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02-17-2009 Republic Act No.

9520
Philippine Cooperative Code of 2008
ebruar! 17" 2009
R#P$%&'C AC( N). 9520
AN AC( A*#N+'N, (-# C))P#RA('.# C)+# ) (-# P-'&'PP'N#/ () %# 0N)1N A/
(-# 2P-'&'PP'N# C))P#RA('.# C)+# ) 20082
/#C(')N 1. Article3 1" 2" 4" 5 and 5 of Chapter ' on ,eneral Concept3 and Principle3 of
Republic Act No. 6948" other7i3e 8no7n a3 the 2Cooperative Code of the Philippine32 are
hereb! a9ended to read a3 follo73: #-/Cc(
C-AP(#R '
,eneral Concept3 and Principle3
2AR(. 1. (itle. ; (hi3 Act 3hall be 8no7n a3 the 2Philippine Cooperative Code of 20082.
/(-A'+
2AR(. 2. +eclaration of Polic!. ; 't i3 the declared polic! of the /tate to fo3ter the creation
and <ro7th of cooperative3 a3 a practical vehicle for pro9otin< 3elf-reliance and harne33in<
people po7er to7ard3 the attain9ent of econo9ic develop9ent and 3ocial =u3tice. (he /tate
3hall encoura<e the private 3ector to underta8e the actual for9ation and or<ani>ation of
cooperative3 and 3hall create an at9o3phere that i3 conducive to the <ro7th and develop9ent
of the3e cooperative3.
2(o7ard thi3 end" the ,overn9ent and all it3 branche3" 3ubdivi3ion3" in3tru9entalitie3 and
a<encie3 3hall en3ure the provi3ion of technical <uidance" financial a33i3tance and other
3ervice3 to enable 3aid cooperative3 to develop into viable and re3pon3ive econo9ic
enterpri3e3 and thereb! brin< about a 3tron< cooperative 9ove9ent that i3 free fro9 an!
condition3 that 9i<ht infrin<e upon the autono9! or or<ani>ational inte<rit! of cooperative3.
-(cA+C
2urther" the /tate reco<ni>e3 the principle of 3ub3idiarit! under 7hich the cooperative 3ector
7ill initiate and re<ulate 7ithin it3 o7n ran83 the pro9otion and or<ani>ation" trainin< and
re3earch" audit and 3upport 3ervice3 relatin< to cooperative3 7ith <overn9ent a33i3tance 7here
nece33ar!.
2AR(. 4. ,eneral Concept3. ; A cooperative i3 an autono9ou3 and dul! re<i3tered
a33ociation of per3on3" 7ith a co99on bond of intere3t" 7ho have voluntaril! =oined to<ether to
achieve their 3ocial" econo9ic" and cultural need3 and a3piration3 b! 9a8in< e?uitable
contribution3 to the capital re?uired" patroni>in< their product3 and 3ervice3 and acceptin< a fair
3hare of the ri383 and benefit3 of the underta8in< in accordance 7ith univer3all! accepted
cooperative principle3.
2AR(. 5. Cooperative Principle3. ; #ver! cooperative 3hall conduct it3 affair3 in
accordance 7ith ilipino culture" <ood value3 and e@perience and the univer3all! accepted
principle3 of cooperation 7hich include" but are not li9ited to" the follo7in<: '(#cA+
2A1B .oluntar! and )pen *e9ber3hip ; Cooperative3 are voluntar! or<ani>ation3" open to
all per3on3 able to u3e their 3ervice3 and 7illin< to accept the re3pon3ibilitie3 of 9e9ber3hip"
7ithout <ender" 3ocial" racial" cultural" political or reli<iou3 di3cri9ination.
2A2B +e9ocratic *e9ber Control ; Cooperative3 are de9ocratic or<ani>ation3 that are
controlled b! their 9e9ber3 7ho activel! participate in 3ettin< their policie3 and 9a8in<
deci3ion3. *en and 7o9en 3ervin< a3 elected repre3entative3" director3 or officer3 are
accountable to the 9e9ber3hip. 'n pri9ar! cooperative3" 9e9ber3 have e?ual votin< ri<ht3 of
one-9e9ber" one-vote. Cooperative3 at other level3 are or<ani>ed in the 3a9e de9ocratic
9anner.
2A4B *e9ber #cono9ic Participation ; *e9ber3 contribute e?uitabl! to" and de9ocraticall!
control" the capital of their cooperative. At lea3t part of that capital i3 the co99on propert! of the
cooperative. (he! 3hall receive li9ited co9pen3ation or li9ited intere3t" if an!" on capital
3ub3cribed and paid a3 a condition of 9e9ber3hip. *e9ber3 allocate 3urplu3e3 for an! or all of
the follo7in< purpo3e3: developin< the cooperative b! 3ettin< up re3erve3" part of 7hich 3hould
at lea3t be indivi3ibleC benefittin< 9e9ber3 in proportion to their patrona<e of the cooperativeD3
bu3ine33C and" 3upportin< other activitie3 approved b! the 9e9ber3hip. /#+aA-
2A5B Autono9! and 'ndependence ; Cooperative3 are autono9ou3" 3elf-help or<ani>ation3
controlled b! their 9e9ber3. 'f the! enter into a<ree9ent3 7ith other or<ani>ation3" includin<
<overn9ent" or rai3e capital fro9 e@ternal 3ource3" the! 3hall do 3o on ter93 that en3ure
de9ocratic control of their 9e9ber3 and 9aintain their cooperative autono9!.
2A5B #ducation" (rainin< and 'nfor9ation ; Cooperative3 3hall provide education and
trainin< for their 9e9ber3" elected and appointed repre3entative3" 9ana<er3" and e9plo!ee3"
3o that the! can contribute effectivel! and efficientl! to the develop9ent of their cooperative3.
a+(/-c
2A6B Cooperation A9on< Cooperative3 ; Cooperative3 3erve their 9e9ber3 9o3t effectivel!
and 3tren<then the cooperative 9ove9ent b! 7or8in< to<ether throu<h local" national" re<ional
and international 3tructure3.
2A7B Concern for Co99unit! ; Cooperative3 7or8 for the 3u3tainable develop9ent of their
co99unitie3 throu<h policie3 approved b! their 9e9ber3.
2AR(. 5. +efinition of (er93. ; (he follo7in< ter93 3hall 9ean:
2A1B *e9ber ; include3 a per3on either natural or =uridical 7ho" adherin< to the principle3
3et forth in thi3 Code and in the article3 of cooperation" ha3 been ad9itted b! the cooperative a3
9e9berC -c/aA+
2A2B ,eneral A33e9bl! ; 3hall 9ean the full 9e9ber3hip of the cooperative dul! a33e9bled
for the purpo3e of e@erci3in< all the ri<ht3 and perfor9in< all the obli<ation3 pertainin< to
cooperative3" a3 provided b! thi3 Code" it3 article3 of cooperation and b!la73: Provided" (hat
for cooperative3 7ith nu9erou3 and di3per3ed 9e9ber3hip" the <eneral a33e9bl! 9a! be
co9po3ed of dele<ate3 elected b! each 3ector" chapter or di3trict of the cooperative in
accordance 7ith the rule3 and re<ulation3 of the Cooperative +evelop9ent Authorit!C
2A4B %oard of +irector3 3hall 9ean that bod! entru3ted 7ith the 9ana<e9ent of the affair3 of
the cooperative under it3 article3 of cooperation and b!la73C
2A5B Co99ittee ; 3hall refer to an! bod! entru3ted 7ith 3pecific function3 and
re3pon3ibilitie3 under the b!la73 or re3olution of the <eneral a33e9bl! or the board of director3C
'/(-#+
2A5B Article3 of Cooperation ; 9ean3 the article3 of cooperation re<i3tered under thi3 Code
and include3 a re<i3tered a9end9ent thereofC
2A6B %!la73 ; 9ean3 the b!la73 re<i3tered under thi3 Code and include3 an! re<i3tered
a9end9ent thereofC
2A7B Re<i3tration ; 9ean3 the operative act <rantin< =uridical per3onalit! to a propo3ed
cooperative and i3 evidenced b! a certificate of re<i3trationC
2A8B Cooperative +evelop9ent Authorit! ; refer3 to the <overn9ent a<enc! in char<e of the
re<i3tration and re<ulation of cooperative3 a3 3uch" hereinafter referred to a3 the Authorit!C
2A9B $niver3all! Accepted Principle3 ; 9ean that bod! of cooperative principle3 adhered to
7orld7ide b! cooperative3C
2A10B Repre3entative A33e9bl! ; 9ean3 the full 9e9ber3hip of a bod! of repre3entative3
elected b! each of the 3ector3" chapter or di3trict of the cooperative dul! a33e9bled for the
purpo3e of e@erci3in< 3uch po7er3 la7full! dele<ated unto the9 b! the <eneral a33e9bl! in
accordance 7ith it3 b!la73C C+-ac#
2A11B )fficer3 of the Cooperative3 ; 3hall include the 9e9ber3 of the board of director3"
9e9ber3 of the different co99ittee3 created b! the <eneral a33e9bl!" <eneral 9ana<er or
chief e@ecutive officer" 3ecretar!" trea3urer and 9e9ber3 holdin< other po3ition3 a3 9a! be
provided for in their b!la73C
2A12B /ocial Audit ; i3 a procedure 7herein the cooperative a33e33e3 it3 3ocial i9pact and
ethical perfor9ance vi3-a-vi3 it3 3tated 9i33ion" vi3ion" <oal3 and code of 3ocial re3pon3ibilit!
for cooperative3 to be e3tabli3hed b! the Authorit! in con3ultation 7ith the cooperative 3ector. 't
enable3 the cooperative3 to develop a proce33 7hereb! it can account for it3 3ocial
perfor9ance and evaluate it3 i9pact in the co99unit! and be accountable for it3 deci3ion3 and
action3 to it3 re<ular 9e9ber3C acC'(/
2A14B Perfor9ance Audit ; 3hall refer to an audit on the efficienc! and effectivene33 of the
cooperative a3 a 7holeC it3 9ana<e9ent and officer3C and it3 variou3 re3pon3ibilit! center3 a3
ba3i3 for i9provin< individual" tea9 or overall perfor9ance and for ob=ectivel! infor9in< the
<eneral 9e9ber3hip on 3uch perfor9anceC
2A15B A /in<le-line or /in<le-purpo3e Cooperative ; 3hall include cooperative underta8in<
activitie3 7hich are related to it3 9ain line of bu3ine33 or purpo3eC
2A15B /ervice Cooperative3 ; are tho3e 7hich provide an! t!pe of 3ervice to it3 9e9ber3"
includin< but not li9ited to" tran3port" infor9ation and co99unication" in3urance" hou3in<"
electric" health 3ervice3" education" ban8in<" and 3avin<3 and creditC
2A16B /ub3idiar! Cooperative ; refer3 to an! or<ani>ation all or 9a=orit! of 7ho3e
9e9ber3hip or 3hareholder3 co9e fro9 a cooperative" or<ani>ed for an! other purpo3e
different fro9 that of" and receive3 technical" 9ana<erial and financial a33i3tance fro9" a
cooperative" in accordance 7ith the rule3 and re<ulation3 of the Authorit!C and (a'/#-
2A17B ederation of Cooperative3 ; refer3 to three or 9ore pri9ar! cooperative3" doin< the
3a9e line of bu3ine33" or<ani>ed at the 9unicipal" provincial" cit!" 3pecial 9etropolitan political
3ubdivi3ion" or econo9ic >one3 created b! la7" re<i3tered 7ith the Authorit! to underta8e
bu3ine33 activitie3 in 3upport of it3 9e9ber-cooperative3.2
/#C(')N 2. Article3 6" 7" 9" 10" 11" 12" 14" 15" 16" 17" 18" 20" 21" 24" 25 and 25 of Chapter ''
on )r<ani>ation and Re<i3tration of the 3a9e Code are hereb! a9ended to read" a3 follo73:
C-AP(#R ''
)r<ani>ation and Re<i3tration
2AR(. 6. Purpo3e3 of Cooperative3. ; A cooperative 9a! be or<ani>ed and re<i3tered for
an! or all of the follo7in< purpo3e3:
2A1B (o encoura<e thrift and 3avin<3 9obili>ation a9on< the 9e9ber3C c(Ca#A
2A2B (o <enerate fund3 and e@tend credit to the 9e9ber3 for productive and provident
purpo3e3C
2A4B (o encoura<e a9on< 9e9ber3 3!3te9atic production and 9ar8etin<C
2A5B (o provide <ood3 and 3ervice3 and other re?uire9ent3 to the 9e9ber3C
2A5B (o develop e@perti3e and 38ill3 a9on< it3 9e9ber3C
2A6B (o ac?uire land3 and provide hou3in< benefit3 for the 9e9ber3C -/aCc#
2A7B (o in3ure a<ain3t lo33e3 of the 9e9ber3C
2A8B (o pro9ote and advance the econo9ic" 3ocial and educational 3tatu3 of the 9e9ber3C
2A9B (o e3tabli3h" o7n" lea3e or operate cooperative ban83" cooperative 7hole3ale and retail
co9ple@e3" in3urance and a<riculturalEindu3trial proce33in< enterpri3e3" and public 9ar8et3C
2A10B (o coordinate and facilitate the activitie3 of cooperative3C
2A11B (o advocate for the cau3e of the cooperative 9ove9entC
2A12B (o en3ure the viabilit! of cooperative3 throu<h the utili>ation of ne7 technolo<ie3C
2A14B (o encoura<e and pro9ote 3elf-help or 3elf-e9plo!9ent a3 an en<ine for econo9ic
<ro7th and povert! alleviationC and /(cA+a
2A15B (o underta8e an! and all other activitie3 for the effective and efficient i9ple9entation of
the provi3ion3 of thi3 Code.
2AR(. 7. )b=ective3 and ,oal3 of a Cooperative. ; (he pri9ar! ob=ective of ever!
cooperative i3 to help i9prove the ?ualit! of life of it3 9e9ber3. (o7ard3 thi3 end" the
cooperative 3hall ai9 to:
2AaB Provide <ood3 and 3ervice3 to it3 9e9ber3 to enable the9 to attain increa3ed inco9e"
3avin<3" inve3t9ent3" productivit!" and purcha3in< po7er" and pro9ote a9on< the93elve3
e?uitable di3tribution of net 3urplu3 throu<h 9a@i9u9 utili>ation of econo9ie3 of 3cale" co3t-
3harin< and ri38-3harin<C
2AbB Provide opti9u9 3ocial and econo9ic benefit3 to it3 9e9ber3C
2AcB (each the9 efficient 7a!3 of doin< thin<3 in a cooperative 9annerC -+(/Cc
2AdB Propa<ate cooperative practice3 and ne7 idea3 in bu3ine33 and 9ana<e9entC
2AeB Allo7 the lo7er inco9e and le33 privile<ed <roup3 to increa3e their o7ner3hip in the
7ealth of the nationC and
2AfB Cooperate 7ith the <overn9ent" other cooperative3 and people-oriented or<ani>ation3 to
further the attain9ent of an! of the fore<oin< ob=ective3.
2AR(. 8. Cooperative3 Not in Re3traint of (rade. ; No cooperative or 9ethod or act
thereof 7hich co9plie3 7ith thi3 Code 3hall be dee9ed a con3pirac! or co9bination in re3traint
of trade or an ille<al 9onopol!" or an atte9pt to le33en co9petition or fi@ price3 arbitraril! in
violation of an! of the la73 of the Philippine3.
2AR(. 9. Cooperative Po7er3 and Capacitie3. ; A cooperative re<i3tered under thi3 Code
3hall have the follo7in< po7er3" ri<ht3 and capacitie3: C+A-a#
2A1B (o the e@clu3ive u3e of it3 re<i3tered na9e" to 3ue and be 3uedC
2A2B )f 3ucce33ionC
2A4B (o a9end it3 article3 of cooperation in accordance 7ith the provi3ion3 of thi3 CodeC
2A5B (o adopt b!la73 not contrar! to la7" 9oral3 or public polic!" and to a9end and repeal
the 3a9e in accordance 7ith thi3 CodeC
2A5B (o purcha3e" receive" ta8e or <rant" hold" conve!" 3ell" lea3e" pled<e" 9ort<a<e" and
other7i3e deal 7ith 3uch real and per3onal propert! a3 the tran3action of the la7ful affair3 of the
cooperative 9a! rea3onabl! and nece33aril! re?uire" 3ub=ect to the li9itation3 pre3cribed b! la7
and the Con3titutionC
2A6B (o enter into divi3ion" 9er<er or con3olidation" a3 provided in thi3 CodeC a/'A-C
2A7B (o for9 3ub3idiar! cooperative3 and =oin federation3 or union3" a3 provided in thi3 CodeC
2A8B (o avail of loan3" be entitled to credit and to accept and receive <rant3" donation3 and
a33i3tance fro9 forei<n and do9e3tic 3ource3" 3ub=ect to the condition3 of 3aid loan3" credit3"
<rant3" donation3 or a33i3tance that 7ill not under9ine the autono9! of the cooperative. (he
Authorit!" upon 7ritten re?ue3t" 3hall provide nece33ar! a33i3tance in the docu9entar!
re?uire9ent3 for the loan3" credit" <rant3" donation3 and other financial 3upportC
2A9B (o avail of preferential ri<ht3 <ranted to cooperative3 under Republic Act No. 7160"
other7i3e 8no7n a3 the &ocal ,overn9ent Code" and other la73" particularl! tho3e in the <rant
of franchi3e3 to e3tabli3h" con3truct" operate and 9aintain ferrie3" 7harve3" 9ar8et3 or
3lau<hterhou3e3 and to lea3e public utilitie3" includin< acce33 to e@ten3ion and on-3ite re3earch
3ervice3 and facilitie3 related to a<riculture and fi3her! activitie3C +('c/-
2A10B (o or<ani>e and operate 3chool3 in accordance 7ith Republic Act No. 9155"
,overnance of %a3ic #ducation Act of 2001 and other pertinent la73C and
2A11B (o e@erci3e 3uch other po7er3 <ranted b! thi3 Code or nece33ar! to carr! out it3
purpo3e or purpo3e3 a3 3tated in it3 article3 of cooperation.
