4. Questions
• What is your understanding about
cooperative?
• What are the purposes of a
cooperative?
• What are the most important
characteristics of a cooperative?
5. • What are the types of cooperatives?
• What makes a cooperative
unique and different from
other business enterprises?
Questions
6. What is a Cooperative?
RA 9520 Chapter 1 section 3
• A cooperative is an AUTONOMOUS and
duly registered association of persons, with
a common bond of interest, who have
voluntarily joined together to achieve
their SOCIAL, ECONOMIC, AND
CULTURAL NEEDS AND ASPIRATIONS
7. by making equitable contributions to the
capital required, PATRONIZING THEIR
PRODUCTS AND SERVICES and accepting
a fair share of the risks and benefits of the
undertaking in accordance with universally
accepted cooperative principles.
8. Characteristics of a Coop:
▪ People come together because of common
needs - products and services that the
cooperative offers.
▪ Cooperative ownership – members are
owners and customers. Success of the
cooperative depends on how well members
patronize its business.
▪ As owners, members are the “supreme
authority.”
9. • Cooperatives are unique and different
from other business because, among
other things:
⮚Members have only one vote
regardless of the amount of capital
they have in the cooperative
What Makes a Coop Unique?
10. ⮚ Members get back part of what they
paid for the products and services in form
of interest on share capital and patronage
refund.
⮚ Cooperatives around the world
adhere to the same set of values
and principles.
What Makes a Coop Unique?
11. ⮚ Cooperatives have a social purpose –
it aims to improve the lives of its
members and its families and to
contribute to the development of
community and the country as a whole.
What Makes a Coop Unique?
12. In terms of MEMBERSHIP,
Cooperative shall be categorized into:
⮚ PRIMARY
⮚SECONDARY
⮚TERTIARY
What are the categories of Cooperative
13. The Cooperative Difference
(vis-à-vis a Partnership and a
Corporation)
PARTICULAR COOPERATIVE CORPORATION PARTNERSHIP
Legal Basis Coop Code Corporation Code Partnership Law
Purpose and
Motivation
Service Above
Profit
To make profit To make profit
Requisite for
membership
Can make use of
the services of
the coop and
willing to take
responsibilities
Capacity to buy
shares of stock
Capacity to invest
or render service
14. PARTICULAR COOPERATIVE CORPORATION PARTNERSHIP
Customer Member-users Non-members Non-members
Voting
One member, one vote
in primary coop
Shares of common
stocks
Equal voting rights
Management
Members, Board of
Directors and Hired
Mgt.
Board of Directors and
Hired Mgt.
Shared equally by all
partners unless one
is appointed
Governing
Principles
Coop Principles and
Business Mgt.
Purely Business Mgt.
Principles
Partnership principles
as stipulated by the
partners
Rates of interest
on capital
Limited No limit No limit
Basis of
distribution of
surplus/profit
Shares of stock and
patronage refund or
volume of business
contributed by
members
Shares of stock
Based on partnership
agreement
Educational
Program
Continuous None None
15. COOPERATIVE PHILOSOPHIES AND PRACTICES
PHILOSOPHY
❑ The most basic beliefs, concepts, and
attitudes of an individual or group.
PRACTICES
❑ Habitual or customary performance of an
individual or group.
16. 1. OWNED AND DEMOCRATICALLY
CONTROLLED BY THE MEMBERS
• the people/members use their coop’s services or buy its goods
• not by outside investors
• coop members elect their board of directors / officers from within the membership
• general assembly approves the developmental plans and programs
• general assembly is the highest level of governance
PHILOSOPHIES OF COOPERATIVES
17. 2. EXIST SOLELY TO SERVE ITS
MEMBERS
• The primary purpose of organizing a
cooperative is helping its members.
• Thus, none members who are patronizing
the coop are given a chance to become
members after two years of patronage
using their accumulated patronage refund.
