND FUNDS
GROUP 4

12. The capitalization of cooperatives
and the accounting procedures
shall be governed by the
provisions of this Code and the
regulations which shall be issued.
ART. 71
Capital

13. Cooperatives registered under this
Code may derive their capital from
any or all of the following sources:
ART. 72
Capital Sources
4
Funds received as subsidies, donations,
legacies, grants, or other assistance, whether
local or foreign, shall not be divided into
individual share capital holdings but will remain
part of the cooperative's donated capital or fund.
1
Members' share
capital;
2
Loans and
borrowings
including
deposits;
3
Revolving capital which
consists of the deferred
payment of patronage
refunds, or interest on
share capital; and

14. No member of a primary cooperative
other than a cooperative itself shall own
or hold more than ten per centum (10%)
of the share capital of the cooperative.
ART. 73
Limitation on Share
Capital Holdings If a cooperative member dies, the heir is entitled
to the member's shares, with the condition that the
heir's total shareholding does not exceed 10% of
the cooperative's share capital. The heir must
qualify and be admitted as a cooperative member.
If the heir fails to qualify or exceeds the share
limit, the excess shares will revert to the
cooperative, and the heir will be compensated for
their value.

15. Subject to the provisions of this Code,
no member shall transfer his shares or
interest in the cooperative or any part
thereof unless:
ART. 74
Assignment of Share
Capital Contribution
or Interest
1
He has held
such share
capital
contribution or
interest for not
less than one
(1) year;
2
The assignment
is made to the
cooperative or to
a member of the
cooperative or to
a person who falls
within the field of
membership of
the cooperative;
and
3
The board
of directors
has
approved
such
assignment.

16. The bylaws of every cooperative
shall provide for a reasonable
and realistic member capital
build-up program to allow the
continuing growth of the
members' investment in their
cooperative as their own
economic conditions continue to
improve.
ART. 75
Capital Build-Up

17. The term 'share' refers to a unit of
capital in a primary cooperative the
par value of which may be fixed at
any figure not more than One
thousand pesos (P1,000.00). The
share capital of a cooperative is the
money paid or required to be paid for
the operations of the cooperative. The
method for the issuance of share
certificates shall be prescribed in its
bylaws.
ART. 76
Shares

18. The bylaws of a
cooperative may prescribe
a fine on unpaid
subscribed share capital:
Provided, That such fine is
fair and reasonable under
the circumstances.
ART. 77
Fines

19. A cooperative may invest its capital in any
of the following:
a
c
In shares or
debentures or
securities of
any other
cooperative;
b
d
ART. 78
In any
reputable bank
in the locality,
or any
cooperative:
In securities
issued or
guaranteed by the
Government;
In real estate
primarily for the use
of the cooperative
or its members; or
Investment of Capital
e
In any other
manner
authorized in
the bylaws.

20. The cooperative's general assembly
can empower the board to raise
revolving capital by deferring
patronage refunds, interest on share
capital, or deducting a percentage
from sales or services. The board
will issue certificates specifying the
amount, interest rate, and
retirement time for the revolving
capital.
ART. 79
Revolving
Capital

21. Thank You
So Much