2AR(. 10. )r<ani>in< a Pri9ar! Cooperative. ; ifteen A15B or 9ore natural per3on3 7ho
are ilipino citi>en3" of le<al a<e" havin< a co99on bond of intere3t and are actuall! re3idin< or
7or8in< in the intended area of operation" 9a! or<ani>e a pri9ar! cooperative under thi3 Code:
Provided" (hat a pro3pective 9e9ber of a pri9ar! cooperative 9u3t have co9pleted a Pre-
*e9ber3hip #ducation /e9inar AP*#/B.
2An! ne7l! or<ani>ed pri9ar! cooperative 9a! be re<i3tered a3 9ultipurpo3e cooperative onl!
after co9pliance 7ith the 9ini9u9 re?uire9ent3 for 9ultipurpo3e cooperative3 to be 3et b! the
Authorit!. A 3in<le-purpo3e cooperative 9a! tran3for9 into a 9ultipurpo3e or 9a! create
3ub3idiarie3 onl! after at lea3t t7o A2B !ear3 of operation3. +c/#-(
2AR(. 11. #cono9ic /urve!. ; #ver! <roup of individual3 or cooperative3 intendin< to for9
a cooperative under thi3 Code 3hall 3ub9it to the Authorit! a <eneral 3tate9ent de3cribin<"
a9on< other3 the 3tructure and purpo3e3 of the propo3ed cooperative: Provided" (hat the
3tructure and actual 3taffin< pattern of the cooperative 3hall include a boo88eeper: Provided"
further" (hat the! 3hall not be allo7ed to operate 7ithout the nece33ar! per3onnel and 3hall al3o
3ub9it an econo9ic 3urve!" indicatin< therein the area of operation" the 3i>e of 9e9ber3hip"
and other pertinent data in a for9at provided b! the Authorit!.
2AR(. 12. &iabilit!. ; A cooperative dul! re<i3tered under thi3 Code 3hall have li9ited
liabilit!.
2AR(. 14. (er9. ; A cooperative 3hall e@i3t for a period not e@ceedin< fift! A50B !ear3 fro9
the date of re<i3tration unle33 3ooner di33olved or unle33 3aid period i3 e@tended. (he
cooperative ter9" a3 ori<inall! 3tated in the article3 of cooperation" 9a! be e@tended for period3
not e@ceedin< fift! A50B !ear3 in an! 3in<le in3tance b! an a9end9ent of the article3 of
cooperation" in accordance 7ith thi3 Code: Provided" (hat no e@ten3ion can be 9ade earlier
than five A5B !ear3 prior to the ori<inal or 3ub3e?uent e@pir! dateEdate3 unle33 there are
=u3tifiable rea3on3 for an earlier e@ten3ion a3 9a! be deter9ined b! the Authorit!. aAC-+/
2AR(. 15. Article3 of Cooperation. ; A1B All cooperative3 appl!in< for re<i3tration 3hall file
7ith the Authorit! the article3 of cooperation 7hich 3hall be 3i<ned b! each of the or<ani>er3
and ac8no7led<ed b! the9 if natural per3on3" and b! the chairper3on3 or 3ecretarie3" if =uridical
per3on3" before a notar! public.
2A2B (he article3 of cooperation 3hall 3et forth:
2AaB (he na9e of the cooperative 7hich 3hall include the 7ord DcooperativeDC
2AbB (he purpo3e or purpo3e3 and 3cope of bu3ine33 for 7hich the cooperative i3 to be
re<i3teredC
2AcB (he ter9 of e@i3tence of the cooperativeC
2AdB (he area of operation and the po3tal addre33 of it3 principal officeC cC/+a'
2AeB (he na9e3" nationalit!" and the po3tal addre33e3 of the re<i3trant3C
2AfB (he co99on bond of 9e9ber3hipC
2A<B (he li3t of na9e3 of the director3 7ho 3hall 9ana<e the cooperativeC and
2AhB (he a9ount of it3 3hare capital" the na9e3 and re3idence3 of it3 contributor3 and a
3tate9ent of 7hether the cooperative i3 pri9ar!" 3econdar! or tertiar! in accordance 7ith Article
24 hereof.
2A4B (he article3 of cooperation 9a! al3o contain an! other provi3ion3 not incon3i3tent 7ith
thi3 Code or an! related la7.
2A5B our A5B copie3 each of the propo3ed article3 of cooperation" b!la73" and the <eneral
3tate9ent re?uired under Article 11 of thi3 Code 3hall be 3ub9itted to the Authorit!. -C(A#c
2A5B No cooperative" other than a cooperative union a3 de3cribed under Article 25 hereof"
3hall be re<i3tered unle33 the article3 of cooperation i3 acco9panied 7ith the bond3 of the
accountable officer3 and a 37orn 3tate9ent of the trea3urer elected b! the 3ub3criber3 3ho7in<
that at lea3t t7ent!-five per centu9 A25FB of the authori>ed 3hare capital ha3 been 3ub3cribed
and at lea3t t7ent!-five per centu9 A25FB of the total 3ub3cription ha3 been paid: Provided"
(hat in no ca3e 3hall the paid-up 3hare capital be le33 than ifteen thou3and pe3o3
AP15"000.00B.
2(he Authorit! 3hall periodicall! a33e33 the re?uired paid-up 3hare capital and 9a! increa3e it
ever! five A5B !ear3 7hen nece33ar! upon con3ultation 7ith the cooperative 3ector and the
National #cono9ic and +evelop9ent Authorit! AN#+AB.
2AR(. 15. %!la73. ; A1B #ach cooperative to be re<i3tered under thi3 Code 3hall adopt
b!la73 not incon3i3tent 7ith the provi3ion3 of thi3 Code. (he b!la73 3hall be filed at the 3a9e
ti9e a3 the article3 of cooperation. cC#A-(
2A2B (he b!la73 of each cooperative 3hall provide:
2AaB (he ?ualification3 for ad9i33ion to 9e9ber3hip and the pa!9ent to be 9ade or intere3t
to be ac?uired a3 a condition for the e@erci3e of the ri<ht of 9e9ber3hipC
2AbB (he ri<ht3 and liabilitie3 of 9e9ber3hipC
2AcB (he circu93tance3 under 7hich 9e9ber3hip i3 ac?uired" 9aintained and lo3tC
2AdB (he procedure to be follo7ed in ca3e3 of ter9ination of 9e9ber3hipC
2AeB (he condition3 under 7hich the tran3fer of a 3hare or intere3t of the 9e9ber3 3hall be
per9ittedC
2AfB (he rule3 and procedure3 on the a<enda" ti9e" place and 9anner of callin<" convenin<"
conductin< 9eetin<3" ?uoru9 re?uire9ent3" votin< 3!3te93" and other 9atter3 relative to the
bu3ine33 affair3 of the <eneral a33e9bl!" board of director3" and co99ittee3C a'cC(A
2A<B (he <eneral conduct of the affair3 of the cooperative" includin< the po7er3 and dutie3 of
the <eneral a33e9bl!" the board of director3" co99ittee3 and the officer3" and their
?ualification3 and di3?ualification3C
2AhB (he 9anner in 7hich the capital 9a! be rai3ed and the purpo3e3 for 7hich it can be
utili>edC
2AiB (he 9ode of cu3tod! and of inve3t9ent of net 3urplu3C
2A=B (he accountin< and auditin< 3!3te93C
2A8B (he 9anner of loanin< and borro7in<" includin< li9itation3 thereofC
2AlB (he 9ethod of di3tribution of net 3urplu3C
2A9B (he 9anner of adoptin<" a9endin<" repealin<" and abro<atin< b!la73C C(A'-c
2AnB A conciliation or 9ediation 9echani39 for the a9icable 3ettle9ent of di3pute3 a9on<
9e9ber3" director3" officer3 and co99ittee 9e9ber3 of the cooperativeC and
2AoB )ther 9atter3 incident to the purpo3e3 and activitie3 of the cooperative.
2AR(. 16. Re<i3tration. ; A cooperative for9ed or or<ani>ed under thi3 Code ac?uire3
=uridical per3onalit! fro9 the date the Authorit! i33ue3 a certificate of re<i3tration under it3
official 3eal. All application3 for re<i3tration 3hall be finall! di3po3ed of b! the Authorit! 7ithin a
period of 3i@t! A60B da!3 fro9 the filin< thereof" other7i3e the application i3 dee9ed approved"
unle33 the cau3e of the dela! i3 attributable to the applicant: Provided" (hat in ca3e of a denial
of the application for re<i3tration" an appeal 3hall lie 7ith the )ffice of the Pre3ident 7ithin ninet!
A90B da!3 fro9 receipt of notice of 3uch denial: Provided" further" (hat failure of the )ffice of the
Pre3ident to act on the appeal 7ithin ninet! A90B da!3 fro9 the filin< thereof 3hall 9ean approval
of 3aid application. #/c-+A
2AR(. 17. Certificate of Re<i3tration. ; A certificate of re<i3tration i33ued b! the Authorit!
under it3 official 3eal 3hall be conclu3ive evidence that the cooperative therein 9entioned i3 dul!
re<i3tered unle33 it i3 proved that the re<i3tration thereof ha3 been cancelled.
2AR(. 18. A9end9ent of Article3 of Cooperation and %!la73. ; $nle33 other7i3e
pre3cribed b! thi3 Code and for le<iti9ate purpo3e3" an! provi3ion or 9atter 3tated in the
article3 of cooperation and b!la73 9a! be a9ended b! t7o-third3 A2E4B vote of all the 9e9ber3
7ith votin< ri<ht3" 7ithout pre=udice to the ri<ht of the di33entin< 9e9ber3 to e@erci3e their ri<ht
to 7ithdra7 their 9e9ber3hip under Article 40.
2%oth the ori<inal and a9ended article3 andEor b!la73 3hall contain all provi3ion3 re?uired b!
la7 to be 3et out in the article3 of cooperation and b!la73. A9end9ent3 3hall be indicated b!
under3corin< or other7i3e appropriatel! indicatin< the chan<e or chan<e3 9ade and a cop! of
the a9ended article3 or a9ended b!la73 dul! certified under oath b! the cooperative 3ecretar!
and a 9a=orit! of the director3 3tatin< the fact that 3aid a9end9ent or a9end9ent3 to the
article3 of cooperation andEor b!la73 have been dul! approved b! the re?uired vote of the
9e9ber3. All a9end9ent3 to the article3 of cooperation andEor b!la73 3hall be 3ub9itted to the
Authorit!. (he a9end9ent3 3hall ta8e effect upon it3 approval b! the Authorit! or 7ithin thirt!
A40B da!3 fro9 the date of filin< thereof if not acted upon b! the Authorit! for a cau3e not
attributable to the cooperative. #AC'a(
2AR(. 19. Contract3 #@ecuted Prior to Re<i3tration and #ffect3 (hereof. ; Contract3
e@ecuted bet7een private per3on3 and cooperative3 prior to the re<i3tration of the cooperative
3hall re9ain valid and bindin< bet7een the partie3 and upon re<i3tration of the cooperative. A
for9al 7ritten contract 3hall be adopted and 9ade in the cooperativeD3 na9e or on it3 behalf
prior to it3 re<i3tration.
2AR(. 20. +ivi3ion of Cooperative3. ; An! re<i3tered cooperative 9a!" b! a re3olution
approved b! a vote of three-fourth3 A4E5B of all the 9e9ber3 7ith votin< ri<ht3" pre3ent and
con3titutin< a ?uoru9" re3olve to divide it3elf into t7o A2B or 9ore cooperative3. (he procedure
for 3uch divi3ion 3hall be pre3cribed in the re<ulation3 of the Authorit!. (he ne7 cooperative3
3hall beco9e le<all! e3tabli3hed upon re<i3tration 7ith the Authorit!: Provided" (hat all the
re?uire9ent3 3et forth in thi3 Code have been co9plied 7ith b! the ne7 cooperative3: Provided"
further" (hat no divi3ion of a cooperative in fraud of creditor3 3hall be valid. -(a'AC
2AR(. 21. *er<er and Con3olidation of Cooperative3. ; A1B (7o A2B or 9ore cooperative3
9a! 9er<e into a 3in<le cooperative 7hich 3hall either be one of the con3tituent cooperative3 or
the con3olidated cooperative.
2A2B No 9er<er or con3olidation 3hall be valid unle33 approved b! a three-fourth3 A4E5B vote
of all the 9e9ber3 7ith votin< ri<ht3" pre3ent and con3titutin< a ?uoru9 of each of the
con3tituent cooperative3 at 3eparate <eneral a33e9bl! 9eetin<3. (he di33entin< 9e9ber3 3hall
have the ri<ht to e@erci3e their ri<ht to 7ithdra7 their 9e9ber3hip pur3uant to Article 40.
2A4B (he Authorit! 3hall i33ue the <uideline3 <overnin< the procedure of 9er<er or
con3olidation of cooperative3. 'n an! ca3e" the 9er<er or con3olidation 3hall be effective upon
the i33uance of the certificate of 9er<er or con3olidation b! the Authorit!.
2AR(. 22. #ffect3 of *er<er and Con3olidation. ; (he 9er<er or con3olidation of
cooperative3 3hall have the follo7in< effect3: ('A+Cc
2A1B (he con3tituent cooperative3 3hall beco9e a 3in<le cooperative 7hich" in ca3e of
9er<er" 3hall be the 3urvivin< cooperative" and" in ca3e of con3olidation" 3hall be the
con3olidated cooperativeC
2A2B (he 3eparate e@i3tence of the con3tituent cooperative3 3hall cea3e" e@cept that of the
3urvivin< or the con3olidated cooperativeC
2A4B (he 3urvivin< or the con3olidated cooperative 3hall po33e33 all the ri<ht3" privile<e3"
i99unitie3 and po7er3 and 3hall be 3ub=ect to all the dutie3 and liabilitie3 of a cooperative
or<ani>ed under thi3 CodeC
2A5B (he 3urvivin< or the con3olidated cooperative 3hall po33e33 all the a33et3" ri<ht3"
privile<e3" i99unitie3 and franchi3e3 of each of the con3tituent cooperative3C and -+(/'#
2A5B (he 3urvivin< or the con3olidated cooperative 3hall be re3pon3ible for all the liabilitie3
and obli<ation3 of each of the con3tituent cooperative3 in the 3a9e 9anner a3 if 3uch 3urvivin<
or con3olidated cooperative had it3elf incurred 3uch liabilitie3 or obli<ation3. An! clai9" action or
proceedin< pendin< b! or a<ain3t an! 3uch con3tituent cooperative3 9a! be pro3ecuted b! or
a<ain3t the 3urvivin< or con3olidated cooperative" a3 the ca3e 9a! be. Neither the ri<ht3 of
creditor3 nor an! lien upon the propert! of an! of 3uch con3tituent cooperative3 3hall be
i9paired b! 3uch 9er<er or con3olidation.
2AR(. 24. (!pe3 and Cate<orie3 of Cooperative3. ; A1B (!pe3 of Cooperative3 ;
Cooperative3 9a! fall under an! of the follo7in< t!pe3:
2AaB Credit Cooperative ; i3 one that pro9ote3 and underta8e3 3avin<3 and lendin< 3ervice3
a9on< it3 9e9ber3. 't <enerate3 a co99on pool of fund3 in order to provide financial
a33i3tance and other related financial 3ervice3 to it3 9e9ber3 for productive and provident
purpo3e3C A#-('C
2AbB Con3u9er3 Cooperative ; i3 one the pri9ar! purpo3e of 7hich i3 to procure and
di3tribute co99oditie3 to 9e9ber3 and non-9e9ber3C
2AcB Producer3 Cooperative ; i3 one that underta8e3 =oint production 7hether a<ricultural or
indu3trial. 't i3 for9ed and operated b! it3 9e9ber3 to underta8e the production and proce33in<
of ra7 9aterial3 or <ood3 produced b! it3 9e9ber3 into fini3hed or proce33ed product3 for 3ale
b! the cooperative to it3 9e9ber3 and non-9e9ber3. An! end product or it3 derivative ari3in<
fro9 the ra7 9aterial3 produced b! it3 9e9ber3" 3old in the na9e and for the account of the
cooperative" 3hall be dee9ed a product of the cooperative and it3 9e9ber3C
2AdB *ar8etin< Cooperative ; i3 one 7hich en<a<e3 in the 3uppl! of production input3 to
9e9ber3 and 9ar8et3 their product3C c+C#-a
2AeB /ervice Cooperative ; i3 one 7hich en<a<e3 in 9edical and dental care"
ho3pitali>ation" tran3portation" in3urance" hou3in<" labor" electric li<ht and po7er"
co99unication" profe33ional and other 3ervice3C
2AfB *ultipurpo3e Cooperative ; i3 one 7hich co9bine3 t7o A2B or 9ore of the bu3ine33
activitie3 of the3e different t!pe3 of cooperative3C
2A<B Advocac! Cooperative ; i3 a pri9ar! cooperative 7hich pro9ote3 and advocate3
cooperativi39 a9on< it3 9e9ber3 and the public throu<h 3ociall!-oriented pro=ect3" education
and trainin<" re3earch and co99unication" and other 3i9ilar activitie3 to reach out to it3
intended beneficiarie3C
2AhB A<rarian Refor9 Cooperative ; i3 one or<ani>ed b! 9ar<inal far9er3 9a=orit! of 7hich
are a<rarian refor9 beneficiarie3 for the purpo3e of developin< an appropriate 3!3te9 of land
tenure" land develop9ent" land con3olidation or land 9ana<e9ent in area3 covered b! a<rarian
refor9C 'ca#+C
2AiB Cooperative %an8 ; i3 one or<ani>ed for the pri9ar! purpo3e of providin< a 7ide ran<e
of financial 3ervice3 to cooperative3 and their 9e9ber3C
2A=B +air! Cooperative ; i3 one 7ho3e 9e9ber3 are en<a<ed in the production of fre3h 9il8
7hich 9a! be proce33ed andEor 9ar8eted a3 dair! product3C
2A8B #ducation Cooperative ; i3 one or<ani>ed for the pri9ar! purpo3e of o7nin< and
operatin< licen3ed educational in3titution3" not7ith3tandin< the provi3ion3 of Republic Act No.
