‘CPA REVIEW SCHOOL OF THE PHILIPPINES [REGULATORY FRAMEWORK FOR BUSINESS TRANBACTIONS ‘COVERAGE: Cooperative Code of the Philippines Direction: Kead und study the following crmorpt —__—— 1. Cooperatives (Repub het No. 9820 alex. Philplae Cooperative Code of 008) 2 Detain orCoopernve A Cooperative maven kn al reine ston of eis, ‘ths common bods nere ws have vlna je together to acieve tei oll enon, tod cull pets un pation by making equal orbs Wo the capil require, patronizing thes produ and orcs nd ncn fr share of he ka and benefits ofthe dering seconds wih univeraly sxe oop piles. 1 Cooperative Pills = ver cooperative all conduct is az in cordance with ipo cate, foul suluey and expense ene nivel acered principe of cooperation which clude, bu ae ot ined he allowing TT "Noluotry and Open Membership Cooperatives are voluntary organizations, open tall Prony eto we ther sence ad ing to mcep the rempomes of embers, Mrihot ene socal rch coll, pola oligos isha. ii Demecrae Member Control: Copesvs are democratic organizations tae contol iy tc mene wo evel, priipe in sein he poe nd making dein. Men 1d women serving a elosedrepreteiien, ser or officers ar acouible 1 the Imemberhp In primary cooperatives, member ave equal voting rights of one member, coe ote Coopratvn tar level ae gain heme eerie mane li. Member Economic Parkinson = Manters coovibue equahy to, and. democratically onl the cpl aft compres At eat prof tet eta the common propery of the cooperative Tey sal eave ied compensation rind interest f com capal fhosonbed and pide edition of menbenhp. Members gate sures fr ay oF al of de lowing prose. developing te cooperative by ting up reserve, part of which bold tie be visti, boing enters propor she pavengeof he cooperatives busine an, upping ther ative approved byte membership iv. Attomomy and Independence -Coperives re stenomous, help xpnuaton coal Sythe members I they en ain tecmens wih tbr organatons, including vere, or rae "ail fom extemal sous, they shall do 50 on fer that ensue Stmncrat cont ofthe members an anain thee coopera atone 1 dvcnon,Frainlag and Information Cooperatives tall ovis eduction end ining for their mer elated and mowed represent, manages, and employes, 3th! they an conic effecively end hie fo the development ft cooperates. vi. Cooperation Amoog Coopersives= Coopecives seve Weir menbers mot efeively and stengen he eopratve movement by woking tgeer tough cal nos, regional and inrnatona svctres vik. Concern for Community. Coopertives work forthe sutinble development of ter ommonkiaeugh pois approved by ht eres ‘&. Definition of Term. 4. Member includes a person eihor natural o juridical wiv eerng to the principles st forth in this Code and in the Anicles of Coopertve, has been admitted by the cooperative as member; i, General Assembly shall mean tho fll membership of the cooperative duly assembled forthe purpose of exerisng al th rights and performing al the obligations pertaining to cooperatives, 1 provided by this Code, its artces of cooperation and bylaws; Provided, That for cooperatives With numerous and dispersed meribersip, te general assembly may be composed of delegates lect by each sector hiplar ct diet ofthe cooperative in accordance with the rules and regulatios ofthe Cooperative Development Authority, |i, Board of Directors shall mean that body eatrusied with the management of the afr of the ‘cooperative under its aticles of cooperation and bliss iv. Commies sal refer to any body entustd with specific functions end responsibilities unde the bylaws or resolution ofthe general nsembly or the board of directors, . Articles of Cooperation means the articles of cooperation registered under this Code and includes a ogistred amendment thereof, i Byram the byl rp drs Cod nd coe any repre enendnnt vi Reglsraton means te operative at granting artical personality oa proposed cooperative end i evidenced bya ceifeaeofreghseation, Vill, Cooperative Development Avthérity as auch hereinafter refered to s the Authority, ‘ix, Universally Accepted Principlis motns thit body of cooperstive principles edbered to worlwide by cooperatives; SE CRAR. Regulatory Framework for Buses ensactins RFBT 8807 Page 1 of 201X Representative Assembly means the fll membership ofa body of representatives elected by ‘each of the sectors, chpler or dstit othe cooperntive duly assembled for the pupose of ‘ring ch pores ely lied mb rel enya carne with itsbylans, Xi, Officers of the Cooperative shal include the members of he board of directors, members of the Aitferent commit creat by the general assembly, general manager or chief executive officer, __ Sere, treasurer end members holding other postions as may be provided for in thet bylaws; xxi, Soci Audit is e procedure wherein the cooperative assesses its social impact and ethical Performance visavis is stated mission, vision, goals and code of socal responibiliy for cooperatives t be established by the Authority in consultation withthe cooperative sector. It ‘enables te cooperative to develop a process whereby it an account for its social performance and evaluate ts impact in the comunity and be secoutble forts decisions and actions tots regular members ‘xl Performance Audit sal refer t a anit on the efficiency end ffectventss ofthe cooperative 45 a whole; is management and officers and its various responsibilty centers as bass for ‘proving individual tam or overall performance and for objectively informing the general membership on such performance, iv. Single-Line or Single Purpose Cooperative shall include cooperative underaking actives ‘which ae related tts main line f business or purpose, ax. Service Cooperatives ae thse his provide eny ype of service to is members, ivtding but fot limited 0, anspor, information and communication, insurance, housing, electric, health seevices, education banking and savings and cred avi. Subsidiary Cooperative refers to tee oF more primary cooperatives, doing the same line of ‘business, organized a the municipal, provincial cy, special metropoian politcal subdivision, ‘or economic zones created by law, reseed with the Authority to undertake business activites in suppor ofits member-cooperatives. ‘Purposes of Cooperatives 1. Toencouragethift and sevings mobilization among the members i To generate finds and extend ered to the merabers for productive and provident pposes; lit To encourage among members systematic production and marketing, fv. Toprovide goods and services and other requirements tothe members; '¥. To develop expertise and skill among its members, vi. To acquire lands and provide housing benefits forthe members; vik. To insure against losses of the members; vil. To promote and advance the ecoromie, social an educational tutus of he members; ‘ix. To emablsh, own, lease or operte cooperative banks, cooperative wholesale and retail compexes, insurance and agrcultralindustal processing enterprises and public markets, x Tocoordinate and facilitate the activites of cooperatives; Xi, To.advocate forthe cause ofthe cooperative movements; 1X To ensue the viability ofcoopertves trough the uilizaton of now technologies; ‘xii, To encourge and promote sei help or self-employment as an engine for economic grow and poverty alleviation; and xiv. To undertake any and all other activites forthe effective and efiient implementation of the provisions ofthis Code. Objectives and Gosl of Cooperative. ‘vie godt senso is meer 1 etal tha ati nrc income, vines invxmany prodtctviy, and purng power, td proete aneng eases quale Glsribuon of tet sup though nian wlan of economic fl, os-shring end taser Provide optimum sil ad sori beefs 1 members ‘Tab hen lest noe of ong igs copeave mune, Fropags coopeniv acces and pew tess arn and management ‘Allon i ow nce and less prvged oust increase ter omni the wel of tema: rd vi Coopente vith be gover cooperatives ad peopled orpaniatin to futher