(Chapter III – Article 26, R.A. 9520)
PHILOSOPHIES OF COOPERATIVES
18. 3. A GOOD COOPERATIVE FOLLOWS
GOOD BUSINESS SENSE
- a cooperative do not spend more than what it
earns
- to meet their members' needs for
affordable and high quality goods or
services
PHILOSOPHIES OF COOPERATIVES
19. • CAPITAL FORMATION
– Cooperatives adopt the continuing capital build-up program for sustained increase in capital
that can be used for their responsive services to the members.
COOPERATIVE PRACTICES
20. • COMPETITIVE PRICING
⮚ selling at market price
• Cooperatives offer goods and services at
prevailing market prices.
• This promotes stability;
• It can cope with operational expenses and
cover up the negative effects of shrinkage,
depreciation and losses; and
• It helps maintain the prices of goods;
COOPERATIVE PRACTICES
21. • COOPERATIVES CAN AVOID
DESTRUCTIVE COMPETITION
• Fostering constructive competition among
cooperatives will safeguard the interests of
consumers;
• Cooperatives are encouraged to cooperate
in unison and bring their joint power in the
market up to the level achieved by
enterprises that are operated for the benefit
of other stakeholders;
COOPERATIVE PRACTICES
22. • COOPERATIVES CAN AVOID
DESTRUCTIVE COMPETITION
–They cooperate in order to get a fair deal
from the large scale buyers of their
products;
–Consumers cooperate to get a better
deal from manufacturers and suppliers.
COOPERATIVE PRACTICES
23. • CONSTANT EXPANSION
• As organizations, cooperatives have to
grow for community services;
• Expansion is a must;
COOPERATIVE PRACTICES
24. • CONSTANT EXPANSION
• However, members in this regard
should undergo continuous
education and training to learn
various management
practices/techniques and effective
financial supervision.
COOPERATIVE PRACTICES
25. •CONSTANT EXPANSION
–New members should be recruited
to accumulate more capital and
savings to support operation of the
expanded business and services
which in the long run will provide
more benefits for them; and
COOPERATIVE PRACTICES
26. • QUALITY STANDARDIZED
GOODS
– Cooperatives are intended to develop communities through the production of high quality
goods and provision of better services;
– Cooperatives could help by patronizing only standardized products and services of high
quality;
COOPERATIVE PRACTICES
27. QUALITY STANDARDIZED GOODS
– Hence, different types of cooperatives will strive to improve their goods and services to stand
competition with business establishments; and
– This in turn will be instrumental in improving life in the country.
COOPERATIVE PRACTICES
28. • COOPERATIVE WHOLESALE
BUSINESS OR INTER-LENDING
(cooperative bank)
• Cooperatives can be organized with enough people and capital;
• They respond to the needs of the community;
• Needs arise when there are people;
COOPERATIVE PRACTICES
29. • MINIMIZE EXPENDITURES
–Their officers do not receive
remuneration;
–If they get compensation, it is only in the
form of allowances, per diems, or
honoraria;
COOPERATIVE PRACTICES
30. • MINIMIZE EXPENDITURES
–When audit shows that the cooperative
is now capable or can afford the
minimum wage, only employees get paid
regularly;
–The government can give exemption;
–Minimizing expenses should not be
taken as a remedy to cover up the
weaknesses of the system.
COOPERATIVE PRACTICES
32. What is VALUES?
• Important and enduring belief or ideals
shared by the members of a culture about
what is good or desirable and what is not.
• Values exert majorValues
exert major influenceValues
exert major influence on the behaviorValues
exert major influence on the behavior of
an individualValues exert major influence on
the behavior of an individual and serve as
broad guidelines in all situations.