9155" other7i3e 8no7n a3 the ,overnance of %a3ic #ducation Act of 2001C
2AlB #lectric Cooperative ; i3 one or<ani>ed for the pri9ar! purpo3e of underta8in< po7er
<eneration" utili>in< rene7able ener<! 3ource3" includin< h!brid 3!3te93" ac?ui3ition and
operation of 3ubtran39i33ion or di3tribution to it3 hou3ehold 9e9ber3C prcd
2A9B inancial /ervice Cooperative ; i3 one or<ani>ed for the pri9ar! purpo3e of en<a<in<
in 3avin<3 and credit 3ervice3 and other financial 3ervice3C
2AnB i3her9en Cooperative ; i3 one or<ani>ed b! 9ar<inali>ed fi3her9en in localitie3
7ho3e product3 are 9ar8eted either a3 fre3h or proce33ed product3C
2AoB -ealth /ervice3 Cooperative ; i3 one or<ani>ed for the pri9ar! purpo3e of providin<
9edical" dental and other health 3ervice3C
2ApB -ou3in< Cooperative ; i3 one or<ani>ed to a33i3t or provide acce33 to hou3in< for the
benefit of it3 re<ular 9e9ber3 7ho activel! participate in the 3avin<3 pro<ra9 for hou3in<. 't i3
co-o7ned and controlled b! it3 9e9ber3C
2A?B 'n3urance Cooperative ; i3 one en<a<ed in the bu3ine33 of in3urin< life and propert! of
cooperative3 and their 9e9ber3C #'(ca-
2ArB (ran3port Cooperative ; i3 one 7hich include3 land and 3ea tran3portation" li9ited to
39all ve33el3" a3 defined or cla33ified under the Philippine 9ariti9e la73" or<ani>ed under the
provi3ion3 of thi3 CodeC
2A3B 1ater /ervice Cooperative ; i3 one or<ani>ed to o7n" operate and 9ana<e 7ater
3!3te93 for the provi3ion and di3tribution of potable 7ater for it3 9e9ber3 and their hou3ehold3C
2AtB 1or8er3 Cooperative ; i3 one or<ani>ed b! 7or8er3" includin< the 3elf-e9plo!ed" 7ho
are at the 3a9e ti9e the 9e9ber3 and o7ner3 of the enterpri3e. 't3 principal purpo3e i3 to
provide e9plo!9ent and bu3ine33 opportunitie3 to it3 9e9ber3 and 9ana<e it in accordance
7ith cooperative principle3C and
2AuB )ther t!pe3 of cooperative a3 9a! be deter9ined b! the Authorit!. +-/#c'
2A2B Cate<orie3 of Cooperative3 ; Cooperative3 3hall be cate<ori>ed accordin< to
9e9ber3hip and territorial con3ideration3 a3 follo73:
2AaB 'n ter93 of 9e9ber3hip" cooperative 3hall be cate<ori>ed into:
2AiB Pri9ar! ; (he 9e9ber3 of 7hich are natural per3on3C
2AiiB /econdar! ; (he 9e9ber3 of 7hich are pri9arie3C and
2AiiiB (ertiar! ; (he 9e9ber3 of 7hich are 3econdar! cooperative3C and
2AbB 'n ter93 of territor!" cooperative3 3hall be cate<ori>ed accordin< to area3 of operation3
7hich 9a! or 9a! not coincide 7ith the political 3ubdivi3ion3 of the countr!. '(#cA+
2AR(. 25. unction3 of a ederation of Cooperative3. ; A federation of cooperative3 3hall
underta8e the follo7in< function3:
2AaB (o carr! on an! cooperative enterpri3e authori>ed under Article 6 that co9ple9ent3"
au<9ent3" or 3upple9ent3 but doe3 not conflict" co9pete 7ith" nor 3upplant the bu3ine33 or
econo9ic activitie3 of it3 9e9ber3C
2AbB (o carr! on" encoura<e" and a33i3t educational and advi3or! 7or8 relatin< to it3 9e9ber
cooperative3C
2AcB (o render 3ervice3 de3i<ned to encoura<e 3i9plicit!" efficienc!" and econo9! in the
conduct of the bu3ine33 of it3 9e9ber cooperative3 and to facilitate the i9ple9entation of their
boo88eepin<" accountin<" and other 3!3te93 and procedure3C '+C/cA
2AdB (o print" publi3h" and circulate an! ne73paper or other publication in the intere3t of it3
9e9ber cooperative3 and enterpri3e3C
2AeB (o coordinate and facilitate the activitie3 of it3 9e9ber cooperative3C
2AfB (o enter into =oint venture3 7ith national or international cooperative3 of other countrie3
in the 9anufacture and 3ale of product3 andEor 3ervice3 in the Philippine3 and abroadC and
2A<B (o perfor9 3uch other function3 a3 9a! be nece33ar! to attain it3 ob=ective3.
2A federation of cooperative3 9a! be re<i3tered b! carr!in< out the for9alitie3 for re<i3tration of
a cooperative.
2Re<i3tered cooperative3 9a! or<ani>e a federation accordin< to the t!pe of bu3ine33 activit!
en<a<ed in b! the cooperative3.
2AR(. 25. Cooperative $nion3. ; Re<i3tered cooperative3 and federation3 at the
appropriate level3 9a! or<ani>e or =oin cooperative union3 to repre3ent the intere3t and 7elfare
of all t!pe3 of cooperative3 at the provincial" cit!" re<ional" and national level3. Cooperative
union3 9a! have the follo7in< purpo3e3: /-A+c(
2AaB (o repre3ent it3 9e9ber or<ani>ation3C
2AbB (o ac?uire" anal!>e" and di33e9inate econo9ic" 3tati3tical" and other infor9ation
relatin< to it3 9e9ber3 and to all t!pe3 of cooperative3 7ithin it3 area of operationC
2AcB (o 3pon3or 3tudie3 in the econo9ic" le<al" financial" 3ocial and other pha3e3 of
cooperation" and publi3h the re3ult3 thereofC
2AdB (o pro9ote the 8no7led<e of cooperative principle3 and practice3C
2AeB (o develop the cooperative 9ove9ent in their re3pective =uri3diction3C
2AfB (o advi3e the appropriate authoritie3 on all ?ue3tion3 relatin< to cooperative3C
Aca#+C
2A<B (o rai3e fund3 throu<h 9e9ber3hip fee3" due3 and contribution3" donation3" and
3ub3idie3 fro9 local and forei<n 3ource3 7hether private or <overn9entC and
2AhB (o do and perfor9 3uch other non-bu3ine33 activitie3 a3 9a! be nece33ar! to attain the
fore<oin< ob=ective3.
2Cooperative union3 9a! a33i3t the national and local <overn9ent3 in the latterD3 develop9ent
activitie3 in their re3pective =uri3diction3.2
/#C(')N 4. Article3 26" 27" 28" 29" 40" 41 and 42 of Chapter ''' on *e9ber3hip of the 3a9e
Code are hereb! renu9bered and a9ended to read" a3 follo73:
C-AP(#R '''
*e9ber3hip
2AR(. 26. 0ind3 of *e9ber3hip. ; A cooperative 9a! have t7o A2B 8ind3 of 9e9ber3" to
7it: A1B re<ular 9e9ber3 and A2B a33ociate 9e9ber3. a+-/c'
2A re<ular 9e9ber i3 one 7ho ha3 co9plied 7ith all the 9e9ber3hip re?uire9ent3 and entitled
to all the ri<ht3 and privile<e3 of 9e9ber3hip. An a33ociate 9e9ber i3 one 7ho ha3 no ri<ht to
vote nor be voted upon and 3hall be entitled onl! to 3uch ri<ht3 and privile<e3 a3 the b!la73
9a! provide: Provided" (hat an a33ociate 9e9ber 7ho 9eet3 the 9ini9u9 re?uire9ent3 of
re<ular 9e9ber3hip" continue3 to patroni>e the cooperative for t7o A2B !ear3" and 3i<nifie3
hi3Eher intention to re9ain a 9e9ber 3hall be con3idered a re<ular 9e9ber.
2A cooperative or<ani>ed b! 9inor3 3hall be con3idered a laborator! cooperative and 9u3t be
affiliated 7ith a re<i3tered cooperative. A laborator! cooperative 3hall be <overned b! 3pecial
<uideline3 to be pro9ul<ated b! the Authorit!.
2AR(. 27. ,overn9ent )fficer3 and #9plo!ee3. ; A1B An! officer or e9plo!ee of the
Authorit! 3hall be di3?ualified to be elected or appointed to an! po3ition in a cooperative:
Provided" (hat the di3?ualification doe3 not e@tend to a cooperative or<ani>ed b! the officer3 or
e9plo!ee3 of the Authorit!. /#A-c(
2A2B All elective official3 of the ,overn9ent 3hall be ineli<ible to beco9e officer3 and
director3 of cooperative3: Provided" (hat the di3?ualification doe3 not e@tend to a part! li3t
repre3entative bein< an officer of a cooperative he or 3he repre3ent3C and
2A4B An! <overn9ent e9plo!ee or official 9a!" in the di3char<e of hi3 dutie3 a3 9e9ber in
the cooperative" be allo7ed b! the head of office concerned to u3e official ti9e for attendance at
the <eneral a33e9bl!" board and co99ittee 9eetin<3 of cooperative3 a3 7ell a3 cooperative
3e9inar3" conference3" 7or83hop3" technical 9eetin<3" and trainin< cour3e3 locall! or abroad:
Provided" (hat the operation3 of the office concerned are not adver3el! affected.
2AR(. 28. Application. ; An applicant for 9e9ber3hip 3hall be dee9ed a 9e9ber after
approval of hi3 9e9ber3hip b! the board of director3 and 3hall e@erci3e the ri<ht3 of 9e9ber
after havin< 9ade 3uch pa!9ent3 to the cooperative in re3pect to 9e9ber3hip or ac?uired
intere3t in the cooperative a3 9a! be pre3cribed in the b!la73. 'n ca3e 9e9ber3hip i3 refu3ed
or denied b! the board of director3" an appeal 9a! be 9ade to the <eneral a33e9bl! and the
latterD3 deci3ion 3hall be final. or thi3 purpo3e" the <eneral a33e9bl! 9a! opt to create an
appeal and <rievance co99ittee" the 9e9ber3 of 7hich" 3hall 3erve for a period of one A1B !ear
and 3hall decide appeal3 on 9e9ber3hip application 7ithin thirt! A40B da!3 upon receipt thereof.
'f the co99ittee fail3 to decide 7ithin the pre3cribed period" the appeal i3 dee9ed approved in
favor of the applicant. acC'(/
2AR(. 29. &iabilit! of *e9ber3. ; A 9e9ber 3hall be liable for the debt3 of the cooperative
to the e@tent of hi3 contribution to the 3hare capital of the cooperative.
2AR(. 40. (er9ination of *e9ber3hip. ; A1B A 9e9ber of a cooperative 9a!" for an! valid
rea3on" 7ithdra7 hi3 9e9ber3hip fro9 the cooperative b! <ivin< a 3i@t! A60B da! notice to the
board of director3. /ub=ect to the b!la73 of the cooperative" the 7ithdra7in< 9e9ber 3hall be
entitled to a refund of hi3 3hare capital contribution and all other intere3t3 in the cooperative:
Provided" (hat 3uch refund 3hall not be 9ade if upon 3uch pa!9ent the value of the a33et3 of
the cooperative 7ould be le33 than the a<<re<ate a9ount of it3 debt3 and liabilitie3 e@clu3ive of
hi3 3hare capital contribution.
2A2B (he death or in3anit! of a 9e9ber in a pri9ar! cooperative" and the in3olvenc! or
di33olution of a 9e9ber in a 3econdar! or tertiar! cooperative 9a! be con3idered valid <round3
for ter9ination of 9e9ber3hip: Provided" ho7ever" (hat in ca3e of death or in3anit! of an
a<rarian refor9 beneficiar!-9e9ber of a cooperative" the ne@t-of-8in 9a! a33u9e the dutie3
and re3pon3ibilitie3 of the ori<inal 9e9ber. c-A(/'
2A4B *e9ber3hip in the cooperative 9a! be ter9inated b! a vote of the 9a=orit! of all the
9e9ber3 of the board of director3 for an! of the follo7in< cau3e3:
2AaB 1hen a 9e9ber ha3 not patroni>ed an! of the 3ervice3 of the cooperative for an
unrea3onable period of ti9e a3 9a! be previou3l! deter9ined b! the board of director3C
2AbB 1hen a 9e9ber ha3 continuou3l! failed to co9pl! 7ith hi3 obli<ation3C
2AcB 1hen a 9e9ber ha3 acted in violation of the b!la73 and the rule3 of the cooperativeC
and
2AdB or an! act or o9i33ion in=uriou3 or pre=udicial to the intere3t or the 7elfare of the
cooperative. A+(Ca'
2A 9e9ber 7ho3e 9e9ber3hip the board of director3 9a! 7i3h to ter9inate 3hall be infor9ed
of 3uch intended action in 7ritin< and 3hall be <iven an opportunit! to be heard before the 3aid
board 9a8e3 it3 deci3ion. (he deci3ion of the board 3hall be in 7ritin< and 3hall be
co99unicated in per3on or b! re<i3tered 9ail to 3aid 9e9ber and 3hall be appealable 7ithin
thirt! A40B da!3 fro9 receipt thereof to the <eneral a33e9bl! 7ho3e deci3ion 3hall be final. (he
<eneral a33e9bl! 9a! create an appeal and <rievance co99ittee 7ho3e 9e9ber3 3hall 3erve
for a period of one A1B !ear and 3hall decide appeal3 on 9e9ber3hip ter9ination. (he
co99ittee i3 <iven thirt! A40B da!3 fro9 receipt thereof to decide on the appeal. ailure to
decide 7ithin the pre3cribed period" the appeal i3 dee9ed approved in favor of the 9e9ber.
Pendin< a deci3ion b! the <eneral a33e9bl!" the 9e9ber3hip re9ain3 in force.
2AR(. 41. Refund of 'ntere3t3. ; All 3u93 co9puted in accordance 7ith the b!la73 to be
due fro9 a cooperative to a for9er 9e9ber 3hall be paid to hi9 either b! the cooperative or b!
the approved tran3feree" a3 the ca3e 9a! be" in accordance 7ith thi3 Code.DD -+(C/'
/#C(')N 5. Article3 44" 45" 45" 46" 47" 48" 49" 50" 51" 52" 54" 55" 55" 56" 57" 58" 59" 50 and
51 of Chapter '. on Ad9ini3tration of the 3a9e Code are hereb! renu9bered and a9ended to
read" a3 follo73:
C-AP(#R '.
Ad9ini3tration
2AR(. 42. Co9po3ition of the ,eneral A33e9bl!. ; (he ,eneral a33e9bl! 3hall be
co9po3ed of 3uch 9e9ber3 7ho are entitled to vote under the article3 of cooperation and
b!la73 of the cooperative.
2AR(. 44. Po7er3 of the ,eneral A33e9bl!. ; (he <eneral a33e9bl! 3hall be the hi<he3t
polic!-9a8in< bod! of the cooperative and 3hall e@erci3e 3uch po7er3 a3 are 3tated in thi3
Code" in the article3 of cooperation and in the b!la73 of the cooperative. (he <eneral a33e9bl!
3hall have the follo7in< e@clu3ive po7er3 7hich cannot be dele<ated: A'/-c+
2A1B (o deter9ine and approve a9end9ent3 to the article3 of cooperation and b!la73C
2A2B (o elect or appoint the 9e9ber3 of the board of director3" and to re9ove the9 for
cau3e. -o7ever" in the ca3e of the electric cooperative3 re<i3tered under thi3 Code" election of
the 9e9ber3 of the board 3hall be held in accordance 7ith it3 b!la73 or election <uideline3 of
3uch electric cooperativeC and
2A4B (o approve develop9ental plan3 of the cooperative.
2/ub=ect to 3uch other provi3ion3 of thi3 Code and onl! for purpo3e3 of pro9pt and intelli<ent
deci3ion-9a8in<" the <eneral a33e9bl! 9a!" b! a three-fourth3 A4E5B vote of all it3 9e9ber3 7ith
votin< ri<ht3" pre3ent and con3titutin< a ?uoru9" dele<ate 3o9e of it3 po7er3 to a 39aller bod!
of the cooperative. (he3e po7er3 3hall be enu9erated under the b!la73 of the cooperative.
-/'aA(
2AR(. 45. *eetin<3. ; A1B A re<ular 9eetin< 3hall be held annuall! b! the <eneral
a33e9bl! on a date fi@ed in the b!la73" or if not 3o fi@ed" on an! date 7ithin ninet! A90B da!3
after the clo3e of each fi3cal !ear: Provided" (hat notice of re<ular 9eetin<3 3hall be 3ent in
7ritin<" b! po3tin< or publication" or throu<h other electronic 9ean3 to all 9e9ber3 of recordC
2A2B 1henever nece33ar!" a 3pecial 9eetin< of the <eneral a33e9bl! 9a! be called at an!
ti9e b! a 9a=orit! vote of the board of director3 or a3 provided for in the b!la73: Provided" (hat
a notice in 7ritin< 3hall be 3ent one A1B 7ee8 prior to the 9eetin< to all 9e9ber3 7ho are
entitled to vote. -o7ever" a 3pecial 9eetin< 3hall be called b! the board of director3 after
co9pliance 7ith the re?uired notice 7ithin one A1B 9onth after receipt of a re?ue3t in 7ritin<
fro9 at lea3t ten per centu9 A10FB of the total 9e9ber3 7ho are entitled to vote to tran3act
3pecific bu3ine33 covered b! the call.
