The Philippine Cooperative

Code of 2008
(Republic Act No. 9520)
99

 Amended Republic Act 6938 (Cooperative

Code of the Philippines)

 Signed into law on February 17, 2009

 Published in Daily Tribune 0n March 7, 2009

 Effectivity Date: 15 days after publication

(March 23, 2009)
 Article 1. Title

This act shall be known as the “Philippine

Cooperative Code of 2008”
Article 2. Declaration of Policy
The State recognizes the principle of
subsidiarity under which the cooperative
sector will initiate and regulate within its
own ranks the promotion and organization,
training and research, audit and support
services relating to cooperatives with
government assis-tance where necessary.
Section 3. General Concepts.
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 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.
Cooperative Principles (Article 4)
• Patterned after the Principles as formulated
by the International Co-operative Alliance
(ICA)
> Voluntary and Open Membership
> Democratic Member Control
> Member Economic Participation
> Autonomy and Independence
> Education, Training and Information
> Cooperation Among Cooperatives
 Officers of the Cooperative
- shall include the members of
the board of directors, members of
the different committees created by
the general assembly, general
manager or chief executive officer,
secretary, treasurer, and members
holding other positions as may be
provided for in their bylaws;
Vote Requirements
(Arts. 18, 20, 21, 64,65)
 Amendments need 2/3 vote of members with
voting rights

 Merger, consolidation, division and voluntary

dissolution of cooperatives require 3/4 of all
members with voting rights present and
constituting a quorum
Types of Cooperatives (Art. 23)
 Credit cooperative
 Consumers cooperative
 Marketing cooperative
 Producers cooperative
 Service cooperative
 Multipurpose cooperative
Additional Types of Cooperatives
 Advocacy Cooperative
 Agrarian Reform Cooperative
 Coop Bank
 Dairy Cooperative
 Education Cooperative
 Electric Cooperative
 Financial Service Cooperative
 Fishermen Cooperative
Additional Types of Cooperatives
 Health Service Cooperative
 Housing Cooperative
 Insurance Cooperative
 Transport Cooperative
 Water Service Cooperative
 Workers Cooperative
 Other types of Cooperative
Membership in Cooperatives (Art 26)
 Legal age, Filipino citizens
 Capable and willing to perform the

responsibilities of a member
 Associate members needs to qualify

for regular membership within two (2)

years
Appeals on Membership Arts 28,30)
 The GA may opt to create an appeal and
grievance committee,

> the members of which, shall serve for a

period of one (1) year
> shall decide appeals on membership
application and termination within thirty
(30) days upon receipt thereof.

> If the committee fails to decide within the

prescribed period, the appeal is deemed
approved in favor of the applicant.
Government Officers & Employees
(Art 27)

All elective officials are ineligible to

be officers or directors of cooperatives
except party-list representatives.
 Termination of Membership

◦ twin requirement of due process –

(notice and hearing )

◦ BOD decision shall be in writing and

is appealable to the general assembly
whose decision therein, shall be
final.
  Option to create an appeal and
grievance committee to decide on
the appeal w/in 30 days, otherwise
the appeal is deemed terminated in
favor of the member

◦ Pending a decision by the general

assembly, the membership remains
in force.
General Assembly (Art. 32)

◦ composed of such members who are

entitled to vote under the articles of
cooperation and bylaws of the
cooperative.
Powers that can’t be delegated
(Art.33)
 Determine and approve amendments to
the articles of cooperation and bylaws;
 To elect or appoint the members of the
board of directors, and to remove them
for cause;
 To approve developmental plans of the
cooperative;
 Conduct of General Assembly Meeting
(Art 34)
 Annual regular meeting
◦ On a date fixed in the by-laws or within
90 days after close of fiscal year

◦ reporting of the coop operations, financial

statement, election of officers, plans and
budget, other important matters are
discussed and properly acted upon
GA meeting. . .
 written notice of regular meetings shall be
sent in writing, by posting or publication, or
through other electronic means to all
members of record;
 Special General Assembly
◦ Anytime as needed

◦ By a majority vote of the BOD

◦ Only the agenda specified in the notice of

meeting shall be discussed
Special GA. . .
 10% of members entitled to vote may
petition the BOD for a Special GA meeting
 If the BOD fails to act on the petition, 10%
of members entitled to vote may file a
petition with the CDA for a Special GA
meeting
 Composition and Term of the Board of
Directors (Article 37)
-composed of not less than 5 nor more than
15 members