39. The RIGHTS and RESPONSIBILITIES
of a Cooperative Member
• RIGHT to receive
dividends
• RESPONSIBILITY to
put up share capital
• RIGHT to be
elected
• RESPONSIBILITY to
fulfil the duties as
member and officer
• RIGHT to elect
officers
• RESPONSIBILITY to
vote
RIGHTS RESPONSIBILITIES
40. The RIGHTS and RESPONSIBILITIES of a
Cooperative Member
• RIGHT to
participate
• RESPONSIBILITY to
attend meetings
and participate
• RIGHT to receive
patronage refunds
and avail coop
services
• RESPONSIBILITY to
patronize the goods
and services of the
coop
RIGHTS RESPONSIBILITIES
41. • RIGHT to borrow/
loan
• RESPONSIBILITY to pay
back loans
• RIGHT to promote and
work for the
cooperative
• RESPONSIBILITY to
support the advocacies
of the coop
RIGHTS RESPONSIBILITIES
The RIGHTS and RESPONSIBILITIES of
a Cooperative Member
42. RESPONSIBILITY to help the
cooperative members and
the community.
The RIGHTS and RESPONSIBILITIES of
a Cooperative Member
45. Republic Act No. 9520
AN ACT AMENDING THE
COOPERATIVE CODE OF THE
PHILIPPINES (FORMERLY KNOWN
AS R.A. 6938) TO BE KNOWN AS
THE “ THE PHILIPPINE
COOPERATIVE CODE OF 2008”
46. Definition of Terms
Representative Assembly
The full membership of a body of
representatives elected by each of the
sectors, chapters or districts of the
cooperative duly assembled for the
purpose of exercising such powers lawfully
delegated unto them by the general
assembly in accordance with its by-laws
47. Officers of the Cooperative
- Members of the board of directors;
- Members of the committees created
by the general assembly;
- General manager or chief executive officer;
- Secretary
- Treasurer
- Other positions as the by-laws provides
Definition of Terms
48. Social Audit
A procedure to assess the social impact
and ethical performance of cooperatives
vis-à-vis their vision, mission, goals and
code of social responsibility
Definition of Terms
49. Performance Audit
The audit on the efficiency and
effectiveness of a cooperative as a whole,
its management and officers, and its
various responsibility centers as basis for
improving individual or overall performance
Definition of Terms
50. Subsidiary Cooperative
Requisites:
❑ A cooperative;
❑ All or majority of members come from a
(parent) cooperative,
❑ organized for any purpose different from
the (parent) cooperative;
❑ receives technical, managerial and financial
assistance from (parent) cooperative
Definition of Terms
51. Federation of Cooperatives
May be organized by ten or more primary
cooperatives doing the same line of
business, organized at the municipal,
provincial, city, special metropolitan,
political subdivision or economic zone
Definition of Terms
52. Additional Powers and Capacities of a
Cooperative
❑ May form a subsidiary coop or join
federation;
❑ May avail of preferential rights granted
to coops under the local government
code (RA 7160), such as:
❑ grant of franchise or license to manage
ferries, wharves, markets or
slaughterhouses, lease of public utilities
❑ May organize and operate schools
53. Organization
• Pre-Membership Education Seminar is
mandatory;
• Paid-up capital should be based on their
proposed business;
• Must register as a single-purpose cooperative;
• May apply as multi-purpose coop (MPC) only
after 2 years and when the requirements for
MPC are met;
• Must identify a reasonable and realistic capital
build-up program
54. Types of Cooperatives
- advocacy coop - coop banks
- agrarian reform - water service coop
- dairy coop - workers coop
- education coop - credit coop
- electric coop - consumers coop
- financial service coop - producers coop
- fishermen coop - marketing coop
- health services coop - service coop
- housing coop - multi-purpose coop
- Insurance coop - others as CDA determines
- transport coop
- Agriculture Cooperative
55. Training Requirements
MC NO 2015-09, series of 2015,
“Revised Guidelines Implementing the New
Training Requirement of Cooperative
officers
For Cooperative Officers. Failure of a
cooperative officer to comply with required
trainings during his/her term shall be a
ground for his/her disqualification of as
future officer of the cooperative in any
position until he/she has complied with
the required training
56. Training Requirements
For the Cooperative. Willful failure of the
concerned cooperative to comply with the
training requirements for its officers, despite
notice shall be aground for non – issuance
of the Certificate of Compliance to the
cooperative for the next immediate year
57. Eligibility of Government Officers &
Employees
- CDA officers/employees not eligible
for election or appointment;
- Elective officials (except party-list
representatives) of the government
not eligible to become officers and
directors
58. Quorum
For all coops (except electric coops):
- at least 25% of members entitled to
vote
For electric coops:
- 5% of members entitled to vote,
unless by-laws provides otherwise
59. Term of Office of Board of Directors
• Maximum of two years for every term;
• Prohibition on 3 consecutive term
election now lifted, unless the coop’s
by-laws provides otherwise
60. Prohibition as Appointive
Officers of the Cooperative
- 2 or more persons related up to 3rd
civil degree of consanguinity or
affinity;
- Person who is engaged in business
similar to that of the coop;
- Person who has interest in conflict with
the cooperative in any manner.