2'f the board fail3 to call a re<ular or a 3pecial 9eetin< 7ithin the <iven period" the Authorit!"
upon petition of ten per centu9 A10FB of all the 9e9ber3 of the cooperative 7ho are entitled to
vote" and for <ood cau3e 3ho7n" 3hall i33ue an order to the petitioner3 directin< the9 to call a
9eetin< of the <eneral a33e9bl! b! <ivin< proper notice a3 re?uired in thi3 Code or in the
b!la73C C('+cA
2A4B 'n the ca3e of a ne7l! approved cooperative" a 3pecial <eneral a33e9bl! 3hall be called"
a3 far a3 practicable" 7ithin ninet! A90B da!3 fro9 3uch approvalC
2A5B (he Authorit! 9a! call a 3pecial 9eetin< of the cooperative for the purpo3e of reportin<
to the 9e9ber3 the re3ult of an! e@a9ination" or other inve3ti<ation of the cooperative affair3C
and
2A5B Notice of an! 9eetin< 9a! be 7aived" e@pre33l! or i9pliedl!" b! an! 9e9ber.
2AR(. 45. Guoru9. ; A ?uoru9 3hall con3i3t of at lea3t t7ent!-five per centu9 A25FB of all
the 9e9ber3 entitled to vote. 'n the ca3e of cooperative ban83" the ?uoru9 3hall be a3 provided
in Article 99 of thi3 Code. 'n the ca3e of electric cooperative3 re<i3tered under thi3 Code" a
?uoru9" unle33 other7i3e provided in the b!la73" 3hall con3i3t of five per centu9 A5FB of all the
9e9ber3 entitled to vote. C/+A'a
2AR(. 46. .otin< /!3te9. ; #ach 9e9ber of a pri9ar! cooperative 3hall have onl! one A1B
vote. 'n the ca3e of 9e9ber3 of 3econdar! or tertiar! cooperative3" the! 3hall have one A1B
ba3ic vote and a3 9an! incentive vote3 a3 provided for in the b!la73 but not to e@ceed five A5B
vote3. (he vote3 ca3t b! the dele<ate3 3hall be dee9ed a3 vote3 ca3t b! the 9e9ber3 thereof.
2-o7ever" the b!la73 of a cooperative other than a pri9ar! 9a! provide for votin< b! pro@!.
.otin< b! pro@! 9ean3 allo7in< a dele<ate of a cooperative to repre3ent or vote in behalf of
another dele<ate of the 3a9e cooperative.
2AR(. 47. Co9po3ition and (er9 of the %oard of +irector3. ; $nle33 other7i3e provided in
the b!la73" the direction and 9ana<e9ent of the affair3 of a cooperative 3hall be ve3ted in a
board of director3 7hich 3hall be co9po3ed of not le33 than five A5B nor 9ore than fifteen A15B
9e9ber3 elected b! the <eneral a33e9bl! for a ter9 fi@ed in the b!la73 but not e@ceedin< a
ter9 of t7o A2B !ear3 and 3hall hold office until their 3ucce33or3 are dul! elected and ?ualified"
or until dul! re9oved for cau3e. #(+-aC
2AR(. 48. Po7er3 of the %oard of +irector3. ; (he board of director3 3hall be re3pon3ible
for the 3trate<ic plannin<" direction-3ettin< and polic!-for9ulation activitie3 of the cooperative3.
2AR(. 49. +irector3. ; A1B An! 9e9ber of a cooperative 7ho" under the b!la73 of the
cooperative" ha3 the ri<ht to vote and 7ho po33e33e3 all the ?ualification3 and none of the
di3?ualification3 provided in the la73 or the b!la73 3hall be eli<ible for election a3 director.
2A2B (he cooperative 9a!" b! re3olution of it3 board of director3" ad9it a3 director" or
co99ittee 9e9ber one appointed b! an! financin< in3titution fro9 7hich the cooperative
received financial a33i3tance 3olel! to provide technical 8no7led<e not available 7ithin it3
9e9ber3hip. /uch director or co99ittee 9e9ber need not be a 9e9ber of the cooperative and
3hall have no po7er3" ri<ht3 nor re3pon3ibilitie3 e@cept to provide technical a33i3tance a3
re?uired b! the cooperative.
2A4B (he 9e9ber3 of the board of director3 3hall not hold an! other po3ition directl! involved
in the da! to da! operation and 9ana<e9ent of the cooperative. /A-'a+
2A5B An! per3on en<a<ed in a bu3ine33 3i9ilar to that of the cooperative or 7ho in an! 7a!
ha3 a conflict of intere3t 7ith it" i3 di3?ualified fro9 election a3 a director of 3aid cooperative.
2AR(. 50. *eetin< of the %oard and Guoru9 Re?uire9ent. ; A1B 'n the ca3e of pri9ar!
cooperative3" re<ular 9eetin<3 of the board of director3 3hall be held at lea3t once a 9onth.
2A2B /pecial 9eetin<3 of the board of director3 9a! be held at an! ti9e upon the call of the
chairper3on or a 9a=orit! of the 9e9ber3 of the board: Provided" (hat 7ritten notice3 of the
9eetin< 3pecif!in< the a<enda of the 3pecial 9eetin< 3hall be <iven to all 9e9ber3 of the board
at lea3t one A1B 7ee8 before the 3aid 9eetin<.
2A4B A 9a=orit! of the 9e9ber3 of the board 3hall con3titute a ?uoru9 for the conduct of
bu3ine33" unle33 the b!la73 provide other7i3e.
2A5B +irector3 cannot attend or vote b! pro@! at board 9eetin<3. +(/a'c
2AR(. 51. .acanc! in the %oard of +irector3. ; An! vacanc! in the board of director3"
other than b! e@piration of ter9" 9a! be filled b! the vote of at lea3t a 9a=orit! of the re9ainin<
director3" if 3till con3titutin< a ?uoru9C other7i3e" the vacanc! 9u3t be filled b! the <eneral
a33e9bl! in a re<ular or 3pecial 9eetin< called for the purpo3e. A director 3o elected to fill a
vacanc! 3hall 3erve onl! the une@pired ter9 of hi3 predece33or in office.
2AR(. 52. )fficer3 of the Cooperative. ; (he board of director3 3hall elect fro9 a9on<
the93elve3 the chairper3on and vice-chairper3on" and elect or appoint other officer3 of the
cooperative fro9 out3ide of the board in accordance 7ith their b!la73. All officer3 3hall 3erve
durin< <ood behavior and 3hall not be re9oved e@cept for cau3e after due hearin<. &o33 of
confidence 3hall not be a valid <round for re9oval unle33 evidenced b! act3 or o9i33ion
cau3in< lo33 of confidence in the hone3t! and inte<rit! of 3uch officer. No t7o A2B or 9ore
per3on3 7ith relation3hip3 up to the third civil de<ree of con3an<uinit! or affinit! nor 3hall an!
per3on en<a<ed in a bu3ine33 3i9ilar to that of the cooperative nor 7ho in an! other 9anner
ha3 intere3t3 in conflict 7ith the cooperative 3hall 3erve a3 an appointive officer. a'AcC-
2AR(. 54. Co99ittee3 of Cooperative3. ; A1B (he b!la73 9a! create an e@ecutive
co99ittee to be appointed b! the board of director3 7ith 3uch po7er3 and dutie3 a3 9a! be
dele<ated to it in the b!la73 or b! a 9a=orit! vote of all the 9e9ber3 of the board of director3.
2A2B (he b!la73 3hall provide for the creation of an audit" election" 9ediation and conciliation"
ethic3" and 3uch other co99ittee3 a3 9a! be nece33ar! for the conduct of the affair3 of the
cooperative. (he 9e9ber3 of both the audit and election co99ittee3 3hall be elected b! the
<eneral a33e9bl! and the re3t 3hall be appointed b! the board. (he audit co99ittee 3hall be
directl! accountable and re3pon3ible to the <eneral a33e9bl!. 't 3hall have the po7er and dut!
to continuou3l! 9onitor the ade?uac! and effectivene33 of the cooperativeD3 9ana<e9ent
control 3!3te9 and audit the perfor9ance of the cooperative and it3 variou3 re3pon3ibilit!
center3.
2$nle33 other7i3e provided in the b!la73" the board" in ca3e of a vacanc! in the co99ittee3"
9a! call an election to fill the vacanc! or appoint a per3on to fill the 3a9e 3ub=ect to the
provi3ion that the per3on elected or appointed 3hall 3erve onl! for the une@pired portion of the
ter9. Aa/('-
2AR(. 55. unction3" Re3pon3ibilitie3 and (rainin< Re?uire9ent3 of +irector3" )fficer3 and
Co99ittee *e9ber3. ; (he function3 and re3pon3ibilitie3 of the director3" officer3 and
co99ittee 9e9ber3" a3 7ell a3 their trainin< re?uire9ent3" 3hall be in accordance 7ith the
rule3 and re<ulation3 i33ued b! the Authorit!.
2AR(. 55. &iabilit! of +irector3" )fficer3 and Co99ittee *e9ber3. ; +irector3" officer3 and
co99ittee 9e9ber3" 7ho 7illfull! and 8no7in<l! vote for or a33ent to patentl! unla7ful act3 or
7ho are <uilt! of <ro33 ne<li<ence or bad faith in directin< the affair3 of the cooperative or
ac?uire an! per3onal or pecuniar! intere3t in conflict 7ith their dut! a3 3uch director3" officer3 or
co99ittee 9e9ber3 3hall be liable =ointl! and 3everall! for all da9a<e3 or profit3 re3ultin<
therefro9 to the cooperative" 9e9ber3 and other per3on3.
21hen a director" officer or co99ittee 9e9ber atte9pt3 to ac?uire or ac?uire3" in violation of
hi3 dut!" an! intere3t or e?uit! adver3e to the cooperative in re3pect to an! 9atter 7hich ha3
been repo3ed in hi9 in confidence" he 3hall" a3 a tru3tee for the cooperative" be liable for
da9a<e3 and 3hall be accountable for double the profit3 7hich other7i3e 7ould have accrued to
the cooperative. C'(c/-
2AR(. 56. Co9pen3ation. ; A1B 'n the ab3ence of an! provi3ion in the b!la73 fi@in< their
co9pen3ation" the director3 3hall not receive an! co9pen3ation e@cept for rea3onable per
die93: Provided" ho7ever" (hat the director3 and officer3 3hall not be entitled to an! per die9
7hen" in the precedin< calendar !ear" the cooperative reported a net lo33 or had a dividend rate
le33 than the official inflation rate for the 3a9e !ear. An! co9pen3ation other than per die93
9a! be <ranted to director3 b! a 9a=orit! vote of the 9e9ber3 7ith votin< ri<ht3 at a re<ular or
3pecial <eneral a33e9bl! 9eetin< 3pecificall! called for the purpo3e: Provided" (hat no
additional co9pen3ation other than per die93 3hall be paid durin< the fir3t !ear of e@i3tence of
an! cooperative.
2A2B (he co9pen3ation of officer3 of the cooperative a3 7ell a3 the 9e9ber3 of the
co99ittee3 created pur3uant to thi3 Code or it3 b!la73 9a! be fi@ed in the b!la73.
2A4B $nle33 alread! fi@ed in the b!la73" the co9pen3ation of all other e9plo!ee3 3hall be
deter9ined b! the board of director3. #a'CA+
2AR(. 57. +ealin<3 of +irector3" )fficer3 or Co99ittee *e9ber3. ; A contract entered into
b! the cooperative 7ith one A1B or 9ore of it3 director3" officer3" and co99ittee 9e9ber3 i3
voidable" at the option of the cooperative" unle33 all the follo7in< condition3 are pre3ent:
2A1B (hat the pre3ence of 3uch director in the board 9eetin< 7herein the contract 7a3
approved 7a3 not nece33ar! to con3titute a ?uoru9 for 3uch 9eetin<C
2A2B (hat the vote of 3uch director 7a3 not nece33ar! for the approval of the contractC
2A4B (hat the contract i3 fair and rea3onable under the circu93tance3C and
2A5B (hat in the ca3e of an officer or co99ittee 9e9ber" the contract 7ith the officer or
co99ittee 9e9ber ha3 been previou3l! authori>ed b! the <eneral a33e9bl! or b! the board of
director3. A/-a(c
21here an! of the fir3t t7o condition3 3et forth in the precedin< para<raph i3 ab3ent" in the ca3e
of a contract 7ith a director" 3uch contract 9a! be ratified b! a three-fourth3 A4E5B vote of all the
9e9ber3 7ith votin< ri<ht3" pre3ent and con3titutin< a ?uoru9 in a 9eetin< called for the
purpo3e: Provided" (hat full di3clo3ure of the adver3e intere3t of the director3 involved i3 9ade
at 3uch 9eetin<" and that the contract i3 fair and rea3onable under the circu93tance3.
2AR(. 58. +i3lo!alt! of a +irector. ; A director 7ho" b! virtue of hi3 office" ac?uire3 for
hi93elf an opportunit! 7hich 3hould belon< to the cooperative 3hall be liable for da9a<e3 and
9u3t account for double the profit3 that other7i3e 7ould have accrued to the cooperative b!
refundin< the 3a9e" unle33 hi3 act ha3 been ratified b! a three-fourth3 A4E5B vote of all the
9e9ber3 7ith votin< ri<ht3" pre3ent and con3titutin< a ?uoru9. (hi3 provi3ion 3hall be
applicable" not7ith3tandin< the fact that the director u3ed hi3 o7n fund3 in the venture.
2AR(. 59. 'lle<al $3e of Confidential 'nfor9ation. ; A1B A director or officer" or an a33ociate
of a director or officer" 7ho" for hi3 benefit or advanta<e or that of an a33ociate" 9a8e3 u3e of
confidential infor9ation that" if <enerall! 8no7n" 9i<ht rea3onabl! be e@pected to adver3el!
affect the operation and viabilit! of the cooperative" 3hall be held: /(-+Ac
2AaB &iable to co9pen3ate the cooperative for the direct lo33e3 3uffered b! the cooperative a3
a re3ult of the ille<al u3e of infor9ationC and
2AbB Accountable to the cooperative for an! direct benefit or advanta<e received or !et to be
received b! hi9 or hi3 a33ociate" a3 a re3ult of the tran3action.
2A2B (he cooperative 3hall ta8e the nece33ar! 3tep3 to enforce the liabilitie3 de3cribed in
3ub3ection AaB.
2AR(. 50. Re9oval. ; All co9plaint3 for the re9oval of an! elected officer 3hall be filed
7ith the board of director3. /uch officer 3hall be <iven the opportunit! to be heard. *a=orit! of
the board of director3 9a! place the officer concerned under preventive 3u3pen3ion pendin< the
re3olution of the inve3ti<ation. $pon findin< of a pri9a facie evidence of <uilt" the board 3hall
pre3ent it3 reco99endation for re9oval to the <eneral a33e9bl!. #/+c'A
2An elective officer 9a! be re9oved b! three-fourth3 A4E5B vote3 of the re<ular 9e9ber3 pre3ent
and con3titutin< a ?uoru9" in a re<ular or 3pecial <eneral a33e9bl! 9eetin< called for the
purpo3e. (he officer concerned 3hall be <iven an opportunit! to be heard at 3aid a33e9bl!.2
/#C(')N 5. Article3 52" 54" 55" 55" 56" 57" 58" 59" 60" 61" 62 and 64 of Chapter . on
Re3pon3ibilitie3" Ri<ht3 and Privile<e3 of Cooperative3 of the 3a9e Code are hereb!
renu9bered and a9ended to read" a3 follo73:
C-AP(#R .
Re3pon3ibilitie3" Ri<ht3 and Privile<e3 of Cooperative3
2AR(. 51. Addre33. ; #ver! cooperative 3hall have an official po3tal addre33 to 7hich all
notice3 and co99unication3 3hall be 3ent. /uch addre33 and ever! chan<e thereof 3hall be
re<i3tered 7ith the Authorit!. C/-#ca
2AR(. 52. %oo83 to be 0ept )pen. ; A1B #ver! cooperative 3hall have the follo7in<
docu9ent3 read! and acce33ible to it3 9e9ber3 and repre3entative3 of the Authorit! for
in3pection durin< rea3onable office hour3 at it3 official addre33:
2AaB A cop! of thi3 Code and all other la73 pertainin< to cooperative3C
2AbB A cop! of the re<ulation3 of the Authorit!C
2AcB A cop! of the article3 of cooperation and b!la73 of the cooperativeC
2AdB A re<i3ter of 9e9ber3C
2AeB (he boo83 of the 9inute3 of the 9eetin<3 of the <eneral a33e9bl!" board of director3
and co99ittee3C
2AfB /hare boo83" 7here applicableC
2A<B inancial 3tate9ent3C and
2AhB /uch other docu9ent3 a3 9a! be pre3cribed b! la73 or the b!la73. +-AC#/
2A2B (he accountant or the boo88eeper of the cooperative 3hall be re3pon3ible for the
9aintenance and 3afe8eepin< of the boo83 and record3 of account of the cooperative in
accordance 7ith <enerall! accepted accountin< practice3. -e 3hall al3o be re3pon3ible for the
production of the 3a9e at the ti9e of audit or in3pection.
2(he audit co99ittee 3hall be re3pon3ible for the continuou3 and periodic revie7 of the boo83
and record3 of account to en3ure that the3e are in accordance 7ith the cooperative principle3
and <enerall! accepted accountin< practice3.
