M7:

DISSOLUTIO
N OF
COOPERATI
VE
INTRODU
CTION
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An autonomous
association of people

COOPER
united voluntarily to
meet their common
economic, social, and
cultural needs and
aspirations through a
jointly-owned and
ATIVE
democratically controlled
business.

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Is the legal
termination of a
dissolutio
cooperative. n

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REQUIREMENTS FOR
DISSOLVING A
COOPERATIVE
A cooperative can apply to dissolve when it has
no property or liabilities unless the cooperative
is bankrupt or insolvent.

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DISSOLVING A COOPERATIVE THAT
OWN PROPERTY OR HAS LIABILITIES
A cooperative can be dissolved only when its
property has been distributed and its liabilities
have been discharged.

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 THERE
 Liquidation before
starting the dissolution
ARE
process.
 Starting the dissolution
TWO
process before the
liquidation process. WAYS
TO
PROCEE 7
 DISSOLVE
AFTER A
CERTIFICATE OF
INTENT TO
DISSOLVE IS
ISSUED.
REASONS
FOR
DISSOLU
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ARTICLE 65: VOLUNTARY
DISSOLUTION WHERE NO
CREDITORS ARE AFFECTED
Two-thirds (2/3) of all the members with voting rights
at a meeting to be held upon call of the directors.

That notice of such meeting is sent to each

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ARTICLE 66.Voluntary
Dissolution Where Creditors Are
Affected
The order of Dissolution shall set fort in:

✗ The assets and liabilities of the Cooperative.

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ARTICLE 67. Involuntary
Dissolution
A cooperative may be dissolved by order of a
competent court after a due hearing on the
grounds of:

(1) Violation of any law, regulation, or provisions

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ARTICLE 68. Dissolution by Order
of the Authority
The authority may suspend or revoke, after due
notice and hearing, the certificate of registration
of a cooperative on any of the following grounds:

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(1) Having obtained its regulations by fraud;
(2) Existing for illegal purposes;
(3) Willful violation, despite notice by the Authority, of the
provisions of this Code or its by-laws;
(4) Willful failure to operate on a cooperative basis; and
(5) Failure to meet the required minimum number of members
in the cooperative.

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ARTICLE 69. Dissolution by Failure
to Organize
and Operate.
If a cooperative has not commenced business and operation within
two (2) years after the date shown on its certificate of registration
or has not carried on business for two (2) consecutive years, the
Authority shall send formal inquiry to the said cooperative as to
the status of its operation. Failure of the cooperative to promptly
provide justifiable cause for its failure to operate shall warrant the
Authority to strike off its name from the register and, for all intents
and purposes, the cooperative shall be deemed dissolved.

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ARTICLE 70. Cooperative
Liquidation
Every cooperative, whose charter expires by its own limitation or
whose cooperative existence is terminated by voluntary dissolution
or its terminated by appropriate judicial proceedings its assets, but
not for the purpose of continuing the shall nevertheless be
continued as a body cooperative for three (3) years after the time
when it would have been so dissolved, for the purpose of
prosecuting and defending suits by or against it and enabling it to
settle and close its affairs, to dispose of and convey its property
and to distribute business for which it was established.

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At any time during said three (3) years, said cooperative is authorized and empowered
to convey all of its property to trustees for the benefit of members, creditors, and other
person in interest. From and after any such conveyance by the cooperative of its
property in trust for the benefit of its members, creditors and others in interest, all
interest which the cooperative had in the property terminates the legal interest vests in
the trustees and the beneficial interest vests in the members, creditors or other persons in
interest.
Upon the winding up of the cooperative affairs, any asset distributable to any creditor
or shareholder or member who is unknown or cannot be found shall be given to the
federation, union or association to which the cooperative is affiliated or to the
movement.
Except by decrease of share capital and as otherwise allowed by this Code, no
cooperative shall distribute any of its assets or property except upon lawful dissolution
and after payment of all its debts and liabilities.

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ARTICLE 71. Rules and
Regulations on Liquidation
The Authority shall issue the appropriate implementing guidelines
for the liquidation of cooperatives. These Guidelines shall cover
the following:

(1) Cooperatives whose charter expires by its own limitation.

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 The procedure of
Liquidation
The following procedure shall be observed in liquidation:
1. Constitution of the Board of Liquidators/Trustees.
2. Inventory of Assets and Liabilities of the Cooperative.
3. Payments of Creditors in accordance with the provisions of the New Civil Code on the
Preference and Concurrence of Credits.
4. Transfer of the Statutory Funds to the intended beneficiaries.
5. Distribution of the remaining assets.
6. Submission of the Board of Liquidators/Trustees of the Liquidation's Final Report.
7. Cancellation of the Certificates of Registration and delisting of the name of the
cooperative in the Cooperative Registry.

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THANK
YOU
FOR
LISTENIN
G! 20