63. Functions, Responsibilities, Training
Requirements of Directors, Officers &
Committee Members
- Mandates CDA to issue rules and
regulations on the following:
- Functions
- Responsibilities
- Training requirements
64. Compensation
▪ Only reasonable per diems may be given to directors
when the by-laws does not provide compensation;
▪ Directors and officers are not entitled to per diem when:
- the coop incurred net loss in preceding year;
- the coop had a dividend rate less than the official inflation
rate for the same year
▪ Any compensation other than per diem may only be given
to directors when it is approved by a majority vote of
members with voting rights at a regular or special
assembly.
65. Removal of Elective Officer
- Complaint may be filed with the board of
directors;
- May be placed under preventive suspension;
- Shall be accorded due process;
-Board may recommend the removal upon finding of prima
facie evidence;
- Elective officer may be removed by three-fourths (3/4)
votes of regular members present and constituting a
quorum
66. Submission of Reports
• Reports to be submitted to CDA within
120 days from end of calendar year;
• Administrative fines and penalty may be
imposed by CDA on accountable officers
in case of failure to file reports within
the set period;
• Failure to file may be ground for the
revocation of authority of the
cooperative to operate as such.
67. Bonding of Accountable Officers
• Directors, officers and employees
holding funds, securities and property
on behalf of coops shall be bonded
adequately as determined by the board
of directors;
• SURETY Bonds to be renewed every
year;
68. Tax Classification of Cooperatives
RA 9520
Coops transacting
business with
members and non-
members
Coops transacting
business with
members only
LESS THAN P 10
MILLION
MORE THAN P10
MILLION
Accumulated reserves & Undivided net savings
69. Share Capital Holdings of Members
Article 73
• member can own or invest not more than
10 percent of the total subscribed capital
70. Right to Examine
• A member has right to examine coop
records within reasonable hours during
business days
• Any officer who refuses to allow a member
to examine may be punished under Article
140
• The exercise of this right must be for
legitimate purpose and in good faith
71. Requirements for Assignment
of Share Capital
• The member has held such share capital
contribution or interest for not less than 1 year
• The assignment is made to:
- Cooperative; or
- Member of the cooperative
- Person within the field of membership
The board of directors has approved such
assignment
72. Revolving Capital
• GA may authorize the BOD to raise a revolving capital by
deferring the payment of interest on share capital and
patronage refund
• authorized deduction from products sold or services
rendered or per unit of services or product handled
• revolving capital certificate with serial number, name,
amount and rate of interest and time of retirement to be
indicated
73. Allocation of Net Surplus
• 50% for Reserve Fund for 1st 5 years, (at least
10% on 6th year and thereafter);
• Not more than 10% for coop education &
training fund (CETF) where ½ shall be spent by
coop for education & training, while the other
½ may be remitted to a union or federation;
74. • Not more than 7% for optional fund, or land and
building or any other fund which the coop
identified in its by-laws;
• Remaining portion of net surplus to be made
available to members in the form of interest on
capital & patronage refund (at least 25%)
• Not less than 3% for community development
fund;
Allocation of Net Surplus
76. Involuntary Dissolution
- May be dissolved by order of competent
court
- May be dissolved on the ground of:
- Violation of any law, regulation or
provisions of its by-laws; or
- Insolvency
77. Involuntary Dissolution
- May be dissolved by order of competent
court
- May be dissolved on the ground of:
- Violation of any law, regulation or
provisions of its by-laws; or
- Insolvency
78. Dissolution by Order of CDA
- Having obtained its registration by fraud
- Existing for an illegal purpose
- Willful violation, despite notice by Authority, of
the provisions of this Code or its by-laws
- Willful failure to operate on a cooperative basis
- Failure to meet the required minimum number
of members in the cooperative
79. Settlement of Coop Disputes
- Mediated at the level of primary coop level;
- If not resolved at primary coop level, then
mediated at the federation or union;
- If not resolved at federation/union level, then
submitted to CDA for arbitration;
- If not satisfied by arbitral decision, then decision
may be appealed at the Office of the President.
80. Penalty Provisions
- Attempting to evade or defeat tax in violation
of Art. 60 and 61 of RA 9520, punishable by
imprisonment of 2-4 years and fine of 30,000 –
100,000;
- Direct or indirect violation of Art. 60 and 61 by
any public official or employee, punishable by
imprisonment of 1-5 years and fine of 5,000;
81. - violation of Arts. 45 (Liability), 48 (Disloyalty), 49 Illegal Use
of Confidential Info) by director, officer or committee
member, punishable by imprisonment of 5-10 years and fine
of 5,000 – 500,000;
- direct or indirect interference or intervention by:
*influencing the election or appointment of directors,
officers, committee members, thru endorsement or
campaign;
*Requiring prior clearance for any policy or decision in a
coop;
Penalty Provisions
82. *Requesting or demanding for creation of positions or
recommending appointment, transfer or removal of a
person from his position;
*committing acts inimical or adverse to the autonomy and
independence of coops.
- Offenses punishable by imprisonment of 1-5 years and fine
of 50,000:
*Omission or refusal to furnish any report or information
required under the Code;
Penalty Provisions
83. *Providing CDA any false or misleading
information, report or other documents required
under the Code;
*Omission or refusal to keep a book or register
required under the Code or make the required
entry therein
- Offenses punishable by imprisonment of 1-5
years and fine of 50,000:
*Making a false or misleading entry required
under the Code in a book or register;
Penalty Provisions
84. *Hindering an authorized person from making
an inspection, audit, examination or
investigation under this Code;
*Failure to comply with an order or written
instructions issued or given by the Authority
(CDA);
- Offenses punishable by imprisonment of 1-5
years and fine of 50,000:
*Violation of provisions regarding transactions
with a restricted party;
Penalty Provisions
85. *abetting, counseling, allowing, authorizing or
commanding another person to commit an offense
punishable by the Code (when the offender is a
cooperative, penalty is imposed on its directors and
officers)
General Penalty
Any violation under the Code where no penalty is
specified is punishable by imprisonment of 6
months to 1 year and fine of 1,000.
Penalty Provisions
87. • Training program should contain standard
training curriculum as prescribed by the
authority (MC No.2015-09 series of 2015)
• Co-op Officers are required to undergo
necessary training conducted by cooperative
unions /federations or other training institutions
duly accredited by CDA
Standard Training Curricula
for Cooperative Officers
88. CDA Mandatory Trainings for all
Cooperative Officers
CATEGORY OF COOP TRAINING COURSE NO. OF HRS.