2A4B #ach cooperative 3hall 9aintain record3 of account3 3uch that the true and correct
condition and the re3ult3 of the operation of the cooperative 9a! be a3certained therefro9 at
an! ti9e. (he financial 3tate9ent3" audited accordin< to <enerall! accepted auditin< 3tandard3"
principle3 and practice3" 3hall be publi3hed annuall! and 3hall be 8ept po3ted in a con3picuou3
place in the principal office of the cooperative.
2A5B /ub=ect to the pertinent provi3ion3 of the National 'nternal Revenue Code and other
la73" a cooperative 9a! di3po3e b! 7a! of burnin< or other 9ethod of co9plete de3truction an!
docu9ent" record or boo8 pertainin< to it3 financial and nonfinancial operation3 7hich are
alread! 9ore than five A5B !ear3 old e@cept tho3e relatin< to tran3action3 7hich are the 3ub=ect
of civil" cri9inal" and ad9ini3trative proceedin<3. An inventor! of the audited docu9ent3"
record3" and boo83 to be di3po3ed of 3hall be dra7n up and certified to b! the board 3ecretar!
and the chair9an of the audit co99ittee and pre3ented to the board of director3 7hich 9a!
thereupon approve the di3po3ition of 3aid record3. aC(c+/
2AR(. 54. Report3. ; A1B #ver! cooperative 3hall dra7 up re<ular report3 of it3 pro<ra9 of
activitie3" includin< tho3e in pur3uance of their 3ocio-civic underta8in<3" 3ho7in< their pro<re33
and achieve9ent3 at the end of ever! fi3cal !ear. (he report3 3hall be 9ade acce33ible to it3
9e9ber3" and copie3 thereof 3hall be furni3hed to all it3 9e9ber3 of record. (he3e report3 3hall
be filed 7ith the Authorit! 7ithin one hundred t7ent! A120B da!3 fro9 the end of the calendar
!ear. (he for9 and content3 of the report3 3hall be a3 pre3cribed b! the rule3 of the Authorit!.
ailure to file the re?uired report3 3hall 3ub=ect the accountable officerE3 to fine3 and penaltie3
a3 9a! be pre3cribed b! the Authorit!" and 3hall be a <round for the revocation of authorit! of
the cooperative to operate a3 3uch. (he fi3cal !ear of ever! cooperative 3hall be the calendar
!ear" e@cept a3 9a! be other7i3e provided in the b!la73. #(-'+a
2A2B 'f a cooperative fail3 to 9a8e" publi3h and file the report3 re?uired herein" or fail3 to
include therein an! 9atter re?uired b! thi3 Code" the Authorit! 3hall" 7ithin fifteen A15B da!3
fro9 the e@piration of the pre3cribed period" 3end 3uch cooperative a 7ritten notice" 3tatin< it3
non-co9pliance and the co99en3urate fine3 and penaltie3 that 7ill be i9po3ed until 3uch ti9e
that the cooperative ha3 co9plied 7ith the re?uire9ent3.
2AR(. 55. Re<i3ter of *e9ber3 a3 Pri9a acie #vidence. ; An! re<i3ter or li3t of
9e9ber3 or 3hare3 8ept b! an! re<i3tered cooperative 3hall be pri9a facie evidence of the
follo7in< particular3 entered therein:
2A1B (he date on 7hich the na9e of an! per3on 7a3 entered in 3uch re<i3ter or li3t a3
9e9berC and
2A2B (he date on 7hich an! 3uch per3on cea3ed to be a 9e9ber. (/acC-
2AR(. 55. Probative .alue of Certified Copie3 of #ntrie3. ; A1B A cop! of an! entr! in an!
boo8" re<i3ter or li3t re<ularl! 8ept in the cour3e of bu3ine33 in the po33e33ion of a cooperative
3hall" if dul! certified in accordance 7ith the rule3 of evidence" be ad9i33ible a3 evidence of the
e@i3tence of the entr! and pri9a facie evidence of the 9atter3 and tran3action3 therein
recorded.
2A2B No per3on or a cooperative in po33e33ion of the boo83 of 3uch cooperative 3hall" in an!
le<al proceedin<3 to 7hich the cooperative i3 not a part!" be co9pelled to produce an! of the
boo83 of the cooperative" the content3 of 7hich can be proved and the 9atter3" tran3action3
and account3 therein recorded" unle33 b! order of a co9petent court.
2AR(. 56. %ondin< of Accountable )fficer3. ; #ver! director" officer" and e9plo!ee
handlin< fund3" 3ecuritie3 or propert! on behalf of an! cooperative 3hall be covered b! a 3uret!
bond to be i33ued b! a dul! re<i3tered in3urance or bondin< co9pan! for the faithful
perfor9ance of their re3pective dutie3 and obli<ation3. (he board of director3 3hall deter9ine
the ade?uac! of 3uch bond3.
2$pon the filin< of the application for re<i3tration of a cooperative" the bond3 of the accountable
officer3 3hall be re?uired b! the Authorit!. /uch bond3 3hall be rene7ed annuall! and the
Authorit! 3hall accordin<l! be infor9ed of 3uch rene7al.
2AR(. 57. Preference of Clai93. ; A1B Not7ith3tandin< the provi3ion3 of e@i3tin< la73"
rule3 and re<ulation3 to the contrar!" but 3ub=ect to the prior clai9 of the Authorit!" an! debt due
to the cooperative fro9 a 9e9ber 3hall con3titute a fir3t lien upon an! ra7 9aterial3" production
input3" and product3 producedC or an! land" buildin<" facilitie3" e?uip9ent" <ood3 or 3ervice3
ac?uired and held" b! 3uch 9e9ber throu<h the proceed3 of the loan or credit <ranted b! the
cooperative to hi9 for a3 lon< a3 the 3a9e i3 not full! paid.
2A2B No propert! or intere3t on propert! 7hich i3 3ub=ect to a lien under para<raph A1B 3hall be
3old nor conve!ed to third partie3 7ithout the prior per9i33ion of the cooperative. (he lien upon
the propert! or intere3t 3hall continue to e@i3t even after the 3ale or conve!ance thereof until
3uch lien ha3 been dul! e@tin<ui3hed.
2A4B Not7ith3tandin< the provi3ion3 of an! la7 to the contrar!" an! 3ale or conve!ance 9ade
in contravention of para<raph A2B hereof 3hall be void.
2AR(. 58. 'n3tru9ent for /alar! or 1a<e +eduction. ; A1B A 9e9ber of a cooperative 9a!"
not7ith3tandin< the provi3ion3 of e@i3tin< la73 to the contrar!" e@ecute an in3tru9ent in favor of
the cooperative authori>in< hi3 e9plo!er to deduct fro9 hi3Eher 3alar! or 7a<e3" co99utation
of leave credit3 and an! other 9onetar! benefit3 pa!able to hi9 b! the e9plo!er and re9it 3uch
a9ount a3 9a! be 3pecified in 3ati3faction of a debt or other de9and due fro9 the 9e9ber to
the cooperative.
2A2B $pon the e@ecution of 3uch in3tru9ent and a3 9a! be re?uired b! the cooperative
contained in a 7ritten re?ue3t" the e9plo!er 3hall 9a8e the deduction in accordance 7ith the
a<ree9ent and re9it forth7ith the a9ount 3o deducted 7ithin ten A10B da!3 after the end of the
pa!roll 9onth to the cooperative. (he e9plo!er 3hall 9a8e the deduction for a3 lon< a3 3uch
debt or other de9and re9ain3 unpaid b! the e9plo!ee.
2A4B (he ter9 De9plo!erD a3 u3ed in thi3 article 3hall include all private fir93 and the national
and local <overn9ent3 and <overn9ent-o7ned or controlled corporation3 7ho have under their
e9plo! a 9e9ber of a cooperative and have a<reed to carr! out the ter93 of the in3tru9ent
9entioned in para<raph3 A1B and A2B of thi3 article.
2A5B (he provi3ion3 of thi3 article 3hall appl! to all 3i9ilar a<ree9ent3 referred to in
para<raph A1B and 7ere enforced prior to the approval of thi3 Code.
2A5B Not7ith3tandin< the provi3ion3 of e@i3tin< la73 to the contrar!" the re3pon3ibilitie3 of the
e9plo!er a3 3tated in para<raph3 A1B and A2B of thi3 article 3hall be 9andator!: Provided" (hat in
the ca3e of a private e9plo!er" the actual and rea3onable co3t3 of deductin< and re9ittin< 9a!
be collected.
2AR(. 59. Pri9ar! &ien. ; Not7ith3tandin< the provi3ion3 of an! la7 to the contrar!" a
cooperative 3hall have a pri9ar! lien upon the capital" depo3it3 or intere3t of a 9e9ber for an!
debt due to the cooperative fro9 3uch a 9e9ber.
2AR(. 60. (a@ (reat9ent of Cooperative3. ; +ul! re<i3tered cooperative3 under thi3 Code
7hich do not tran3act an! bu3ine33 7ith non-9e9ber3 or the <eneral public 3hall not be 3ub=ect
to an! ta@e3 and fee3 i9po3ed under the internal revenue la73 and other ta@ la73.
Cooperative3 not fallin< under thi3 article 3hall be <overned b! the 3ucceedin< 3ection.
2AR(. 61. (a@ and )ther #@e9ption3. ; Cooperative3 tran3actin< bu3ine33 7ith both
9e9ber3 and non-9e9ber3 3hall not be 3ub=ect to ta@ on their tran3action3 7ith 9e9ber3. 'n
relation to thi3" the tran3action3 of 9e9ber3 7ith the cooperative 3hall not be 3ub=ect to an!
ta@e3 and fee3" includin< but not li9ited to final ta@e3 on 9e9ber3D depo3it3 and docu9entar!
ta@. Not7ith3tandin< the provi3ion3 of an! la7 or re<ulation to the contrar!" 3uch cooperative3
dealin< 7ith non9e9ber3 3hall en=o! the follo7in< ta@ e@e9ption3: Ca#'/(
2A1B Cooperative3 7ith accu9ulated re3erve3 and undivided net 3avin<3 of not 9ore than
(en 9illion pe3o3 AP10"000"000.00B 3hall be e@e9pt fro9 all national" cit!" provincial" 9unicipal
or baran<a! ta@e3 of 7hatever na9e and nature. /uch cooperative3 3hall be e@e9pt fro9
cu3to93 dutie3" advance 3ale3 or co9pen3atin< ta@e3 on their i9portation of 9achinerie3"
e?uip9ent and 3pare part3 u3ed b! the9 and 7hich are not available locall! a3 certified b! the
+epart9ent of (rade and 'ndu3tr! A+('B. All ta@-free i9portation3 3hall not be 3old nor the
beneficial o7ner3hip thereof be tran3ferred to an! per3on until after five A5B !ear3" other7i3e" the
cooperative and the tran3feree or a33i<nee 3hall be 3olidaril! liable to pa! t7ice the a9ount of
the i9po3ed ta@ andEor dutie3.
2A2B Cooperative3 7ith accu9ulated re3erve3 and undivided net 3avin<3 of 9ore than (en
9illion pe3o3 AP10"000"000.00B 3hall pa! the follo7in< ta@e3 at the full rate:
2AaB 'nco9e (a@ ; )n the a9ount allocated for intere3t on capital3: Provided" (hat the 3a9e
ta@ i3 not con3e?uentl! i9po3ed on intere3t individuall! received b! 9e9ber3: Provided" further"
(hat cooperative3" re<ardle33 of cla33ification" are e@e9pt fro9 inco9e ta@ fro9 the date of
re<i3tration 7ith the Authorit!C
2AbB .alue-Added (a@ ; )n tran3action3 7ith non-9e9ber3: Provided" ho7ever" (hat
cooperative3 dul! re<i3tered 7ith the Authorit!" are e@e9pt fro9 the pa!9ent of value-added
ta@" 3ub=ect to /ection 109" 3ub-3ection3 &" * and N of Republic Act No. 9447" the National
'nternal Revenue Code" a3 a9ended: Provided" (hat the e@e9pt tran3action under /ection 109
A&B 3hall include 3ale3 9ade b! cooperative3 dul! re<i3tered 7ith the Authorit! or<ani>ed and
operated b! it3 9e9ber3 to underta8e the production and proce33in< of ra7 9aterial3 or of
<ood3 produced b! it3 9e9ber3 into fini3hed or proce33ed product3 for 3ale b! the cooperative
to it3 9e9ber3 and non-9e9ber3: Provided" further" (hat an! proce33ed product or it3
derivative ari3in< fro9 the ra7 9aterial3 produced b! it3 9e9ber3" 3old in the na9e and for the
account of the cooperative" 3hall be dee9ed a product of the cooperative: Provided" finall!" (hat
at lea3t t7ent!-five per centu9 A25FB of the net inco9e of the cooperative3 i3 returned to the
9e9ber3 in the for9 of intere3t andEor patrona<e refund3C
2AcB All other ta@e3 unle33 other7i3e provided hereinC and
2AdB +onation3 to charitable" re3earch and educational in3titution3 and reinve3t9ent to
3ocioecono9ic pro=ect3 7ithin the area of operation of the cooperative 9a! be ta@ deductible.
2A4B All cooperative3" re<ardle33 of the a9ount of accu9ulated re3erve3 and undivided net
3avin<3 3hall be e@e9pt fro9 pa!9ent of local ta@e3 and ta@e3 on tran3action3 7ith ban83 and
in3urance co9panie3: Provided" (hat all 3ale3 or 3ervice3 rendered for non-9e9ber3 3hall be
3ub=ect to the applicable percenta<e ta@e3 e@cept 3ale3 9ade b! producer3" 9ar8etin< or
3ervice cooperative3: Provided" further" (hat nothin< in thi3 article 3hall preclude the
e@a9ination of the boo83 of account3 or other accountin< record3 of the cooperative b! dul!
authori>ed internal revenue officer3 for internal revenue ta@ purpo3e3 onl!" after previou3
authori>ation b! the Authorit!.
2A5B 'n area3 7here there are no available notarie3 public" the =ud<e" e@erci3in< hi3 e@ officio
capacit! a3 notar! public" 3hall render 3ervice" free of char<e" to an! per3on or <roup of per3on3
re?uirin< the ad9ini3tration of oath or the ac8no7led<9ent of article3 of cooperation and
in3tru9ent3 of loan fro9 cooperative3 not e@ceedin< ive hundred thou3and pe3o3
AP500"000.00B.
2A5B An! re<i3ter of deed3 3hall accept for re<i3tration" free of char<e" an! in3tru9ent relative
to a loan 9ade under thi3 Code 7hich doe3 not e@ceed (7o hundred fift! thou3and pe3o3
AP250"000.00B or the deed3 of title of an! propert! ac?uired b! the cooperative or an! paper or
docu9ent dra7n in connection 7ith an! action brou<ht b! the cooperative or 7ith an! court
=ud<9ent rendered in it3 favor or an! in3tru9ent relative to a bond of an! accountable officer of
a cooperative for the faithful perfor9ance of hi3 dutie3 and obli<ation3.
2A6B Cooperative3 3hall be e@e9pt fro9 the pa!9ent of all court and 3heriffD3 fee3 pa!able to
the Philippine ,overn9ent for and in connection 7ith all action3 brou<ht under thi3 Code" or
7here 3uch action3 i3 brou<ht b! the Authorit! before the court" to enforce the pa!9ent of
obli<ation3 contracted in favor of the cooperative. /#'a-(
2A7B All cooperative3 3hall be e@e9pt fro9 puttin< up a bond for brin<in< an appeal a<ain3t
the deci3ion of an inferior court or for 3ee8in< to 3et a3ide an! third part! clai9: Provided" (hat a
certification of the Authorit! 3ho7in< that the net a33et3 of the cooperative are in e@ce33 of the
a9ount of the bond re?uired b! the court in 3i9ilar ca3e3 3hall be accepted b! the court a3 a
3ufficient bond.
2A8B An! 3ecurit! i33ued b! cooperative3 3hall be e@e9pt fro9 the provi3ion3 of the
/ecuritie3 Act provided 3uch 3ecurit! 3hall not be 3peculative.
2AR(. 62. Privile<e3 of Cooperative3. ; Cooperative3 re<i3tered under thi3 Code 3hall"
not7ith3tandin< the provi3ion3 of an! la7 to the contrar!" be al3o accorded the follo7in<
privile<e3:
2A1B Cooperative3 3hall en=o! the privile<e of depo3itin< their 3ealed ca3h bo@e3 or
container3" docu9ent3 or an! valuable paper3 in the 3afe3 of the 9unicipal or cit! trea3urer3
and other <overn9ent office3 free of char<e" and the cu3todian of 3uch article3 3hall i33ue a
receipt ac8no7led<in< the article3 received dul! 7itne33ed b! another per3onC -'(A#C
2A2B Cooperative3 or<ani>ed a9on< <overn9ent e9plo!ee3" not7ith3tandin< an! la7 or
re<ulation to the contrar!" 3hall en=o! the free u3e of an! available 3pace in their a<enc!"
7hether o7ned or rented b! the ,overn9entC
2A4B Cooperative3 renderin< 3pecial t!pe3 of 3ervice3 and facilitie3 3uch a3 cold 3tora<e" ice
plant" electricit!" tran3portation" and 3i9ilar 3ervice3 and facilitie3 3hall 3ecure a franchi3e
therefor" and 3uch cooperative3 3hall open their 9e9ber3hip to all per3on3 ?ualified in their
area3 of operationC
2A5B 'n area3 7here appropriate cooperative3 e@i3t" the preferential ri<ht to 3uppl!