fe nme faye he fog ejeaves, (CRAR- Regulatory Framework for Busiass Transactions ary Page 2 of 204. Powers and Capacities of Cooperative 1 Tothe exclusive uso of ts restered nae, osu and be sed : it Ofsuccesion ii. Toamend its rls of cooperation in accordance wit th provisions of this Code jv. To adopt bylaws not entry to law, moral or public policy, and to amend and repeal the same in accordance wi Cooperative Code, i \. To purchase, receive, ake oF mt, hold convey, sel las, pledge, morghge, and otherwise ea! with sich real and penal’ propery as the transition of the lawful affairs of the ‘cooperative may reusonabl) and necessarily reguie, subject othe Limitation prescribed by aw the Consittion, ‘To cnt division, merger o consolidation, as provided in Cooperative “To form subsidiary cooperatives an join federation r unions as provided in Coperatve Code; ‘To avail of loans, be ented o credit and to acept and receive gant, dontons and asiance fiom forign and domestic sours, subject to the conditions of suid labs, erdis, grams, donation or assistance ta wil aot tndermine the sstonomy ofthe cooperate. The Autry, ‘pon writen request, sal provide aeesary assistance inthe documentary requirement fo the Tons, cred grt, donations and ter inancial uppers ix. To sal of preferenial rights granted to cooperatives under Republic Act Inown as the Local Goverment Code, and olber Iw, partially franchises to exublsh, com, operate and maintain fees, wh slaughterhouses and to lee public utes, including acess to extension abd erste research services and fates related agiulae and her activites 1 Tocrpmize ad operte schools aosordance with Republic Act No. 9155, Bévcaton Actot 200 a other pertinent iaws; and if 15, To eerie auch other powers rusted by Cropertve Code o necessary to cy out ts pupae ce purposes as stated ins Aries of cooperation. ‘& Types and Categories of Cooperatives ‘L Single-Line or Single-Purpose Cooperative shall include cooperstive undertaking ectviies ‘which ae elated to its main line of business or purpose; i Ji, Service Cooperatives are those wich prove any type of service to ts members, including but ‘not limited fo, anspor, information and commonication, insurance, housing, electric, health services, education, banking, and savings and eredit, - ‘Credit Cooperative is one that promotes and undertakes savings and lending pervces among its embers. If generates a common pool of finds in order to provide financid assistance 10 its members for productive and provident porposes; 1, Objectives of Credit Cooperative ‘To cucourage savings mong its members, To crete a poo of such savings for which loans for productive or provident rpose may be granted to its members, and & Toprovide related services io entble its members to maximize the benefit from such lars |v, Consumers Cooperative is one of the primary purpose of which is t0 progure and distribute ‘commits to members and non-members; ! '. Producers Cooperative is coe that undertakes joint production whether agricultural or industrial, It is formed and operated by its members to undertake the production and processing of raw iateials or goods produced by its members into finished or processed products forsale by ‘cooperative to is members and non-members. Any end produc or its derivative ersing from ‘aw tutterals produced by its embers, sold in the nae and forthe account ofthe . shal be deemed a product of he cooperative and its members, i ‘Vi. Marketing Cooperative is one whicb engages inthe supply of production inputs to members dad rackets their products; i vii. Multiparpose Cooperative is one which combines two (2) or more of the business activites of these different types of cooperatives, vil, Advocacy Cooperative is primary cooperative which promotes and advocates cooperativism ‘among its members and the public through sovially-oriented projets, education and tuning, research and communication, and other similar atvities to reach out to its intended beneficiaries; ‘x Agrarian Reform Cooperativeis one organized by marginal farmers majority of which are ‘agrarian reform beneficiaries forthe purpose of developing an appropriate sytem of land tenure, land development, land consolidation or land management in ares covered by agrarian reform, 1% Cooperative Bank is one organized for the primary purpose of providing a wide range of financial servies to coopeetives ad ther members; 1x, Dairy Cooperative is one whose members are engaged in the production of fresh milk which tay bs procs! nd matted o ny sodas, 1 xi, Education Cooperatives one organized for the primary pixpose of owning and operating licensed educnonel instnutions norwithstanding the provisious of Republic Act No. 9155, ‘otherwise known as the Govemance of Besic Education Act of 2001; RAR, Replay Paneworfor DsiessTsscions RFBT 6607 T Page 50120Xi, Electric Cooperative is one organized for the primary purposed of underaking, power enerations, uilizng renewable energy sources, including Hybrid systems, acquisition and ‘operation of subtransission or distribution tits household members; xiv. Financial Service Cooperatives one organized forthe primary purpose of engaging in savings nd credit services and other financial services; 1. Services of Financial Service Cooperative ‘2 The functions of eredit cooperatives and oer cooperatives, including multipurpose cooperatives, tht provide savings and credit to their members, ang Othe financial services subject to regulation by the BSP. av. Fishermen Cooperative is one organized by marginalized fishermen i localities whose products ‘are marketed eter afresh or procesed produ, Dei, Health Services Cooperative is one organized for the primary purpose of providing medical, dental and cher health saves; ‘at ail, Housing Cooperative sone organized to assist or provide acess to housing forthe benefit ofits ‘regular members who setvely participate inthe savings program for housing It is co-owned and sontolled by ts members; ‘vii, Insurance Cooperative is one engaged in the business of insuring if and poverty of ‘operatives and ther members xix, Transport Cooperative is oe which includes land and sea transportation, lited to small vessels, as defined or clasiied under the Philippine maritime laws, organized under the provisions of this Code, ax Water Service Cooperative sone crganized fo ow, operate and manage waters aystems forthe provision and distribution of petale water fr its members and their household rai, Workers Cooperative is one organized by workers, inching the self-employed, who are at same rime the members and owners of the enterprise. 1 principal purpose i to provide employment and busvess opporumites 19 its members and manage ft in accordance with «cooperate principles all, Laborstory Cooperative - shall refer toa coopeatve duly recognize by the Authority, formed and managed principally by mrs and is efiated with another registered cooperative which is salled the gurdian cooperative. Fifteen (15) or more minors who ae Filipino eitzens, actually ‘esidig im the conamunity or eurolleé in an educational institution within or near the area of ‘operation ofthe Guardien Cooperative o ot of school minor actually residing inthe commit, may organize a Laboratory Cooperative composed of minors, which sll be seven (7) years old bust below eighteen (18) years of age. Purposes of Laboratory Cooperatives A Laboratory Cooperative shall be organired for any oral of the following purposes 1 Toservs as training ground for its members to prepare them for membership in regular cooperatives 2. Toteach te value of tril and seving mobilization among its members; 3. To instil cooperative values, principles, inacial discipline and leadership kills among its members, 4. ‘To promote and adveace Filipino social and cultural values, ecological awareness and stainable developmect, ‘il, Guardian Cooperative shall refer to duly registered cooperative to which a laboratory cooperative i alized with vatv. Primary Cocperative~ The members of which ae natural persons. 