- elected by the General Assembly for a

term fixed in the by-laws but not
exceeding a term of 2 years
 Directors (Art.39)
Disqualification
 Prohibitionagainst holding any other
position involved in day-to-day
operations and management

 Disqualification
of persons engaged in
business similar or those with conflict
of interest
Vacancy in the Board of
Directors (Art 41)
◦ With quorum – by appointment

◦ Without quorum – election in a regular

or special GA meeting
Vacancy in the board…

◦ for vacancy due to expiration of term–

election in a regular or special meeting

◦ A director so elected to fill a vacancy

shall be elected/appointed only for
the unexpired term of his predecessor
in office
Officers of the Cooperative ( Art 42)
 Shall serve during good behaviour and shall
not be removed except for cause and after
due hearing

 Loss of confidence not a ground for removal

unless evidenced by acts or omissions
causing loss of confidence in the honesty and
integrity of such officer
Officers of the coop…

 Prohibition on persons related up to

3rd civil degree of consanguinity and
affinity & those engaged in similar
business or has interests in conflict
with cooperative shall serve as an
appointive officer
Committees (Art. 43)
 Mandatory committees
Audit
Election
Mediation and Conciliation
Ethics
Committees . . .
 Elected by GA
Audit
Election
 Appointed by the BOD
Other committees (Credit,
Education and Training Committee)
 Committee Members & Officers(Art.44)
 Functions, responsibilities and training
requirements shall be in accordance with
the rules and regulations issued by CDA

 All officers and committee members

required to undergo trainings conducted
by accredited institutions by the CDA
Compensation. Art. 46)
 Directors
 During the 1st year, per diems only

 For succeeding years, per diems and

additional compensation if provided in
the by-laws, or by a majority vote of
members during regular or special
meeting
Compensation. . .
 For the other officers & committee
members
 fixed in the by-laws

 Foremployees
 fixed in the bylaws
 determined by the board of
directors. Art. 47)
Compensation. . .

 but if cooperative reports a net loss

for the preceding year, or had a
dividend rate less than the official
inflation rate for the same year,
officers are not entitled to per diems
Responsibilities of Cooperatives
 An official postal address which shall be
registered with the Authority (Art 51)

 Books to be kept Open (Art. 52)

1. A copy of the articles of cooperation and
bylaws of the cooperative;
2. A copy of the regulations of the Authority
3. A register of members;
Books to be kept Open. . .

4. The books of the minutes of the meetings

of the general assembly, board of directors
and committees;
5. Share books, where applicable;
6. Financial statements; and
7. Such other documents as may be
prescribed by laws or the bylaws.
 Accountant or bookkeeper is
responsible for maintenance and
safekeeping of books of accounts

 Audited financial statements shall be

published annually and required to be
posted in principal office
 Audit committee responsible for
continuous and periodic review of
books of accounts; monitor adequacy
and effectiveness of management’s
control system and audit the
performance of the cooperative
Annual Reports (Art 53)
 Annual Report on Regular activities
including socio-civic undertakings
showing their progress and
achievements

 Provided to members
Annual Reports. . .

 Made accessible to members

 Filed
with CDA within 120 days from
close of calendar year;
 In case of non-submission
◦ accountable officer/s can be fined until the
cooperative has complied

◦ other penalties imposable as may be

prescribed by CDA

◦ Ground for revocation of authority of

cooperative to operate
Bonding of Accountable Officers
(Art.56)
 Anyand all director, officer and
employee handling funds, securities or
property on behalf of any cooperative
 covered by a surety bond
Bonding of Accountable Officers. . .

 Requiredfor registration of a
cooperative

 renewed annually and the Authority

shall accordingly be informed of such
renewal.
 Tax Treatment of Cooperatives
(Article 60)
-Duly registered under this code which do
not transact any business with non-member
or the general subject shall not be subject
to any taxes and fees imposed under
revenue laws .
(Article 61)