<overn9ent in3titution3 and a<encie3 rice" corn and other <rain3" fi3h and other 9arine
product3" 9eat" e<<3" 9il8" ve<etable3" tobacco and other a<ricultural co99oditie3 produced b!
their 9e9ber3 3hall be <ranted to the cooperative3 concernedC
2A5B Preferential treat9ent in the allocation of fertili>er3" includin< 3eed3 and other
a<ricultural input3 and i9ple9ent3" and in rice di3tribution 3hall be <ranted to cooperative3 b!
the appropriate <overn9ent a<encie3C
2A6B Preferential and e?uitable treat9ent in the allocation or control of botto9rie3 of
co99ercial 3hippin< ve33el3 in connection 7ith the 3hip9ent of <ood3 and product3 of
cooperative3C
2A7B Cooperative3 and their federation3" 3uch a3 far9 and fi3her! producer3 and 3upplier3"
9ar8et vendor3 and 3uch other cooperative3" 7hich have for their pri9ar! purpo3e the
production andEor the 9ar8etin< of product3 fro9 a<riculture" fi3herie3 and 39all entrepreneurial
indu3trie3 and federation3 thereof" 3hall have preferential ri<ht3 in the 9ana<e9ent of public
9ar8et3 andEor lea3e of public 9ar8et facilitie3" 3tall3 or 3pace3: Provided" (hat the3e ri<ht3
3hall onl! be utili>ed e@clu3ivel! b! cooperative3: Provided" further" (hat no cooperative for9in<
a =oint venture" partner3hip or an! other 3i9ilar arran<e9ent 7ith a non-cooperative entit! can
utili>e the3e ri<ht3C +'Ac(#
2A8B Cooperative3 en<a<ed in credit 3ervice3 andEor federation3 3hall be entitled to loan3"
credit line3" redi3countin< of their loan note3" and other eli<ible paper3 7ith the +evelop9ent
%an8 of the Philippine3" the &and %an8 of the Philippine3 and other financial in3titution3 e@cept
the %an<8o /entral n< Pilipina3 A%/PBC
2(he Philippine +epo3it 'n3urance Corporation AP+'CB and other <overn9ent a<encie3"
<overn9ent-o7ned and controlled corporation3 and <overn9ent financial in3titution3 3hall
provide technical a33i3tance to re<i3tered national federation3 and union3 of cooperative3 7hich
have 3i<nificant en<a<e9ent in 3avin<3 and credit operation3 in order for the3e federation3 and
union3 to e3tabli3h andEor 3tren<then their o7n autono9ou3 cooperative depo3it in3urance
3!3te93C
2A9B A public tran3port 3ervice cooperative 9a! be entitled to financin< 3upport for the
ac?ui3ition andEor 9aintenance of land and 3ea tran3port e?uip9ent" facilitie3 and part3 throu<h
the pro<ra9 of the <overn9ent financial in3titution3. 't 3hall have the preferential ri<ht to the
9ana<e9ent and operation of public ter9inal3 and port3 7hether land or 3ea tran3port 7here
the cooperative operate3 and on 3ecurin< a franchi3e for active or potential route3 for the public
tran3portC
2A10B Cooperative3 tran3actin< bu3ine33 7ith the ,overn9ent of the Philippine3 or an! of it3
political 3ubdivi3ion3 or an! of it3 a<encie3 or in3tru9entalitie3" includin< <overn9ent-o7ned
and controlled corporation3 3hall be e@e9pt fro9 pre?ualification biddin< re?uire9ent3"
not7ith3tandin< the provi3ion3 of Republic Act No. 9185" other7i3e 8no7n a3" the ,overn9ent
Procure9ent ActC
2A11B Cooperative3 3hall en=o! the privile<e of bein< repre3ented b! the provincial or cit! fi3cal
or the )ffice of the /olicitor ,eneral" free of char<e" e@cept 7hen the adver3e part! i3 the
Republic of the Philippine3C
2A12B Cooperative3 or<ani>ed b! facult! 9e9ber3 and e9plo!ee3 of educational in3titution3
3hall have the preferential ri<ht in the 9ana<e9ent of the canteen and other 3ervice3 related to
the operation of the educational in3titution 7here the! are e9plo!ed: Provided" (hat 3uch
3ervice3 are operated 7ithin the pre9i3e3 of the 3aid educational in3titutionC and
2A14B (he appropriate hou3in< a<encie3 and <overn9ent financial in3titution3 3hall create a
3pecial 7indo7 for financin< hou3in< pro=ect3 underta8en b! cooperative3" 7ith intere3t rate3
and ter93 e?ual to" or better than tho3e <iven for 3ociali>ed hou3in< pro=ect3. (hi3 financin<
3hall be in the for9 of blan8et loan3 or lon<-ter9 7hole3ale loan3 to ?ualified cooperative3"
7ithout need for individual proce33in<. c+#'C-
2(he Authorit!" in con3ultation 7ith the appropriate <overn9ent a<encie3 and concerned
cooperative 3ector" 3hall i33ue rule3 and re<ulation3 on all 9atter3 concernin< hou3in<
cooperative3.2
/#C(')N 6. Article 65 of Chapter .' on 'n3olvenc! of Cooperative3 of the 3a9e Code i3
hereb! renu9bered and a9ended to read" a3 follo73:
C-AP(#R .'
'n3olvenc! of Cooperative3
DDAR(. 64. Proceedin<3 $pon 'n3olvenc!. ; 'n ca3e a cooperative i3 unable to fulfill it3
obli<ation3 to creditor3 due to in3olvenc!" 3uch cooperative 9a! appl! for 3uch re9edie3 a3 it
9a! dee9 fit under the provi3ion3 of Act No. 1956" a3 a9ended" other7i3e 8no7n a3 the
'n3olvenc! &a7. #/(C-a
2Nothin< in thi3 article" ho7ever" preclude3 creditor3 fro9 3ee8in< protection fro9 3aid
in3olvenc! la7.2
/#C(')N 7. Article3 65" 66" 67" 68" 69" 70 and 71 of Chapter .'' on +i33olution of
Cooperative3 of the 3a9e Code are hereb! renu9bered and a9ended to read" a3 follo73:
C-AP(#R .''
+i33olution of Cooperative3
2AR(. 65. .oluntar! +i33olution 1here no Creditor3 are Affected. ; 'f the di33olution of a
cooperative doe3 not pre=udice the ri<ht3 of an! creditor havin< a clai9 a<ain3t it" the di33olution
9a! be effected b! a 9a=orit! vote of the board of director3" and b! a re3olution dul! adopted b!
the affir9ative vote of at lea3t three-fourth3 A4E5B of all the 9e9ber3 7ith votin< ri<ht3" pre3ent
and con3titutin< a ?uoru9 at a 9eetin< to be held upon call of the director3: Provided" (hat the
notice of ti9e" place and ob=ect of the 9eetin< 3hall be publi3hed for three A4B con3ecutive
7ee83 in a ne73paper publi3hed in the place 7here the principal office of 3aid cooperative i3
located" or if no ne73paper i3 publi3hed in 3uch place" in a ne73paper of <eneral circulation in
the Philippine3: Provided" further" (hat the notice of 3uch 9eetin< i3 3ent to each 9e9ber of
record either b! re<i3tered 9ail or b! per3onal deliver! at lea3t thirt! A40B da!3 prior to 3aid
9eetin<. A cop! of the re3olution authori>in< the di33olution 3hall be certified to b! a 9a=orit! of
the board of director3 and counter3i<ned b! the board 3ecretar!. (he Authorit! 3hall thereupon
i33ue the certificate of di33olution.
2AR(. 65. .oluntar! +i33olution 1here Creditor3 Are Affected. ; 1here the di33olution of
a cooperative 9a! pre=udice the ri<ht3 of an! creditor" the petition for di33olution 3hall be filed
7ith the Authorit!. (he petition 3hall be 3i<ned b! a 9a=orit! of it3 board of director3 or other
officer3 9ana<in< it3 affair3" verified b! it3 chairper3on or board 3ecretar! or one of it3 director3
and 3hall 3et forth all clai93 and de9and3 a<ain3t it and that it3 di33olution 7a3 re3olved upon
b! the affir9ative vote of at lea3t three-fourth3 A4E5B of all the 9e9ber3 7ith votin< ri<ht3"
pre3ent and con3titutin< a ?uoru9 at a 9eetin< called for that purpo3e.
2'f the petition i3 3ufficient in for9 and 3ub3tance" the Authorit! 3hall i33ue an order recitin< the
purpo3e of the petition and 3hall fi@ a date 7hich 3hall not be le33 than thirt! A40B nor 9ore than
3i@t! A60B da!3 after the entr! of the order. %efore 3uch date" a cop! of the order 3hall be
publi3hed at lea3t once a 7ee8 or three A4B con3ecutive 7ee83 in a ne73paper of <eneral
circulation publi3hed in the 9unicipalit! or cit! 7here the principal office of the cooperative i3
3ituated" or in the ab3ence of 3uch local ne73paper" in a ne73paper of <eneral circulation in the
Philippine3" and a cop! 3hall li8e7i3e be po3ted for three A4B con3ecutive 7ee83 in three A4B
public place3 in the 9unicipalit! or cit! 7here the cooperativeD3 office i3 located.
2$pon e@pir! of the five A5B-da! notice to file ob=ection3" the Authorit! 3hall proceed to hear the
petition and tr! an! i33ue rai3ed in the ob=ection filedC and if the ob=ection i3 3ufficient and the
9aterial alle<ation3 of the petition are proven" it 3hall i33ue an order to di33olve the cooperative
and direct the di3po3ition of it3 a33et3 in accordance 7ith e@i3tin< rule3 and re<ulation3. (he
order of di33olution 3hall 3et forth therein:
2A1B (he a33et3 and liabilitie3 of the cooperativeC
2A2B (he clai9 of an! creditorC
2A4B (he nu9ber of 9e9ber3C and
2A5B (he nature and e@tent of the intere3t3 of the 9e9ber3 of the cooperative.
2AR(. 66. 'nvoluntar! +i33olution. ; A cooperative 9a! be di33olved b! order of a
co9petent court after due hearin< on the <round3 of:
2A1B .iolation of an! la7" re<ulation or provi3ion3 of it3 b!la73C or
2A2B 'n3olvenc!.
2AR(. 67. +i33olution b! )rder of the Authorit!. ; (he Authorit! 9a! 3u3pend or revo8e"
after due notice and hearin<" the certificate of re<i3tration of a cooperative on an! of the
follo7in< <round3:
2A1B -avin< obtained it3 re<i3tration b! fraudC
2A2B #@i3tin< for an ille<al purpo3eC
2A4B 1illful violation" de3pite notice b! the Authorit!" of the provi3ion3 of thi3 Code or it3
b!la73C
2A5B 1illful failure to operate on a cooperative ba3i3C and
2A5B ailure to 9eet the re?uired 9ini9u9 nu9ber of 9e9ber3 in the cooperative.
2AR(. 68. +i33olution b! ailure to )r<ani>e and )perate. ; 'f a cooperative ha3 not
co99enced bu3ine33 and it3 operation 7ithin t7o A2B !ear3 after the i33uance of it3 certificate of
re<i3tration or ha3 not carried on it3 bu3ine33 for t7o A2B con3ecutive !ear3" the Authorit! 3hall
3end a for9al notice to the 3aid cooperative to 3ho7 cau3e a3 to it3 failure to operate. ailure of
the cooperative to pro9ptl! provide =u3tifiable cau3e for it3 failure to operate 3hall 7arrant the
Authorit! to delete it3 na9e fro9 the ro3ter of re<i3tered cooperative3 and 3hall be dee9ed
di33olved. (Cc'aA
2AR(. 69. &i?uidation of a Cooperative. ; #ver! cooperative 7ho3e charter e@pire3 b! it3
o7n li9itation or 7ho3e e@i3tence i3 ter9inated b! voluntar! di33olution or throu<h an
appropriate =udicial proceedin< 3hall neverthele33 continue to e@i3t for three A4B !ear3 after the
ti9e it i3 di33olved" not to continue the bu3ine33 for 7hich it 7a3 e3tabli3hed but for the purpo3e
of pro3ecutin< and defendin< 3uit3 b! or a<ain3t itC 3ettle9ent and clo3ure of it3 affair3C
di3po3ition" conve!ance and di3tribution of it3 propertie3 and a33et3.
2At an! ti9e durin< the 3aid three A4B !ear3" the cooperative i3 authori>ed and e9po7ered to
conve! all of it3 propertie3 to tru3tee3 for the benefit of it3 9e9ber3" creditor3 and other per3on3
in intere3t. ro9 and after an! 3uch conve!ance" all intere3t3 7hich the cooperative had in the
propertie3 are ter9inated.
2$pon the 7indin< up of the cooperative affair3" an! a33et di3tributable to an! creditor"
3hareholder or 9e9ber 7ho i3 un8no7n or cannot be found 3hall be <iven to the federation or
union to 7hich the cooperative i3 affiliated 7ith. C/(+'#
2A cooperative 3hall onl! di3tribute it3 a33et3 or propertie3 upon la7ful di33olution and after
pa!9ent of all it3 debt3 and liabilitie3" e@cept in the ca3e of decrea3e of 3hare capital of the
cooperative and a3 other7i3e allo7ed b! thi3 Code.
2AR(. 70. Rule3 and Re<ulation3 on &i?uidation. ; (he Authorit! 3hall i33ue the
appropriate i9ple9entin< <uideline3 for the li?uidation of cooperative3.2
/#C(')N 8. Article3 72" 74" 75" 75" 76" 77" 78" 79 and 80 of Chapter .''' on Capital" Propert!"
and und3 of the 3a9e Code are hereb! renu9bered and a9ended to read" a3 follo73:
/cA'a(
C-AP(#R .'''
Capital" Propert!" and und3
2AR(. 71. Capital. ; (he capitali>ation of cooperative3 and the accountin< procedure3
3hall be <overned b! the provi3ion3 of thi3 Code and the re<ulation3 7hich 3hall be i33ued.
2AR(. 72. Capital /ource3. ; Cooperative3 re<i3tered under thi3 Code 9a! derive their
capital fro9 an! or all of the follo7in< 3ource3:
2A1B *e9ber3D 3hare capitalC
2A2B &oan3 and borro7in<3 includin< depo3it3C
2A4B Revolvin< capital 7hich con3i3t3 of the deferred pa!9ent of patrona<e refund3" or
intere3t on 3hare capitalC and -+A(/'
2A5B /ub3idie3" donation3" le<acie3" <rant3" aid3 and 3uch other a33i3tance fro9 an! local or
forei<n in3titution 7hether public or private: Provided" (hat capital co9in< fro9 3uch 3ub3idie3"
donation3" le<acie3" <rant3" aid3 and other a33i3tance 3hall not be divided into individual 3hare
capital holdin<3 at an! ti9e but 3hall in3tead for9 part of the donated capital or fund of the
cooperative.
2$pon di33olution" 3uch donated capital 3hall be 3ub=ect to e3cheat.
2AR(. 74. &i9itation on /hare Capital -oldin<3. ; No 9e9ber of a pri9ar! cooperative
other than a cooperative it3elf 3hall o7n or hold 9ore than ten per centu9 A10FB of the 3hare
capital of the cooperative.
1here a 9e9ber of a cooperative die3" hi3 heir 3hall be entitled to the 3hare3 of the decedent:
Provided" (hat the total 3hare holdin< of the heir doe3 not e@ceed ten per centu9 A10FB of the
3hare capital of the cooperative: Provided" further" (hat the heir ?ualif! and i3 ad9itted a3
9e9ber of the cooperative: Provided" finall!" (hat 7here the heir fail3 to ?ualif! a3 a 9e9ber or
7here hi3 total 3hare holdin< e@ceed3 ten per centu9 A10FB of the 3hare capital" the 3hare or
3hare3 in e@ce33 7ill revert to the cooperative upon pa!9ent to the heir of the value of 3uch
3hare3. (a+/CA
2AR(. 75. A33i<n9ent of /hare Capital Contribution or 'ntere3t. ; /ub=ect to the provi3ion3
of thi3 Code" no 9e9ber 3hall tran3fer hi3 3hare3 or intere3t in the cooperative or an! part
thereof unle33:
2A1B -e ha3 held 3uch 3hare capital contribution or intere3t for not le33 than one A1B !earC
2A2B (he a33i<n9ent i3 9ade to the cooperative or to a 9e9ber of the cooperative or to a
per3on 7ho fall3 7ithin the field of 9e9ber3hip of the cooperativeC and
2A4B (he board of director3 ha3 approved 3uch a33i<n9ent.
2AR(. 75. Capital %uild-$p. ; (he b!la73 of ever! cooperative 3hall provide for a
rea3onable and reali3tic 9e9ber capital build-up pro<ra9 to allo7 the continuin< <ro7th of the
9e9ber3D inve3t9ent in their cooperative a3 their o7n econo9ic condition3 continue to i9prove.
(+CA'/
2AR(. 76. /hare3. ; (he ter9 D3hareD refer3 to a unit of capital in a pri9ar! cooperative the
par value of 7hich 9a! be fi@ed at an! fi<ure not 9ore than )ne thou3and pe3o3 AP1"000.00B.
(he 3hare capital of a cooperative i3 the 9one! paid or re?uired to be paid for the operation3 of
the cooperative. (he 9ethod for the i33uance of 3hare certificate3 3hall be pre3cribed in it3
b!la73.
2AR(. 77. ine3. ; (he b!la73 of a cooperative 9a! pre3cribe a fine on unpaid 3ub3cribed
3hare capital: Provided" (hat 3uch fine i3 fair and rea3onable under the circu93tance3.
2AR(. 78. 'nve3t9ent of Capital. ; A cooperative 9a! inve3t it3 capital in an! of the
follo7in<:
2AaB 'n 3hare3 or debenture3 or 3ecuritie3 of an! other cooperativeC
2AbB 'n an! reputable ban8 in the localit!" or an! cooperativeC
2AcB 'n 3ecuritie3 i33ued or <uaranteed b! the ,overn9entC
2AdB 'n real e3tate pri9aril! for the u3e of the cooperative or it3 9e9ber3C or c-#/A+
2AeB 'n an! other 9anner authori>ed in the b!la73.