1ow, Secondary Cooperative ~The rember of which are primary cooperatives. xawi,_ Tertiary Cooperative ~The members cf which are secondary cooperatives. 4 Funetions of a Federation of Cooperatives ~ A fedcreton of cooperatives shall undertake the following finer i. To eany on aay coopraive enterprise autorized under Aricle 6 that complements augmens, or supplement bu! doesnot confi, compete wih nor supplant the busines or evonomic activites of itsmemters; fi Tocary on, encourage, and assist educational and advisory work relating to its member cooperatives; fi, To render services desined to enccuroge simplicity. efficiency, and soonomy in the conduct ofthe tasiness of is member caoperstves ard to faciiste the limlemensaton of their bocieeping. secounting, and oer systems ad process, |, To prim, pubis, and citculae eny newspaper or ether publication in the interest ofits member cooperatives td enterprises, ¥. Tocoortinate and ficlitate the actives ots member cooperatives; Yi To enter into joint ventures smh natal or iteration cooperatives of other countries in the __ Manufacture and sale of ruducis nde servies in the Flippin and ebvoad; and vit Topertor such other factions ws nay be neces to stam i's objectives, 1. A federation of eooperaives any be registred by cary out he farmaies fr registration ofa cooperative. 2. Registered cooperatives rosy oganie a faderation according to the typeof busines activity engaged iby the cooperatives, —_—_—_—_—_ eee CORR: Regul Framewekfor Busnes Tenacions REBT GOUT Page 40f20,1 Porpones of Cooperite Unlons~ Relteredcoopertves and federations nthe appropri. lvela may “runic Join cooperative unis 0 epee th nest rd welfare of al type of ooperatvs a the [Poviclality, reg sd nts evel. Cooperate unions my hve tho following purposes 4. Trees is menor onion, A To nau, analy, and di coma, satis nd other information relating to kx meter and tol ypes of cooperatives within aoa of operation; {ik To span tis inthe eco, loa, Haucil,scisl and ther phase of cooperation, sod pulls terest ero tw. Topramete he huowlede of soopmtve principles and practices, + Todevelop the eaperatve moverow in hi epetivejuriditons vi. Toadvie the aproprinte authorities all questions roaing to cooperatives, vi, To mise finds thraigh tenbeship Fee, dies ed eorrbution, donations, and subside fom Incl un ivi ues wheter vt goverment, end ‘i. Tod and pti hot one ere my be mer tne oan jectves 1. Coopers unions my east he national and ocal goveramenty in the lat’s developnent avidin thei repestiveuidetons, 1h. Cooperatives Not lo Restralat of Trade, ~ No cooperative oc method ot act thereof which complies wi his Code sal bo desmod a vnepzay e smbinaton in esti of tao ran ileal monopoly, {ran atempt essen cnet or fix pee arbicwily in voto of any Iw ofthe Philipines. Organization of Primary Cooperalve 1 Ordinary Cooperative = Fiteca (1) or more naturel periens who are Flin citizens, of legal tage, having w coon bord offre and are actly residing or working inthe tended area ‘of operation, may organize «primary cooperative under this Code: Provided, Tata prospective tmember of primary cooperative must havo compleed « Pre-Membership Education Seminar (PMS), fi, Any newly organized pear cooperative may be registered as multipurpose cooperative oly nant equa for multipurpose coopersives to be set by the lepirposscoopetalive may tcusform inlo a mulipupose or may ete suis ony alert feet wo 3) oars of eperaions P ii, Voting Requiremest for Repletruton of Eleetrle Cooperative, ~ In compliance with the Telerendum ns «wating procedre, tho rguied number ef votes for registration withthe CDA ‘hal be twenty percent (20%) of all members in good sending - 4k Reonomle Survey before Formation of a Proposed Cooperative - Every group of individuals or cooperatives imending to Torm a cooperative under Cooperative Code sll submit to the Coopertive Development Authority « general statement dessribing, among oer the stucture and purposes of the proposed coopertive: Provided, That th stustre and actual safing pute of tho cooperative shall Trelode a bookkeeper; Provided, futher, Tha they sal pot be allowed to operat without the neessuy, personel ard shall aso submit an eeonomie survey, indicating therein the are of operation, the size of Tremberhip, and ther pertnet dts format provided bythe Coopentive Development Aubry 1k Linbilty of Cooperative daly regatered under tls Code - A cooperative duly reiserd under tis Cade shal have ite bility |. Term of Cooperative ~ A cooperative shall xis ford period not exceeding fit (50 yas fom the dle i ‘of regitation unless sooner dave or unless wid period is extended. The cooperative tem, ‘rig siatod in the eric of operon, ay be extend for periods not exceeding fy (50) years in any single instance by an wrendmeat of the wsticis of cooperation, in eccoraaee with this Code: Provided, Th no extension ean be mado carir than five (S) years prior to the criginal or Subsequent expiry dateldaes nls there ao justifiable reasons for an earlier extension as may be determined by the Auoriy. 1. Articles of Cooperation ~All cooperatives applying for repsration shal fla with the Autor te Artelesof cooperation which shall be signed by cach of the organizers and ecknowledged by them if fatal persons, and bythe cirperacr or escreais, if juridical person, baie a notary public. Each Cooperative tobe registered under tis Code aball adopt Bylaws not inconsistent with the provisions of this Code The bylaws shal be led a the ame ie asthe articles of operation 1 Content of Aricies of Cooper “he name ofthe coeperate whch sal acute he word eoopertive; ‘The pupose or purpored aad scope of business for hich the cooperative isto bo registred, . ‘The tem of eitenve of th cooperative ‘The are of operation nde postal adress oft principl off ‘The names, ional, cle postal adresses ofthe repre, ‘The common bond of reste “The list of names ofthe decors who shall manage the operatives and ‘The amount of its sare cept, the ames and reidences of is contibuers and ¢ statement of wheter he coopcative primary, secondary o era ia acordaoe with ‘Article 23 hereof. eeee pe (CHAR Rogulator Framework for Busse Tanactions RFBT 8607 Page 5 of 20Reg eat for Registration with CDA 1. No cooperative, cher than a cooperative union a described under Article 25 hereof, shall be registered unless the articles of cooperation is arcompanied with the bonds of the accountable officers and a stom statements ofthe treasurer elected by the subscribers showing that at leat tweaty-five per centum (25%) of the authorized share capital has ‘een subscribed and atleast enty-five per ceatum (25%) ofthe total subscription has ‘ben paid: Provided, That in no ease shall the paid-up share capital be less than Fifteen thousand pesos (P15,000.00) 2. The Cooperative Development Authority shall periodically assess the required paid-up share capital and may increase it every five (S) years when necessary upon consultation ‘withthe cooperaive sector and the National Economic and Development Authority (NEDA), 1. Jaridical Personality of Cooperative - A cooperative fonned and organized under this Code squires jc! personality fom the due the Autor sues acerca of registration unde is fii stl ‘Al applications fcr epstation hal be Fall isposed of by th Author wih prod of sixty (60) days fom the fling thereof, otherwise te appiin is deemed approved, ules the cause of he delay is atibuable tothe applicant: Provided, Tau inca of «denial of the application for reiszatice, an appea shal ie with de Oe of the President within ninety (90) days fon ree of ate of och ‘ena: Provided, further, Tat fue of te Offi ofthe Preset tat on the appeal within lnty 30) ‘ays rom the fling thereof