Micro-cooperatives –
cooperatives with total asset
of 3 Million and below
Fundamentals of cooperatives 8
Governance and Management of Cooperatives 8
All other cooperatives with
total asset of more than 3
Million
Fundamentals of cooperatives 16
Governance and Management of Cooperatives 16
Additional trainings for
officers of cooperatives
engaged in savings and credit
with at least Five Million
Pesos (Php5,000,000.00)
worth of deposit liabilities
based on their latest Audited
Financial Statement
Financial Management 8
Risk Management 4
Credit Management 4
89. Cooperative officers shall endeavor to undergo additional
appropriate training such as but not limited to the
following:
Optional trainings for cooperative officers
Financial Management Basic Accounting for Non-Accountants
Policy Development Internal Control including Inventory System
Leadership and Values Re-Orientation Audit Management
Conflict Management Rules Formulation
Strategic Planning and Management Human Resource Management
Orientation on Labor and Other Related laws Effective Communication Skills
Records Management (Financial/Non-Financial
Transaction
Entrepreneurship and Business Mgt. Skills
Cooperative Standards Basic Computer literacy
Investment and Banking Procedures
90. Cooperative officers shall complete
the required trainings within the
first half of their term
Period of Compliance
91. • Non-compliance is a ground for
disqualification for future election or
appointment until compliance with such
requirements
93. • For Micro Co-ops: CDA MC 2019-04
- Copy of Electronic Encoded Coop Annual Progress
Report (CAPR) with the ff. attachements:
1. Financial Statements (to be encoded online) audited
by
any of the ff.;
1.) External Auditor accredited by BOA
2.) Audit Committee of the Co-op
3.) Audit Committee of Federation/Union
where the co-op is affiliated
Required Reports
94. 2. List of Officers and Mandatory Trainings
Undertaken/Completed
3. Social Audit Report
4. Governance and Management Audit Report
5. Semi annual report on Con-med
6. Annual Tax Incentive Report (ATIR) [for
coops issued with Certificate of Tax Exemption
with the BIR)
Required Reports
95.
96.
97. Under MC 2016-07
* For micro co-ops no monetary
penalties shall be imposed
98. • Reports must be filed before CDA either
through personal, registered mail, courier or
electronic means, within 120 days from end
of calendar year
• Reports must be typewritten or printed in a
form prescribed by CDA
Required Reports
99. • Failure to submit reports on time means delay
• Counting of delay starts after the prescribed
period
• If the last day is a non-working day, delay starts
to run on the next working day
• No delay if the failure is due to fortuitous event,
fire or natural calamity public disorder, strike or
lock-out or national emergency affecting the
operation of coop
Required Reports
100. • Coop is to inform CDA about the fortuitous event
• Basis of establishing delay:
- date of CDA acknowledgment (hand carried)
- date of mailing postmarked on the envelop
(mailed)
- date of electronic mail sending (e-mailed)
Required Reports
101. • Sanction for delay is P100 per report per day of
delay
• Request for reconsideration of sanction may be
filed within 30 calendar days from receipt of
Statement of Accounts for reason of fortuitous
event and court litigation/order
• CDA to act on such request within 60 calendar
days
Required Reports
102. • If CDA fails to act, sanction is deemed
lifted
• Decision of CDA is final and executory
• CDA may dissolve/revoke the authority to
coop to operate as such (other than
monetary penalties)
Required Reports
103. • Winding up period is not to exceed 3
years
• Summary proceedings may be instituted if
coop has assets of below P 100,000 and
with no creditors
• Outright cancellation may effected by CDA
for coops with no assets and cannot be
located anymore.
Other Requirements
105. • Capital Sources:
- members’ share capital
- loans and borrowings, including deposits
- revolving capital (consisting of deferred
payment of patronage refund or interest on
share capital)
- subsidies, grants, legacies, aids, etc.
Capitalization &
Accounting Procedures
106. The capacity to Learn is a Gift ;
The Ability to Learn is a Skill;
The willingness to Learn is a
Choice