How to Start/Register a Cooperative in the Philippines

As a juridical entity, a cooperative is similar to a corporation. However, while corporations are registered and supervised by the Securities and Exchange Commission (SEC), cooperatives are registered and supervised by the Cooperative Development Authority (CDA). This is pursuant to the Philippine Cooperative Code of 2008 (Republic Act No. 9520). [See also Introduction to cooperatives]

Registration Process and Requirements for Cooperatives in the Philippines

ORGANIZING A COOPERATIVE

Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having a common bond of interest and are actually residing or working in the intended area of operation, may organize a primary cooperative. A prospective member of a primary cooperative must have completed a Pre-Membership Education Seminar (PMES).

ARTICLES OF COOPERATION

Corporations which seek to register must file its Articles of Incorporation, while cooperatives file its Articles of Cooperation, which must be signed by each of the organizers and acknowledged before a notary public. The Articles of Cooperation shall contain:

  • 1. The name of the cooperative. The name must include the word “cooperative”.
  • 2. The purpose or purposes and scope of business for which the cooperative is to be registered. [See Types of Cooperatives]
  • 3. The term of existence of the cooperative. A cooperative shall exist for a period not exceeding 50 years from the date of registration unless sooner dissolve or unless said period is extended.
  • 4. The area of operation and the postal addresses of its principal office.
  • 5. The names, nationality, and the postal addresses of the registrants.
  • 6. The common bond of membership.
  • 7. The list of names of the directors who shall manage the cooperative. The Board of Directors is entrusted with the management of the affairs of the cooperative under its articles of cooperation and bylaws. 
  • 8. The amount of its share capital, the names and residences of its contributors and a statement of whether the cooperative is primary, secondary or tertiary. At least 25% of the authorized share capital must be subscribed, and at least 25% of the total subscription has been paid. In no case shall the paid-up share capital be less than P15,000.00.

BYLAWS OF THE COOPERATIVE

The bylaws, which is filed at the same time as the Articles of Cooperation, shall provide the following:

  • 1. The qualifications for admission to membership and the payment to be made or interest to be acquired as a conditions for the exercise of the right of membership;
  • 2. The rights and liabilities of membership;
  • 3. The circumstances under which membership is acquired, maintained and lost;
  • 4. The procedure to be followed in cases of termination of membership;
  • 5. The conditions under which the transfer of a share or interest of the members shall be permitted;
  • 6. The rules and procedures on the agenda, time, place and manner of calling, convening, conducting meetings, quorum requirements, voting systems, and other matters relative to the business affairs of the general assembly, board of directors, and committees;
  • 7. The general conduct of the affairs of the cooperative, including the powers and duties of the general assembly, the board of directors, committees and the officers, and their qualifications and disqualifications;
  • 8. The manner in which the capital, may be raised and the purposes for which it can be utilized;
  • 9. The mode of custody and of investment of net surplus;
  • 10. The accounting and auditing systems;
  • 11. The manner of loaning and borrowing including the limitations thereof;
  • 12. The method of distribution of net surplus;
  • 13. The manner of adopting, amending, repealing, and abrogating bylaws;
  • 14. A conciliation or mediation mechanism for the amicable settlement of disputes among members, directors, officers and committee members of the cooperative; and
  • 15. Other matters incident to the purposes and activities of the cooperative.

TREASURER CERTIFICATION

Certification under oath by the treasurer, showing that at least 25% of the authorized share capital must be subscribed, and at least 25% of the total subscription has been paid.

OFFICERS’ BOND

The Articles of Cooperation must be accompanied with the bonds of the accountable officers.

GENERAL STATEMENT

An applicant must prepare and submit a general statement describing, among others the structure and purposes of the proposed cooperative. The structure and actual staffing pattern of the cooperative shall include a bookkeeper. The applicant shall not be allowed to operate without the necessary personnel and shall also submit an economic survey, indicating therein the area of operation, the size of membership, and other pertinent data in a format provided by the CDA.

FILING WITH THE CDA

Prospective cooperatives must submit their application to the CDA Extension Office where the principal office of the cooperative is located. 

All applications for registration shall processed within 60 days from filing. The application is deemed approved in case the CDA fails to act within the 60-day period. In case of denial of the application, an appeal may be filed with the Office of the President within 90 days from receipt of notice of such denial. If the President fails to act within 90 days, the application is deemed approved. 

CERTIFICATE OF REGISTRATION

A cooperative acquires juridical personality from the date the CDA issues a Certificate of Registration.

P&L Law

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