shal mean approval of suid application. ‘0. Evidence of juridical personality of cooperative - A certificate of registration issue by the Authority under its oficial seal shall be conclusive evidence that the cooperative therein meationed is duly registered unis itis prove that the registration thereof has been cancelled. Amendment of Articles of Cooperation and By-lams - Unless otherwise prescribed by this Code and for legitimate purposes, any provision or mater tated in the articles of cooperation and by laws may be mended by two-thirds (2/3) vote of all the members with voting rights, without prejudice tothe right of the dissenting members to exercise their right 19 withdraw their membership under Article 30. The smenciments shall tke effect upon (1) is approval bythe CDA o¢ 2) within thirty (30) days fom the at of fling thereof if ot acted upon by the Authority fora cause ot aributable to he cooperative ‘4. Types of Membership in cooperatives 1. A regular member is one who has complied with all the membership requirements and entitled 9 allthe rights and privileges of membership. fi. An asccite member is one who has 20 right to vot nor be voted upon tnd sbal be ented only to such rights and privileges as te bylaws may provide: Provided, Tht an associate who meots ‘the minimum requirements of regular membership, continues to patronize the cooperative for two (@) sears, and signifies hisher intention to remain x member shall be considered a regular member. ' Lihiliy of Members - A member shall be Bale forthe dbus of the cooperative to the extent of his contribution tothe share capital ofthe cooperative. Termination of Membership i. A member of a cooperative may, for any valid reason, withdraw his membership from the ‘cooperative by giving a sixty (60) diy notice to the board of directo. Subject othe bylaws of the cooperative, the withdrawing member shall be entitled to a refund of his share capital ‘eontribution and all othe interest inthe cooperative: Provided, Tat such fund shall ot be made ‘upon such payment the valu of the assets ofthe cooperative would be les than the ageregate amount of is debt and lisblities exclusive of his share exptal consibution. fi. The death or insanity of a member in a priary cooperative, and the insolvency or dssoution of ‘a member in secondary or trary cooperative may be considered valid grounds for termination ‘of membership: Provided, That in eace of death or insanity of an agrarian reform beneficiary- member of a cooperative, the nextofkin may assume the duties and responsibilities of the crigizal merber Sik Membership in the cooperative may be terminated bya vote ofthe majority ofall the members of the board ofdretors fer cases provided by ln |v. Grounds for Membership Termination in a Cooperative 1. When a member has not patronized any of the serves of the coopeeatve for en unreasonable period of time s may be previously determined by the board of directors; ‘When a momber hs coniuously filed to comply with his obligations; ‘When e member has acted in violation ofthe bylaws andthe rules of the cooperative; and For any act or omission ijurious or prejudicial to the interest or the welfare of the cooperative. per ee (CPAR- Regulatory Framework for Business Tansactions RFBT 8607 Page 6 0f201 Pracedre for Termination of Membership in Cooperative - Menber whase membership the bard of Get my wish to teminte sal be informed of ich intended ation in wi ted shal be given a opportunity oe heard before the suid board kes ts dein, The ‘sion ofthe bod sll bein wing ad shal Be communicated in es oY registered tml to sid member and hal be apie within iy (30) dy om exp hee oe {ral sembly whove decison lb fil Tho genoa assembly my rae an appeal and ‘grievance committee whose members shall serve for # period of one (1) yeat and shall decide {peas on embers trina. The commit is gen hy (30) Sn receipt heal {o'dcdeon the ape. Fare to dose whine peered pid the pel deemed Stored in favero the member Pending isin bythe gene ash, tb membership reinforce. 1) Refund of fatereata ~All sums computed in acordance withthe bylaws o be due fom 2 cooperative to | former member shall be pai to him elther by the cooperative or by the approved rapsfere, as the ce | ay bein abcorance with this Code. «sian i. Cornpesion ofthe General Asemly - The gener assembly shall be of sch ‘hebrew ae ete vote nde eases of operon ad bylaws he cooper ik Power and Detton ef th General Asenbly ~The gelesen sal eh gh oltunaing tty he cope ands ec sch powers eel a is Coe We ani of cope aby of copa UL. Nondelegable Powers of General Assembly 1. To determine and approve smepiments tothe articles of cooperation and bylaws; 2. Toclect cr appoint the mershersof the beard of directors, and to remave thea for ease. However, inthe case ofthe elects cooperatives registred under this Code, eection of the members of the boant shall be held i accordance with is bylaws or eleston {uideline of euch electric cooperative and 13. To-appove developmental plans ofthe cooperetive. iv. Procedure and Required Vote for Delegation of Powers of General Assembly to Board of Directors or Suler Body ofthe Cooperative - Subject to such other provisions ofthis Code and only for purposes of prompt and intelligent desision-making the gencral assembly may by a ‘ree fours (3/4) vote ofall is members with voting rights, present and creo ‘quorum, ‘legate some of is powers to a smaller body of the cooperative, Thest powers shall be ‘enumerated under the bylaws of he cooper 1 1. Cooperative Mectlgs A repular mesg lb eld azul byte genre on Sree ne tls oft ofa any ne thin sinc) ys ate ie ceo ‘each fiscal year: Provided, That notice of regular meetings shall be sent in writing, by posting or pb, ough recess ll embers of. Te Wt ecany, sol aon of te gen sey mayb cl a ine by smajry wir of tr boa of des cas povied fer nthe yaw Provided, ‘That sts in wag hal be et one () woop fo th mectag te al members ho ar elle’ to vt However, «eps metg sal be called by he bord af Gets afer conpliace wit the requiod nace wikia fom at lout tea ee Senun (104) of be tal manors who reeled veo tant speci Bases covered bye el ' 2 tne bud fst cll reir b pei meting iin the grea prod he ‘Auto, upon eto oft pr peti (0) ol he member fe Cope tho etd vty tnd x gd etn showo lean oe peta Sheng te to ans meting of he goers by ing oper notes ‘eroedin tC at 3. Inthec os ewy apne epee pei geen fe led, {Stirs pactiable widely (9 days ea ch apron 4, The Authority may calla special meeting of the cooperative for the purpose of reporting ‘tbe mena en any tamaton or eer nventgaon oh cope afi nd 5, Not of any esting may be waned expres ong by ay seb. (CRAG Regulatory Framework for Busiss Tasssctons RFBT BOOT "Page 7 of 20vi Quorum in General Assembly. |. Ordinary Cooperative ~ A quorum shall consis of et lest tweanfive per centas (25%) ofall he members ented to vot. 2. Hlectri cooperatives registered under this Code ~ A quorum, unless otherwise provided inthe bylaws, shall consist of five percent (5) of al the merabers entitled o vote. 3. Cooperative Bank - As a general cue, the quorum in the regulr or special meeting of general asembly isa least on balf plus ove ofthe numberof voting shares ofall the members in g008 soning However, ag an exception to general rule, the quorum inthe meeting of general assembly of m cooperative hank forthe amendment of is utiles of cooperation of byc-tr is At Test 3/4 of all members with voting rights present and constntng qooram, vii. Voting Syatem. - Each member ofa primary cooperative shall have only one (1) vote. Inthe case cof members of svcondary or teary coopermtives, they shall have one (1) basic vote and as many incentive votes as provided fr inthe Bylaws but uot exceed five (5) votes. The votes east by he Aelegates cal be deemed 2s wots cast hy the members thereof. TL Howerer, the bylaws of cooperative other than a primary may provide for voting by proxy. Voting by proxy nena allowing delegate of cooperative to represent or vote in behalf of mothe delegate ofthe sume cooperative. vill. Composition and Term of the Board of Directors. — Unless otherwise provided in the bylaws, the diveeon and management of the ffir of a cooperative shall be vested ia a board of irectrs which shall be compoced of net les than five (3) nor more than fifteen (15) members flected by the general assombly for term of twa (2) yeas and shall hold office unt thelr swssessrs ae dly elected an qualified, or until duly removed for caused. |x. Powers ofthe Board of Director. - The board of dirctors shall be responsible forte strategic lansing, dizetion setting and poliy-frmulation activities of the cooperatives. 