Coop with accumulated reserves and

undivided net savings of not more than Php
10,000,000.00 shall be exempt from all
national, city, provincial, municipal or
barangay taxes of whatever name and
nature
Dissolution/revocation of Certificate of registration. . .
 By the Authority (Art. 66)
◦ obtaining registration by fraud
◦ existing for an illegal purpose
◦ willful violation of the Coop Code and
the By-laws , despite notice
◦ Willful failure to operate on a
cooperative basis
◦ Failure to operate for 2 consecutive
years
Coop dissolution. . .
 failure to meet the required number of
members
 non-commencement of business within 2
years after registration (newly registered
cooperatives)
Coop dissolution. . .
 failure to file required annual report
 non-compliance with administrative
requirements
Cooperative liquidation (Art 69)
 Expiration of charter

 By voluntary dissolution
 A cooperative shall only distribute its
assets or properties upon lawful
dissolution and after payment of all its
debts and liabilities
COOP LIQUIDATION
Purposes:

 to dispose of and convey its property and

to distribute its assets,

 but not for the purpose of continuing the

business for which it was established.
Capital (Art 71)

 Limitation on share capital held by one

member should not exceed 10% ( Art 73)

 Reasonable and realistic continuing member

capital build-up program ( Art 75
Capital . . .

 Parvalue of share shall not exceed

Php 1,000 (Art 76)

 By-laws
may provide reasonable fines
on unpaid subscription (Art 77)
Revolving Capital (Art 79)
 Through a GA Resolution

◦ deferring the payment of patronage

refunds and interest on share capital

◦ deduction of a percentage from the

proceeds of loans or sales
Annual Audits (Art 80)

 Financial audit conducted by external

auditor in good standing with PICPA and
accredited by Board of Accountancy and
CDA
Annual Audits. ..

 Social and performance audits may be

conducted internally by audit committee, paid
staff, volunteer members, or by qualified
external auditors accredited by CDA
Right to examine (Art 83)
 Member has the right to examine books &
records
 During reasonable hours on business days
 May demand for a copy of excerpts from
said records paying for its cost (Art. 84)
Right to examine. . .

Refusal of officer

◦ Liable for damages

◦ Imprisonment 6mos to 1 year and/or

Refusal of officer
◦ Fine of not less than 1,000.00 (Art. 124)

◦ Except if the member requesting had

improperly used any information secured
through any prior examination of the
records of such cooperative or was not
acting in good faith or for a legitimate
purpose in making his demand.
Distribution of Net Surplus (Art 86)
At least 10% of net surplus; however,

in first 5 years after registration, this

should not be less than 50% of the net
surplus
Distribution of Net Surplus

 Notmore than 10% for CETF; half to be

used by the cooperative; other half may be
remitted to the federation/union chosen by
the cooperative
Distribution of Net Surplus
 Notless than 3% for community
development fund for projects/activities for
the benefit of the community where the
cooperative operates

 Notmore than 7% for optional fund, land and

building, and other funds
Distribution of Net Surplus

 The remaining net surplus shall be made

available to the members in the form of :
>interest on share capital not to exceed
the normal rate of return on
investments
> patronage refunds:
Penal Provisions (Art 140)

 Willful attempt to evade or defeat tax

◦ a fine 30,000.00 to P100,000.00 and
imprisonment of 2 - 4 years
Penal Provisions. . .
 Actsthat deprive, diminish or in any manner
hinder or restrict any duly registered
cooperative from the full employment of the
exemption from the payment of the taxes,
fees and charges :
◦ 1-5 years imprisonment or a fine of not less than
Five thousand pesos (P5,000.00) or both
◦ disqualified to hold any other office;
Penal Provisions. . .
 offenses punishable by a penalty of 1-5
years imprisonment or a fine of not more
than Fifty thousand pesos (P50,000.00) or
both

> Omission or refusal to furnish any information,

report or other document that is required under this
Code;
Penal Provisions. .( offenses)
◦ Providing information, reports or other
documents to the Authority that are
required under this Code which the person
knows to be false or misleading;
◦ Omission or refusal to keep a book or
register required under this Code or to
make the required entry therein;
Penal Provisions. .( offenses)

◦ Knowingly making a false/misleading entry

in a book or register required under this
code

◦ Hindering an authorized person from

making an inspection, audit, examination
or investigation required under this Code;
Penal Provisions. .( offenses)
◦ Failure to comply with an order or written
instructions issued or given by the Authority;

◦ Abetting, counseling, allowing, authorizing or

commanding another person to commit an offense
punishable under this Code: Provided, That in case
the violator is a cooperative or juridical person, the
penalty shall be imposed on its directors and
officers.