COOPERATIVE

SECTOR
September 28, 2024

PART 1
SHERWIN M. ARCIPE, CPA, MPA
Chief, Supervision and Examination Section
Cooperative Development Authority (CDA)
Regional Office 1
The Cooperative Development
Authority (CDA)
RA 11364 or otherwise known as the Cooperative
Development Authority Charter of 2019

• As the lead agency in the

development and regulation of
cooperatives

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LAWS, RULES AND REGULATIONS THAT
COOPERATIVES MUST ADHERE TO;
I. Republic Act No. 9520 and its IRR: This is the primary law
governing cooperatives. It outlines the principles, structure, and
operations of cooperatives.
II. CDA Memorandum Circulars: The CDA issues various
memorandums to provide guidance and clarification on specific
aspects of cooperative operations.
III. Republic Act No. 11364 or The Cooperative Development
Authority Charter of 2019 and its Implementing Rules and
Regulation
IV. CDA Omnibus Rules of Procedures
V. Other Laws, Rules and Regulations governing the operation of
specific type of Cooperatives.
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ORGANIZATIONAL STRUCTURE
MC 2011-07

I. Article 37 of RA 9520 provides, “Unless otherwise provided in the

by‐laws, the direction and management of the affairs of a
cooperative shall be vested in a board which shall be composed of
xxx elected by the general assembly xxx.”
II. Likewise Article 43 (2) provides, “The by‐laws shall provide for the
creation of an audit, election, mediation and conciliation, ethics,
and such other committees as may be necessary for the conduct
of the affairs of the cooperative. The members of both the audit
and election committees shall be elected by the general assembly
and the rest shall be appointed by the board.”

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ORGANIZATIONAL STRUCTURE
MC 2011-07

General Assembly

Board of Election
Audit Committee
Directors Committee

Mediation/ Ethics Other

Conciliation
Committee
Secretary Treasurer
Committee
Committees

Management
Staff 5
GENERAL ASSEMBLY
COMPOSITION:
The general assembly shall be composed of such members who are entitled
to vote under the articles of cooperation and bylaws of the cooperative.

POWER:
•To determine and approve amendments to the articles of
cooperation and by-laws

•To elect or appoint the members of the board of directors,

and to remove them for cause.

•To approve developmental plans of the cooperative

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GENERAL ASSEMBLY
MEETINGS:
• A regular meeting shall be held by the general assembly
on a date fixed in the by-laws, or if not so fixed, on any
date within ninety (90) days after the close of each fiscal
year. Provided, that notice of regular meetings shall be
sent in writing, by posting or publication, or through other
electronic means to all members of record.
• Whenever necessary, a special meeting of the general
assembly may be called at any time by a majority of the
board of directors or as provided for in the by-laws.

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GENERAL ASSEMBLY
QUORUM:
A quorum shall consist of at least twenty-five percent (25%) of all
the members entitled to vote.

VOTING SYSTEM:
Each member of a primary cooperative shall have only one (1) vote.
(one man-one vote policy)

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OFFICERS OF THE COOPERATIVE
B OA R D O F D I R E C TO R S ( B O D )

QUALIFICATION:
Any member of a cooperative who under the bylaws of the
cooperative, has the right to vote and who possesses all the
qualifications and none of the disqualifications provided in the
laws or bylaws shall be eligible for election as director (Article 39)

POWERS:
The board of directors shall be responsible for the strategic
planning, direction-setting and policy-formulation activities of the
cooperatives (Article 38)
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OFFICERS OF THE COOPERATIVE
B OA R D O F D I R E C TO R S ( B O D )

COMPOSITION:
Unless otherwise provided in the bylaws, the direction and
management of the affairs of a cooperative shall be vested in a
board of directors which shall be composed of not less that five (5)
nor more than fifteen (15) members elected by the general
assembly (Article 37)

TERM:
a term of two (2) years and shall hold office until their successors
are duly elected and qualified, or until duly removed for caused.
(Article 37)
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OFFICERS OF THE COOPERATIVE
B OA R D O F D I R E C TO R S ( B O D )

MEETING:
- In the case of primary cooperatives, regular meetings of the
board of directors shall be held at least once a month.

- Special meetings of the board of directors may be held at any

time upon the call of the chairperson or a majority of the
members of the board: Provided, That written notices of the
meeting specifying the agenda of the special meeting shall be
given to all members of the board at least one (1) week before
the said meeting.
- Directors cannot attend or vote by proxy at board meetings.
(Article 40) 11
OFFICERS OF THE COOPERATIVE
B OA R D O F D I R E C TO R S ( B O D )

QUORUM:
- A majority of the members of the Board shall constitute a
quorum or the conduct of business, unless the bylaws proved
otherwise. (Article 40)

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OFFICERS OF THE COOPERATIVE
B OA R D O F D I R E C TO R S ( B O D )

VACANCY:
- Any vacancy in the board of directors, other than by expiration of
term, may be filled by the vote of at least a majority of the
remaining directors, if still constituting a quorum;
- otherwise, the vacancy must be filled by the general assembly in
a regular or special meeting called for the purpose.
- A director so elected to fill a vacancy shall serve only the
unexpired term of his predecessor in office. (Article 41)

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OFFICERS OF THE COOPERATIVE
B OA R D O F D I R E C TO R S ( B O D )

CHAIRPERSON AND VICE-CHAIRPERSON:

The board of directors shall elect from among themselves the
chairperson and vice-chairperson, and elect or appoint other
officers of the cooperative from outside of the board in
accordance with their bylaws. (Article 42)

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OFFICERS OF THE COOPERATIVE
Committees of Cooperatives

- The bylaws may create an executive committee to be appointed

by the board of directors with such powers and duties as may be
delegated to it in the bylaws or by a majority vote of all the
members of the board of directors.
- The bylaws shall provide for the creation of an audit, election,
mediation and conciliation, ethics, and such other committees as
may be necessary for the conduct of the affairs of the
cooperative.
- The members of both the audit and election committee shall be
elected by the general assembly and the rest shall be appointed
by the board. (Article 42 (2))
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OFFICERS OF THE COOPERATIVE
Committees of Cooperatives

THE AUDIT COMMITTEE:

- shall be directly accountable and responsible to the general
assembly. It shall have the power and duty to continuously
monitor the adequacy and effectiveness of the cooperative’s
management control system and audit the performance of the
cooperative and its various responsibility centers. (Article 42 (2))

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OFFICERS OF THE COOPERATIVE
Committees of Cooperatives

VACANCY:
• Unless otherwise provided in the bylaws, the board, in case of a
vacancy in the committees, may call an election to fill the
vacancy or appoint a person to fill the same subject to the
provision that the person elected or appointed shall serve only
for the unexpired portion of the term. (Article 42)

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OFFICERS OF THE COOPERATIVE
ARTICLE 42, RA 9520

- All officers shall serve during good behavior and shall not be
removed except for cause after due hearing.
- Loss of confidence shall not be a 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 to the third
civil degree of consanguinity or affinity nor shall any person
engaged in a business similar to that of the cooperative nor who
in any other manner has interests in conflict with the
cooperative shall serve as an appointive officer.

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OFFICERS OF THE COOPERATIVE
PROHIBITIONS

- Other than those provided in the by-laws.

- Any officer or employee of the Authority shall be disqualified to
be elected or appointed to any position in a cooperative:
Provided, That the disqualification does not extend to a
cooperative organized by the officers or employees of the
Authority. (Article 27 (1))
- All elective officials of the Government shall be ineligible to
become officers and directors of cooperatives: Provided, That
the disqualification does not extend to a party list representative
being an officer of a cooperative he or she represents. (Article 27
(2))
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OFFICERS OF THE COOPERATIVE
C O M P E N S AT I O N

• In the absence of any provision in the by-laws fixing their

compensation, the directors shall not receive any compensation
except for reasonable per diems.

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REQUIRED TRAINING FOR FR
COOPERATIVE OFFICERS
CATEGORY OF COOP TRAINING COURSE NO. OF HOURS

Micro-cooperatives-coops with Fundamentals of Coops 8

total assets of 3m and below Governance and Management
of Coops 8
All other coops with total assets Fundamentals of Coops 16
of more than 3m Governance and Management
of Coops 16
Additional trainings for officers
of cooperatives engaged in Financial Management 8
savings and credit with at least
Five Million Pesos Risk Management 4
(Php5,000,000.00) of deposit
liabilities based on their latest Credit Management 4
AFS
OFFICERS OF THE COOPERATIVE
R E M OVA L

• All complaints for the removal of any elected officer shall be

filed with the board of directors.

• Such officer shall be given the opportunity to be heard. Upon

finding of a prima facie evidence of guilt, the board shall present
its recommendation for removal to the general assembly.

• An elective officer may be removed by ¾ votes of the regular

members present and constituting a quorum, in a regular or
special general assembly meeting called for the purpose.
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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

LEGAL BASES:
- RA 11364 or The Cooperative Development Authority Charter of
2019
- CDA Omnibus Rules of Procedures

- Implementing Rules and Regulation of RA 11364

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GUIDELINES ON PENALTIES, AGAINST
COOPERATIVES, THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

35
GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

36
GUIDELINES ON PENALTIES, AGAINST COOPERATIVES,
THEIR OFFICERS OR MEMBERS
MC 2023-19

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TAX TREATMENT OF COOPERATIVE.
Article 60 & 61

• Duly registered cooperatives under the Code which do not transact

any business with non-members or the general public shall not be
subject to any taxes and fees imposed under the internal revenue
laws and other tax laws.
• Cooperatives transacting business with both members and non-
members shall not be subjected to tax on their transactions with
members.
• The transactions of members with the cooperative shall not be
subject to any taxes and fees, including not limited to final taxes on
members’ deposits and documentary tax.

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TAX TREATMENT OF COOPERATIVE.
Article 60 & 61

• Notwithstanding the provisions of any law or regulation to the

contrary, such cooperatives dealing with nonmembers shall enjoy the
following tax exemptions:
Cooperatives with accumulated reserves and undivided net
savings of not more than Ten million pesos (P10,000,000.00) shall
be exempt from all national, city, provincial, municipal or barangay
taxes of whatever name and nature.

Threshold:
<10M = Exempt (Transaction to Members & Non-Members)
>10M = Transaction to non-members are subject to applicable taxes.

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TAX TREATMENT OF COOPERATIVE.
Article 60 & 61

• All cooperatives, regardless of the amount of accumulated reserves

and undivided net savings shall be exempt from payment of local
taxes and taxes on transactions with banks and insurance
companies

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Thank You!
SHERWIN M. ARCIPE, CPA, MPA
Chief, Supervision and Examination Section
Cooperative Development Authority (CDA)
Regional Office 1