1X Directors (Qualifications of Director ia a Cooperative) TL Any member of a e2operative who unde the bylaws ofthe cocpertive, has the right vote and who possesses al the qualifications and none ofthe disqualifcations provided in the laws oF bylaw shal be eligible for election as director. 2, The coopentive may, by resolution oft board of directors, admit as directors, oF committee member cae aproined by any fiaacing institution ffom which ‘the cooperative received finaueal asiance solely 1o provide technical knowledge not avallabl wii its membership. Such director or committee member not be a member of the cooperative and shall have ne powers, rights, nor responsibilities except to provided ‘echnical assistance as reguzed bythe cooperative. 3. ‘Themembers ofthe board of directors shall not hold eny other poston dircly involved in the day today operation and management of th cooperative. ‘Note: The members of the board of decors may hold the position of chairman and vice-chairman of the board but ae net allowed to beld otber offical postions which shall be sven to perzons outside the boar. 4. Any person engaged ina Business similar to that of the cooperative or who in any way Ins a conflict of iteest with i, is disqualified ffom election as a diene of said cooperative. HL, Meeting ofthe Cooperative Board and Quorum Requiremeat 1. ln the case of prinazy cooporatves,reguler meotings ofthe board of dirctors shall be held atleast once a mith 2 Special meetings of the Soar of dirctors may be held at any time upon the cll ofthe chairperson or& majority of the mesners of the board: Provided, That writen notices of ‘the meeting specifying the agenda ofthe special meeting shall be given to all members of the boasd atleast one(1) week befoethe sad meeting. 3, Directors cannot stlend or vote hy proxy a board meetings. ‘xii. Quorum in Board of Directors, 1. Ordinury Cooperative - At lesst majority ofthe members ofthe Board unless the bylaws provide oterwice. 2. Cooperative Bank -One-baf pus ene of al the meibers oft board of directors. ‘ci Vacaney in the Boord of Directors. Any vacaney in the board of directors, other than by expiration of term, may be fled bythe vote of atleast « majority ofthe remaining doctors, if still constituting a quoram: otherwise, the vacancy mut be filed by the general assembly in a regular or special meeting ealled fe: the purpose. A dcectr so electod to fill a vacancy shall serve onl te unevpied term of his predecessor in office. nr (GEAR Regn Paneer for Ouse: Tancarons REBT 8607 Pages of20iv. Officers ofthe Cooperative, ~The board of directors shall elect from among themselves the chairperson and vice-chisperson, and elector appoint othe ofiers ofthe cooperative from futside of the board in acordence with thee bylaws, All officers shall serve doring good behavior and shall not be removed except for cause afer due hearing, Loss of confidence shall not be & valid ground for removal unless evidenced by acts or omission causing loss of ‘confidence in the honesty and integrity of such officer, No two (2) or more persons with relationships up tothe third civil degree of consanguinity or afnity nor shall any person engaged in a business similar to tat of the cooperative nor who in any other ner bas isteress io ‘confit with the cooperative sal serve ss an appointive officer sv. Committees of Cooperatives 1. The bylaws may create an executive commie tobe appointed by the board of drestors ‘with such powers and dis as may be dloguad to tin tho bylaws or by x majriy vote ofall the members ofthe board of directors 2. The bylaws shal provide for the creation of an audit, election, mediation end coneliation, ethics, and eachother commions as may be necessary forthe conduct ofthe ‘tir ofthe cooperative. The members of bth the adit and election committee shall be ‘lectd by the general assembly andthe rst shall be appointed by the board. The audit comminee shal be directly accountable and responsible tothe general assembly. It shall Ive the power and dy fo continoously moitor the adequacy and effectiveness ofthe ‘cooperatives managemeat contol system and audit the perfomance of the cooperative ‘and te vious reeponsiliy canes. 3. Unless otherwise provided in the bylaws, the board, in cae of a vicaney io the ‘commires, may cal an eleton to fil te vacancy or appoint a person fill the same subject tothe provision thatthe person laced or appointed shall serve enly forthe ‘unexpired portion of thet, vi. Functions, Responsibilities end Training Requirements of Directors, Officers and ‘Committee Members. ~ the functions and responsibiites of directors, officers and committee members, as well as thir taining requirements, sell be ia accordance with the rues and regulations isued by the Authority. avi, Liabiliy of Directors, Oficers und Commitiee Members. - Director offices and committee member, who ae willflly and knowingly vote for or assent paeatly unlawful act or who are bully of gros negligence ar bad fit in directing the afar ofthe cooperative or acquire any personal or pecuniary interest in conflict wit ther duty as such directors, officers or committee ‘embers shall be lable joiatly and severally for all damages cx profits resulting therefrom to the ‘cooperative, members, and other pereons. '. When 2 dizector, officer or commitee member attempts to acquire or acquires, in violuion of his duty, any interest o equity adver tothe cooperative in respect to any mater which bas Bees reposed in him in confidence, he shall, as a trste for the ‘cooperative, be lable for damages and shall be accountable for double the profits which terwise Would have acorued to the ecoperative. si Compensation of Dirctra Cooperative Tine seco sy prow he yaw ng th compensa, he deste Shall ot revive any congestion exe fr rtseable pr Gems: Provided however, Tat toe Steet ler sl at be tiled sy per den wien te preceding eae ear, the copra reported «et os fad end es Shao the ofc alan ra fe he sae yar. Any comgenston er than pe diet mayb rated dtc by majoriy vote of he nbs with engi regular or special gisenl tmily” teeing speiSelyclled for te pues: Provided too aoa! congestion other a per dems hl be paid ‘kag the fi year a exe fay cope 2, Tecan oft fe pew al mete fn cite aswel ae member ole commie rated pest ois Cole ors yews ‘be fixed in the bylaws. ee ‘ytewnmay 3. Unless aealy fed in tye, te compensation of al aher employee shal be Seti’ by bowed of Site i oS SSP SEE S-ermeaereeeeeeeitet eet (CAR gultory Sramewark for Business Hansacons REBT G07 Page 9 of 20,Xx. Dealings of Directors, Otncers, or Commitee Members ~ A contract entered into by the cooperative with one (1) or more of its directors, officers, and committee members is voidele at the option ofthe ecoperatve, less al he following conditions ae present 1. That th presonce of such director i the board meeting Wherein contract was approved was nt necessiry oconstinte a quorum for such meting, 12. That the wot ef such dwcor was nt necessary forthe approval ofthe conrct, 3. That the contracts fir and rearonable under the circumstances and “4. That inthe case of an officer of commitee member, the contrast wih the officer or commitee member has bees previously authorized by the general assembly or by the boned of directors. 