2AR(. 79. Revolvin< Capital. ; (he <eneral a33e9bl! of an! cooperative 9a! authori>e
the board of director3 to rai3e a revolvin< capital to 3tren<then it3 capital 3tructure b! deferrin<
the pa!9ent of patrona<e refund3 and intere3t on 3hare capital or b! the authori>ed deduction
of a percenta<e fro9 the proceed3 of product3 3old or 3ervice3 rendered" or per unit of product
or 3ervice3 handled. (he board of director3 3hall i33ue revolvin< capital certificate3 7ith 3erial
nu9ber" na9e" a9ount" and rate of intere3t to be paid and 3hall di3tinctl! 3et forth the ti9e of
retire9ent of 3uch certificate3 and the a9ount3 to be returned.2
/#C(')N 9. Article3 81" 82" 84" 85 and 85 of Chapter 'H on Audit" 'n?uir! and *e9ber3D Ri<ht
to #@a9ine of the 3a9e Code are hereb! renu9bered and a9ended to read" a3 follo73:
C-AP(#R 'H
Audit" 'n?uir! and *e9ber3D Ri<ht to #@a9ine
2AR(. 80. Annual Audit. ; Cooperative3 re<i3tered under thi3 Code 3hall be 3ub=ect to an
annual financial" perfor9ance and 3ocial audit. (he financial audit 3hall be conducted b! an
e@ternal auditor 7ho 3ati3fie3 all the follo7in< ?ualification3: c'#Ca/
2A1B -e i3 independent of the cooperative or an! of it3 3ub3idiar! that he i3 auditin<C and
2A2B -e i3 a 9e9ber in <ood 3tandin< of the Philippine 'n3titute of Certified Public
Accountant3 AP'CPAB and i3 accredited b! both the %oard of Accountanc! and the Authorit!.
2(he 3ocial audit 3hall be conducted b! an independent 3ocial auditor accredited b! the
Authorit!.
2Perfor9ance and 3ocial audit report3 7hich contain the findin<3 and reco99endation3 of the
auditor 3hall be 3ub9itted to the board of director3.
2(he Authorit!" in con3ultation 7ith the cooperative 3ector" 3hall pro9ul<ate the rule3 and
3tandard3 for the 3ocial audit of cooperative3.
2AR(. 81. Audit Report. ; (he auditor 3hall 3ub9it to the board of director3 and to the
audit co99ittee the financial audit report 7hich 3hall be in accordance 7ith the <enerall!
accepted auditin< 3tandard3 for cooperative3 a3 =ointl! pro9ul<ated b! the Philippine 'n3titute of
Certified Public Accountant3 AP'CPAB and the Authorit!. -C/A'a
2(hereafter" the board of director3 3hall pre3ent the co9plete audit report to the <eneral
a33e9bl! in it3 ne@t 9eetin<.
2AR(. 82. Nonliabilit! for +efa9ation. ; (he auditor i3 not liable to an! per3on in an action
for defa9ation ba3ed on an! act done" or an! 3tate9ent 9ade b! hi9 in <ood faith in
connection 7ith an! 9atter he i3 authori>ed or re?uired to do pur3uant to thi3 Code.
2AR(. 84. Ri<ht to #@a9ine. ; A 9e9ber 3hall have the ri<ht to e@a9ine the record3
re?uired to be 8ept b! the cooperative under Article 52 of thi3 Code durin< rea3onable hour3 on
bu3ine33 da!3 and he 9a! de9and" in 7ritin<" for a cop! of e@cerpt3 fro9 3aid record3 7ithout
char<e e@cept the co3t of reproduction.
2An! officer of the cooperative 7ho 3hall refu3e to allo7 an! 9e9ber of the cooperative to
e@a9ine and cop! e@cerpt3 fro9 it3 record3 3hall be liable to 3uch 9e9ber for da9a<e3 and
3hall be <uilt! of an offen3e 7hich 3hall be puni3hable under Article 150 of thi3 Code: Provided"
(hat if 3uch refu3al i3 pur3uant to a re3olution or order of the board of director3" the liabilit!
under thi3 article 3hall be i9po3ed upon the director3 7ho voted for 3uch refu3al: Provided"
further" (hat it 3hall be a defen3e to an! action under thi3 article that the 9e9ber de9andin< to
e@a9ine and cop! e@cerpt3 fro9 the cooperative record3 ha3 i9properl! u3ed an! infor9ation
3ecured throu<h an! prior e@a9ination of the record3 of 3uch cooperative or 7a3 not actin< in
<ood faith or for a le<iti9ate purpo3e in 9a8in< hi3 de9and. a(/#cA
2AR(. 85. /afet! of Record3. ; #ver! cooperative 3hall" at it3 principal office" 8eep and
carefull! pre3erve the record3 re?uired b! thi3 Code to be prepared and 9aintained. 't 3hall ta8e
all nece33ar! precaution to prevent it3 lo33" de3truction or fal3ification.2
/#C(')N 10. Article3 86 and 87 of Chapter H on Allocation and +i3tribution of Net /urplu3 of
the 3a9e Code are hereb! renu9bered and a9ended to read" a3 follo73:
C-AP(#R H
Allocation and +i3tribution of Net /urplu3
2AR(. 85. Net /urplu3. ; Not7ith3tandin< the provi3ion3 of e@i3tin< la73" the net 3urplu3 of
cooperative3 3hall be deter9ined in accordance 7ith it3 b!la73. #ver! cooperative 3hall
deter9ine it3 net 3urplu3 at the clo3e of ever! fi3cal !ear and at 3uch other ti9e3 a3 9a! be
pre3cribed b! the b!la73.
2An! provi3ion of la7 to the contrar! not7ith3tandin<" the net 3urplu3 3hall not be con3trued a3
profit but a3 an e@ce33 of pa!9ent3 9ade b! the 9e9ber3 for the loan3 borro7ed" or the <ood3
and 3ervice3 availed b! the9 fro9 the cooperative or the difference of the ri<htful a9ount due to
the 9e9ber3 for their product3 3old or 3ervice3 rendered to the cooperative includin< other
inflo73 of a33et3 re3ultin< fro9 it other operatin< activitie3 and 7hich 3hall be dee9ed to have
been returned to the9 if the 3a9e i3 di3tributed a3 pre3cribed herein.
2AR(. 86. )rder of +i3tribution. ; (he net 3urplu3 of ever! cooperative 3hall be di3tributed
a3 follo73: C'a-+c
2A1B An a9ount for the re3erve fund 7hich 3hall be at lea3t ten per centu9 A10FB of net
3urplu3: Provided" (hat" in the fir3t five A5B !ear3 of operation after re<i3tration" thi3 a9ount 3hall
not be le33 than fift! per centu9 A50FB of the net 3urplu3:
2AaB (he re3erve fund 3hall be u3ed for the 3tabilit! of the cooperative and to 9eet net lo33e3
in it3 operation3. (he <eneral a33e9bl! 9a! decrea3e the a9ount allocated to the re3erve fund
7hen the re3erve fund alread! e@ceed3 the 3hare capital.
2An! 3u9 recovered on ite93 previou3l! char<ed to the re3erve fund 3hall be credited to 3uch
fund.
2AbB (he re3erve fund 3hall not be utili>ed for inve3t9ent" other than tho3e allo7ed in thi3
Code. /uch 3u9 of the re3erve fund in e@ce33 of the 3hare capital 9a! be u3ed at an!ti9e for
an! pro=ect that 7ould e@pand the operation3 of the cooperative upon the re3olution of the
<eneral a33e9bl!. -C#cAa
2AcB $pon the di33olution of the cooperative" the re3erve fund 3hall not be di3tributed a9on<
the 9e9ber3. (he <eneral a33e9bl! 9a! re3olve:
2AiB (o e3tabli3h a u3ufructuar! tru3t fund for the benefit of an! federation or union to 7hich
the cooperative i3 affiliatedC and
2AiiB (o donate" contribute" or other7i3e di3po3e of the a9ount for the benefit of the
co99unit! 7here the cooperative operate3. 'f the 9e9ber3 cannot decide upon the di3po3al of
the re3erve fund" the 3a9e 3hall <o to the federation or union to 7hich the cooperative i3
affiliated.
2A2B An a9ount for the education and trainin< fund" 3hall not be 9ore than ten per centu9
A10FB of the net 3urplu3. (he b!la73 9a! provide that certain fee3 or a portion thereof be
credited to 3uch fund. (he fund 3hall provide for the trainin<" develop9ent and 3i9ilar other
cooperative activitie3 <eared to7ard3 the <ro7th of the cooperative 9ove9ent: 'c-(C/
2AaB -alf of the a9ount3 tran3ferred to the education and trainin< fund annuall! under thi3
3ub3ection 3hall be 3pent b! the cooperative for education and trainin< purpo3e3C 7hile the
other half 9a! be re9itted to a union or federation cho3en b! the cooperative or of 7hich it i3 a
9e9ber. (he 3aid union or federation 3hall 3ub9it to the Authorit! and to it3 contributin<
cooperative3 the follo7in< 3chedule3:
2AiB &i3t of cooperative3 7hich have re9itted their re3pective Cooperative #ducation and
(rainin< und3 AC#(BC
2AiiB %u3ine33 con3ultanc! a33i3tance to include the nature and co3tC and
2AiiiB )ther trainin< activitie3 underta8en 3pecif!in< therein the nature" participant3 and co3t of
each activit!.
2AbB $pon the di33olution of the cooperative" the une@pended balance of the education and
trainin< fund appertainin< to the cooperative 3hall be credited to the cooperative education and
trainin< fund of the cho3en union or federation.
2A4B An a9ount for the co99unit! develop9ent fund" 7hich 3hall not be le33 than three per
centu9 A4FB of the net 3urplu3. (he co99unit! develop9ent fund 3hall be u3ed for pro=ect3 or
activitie3 that 7ill benefit the co99unit! 7here the cooperative operate3. cA+(/-
2A5B An optional fund" a land and buildin<" and an! other nece33ar! fund the total of 7hich
3hall not e@ceed 3even per centu9 A7FB.
2A5B (he re9ainin< net 3urplu3 3hall be 9ade available to the 9e9ber3 in the for9 of intere3t
on 3hare capital not to e@ceed the nor9al rate of return on inve3t9ent3 and patrona<e refund3:
Provided" (hat an! a9ount re9ainin< after the allo7able intere3t and the patrona<e refund
have been deducted 3hall be credited to the re3erve fund.
2(he 3u9 allocated for patrona<e refund3 3hall be 9ade available at the 3a9e rate to all
patron3 of the cooperative in proportion to their individual patrona<e: Provided" (hat:
2AaB 'n the ca3e of a 9e9ber patron 7ith paid-up 3hare capital contribution" hi3 proportionate
a9ount of patrona<e refund 3hall be paid to hi9 unle33 he a<ree3 to credit the a9ount to hi3
account a3 additional 3hare capital contributionC
2AbB 'n the ca3e of a 9e9ber patron 7ith unpaid 3hare capital contribution" hi3 proportionate
a9ount of patrona<e refund 3hall be credited to hi3 account until hi3 3hare capital contribution
ha3 been full! paidC (#C'-+
2AcB 'n the ca3e of a non-9e9ber patron" hi3 proportionate a9ount of patrona<e refund 3hall
be 3et a3ide in a <eneral fund for 3uch patron3 and 3hall be allocated to individual non-9e9ber
patron3 onl! upon re?ue3t and pre3entation of evidence of the a9ount of hi3 patrona<e. (he
a9ount 3o allocated 3hall be credited to 3uch patron to7ard pa!9ent of the 9ini9u9 capital
contribution for 9e9ber3hip. 1hen a 3u9 e?ual to thi3 a9ount ha3 accu9ulated at an! ti9e
7ithin a period 3pecified in the b!la73" 3uch patron 3hall be dee9ed and beco9e a 9e9ber of
the cooperative if he 3o a<ree3 or re?ue3t3 and co9plie3 7ith the provi3ion3 of the b!la73 for
ad9i33ion to 9e9ber3hipC and
2AdB 'f 7ithin an! period of ti9e 3pecified in the b!la73" an! 3ub3criber 7ho ha3 not full! paid
hi3 3ub3cribed 3hare capital or an! non-9e9ber patron 7ho ha3 accu9ulated the 3u9
nece33ar! for 9e9ber3hip but 7ho doe3 not re?ue3t nor a<ree to beco9e a 9e9ber or fail3 to
co9pl! 7ith the provi3ion3 of the b!la73 for ad9i33ion to 9e9ber3hip" the a9ount 3o
accu9ulated or credited to their account to<ether 7ith an! part of the <eneral fund for
non9e9ber patron3 3hall be credited to the re3erve fund or to the education and trainin< fund of
the cooperative" at the option of the cooperative.2 #(-C+/
/#C(')N 11. Article3 88" 89" 90" 91" 92" 94" 95 and 95 of Chapter H' on the /pecial Provi3ion3
Relatin< to A<rarian Refor9 Cooperative3 of the 3a9e Code are hereb! renu9bered" retitled
and a9ended to read" a3 follo73:
C-AP(#R H'
A<rarian Refor9 Cooperative3
2AR(. 87. Covera<e. ; (he provi3ion3 of thi3 Chapter 3hall pri9aril! <overn a<rarian
refor9 cooperative3: Provided" (hat the provi3ion3 of the other chapter3 of thi3 Code 3hall appl!
3uppletoril! e@cept in3ofar a3 thi3 Chapter other7i3e provide3.
2AR(. 88. +efinition and Purpo3e. ; An a<rarian refor9 cooperative i3 one or<ani>ed b!
9ar<inal far9er3" 9a=orit! of 7hich are a<rarian refor9 beneficiarie3" for the purpo3e of
developin< an appropriate 3!3te9 of land tenure" land develop9ent" land con3olidation or land
9ana<e9ent in area3 covered b! a<rarian refor9.
2An a<rarian refor9 cooperative a3 defined 3hall be or<ani>ed for an! or all of the follo7in<
purpo3e3: -AcaC/
2A1B (o develop an appropriate 3!3te9 of land tenure" land develop9ent" land con3olidation
or land 9ana<e9ent in area3 covered b! a<rarian refor9C
2A2B (o coordinate and facilitate the di33e9ination of 3cientific 9ethod3 of production" and
provide a33i3tance in the 3tora<e" tran3port" and 9ar8etin< of far9 product3 for a<rarian refor9
beneficiarie3 and their i99ediate fa9il!" hereinafter referred to a3 Dbeneficiarie3DC
2A4B (o provide financial facilitie3 to beneficiarie3 for provident or productive purpo3e3 at
rea3onable co3t3C
2A5B (o arran<e and facilitate the e@peditiou3 tran3fer of appropriate and 3uitable technolo<!
to beneficiarie3 and 9ar<inal far9er3 at the lo7e3t po33ible co3tC
2A5B (o provide 3ocial 3ecurit! benefit3" health" 9edical and 3ocial in3urance benefit3 and
other 3ocial and econo9ic benefit3 that pro9ote the <eneral 7elfare of the a<rarian refor9
beneficiarie3 and 9ar<inal far9er3C
2A6B (o provide non-for9al education" vocationalEtechnical trainin<" and livelihood pro<ra93
to beneficiarie3 and 9ar<inal far9er3C CA/'#a
2A7B (o act a3 conduit3 for e@ternal a33i3tance and 3ervice3 to the beneficiarie3 and 9ar<inal
far9er3C
2A8B (o underta8e a co9prehen3ive and inte<rated develop9ent pro<ra9 in a<rarian refor9
and re3ettle9ent area3 7ith 3pecial concern for the develop9ent of a<ro-ba3ed" 9arine-ba3ed"
and cotta<e-ba3ed indu3trie3C
2A9B (o repre3ent the beneficiarie3 on an! or all 9atter3 that affect their intere3tC and
2A10B (o underta8e 3uch other econo9ic or 3ocial activitie3 a3 9a! be nece33ar! or incidental
in the pur3uit of the fore<oin< purpo3e3.
2AR(. 89. Cooperative #3tate3. ; &andholdin<3 li8e plantation3" e3tate3 or hacienda3
ac?uired b! the /tate for the benefit of the 7or8er3 in accordance 7ith the Co9prehen3ive
A<rarian Refor9 Pro<ra9 7hich 3hall be collectivel! o7ned b! the 7or8er-beneficiarie3 under a
cooperative 3et-up.
2AR(. 90. 'nfra3tructure. ; 'n a<rarian refor9 and re3ettle9ent area3" the ,overn9ent
3hall <rant to a<rarian refor9 cooperative3 preferential treat9ent in the con3truction"
9aintenance and 9ana<e9ent of road3" brid<e3" canal3" 7harve3" port3" re3ervoir3" irri<ation
3!3te93" 7ater7or83 3!3te93" and other infra3tructure3 7ith <overn9ent fundin<. or thi3
purpo3e" the ,overn9ent 3hall provide technical a33i3tance" facilitie3 and e?uip9ent to 3uch
a<rarian refor9 cooperative3. #'c/(+
2AR(. 91. &ea3e of Public &and3. ; (he ,overn9ent 9a! lea3e public land3 to an!
a<rarian refor9 cooperative for a period not e@ceedin< t7ent!-five A25B !ear3" 3ub=ect to
rene7al for another t7ent!-five A25B !ear3 onl!: Provided" (hat the application for rene7al 3hall
be 9ade one A1B !ear before the e@piration of the lea3e: Provided" further" (hat 3uch lea3e 3hall
be for the e@clu3ive u3e and benefit of the beneficiarie3 and 9ar<inal far9er3 3ub=ect to the
provi3ion3 of the Co9prehen3ive A<rarian Refor9 Pro<ra9.
2AR(. 92. Preferential Ri<ht. ; 'n a<rarian refor9 area3" an a<rarian refor9 cooperative
3hall have the preferential ri<ht in the <rant of franchi3e and certificate of public convenience
and nece33it! for the operation of public utilitie3 and 3ervice3: Provided" (hat it 9eet3 the
re?uire9ent3 and condition3 i9po3ed b! the appropriate <overn9ent a<enc! <rantin< the
franchi3e or certificate of public convenience and nece33it!. 'f there i3 an electric 3ervice
provider in the area" it 3hall" upon the re?ue3t of an a<rarian refor9 cooperative" i99ediatel!
provide electric 3ervice3 to the a<rarian refor9 area3. 'f the electric 3ervice provider fail3 to
provide the 3ervice3 re?ue3ted 7ithin a period of one A1B !ear" the a<rarian refor9 cooperative
concerned 9a! underta8e to provide the electric 3ervice3 in the area throu<h it3 o7n re3ource3.