5. Where any ofthe frst two conditions set forth inh ase ofa contact witha ictor such coatract may be vote of all the members with voting rights, present end constituting & quorum in & meeting called forthe purpose: Provided, That fll disclosure ofthe adverse interest of the dirctors involed i made at auch meeting, and that he contract is fir and reasonable under the circumstances. 2% Disloyalty of a Director. A director who, by virtue of his office, acquires fr himself an ‘opportunity which should belong othe cooperative shall be able for damages and aust account fer double the profs that otherwise would have accrued to the cooperative by refusing the same, unless bis ct hasbeen ratified by a three-fourths (3/4) vote of all he members with voting Fights, present end constituting a quorum, This provision shal be applicable, notwitanding the fact that he director wed his own Funds inthe veature. 2a, Mlegal Use of Confidential Information. — A director or oie, or an associate ofa director oF officer, who, for is Benet or advanlage o that of an associate, rakes use of confidential information tat, if generally koown, might reasonably be expected to adversely affoct the ‘operation and viability ofthe cooperative, sal be bel I. Liable vo compensate the cooperative fo the direct losses suffered by the cooperntive as. result ofthe ileal use of infomation, and 2, Accountable othe eoopertive for any direct benefit or advantage received or yet to be received by him or his associ, a result ofthe transaction. 3, The cooperative shal take the necessary steps to eaferce the lisbilties deseribed in subsection (2) xi Removal of Elected Officer or Director. ~All complins fr the reravalof any elected officer shall be led withthe board of dirctors. Such office shal be given the opportunity to be heard. “Maiority ofthe bourd of dieters may plae the offices consered under preventive suspension pending the resalution ofthe investigation. Upon finding of a prim facie evidence of gui he ‘board shall presnt its recommendation formenoval tothe general assembly 1. An elective officer may be removed by three fourths (34) votes of the regular members present and consisting a quorum, in a regular or special general assembly mecting ‘ale forthe purpose, The oficer concemed shall be given an opportunity tobe heard st sid asembly 1. Privileges of Cooperative from Taxes 4, ‘Tax Treatment of Cooperative - Duly registered cooperatives under this Code which do aot tamsuct any business with non-members oF the general public shall not be subject to any taxes sad fees imposed under the iteroal revenue lavs and cher tx Iews. Cooperatives not falling under this article stall be governed by the succeeding section ‘i, Tax and Other Exemptions, Cooperatives tasscting business with both members and noo- members shal ot be subjected to taxon thee transactions with members. In relation to this, the ‘wansactions of members with te cooperative shall not be subject to any taxes and fees, including ‘ot limited to final taxes on members? depesis and documentary tox. Notwithstnding the provisions of any law ot regulation othe contrary, such cooperatives dealing with noumembers Shull ejoy the following tax exemptions: 1. Cooperatives with accumulmed reserves and undivided net savings of not more than Ten million pesos (P10,000,00.00) shall be exempt from all national, city, provincial, ‘municipal or barangay takes of whatever name and nature. Such cooperatives shall be ‘exempt fom customs duit, advance sales or compensating axes on their imporation of ‘machineries, equipment ad spar parts used by them and which ee not avallbl locally 8 certified by the at of wade and indetry (DTD). All x free imporations shall not be sold nor the benfvial ownership thereof be trasfered to any person until ater five (5) yeas, otherwise, the cooperative and the transferee or assignee shal be solidaily lible wo pay twive the agua ofthe imposed tax and/or duties, Gia. ajiny Pomewor for Ouse Tanaris RFBT 8607 Page 10 0f 202. Cooperatives with accumalstd reserves and divided net savings of mere than Ten rilon pesos (10,0000000) shal py the flowing taxes tthe ul rae ‘come Tex On the amount allocated for inret on capital: Provided, That the i same tox isnot consequeily Imposed on intrest indvidaly received by members: Provided, ft, Tht cooprvesrepudlss of elassfeaton, we ‘xempt income tax fo te date of epsrton vith the AUDEN | 1, Value-Added Tex On transactions wit no members: rovied, however, Tat \ eoperntves duly registered wit the Auber; ae exept the ven of ‘abled i: sujet to Seton 108, subsections L, M gd N of Republic Ast No. 937, the Nena InernalRevene Code, as amended: Provided. That | ‘he exempt traction under Seton 109 (L) shall icf sale made by cooperatives duly registred with he Autor organized aber fo undertake the production and processing of ra prohced by is members into Oaithed or proves p Cooperative to Is members and gon-membes: Provided, frie, Teal any rocessed produto its derive acting fom the raw materi produced by member, soll. it then mame tnd. forthe aecou of the cooperative: Provided finally, That tes weave ex cnt (259) ofthe ‘et income of he cooperatives i reumed to the embers ine form fees tad paronage reid | Allthr taxes ules otherwise provided been and 4. Donations to chara, research and ean ition ad reinvestment to socioeconomic projects within the area of operation of the eboperstive may be tox dod, 3. All cooperatives, regards ofthe amount of accumsled reserves and uve net saving shall be exept fom payment of lol taxes and taxes on tans ith banks ‘nd isurance companies: Provided, Tha ales serves rendered for aon-nembers shall be subject tothe appicalepeoage tees sas made by poder, martng Or service cooperatives: Proved iter, That nothing in this ale fall pct the ‘taminaen ofthe books of arcounls or oer ccovatingresords ofthe cooperative by {ly authorized tral rveoue ofr fr ital revenue tax poses ol, et __ Peter eaboration bye Auch ‘ik Other Privilege of « Cooperative 1. Invaras where thee ae no avilable notaries public, the judge, exercising his ex officio capacity as ory publi, sal render service, See of share, t ay person or ‘sou of persons requir the siminsmton of ont cr the aknowledgrent of ares ‘of eooperaton aad insbuneats of lam fom coopentives not excecing Fve Hundred ‘hous Pesos (P00, 000.0). | 2. Any reiterofdods sal acu for registration, fv of charge ny instument eave to 8 loan made under this Code which doesnot exceed Two Hund Fity Thoosand Pesos (P250,000.00) or the deeds of le of any propery acquied by the cooperative or any paper or documeot dram in eonnetca wth an ation brought by te cooperative with any cour judgect rendered ini favor or any istruent relive toa bond of any accouabl fer ofa cooperative forthe fulfil perfomance of his dis aad shligsion. | 3. Cooperaves sal be exept fom se payment ofall cour and sheri' fs pays to the Philippine Government fr and fn ccnecion with all axons brought tne thi Code, or where such actions is brought bythe Authority befor the sory, fo enforce ‘syment of cligations contracted in for of the cooperative. 4. All coopertves sal be exe fot puting op a bond fr bringing an sppesl the decison of an infor eout| or for sesking t0 set ane any thd claim: Provided, That a cenit the Authocty showing ta the ae assets of cooperative ae in exces ofthe mut of the bood reied bythe court in sil cases Shall be accep by the courts stent ood. 5, Cooperative shall enjoy the rvlege of deporting thir sealed cash boxes or oni ecuments or any valuable pepe inthe Sefes ofthe mincialor city treasures and other government offices feof charge, and the custodian of such arcls stall sue ‘receipt achnowledging the articles reotived duly witsessed by anoer person, 6. Cooperatives organied among goverment employees, notwithstanding any law oF regulon tothe corey, tal xy the reuse of any availble space in their agency, ‘heer owned or rented by the Goverment . 1. Cooperatives renderieg special pcs of senses and facilites suc de cold storage ce Plan, elec, ranepovtaion, ad sil servics and facile abl secre a fanchse Aberfore, and sich cooperatives sal open their merch all sone qualified in their ares of operation, RAR. Regulatory Framework for Gusinas Tansacions RFBT 8607 T Page 11. 0f 204. Inareas where eppoprnte cooperatives exis, he preferential ight o supply government ination and ages rie, om and oter guns, fish and oer mare products, me ges milk, vegetables, tobacco and other agricultural commodities produced by thelr ‘ember sal be ganted tothe cooperatives concemed, 9, Preferential treatment in. the allocation of fertilizer, including seeds end other ‘agicultural inputs and implements, and in rice distribution shall be grented 12 operatives by the appopite government agencies, 10 Prenat ead sqstale ueamet ia tt alesion oe consol of betowies of cemmecial shipping, veses in conection with te shipment of goods and products of cooperatives; 11, Cooperatives and their federations, such as farm and fishery producers and supplies, ‘market vendors and such ofr cooperatives, which have for their primary purpose the production and/or the marketing of produsts from agriculture, fcheries and small entrepreneurial indosties and federations thereof, shall have preferential rights in the management of public markets andor lease of public market facies, stalls ot Spaces: Provided, That these rights shall only be utilized exclusively by cooperatives: Provided farther, That no cooperative forming a joint venture, partnership Corany other similar arengement with a non-cooperative entity can utilize these rights; 12, Coopemtives engaged in credit serves andor federations shal be entitled to loans ereit lines, redicounting of ther loan notes. and other eligible papers withthe Development ‘Bank ofthe Philippines, te Land Bank ofthe Philippines and other financial institutions except the Barge Sentral ng Pilipinas (BSP); 13, The Philippine Doposit Insurance Corperstion (PDIC) and ether government agencies, ‘aovermment-owned ard contelled corporations and government financial insttions Shall provide technical assieance to registered ational federations and unions of ‘cooperatives which have significant engagement in savings and credit operation in order for these federations and unions to establish andor strengthen their own aufonomous cooperative deposit insurance systms; 14, A public wanspore service cooperative may be entitled to flancing support for the cquisition andor maintenance of land aad sea transport equipment, facilities ard pars trough the program ofthe goverment financial institutions. It sta have the preferential right 10 the management ard operatoe of public terminals and ports whether land or sea transport where the eroperative operates and on securing 2 fanchise for active or i Solaris Sar te publi BP en — TS. Coopertiv as tranesting business With the Government OF te Philippines ot ail oF politcal subdivisions or iy oF agencies of iastrumertalites, including goveriment- owned snd controlled government agencies and concerned coogeratve sector, shell sue rules and regulations on all matters conceming housing cooperates. rr rr CEA: yuan Framewer for snes Tascusons REST BOOT Page 12 of 20,¥, Dissolution of Cooperative 4, Volaotary Dissolution Where no Creditors are Afete, Ifthe distohion of cooperative doesnt prejudice the rights of ny rede having clan agtint the disoluion may bo fesed by 2 majority vote ofthe board of deters, and ty esltion daly adopted by the fTimatve vote of est three-fourths (34) ofall the members with voting Fights, present end sonstting «quorum aa mesing to be bed upon calf ted: Provided, Tha the nie af ime, pac and objet ofthe meeting sal be pulsed fo re (3) coseoutve wee in ‘ewspeper published inthe place where the principal office of si cooperate is leate, oF fo senspaper’ is published. im such place, in a aevopepet of general cdvulaon inthe Philippines: Provided, rer, That th ntce of such meting is sat to each member of record tithe by registered mall or by personal eine) at ast hy (30) days ror to sad meting. A copy ofthe resolution authoring the dsotin stall be certfed toby «major ofthe bord of directors and couesgned bythe board secretary. The Autor shall thereapon ise the ceric of dsation, fi, Voluntary Dissolution Where Creditors Are Affected. ~ Where the dissolution of cooperntive may prejudice the rights of ery creditor, the petition for dissolution shal be fled with the Authority. The petition shall be signed by « majority of ts board or directors or the officers ‘managing its afr, verified by its chairperson or board seretary or one ofits directors and shall Set forall claims and demands aguns it and that its dissolution was resolved upon by the affirmative vote ofa least three-fourths (3/4) ofall the members with voting right, present and constiuting a quorum ata mecting called for tht purpose. 1H Grounds for Involuntary Dissolution of 2 Cooperative by order of a competent court after due hearing 1 Violation of any lw, regulaton or provisions ofits bylaws; or 2. Insclvency. 1. Grounds for suspension oF revocation, after due notice and hearing, of certificate of ‘istration of w cooperative by Cooperative Development Authority 1. Having obtained its episraton by fran, 2. Existing for an legal purpose: 53. Wilf violation, despite notice by the Autbority, of the provisions ofthis Code or its bylaws: 4. Wilf faire to operate ona cooperative basis nd Failure to meet he required mininur numberof members inthe cooperative, 1 Liguidation of Cooperative “einence emia 1. Every cooperative whose charter expire by it own limitation or whose existence is tein by voluntary dissolution o through an appropriate judicial proceeding shall nevertheless contaue 1 ens Tor tre (3) years ae the time iis disolved nt to continue the business for which t ‘vas esablished but for the purpose of prosecuting and defending suits by or aginst setemeat {nd closure of tsa; disposition, conveyance and disribution of ts properties and assets, ii, At any tne during the sai three (3) years, the cooperative is sutoried and empowered to convey all of its properties to tustees forthe benefit ofits members, ereditors and other persons in imerest, From and afer any such conveyance, al interests which dhe cooperative had in the properties are terminated ‘A cooperative shall only ispibae its assets or properties upon lawful dissolution end afer payment of al its debs and lables, excop in the case of decrease of sire capital of the : ‘oopertive and as otherwise allowed by Cooperative Code. jv. Upon the winding up of the cooperative alli, eny asset distributable to any creditor, shareholder of member who is uaknown or cannot be found shall be given tothe federation ot tunion to which the cooperative is afiited wit ¥. Upon dissolution and fiquidtion, subsidies, donation, lgaces, rans, aids and such other Assistance fom any Tacl or foreign institution whether public or private given to a cooperative ‘whic form pat ofthe donated captor fund of he cooperative shal bo escheated in favor of the Republi ofthe Philippines, (C8AR-Rigulatony Pramcwor for Busines Wanacons fares Page 13 of 201% Merger of Cooperative und Division of Cooperative Deflition of Merger -sball refer to a union of two or more existing belonging 10 the same category whorchy the surviving cooperative, retaining its identity, absorbs one oF more ‘constituent cooperatives. 1. Procedures for Merger of Cooperatives i. Two (2) of more cooperatives may merge into a single cooperative which stall ether be cone of he constituent eooperaves or the consolidated cooperative. fi, Required vote for merger of cooperatives - No merger or consolidation shall be valid unless tpmroved by ree fours (34) vor of all the members with voting rights, present and Constutng @ quorum of each of the constituent cooperatives at seperate general assembly imcetings, The dissenting members shall have the right to exercise thei right to withdraw theit ‘membership pursuant to Article 30, Effects of merger of cooperatives 1. The consitunt ooptaives hal come single cooperative which incase of meres inet rnivtg cooperative and in cas of conoiatin, shall beth consolidated cooper, 2. The spate exienc of the eonstvnteooperives shall cease, except that of the Surviving ore consolidated coopera 3, Ths atving or the conslcated, coopertive shall possess al the eet, rahi, Frlges, mus wad anche ofeach fh consent cooperatives 4, Thc surviving or the comolidaed cooperative shall powess all the asset, ahi, prailees,imnoniiey and fanehises ofeach ofthe conan coopeaives and The suring or the contd cooperative skal be responsi for ll be Rabies {ia bigaton of each of the constucne cooperatives fa the same manner as if sch funivng or conslted coopertve had Welt cured such lbilits or obligations. ‘Any clk scion or proceeding pending by or guns any such consent cooperatives ‘Bay be prosecmed by organs the srviving or consldaed cooperative as the ce iEay ke Nefber the rights of creditor nor any Tien upon the propery of any ich onstoeat coperetves sal be imps by such merge or cosoidin. '. Division of Cooperatives - Any registered cooperative may, by a resolution approved by vote ‘of three-fourths (3/4) of al the members with Voting rights, present and constituting ¢ quora, resolve to divi itself into the two (2) or more cooperatives. The procedare for such division Shall be prescribed inthe regulations of the Authority: Provided, That all the requirments set fort inthis Code have been complied with by the new cooperatives: Provided, futher, Tht 20 Upon the filing of the application for registration of » cooperative, the bonds of the ccountable officers shall be required by the Cooperative Developmgét Autority. Such bonds shall be renewed manually and the Cooperative Developmdnt Authority shall ‘secordingly be informed of such renewal. vil Preference of Claims 1. Notwithstanding the provisions of existing laws, rules and regulations o the contrary, but subject to tho prior claim ofthe Cooperative Development Authoiy, py debt due the cooperative fom the member shall constiute a fist lec upon any raw materials, Broduction, inputs, and products produced; r any lnd, building, filities, equipment, B0ods or services acquired and held by such member through the proceeds of the loan ot ret granted by the cooperative to him for as long asthe save isnot fly paid. 2. No propery or interest on property whichis subject len under pameraph (1) shall be Sold nor conveyed to third parties without the prior permission of the cooperative, The lien upon the property or interest shall continu to ext even after the ale or conveyance ‘thereof until sch lien bas been doy extinguished. 3._ Notwithstanding the provisions of any law to the contary, aay sale arjconveyance made ‘in contravention of paragraph (2) bere! shall be void. aa ‘vil Instrument for Salary or Wage Deduction ‘A member of coopertive may, notwithstanding the provisions of efisting laws tothe ontary, execute en instrument infor ofthe cooperative authorizing his employer to ‘deduct from hsher salary or wages, commutition of leave credifs and ary other tin Sc a tS rh or W's specified in setsfiction of « debe or ether demand due from thy member|t0 the ‘Sipe 2. Upon te tacaion of sh inet ada may beri by he cone Gove wien ges, tho ems sal mate daton accra wk {Seaport and non arans wth he aeonen sd Eh he ‘comt wo deed wit tn (10) deat th ef ofthe pay mato te ‘cooperative. The employer shall make the deduction for as long as spch debt or other Send els ap ye ony 2. Theo "employer aoe i alla al pate sande a tnd ll goremmels ed gcieramertovae a Sontale eprint he etiam of caer ed hive ager ay a ems ft the nares meinen pug) and fi aril i 4. The provisos of is wes shal sp oa star agtement refered ia pang (@ end wer enfloed pro spa eth Corps Ce ! 5. owing te rovsin of tng vo te omen, erspnsblie of o elon sted pap) af 2 hares al be mio Pied Tht nthe cae of pin employe, he atl sad reat st Soesng a reningninbecalewea | 1 Primary Lie of Conpratve-Nosstsartng rovisin of my nw ik hs, a ‘cooperative shall have primary len upon the capital, deposits or interest of « member fr any debt «du othe cooperative from such a member. e. Insolvency of s Cooperative i. Proceedings Upon Insolvency of a Cooperutive- In case a cooperative is unsblet ful its ‘obligations to exeditors due to insolvency, such cooperative may apply for such remedies as it may deem fit uader the provisions of Act No. 1956, as amended, otherwise known as the Insolvency Law or under FRIA 2010. Nothing f this Article, however, precludes creditors from seeing protection from said insolvency law or FRIA 2010. (CRAR- Regulatory Pramesert for Gusinss Tamactons REBT 8607 Page 19 of 20,SUMMARY OF VOTING REQUIREMENTS IN A COOPERATIVE Cooperative Act ‘Voting by Board of Directors | Voting by Members (gular | Prscoce Menten" Mtewbers vt | Vanek) opr ited Right to inde Reig aaalon a Nar Raed af a pais wig | Ys Coopers ‘ons prow! un eamtnaogt fee ae alas | Nae Tf a was wi vas | Yes scope ig ‘ene oT Tata Era meas wi ag | Ye a Dir of Cope ws | Na RT EET mais wi alae ‘more Cooperatives | rights, present and constituting a = Vai Sain of pea | Nay a RNS SAT aaaies ag |e wie cedion ace tces "| (te Xaninin at toed lon | nt Peete coutharg Speer eten bs Cre | oe seer ‘Vata saison of cooperative | May oT a amas Ging OTH aT a Tea WH Vag [NS ‘where creditors are affected | Formal Petition with rotice and | rights, present and constituting & hes Sorat Tike Ho nye aT RT + Sig oa meas wi [Ne directors if vacancy is cue to | voting rights, present and conan fn svete thot ling up of vacanty in he Foard of | Majony of he Remaining Ditciars | Majocty of all member with | No eco if vsarey is no due wo | iftey sill eonsime quorum; or | voting rights, present and espiatn em Gah recov | | esting agian eigen * _ Allston of TRS Gs was [Nafoty oF aT aanben wesc al | Not Rag sia | corsiuisgacuenen — | Deters of paymaH OT RGR Ups: scamendan By MR] ARO Ma oF aT] Re sbie cpt of at enters protat ant | hembes wih vi consi que {pesca and canting set scones Remora ofa ie of copea | Miya ances Ti Rea We val case f Dekpiion of ner of Gat 3] Rio afamentes Wea Raga We Pag ai eleced topeata | Nay oa meaBeE aRagaie We offender prevent supeson Pending reluion ty te | fev commitce over Bt i snc | Fillg of vasny Wee | MARGE a aI ee fr iad | Raed Re exzoutvecommitees | ewig a quor.m ‘Recommending, ‘othe General | Major of all members prec aod | Not Roqured (HW approval of [No Assembly the removal of slested | coring queen | General Assembly is necessary oie ofthe cocpestive | for the declsion reguding the . | removal) Delegation of te daegae powers | Nav aque % of all weribes wih voting [No cof General Assembly 1 the Bowed of | ; right, present and constuting a Direc _ | verse Ralfouion of conta wi Set | Not Reged of al memes with voting | No dealing diewos, fies oF rights, present and eonsiting & encctiv coumitee members 01h? ‘hora scoperstve _ _ Ratification” of —dievaly af” a | Hot Required of a aeabers with vatng | No deector of conpestive et met an osg Removal of mn dais 9A pea [Nt Rejuied Dat recammondaen |e of al TaGRbEN WE vag [NO reecmercodtion of the Baad of by he dou havea pe | righty peer al cnsing Diners {ving eno) ecu END. rrr cen rman nearer mene (C8AR- Regulatory Framework for Busines Tansicons REBT OOIT Page 20 of 20