All inve3t9ent3 9ade b! the 3aid a<rarian refor9 cooperative for the electrification of the
a<rarian refor9 re3ettle9ent area3 3hall be the 3ub=ect of 3ale to the electric 3ervice provider
once it ta8e3 on the 3ervice. #A-+ac
2AR(. 94. Privile<e3. ; /ub=ect to 3uch rea3onable ter93 and condition3 a3 the
+epart9ent of A<rarian Refor9 A+ARB and the Authorit! 9a! i9po3e" a<rarian refor9
cooperative3 9a! be <iven the e@clu3ive ri<ht to do an! or all of the follo7in< econo9ic
activitie3 in a<rarian refor9 and re3ettle9ent area3:
2A1B /uppl! and di3tribution of con3u9er" a<ricultural" a?ua-cultural" and indu3trial <ood3"
production input3" and ra7 9aterial3 and 3upplie3" 9achiner!" e?uip9ent" facilitie3 and other
3ervice3 and re?uire9ent3 of the beneficiarie3 and 9ar<inal far9er3 at rea3onable price3C
2A2B *ar8etin< of the product3 and 3ervice3 of the beneficiarie3 in local and forei<n 9ar8et3C
2A4B Proce33in< of the 9e9ber3D product3 into fini3hed con3u9er or indu3trial <ood3 for
do9e3tic con3u9ption or for e@portC
2A5B Provi3ion of e33ential public 3ervice3 at co3t 3uch a3 po7er" irri<ation" potable 7ater"
pa33en<er andEor car<o tran3portation b! land or 3ea" co99unication 3ervice3" and public
health and 9edical care 3ervice3C
2A5B *ana<e9ent" con3ervation" and co99ercial develop9ent of 9arine" fore3tr!" 9ineral"
7ater and other natural re3ource3 3ub=ect to co9pliance 7ith the la73 and re<ulation3 on
environ9ental and ecolo<ical control3C and
2A6B Provi3ion of financial" technolo<ical" and other 3ervice3 and facilitie3 re?uired b! the
beneficiarie3 in their dail! live3 and livelihood.
2(he ,overn9ent 3hall provide the nece33ar! financial and technical a33i3tance to a<rarian
refor9 cooperative3 to enable the9 to di3char<e effectivel! their purpo3e3 under thi3 article.
(he +AR" the Authorit! and the %/P 3hall dra7 up a =oint pro<ra9 for the or<ani>ation and
financin< of the a<rarian refor9 cooperative3 3ub=ect of thi3 Chapter. (he =oint pro<ra9 3hall be
<eared to7ard3 the beneficiarie3D <radual a33u9ption of full o7ner3hip and 9ana<e9ent control
of the a<rarian refor9 cooperative3. (Aac'#
2AR(. 95. )r<ani>ation and Re<i3tration. ; A<rarian refor9 cooperative3 9a! be
or<ani>ed and re<i3tered under thi3 Code onl! upon prior 7ritten verification b! the +AR to the
effect that the 3a9e i3 needed and de3ired b! the beneficiarie3C re3ult3 of a 3tud! that ha3 been
conducted fairl! indicate the econo9ic fea3ibilit! of or<ani>in< the 3a9e and that it 7ill be
econo9icall! viable in it3 operation3C and that the 3a9e 9a! no7 be or<ani>ed and re<i3tered
in accordance 7ith the re?uire9ent3 of thi3 Code.
2(he Authorit!" in con3ultation 7ith the concerned <overn9ent a<encie3 and cooperative 3ector"
3hall i33ue appropriate rule3 and re<ulation3 pertainin< to the provi3ion3 of thi3 Chapter.2
/#C(')N 12. Article3 96" 97 and 98 of Chapter H'' on the /pecial Provi3ion3 on Public /ervice
Cooperative3 of the 3a9e Code are hereb! tran3ferred to another chapter. Chapter H'' a3
a9ended 3hall no7 read" a3 follo73:
C-AP(#R H''
Cooperative %an83
2AR(. 95. ,overnin< &a7. ; (he provi3ion3 of thi3 Chapter 3hall pri9aril! <overn
cooperative ban83 re<i3tered under thi3 Code and the other provi3ion3 of thi3 Code 3hall appl!
to the9 onl! in3ofar a3 the! are not incon3i3tent 7ith the provi3ion3 contained in thi3 Chapter.
#C+aAc
2AR(. 96. /upervi3ion. ; (he cooperative ban83 re<i3tered under thi3 Code 3hall be under
the 3upervi3ion of the %/P. (he %/P" upon con3ultation 7ith the Authorit! and the concerned
cooperative 3ector" 3hall for9ulate <uideline3 re<ardin< the operation3 and the <overnance of
cooperative ban83. (he3e <uideline3 3hall <ive due reco<nition to the uni?ue nature and
character of cooperative ban83. (o thi3 end" cooperative ban83 3hall provide financial and
ban8in< 3ervice3 to it3 9e9ber3.
2AR(. 97. )r<ani>ation" *e9ber3hip and #3tabli3h9ent of a Cooperative %an8. ; A1B
Cooperative or<ani>ation3 dul! e3tabli3hed and re<i3tered under thi3 Code 9a! or<ani>e a
cooperative ban8" 7hich 3hall li8e7i3e be con3idered a cooperative re<i3trable under the
provi3ion3 of thi3 Code 3ub=ect to the re?uire9ent3 and re?ui3ite authori>ation fro9 the %/P.
)nl! one cooperative ban8 9a! be e3tabli3hed in each province: Provided" (hat an additional
cooperative ban8 9a! be e3tabli3hed in the 3a9e province to cater to the need3 of the localit!
dependin< on the econo9ic condition3 of the province a3 9a! be deter9ined b! the %/P:
Provided" further" (hat the additional cooperative ban8 3hall be located in the cit! or 9unicipalit!
other than the cit! or 9unicipalit! 7here the fir3t cooperative ban8 i3 located. (c/C#a
2A2B *e9ber3hip in a cooperative ban8 3hall either be re<ular or a33ociate. Re<ular
9e9ber3hip 3hall be li9ited to cooperative or<ani>ation3 7hich are holder3 of co99on 3hare3
of the ban8. A33ociate 9e9ber3 are tho3e 3ub3cribin< and holdin< preferred 3hare3 of the
ban8" 7hich 9a! include but are not li9ited to the follo7in<:
2AaB 'ndividual 9e9ber3 of the ban8D3 9e9ber-pri9ar! cooperative3C and
2AbB /a9ahan< Na!on and *unicipal 0atipunan n< 9<a /a9ahan< Na!on A*0/NB 7hich
held co99on 3hare3 of cooperative ban83 prior to the effectivit! of thi3 Act 3hall appl! for
conver3ion to full-fled<ed cooperative3 in order to 9aintain their 3tatu3 a3 re<ular 9e9ber3 of
cooperative ban83: Provided" (hat the! 3hall notif! the cooperative ban8 concerned of their
intention to convert 7ithin a period of ninet! A90B da!3 fro9 the effectivit! of thi3 Act. /a9ahan<
Na!on and *0/N are hereb! <iven a period of one A1B !ear fro9 the effectivit! of thi3 Act to
co9plete their conver3ion a3 cooperative3. Cooperative ban83 3hall e@ert rea3onable effort3 to
infor9 their 9e9ber /a9ahan< Na!on and *0/N to finall! convert or to <ive the notice of
conver3ion 7ithin the pre3cribed period. $pon the failure of the /a9ahan< Na!on and *0/N to
finall! convert to a full-fled<ed cooperative 7ithin the 9a@i9u9 period of one A1B !ear" the
cooperative ban8 concerned 9a! convert the co99on 3hare3 held b! 3uch a33ociation3 to
preferred 3hare3.
2A4B (he article3 of cooperation and b!la73 of a cooperative ban8" or an! a9end9ent
thereto" 3hall be re<i3tered 7ith the Authorit! onl! 7hen acco9panied b! a certificate of
authorit! i33ued b! the %/P" under it3 official 3eal. AC(a+-
2AR(. 98. Ad9ini3tration of Cooperative %an83. ; (o 9aintain the ?ualit! of ban8
9ana<e9ent and accord appropriate protection to depo3itor3 and the public in <eneral" the %/P
3hall pre3cribe the fit and proper ?ualification3 of ban8 director3 and officer3 for the purpo3e3 of
thi3 article" <ivin< due reco<nition to the uni?ue nature and character of cooperative ban83.
2Not7ith3tandin< the provi3ion3 of thi3 Code" the nu9ber" co9po3ition and ter9 of the board of
director3 3hall be defined in the article3 of cooperation and b!la73 of the cooperative ban8.
2AR(. 99. Guoru9 and .otin< Ri<ht3. ; (he ?uoru9 re?uire9ent for <eneral a33e9bl!
9eetin<3" 7hether 3pecial or re<ular" 3hall be one-half plu3 one of the nu9ber of votin< 3hare3
of all the 9e9ber3 in <ood 3tandin<. 'n the 9eetin<3 of the board of director3" 7hether 3pecial
or re<ular" the ?uoru9 re?uire9ent 3hall be one-half plu3 one of all the 9e9ber3 of the board of
director3. #ach director 3hall onl! have one vote.
2Not7ith3tandin< the provi3ion3 of thi3 Code to the contrar!" the ?uoru9 re?uire9ent for
a9end9ent3 of article3 of cooperation and b!la73 3hall be three-fourth3 A4E5B vote of all the
9e9ber3 7ith votin< ri<ht3" pre3ent and con3titutin< a ?uoru9. All other votin< re?uire9ent3
3hall be a3 pre3cribed b! the %/P. '+/a(#
2(he votin< ri<ht3 of 9e9ber3 3hall be proportionate to the nu9ber of their paid-up 3hare3.
2AR(. 100. Po7er3" unction3 and Allied $nderta8in<3 of Cooperative %an83. ; A
cooperative ban8 3hall pri9aril! provide financial" ban8in< and credit 3ervice3 to cooperative
or<ani>ation3 and their 9e9ber3. -o7ever" the %/P 9a! pre3cribe appropriate <uideline3"
ceilin<3 and condition3 on borro7in<3 of a cooperative or<ani>ation fro9 a cooperative ban8.
2(he po7er3 and function3 of a cooperative ban8 3hall be 3ub=ect to 3uch rule3 and re<ulation3
a3 9a! be pro9ul<ated b! the %/P.
2'n addition to the po7er3 <ranted b! thi3 Code and other e@i3tin< la73" an! cooperative ban8
9a! perfor9 an! or all of the ban8in< 3ervice3 offered b! other t!pe3 of ban83 3ub=ect to the
prior approval of the %/P.
2AR(. 101. Capital Re?uire9ent3 of Cooperative %an83. ; A1B A cooperative ban8 3hall
have a 9ini9u9 paid-up capital in 3uch a9ount a3 9a! be re?uired b! the %/P.
2(he %/P 9a! pre3cribe rule3 and re<ulation3 on the t!pe3 of 3hare3 a cooperative ban8 9a!
i33ue" includin< the ter93 thereof and ri<ht3 appurtenant thereto to deter9ine co9pliance 7ith
la73 and re<ulation3 <overnin< capital and e?uit! 3tructure of ban83: Provided" (hat
cooperative ban83 3hall i33ue par value 3hare3 onl!.
2A2B (he %arrio /avin<3 und A%/B and %arrio ,uarantee und A%,B collectedEdeducted
b! variou3 ban83 throu<hout the countr! fro9 the loan proceed3 of far9er-borro7er3 7ho 7ere
9e9ber3 of cooperative3 and /a9ahan< Na!on in co9pliance 7ith Pre3idential +ecree No.
175 and acco9pan!in< letter3 of in3truction" 7hich are 3till floatin< and out3tandin< either a3
active or dor9ant depo3it account3 in the boo83 of tho3e ban83" 3hall be depo3ited to the
cooperative ban8 located in the province 7here the depo3itor! ban83 of the %/ and %, are
located" or if there i3 no cooperative ban8 in the province" to the cooperative ban8 neare3t to the
province. (he %/P" in coordination 7ith the Authorit!" 3hall co9e up 7ith the i9ple9entin<
<uideline3 on ho7 to credit the o7ner3 of the fund3. (ho3e fund3 7ho3e o7ner3 could not be
located or identified 3hall be 3ub=ect to e3cheat. -(+CA/
2AR(. 102. Privile<e3 and 'ncentive3 of Cooperative %an83. ; (he cooperative ban83
re<i3tered under thi3 Code 3hall be <iven the 3a9e privile<e3 and incentive3 <ranted to the rural
ban83" private develop9ent ban83" co99ercial ban83" and all other ban83 to redi3count note3
7ith the %/P" the &and %an8 of the Philippine3" and other <overn9ent ban83 7ithout affectin< in
an! 7a! the provi3ion3 of thi3 Code.
2A1B /ub=ect to the approval of the %/P" a cooperative ban8 3hall publi3h a 3tate9ent of it3
financial condition" includin< tho3e of it3 3ub3idiarie3 and affiliate3" in 3uch ter93
under3tandable to the la!9an and in 3uch fre?uenc! a3 9a! be pre3cribed b! the %/P" in
#n<li3h or ilipino" at lea3t once ever! ?uarter in a ne73paper of local circulation in the cit! or
province 7here the principal office i3 located or" if no ne73paper i3 publi3hed in the 3a9e
province" then in a ne73paper publi3hed in the neare3t cit! or province or in a ne73paper of
<eneral circulation. (he %/P" ho7ever" 9a! allo7 the po3tin< of the financial 3tate9ent3 of the
cooperative ban8 in con3picuou3 place3 it 9a! deter9ine in lieu of the publication re?uired in
the precedin< 3entence 7hen 7arranted b! the circu93tance3. c-aCA/
2-o7ever" in ca3e3 of foreclo3ure of 9ort<a<e3 coverin< loan3 <ranted b! a cooperative ban8"
and the e@ecution of =ud<9ent3 thereon involvin< real propertie3 and levied upon b! a 3heriff" it
3hall be e@e9pt fro9 publication re?uire9ent 7here the total a9ount of the loan" e@cludin<
intere3t and other char<e3 due and unpaid" doe3 not e@ceed (7o hundred fift! thou3and pe3o3
AP250"000.00B or 3uch a9ount a3 the %/P 9a! pre3cribe" a3 9a! be 7arranted b! the
prevailin< econo9ic condition3 and b! the nature and character of the cooperative ban83. 't
3hall be 3ufficient publication in 3uch ca3e3 if the notice of foreclo3ure and e@ecution of
=ud<9ent are po3ted in con3picuou3 area3 of the cooperative ban8D3 pre9i3e3" the 9unicipal
hall" the 9unicipal public 9ar8et" the baran<a! hall" or the baran<a! public 9ar8et" if there be
an!" 7here the propert! 9ort<a<ed i3 3ituated" 7ithin a period of 3i@t! A60B da!3 i99ediatel!
precedin< the public auction or the e@ecution of =ud<9ent. Proof of publication a3 re?uired
herein 3hall be acco9pli3hed b! an affidavit of the 3heriff or officer conductin< the foreclo3ure
3ale or e@ecution of =ud<9ent" and 3hall be attached to the record of the ca3e.
2A2B A cooperative ban8 3hall be allo7ed to foreclo3e land3 9ort<a<ed to it 3ub=ect to the
provi3ion3 of Republic Act No. 6657" other7i3e 8no7n a3 the Co9prehen3ive A<rarian Refor9
&a7 of 1988.
2AR(. 104. A33i3tance to Cooperative %an83. ; 'n accordance 7ith e@i3tin< policie3"
<overn9ent a<encie3" <overn9ent-o7ned or controlled corporation3 and financial in3titution3
3hall provide a33i3tance" technical or other7i3e" to cooperative ban83 to per9it the9 to <ro7"
develop and perfor9 their role in countr!3ide develop9ent to7ard3 a 3u3tainable national
econo9ic develop9ent. 1henever a cooperative ban8 or<ani>ed under thi3 Code i3 in a 3tate
of continuin< inabilit! or un7illin<ne33 to 9aintain a period of li?uidit!" the %/P 9a! de3i<nate
one of it3 official3 or a per3on of reco<ni>ed co9petence" preferabl! 7ith e@perience in
cooperative ban8in< and finance" a3 con3ervator of the 3aid ban8 pur3uant to the appropriate
provi3ion3 of e@i3tin< ban8in< la73. cA-+#/
2AR(. 105. Applicabilit! of %an8in< &a73 and Re<ulation3. ; 1ith re3pect to the provi3ion3
and <overnance of the cooperative ban83" the provi3ion3 of the ban8in< la73" rule3 and
re<ulation3 3hall prevail" not7ith3tandin< /ection 71 of Republic Act No. 8791" other7i3e 8no7n
a3 the ,eneral %an8in< Act of 2000.
2(he %/P and the Authorit!" in con3ultation 7ith the concerned cooperative 3ector" 3hall i33ue
appropriate rule3 and re<ulation3 pertainin< to the provi3ion3 of thi3 Chapter.2
/#C(')N 14. Article3 99" 100" 101" 102" 104" 105" 105" 106" 107" 108 and 109 of Chapter H'''
on /pecial Provi3ion3 Relatin< to Cooperative %an83 of the 3a9e Code are hereb! tran3ferred
to another chapter. Chapter H''' a3 a9ended 3hall no7 read" a3 follo73:
C-AP(#R H'''
'n3urance Cooperative
2AR(. 105. Cooperative 'n3urance /ocietie3. ; #@i3tin< cooperative 9a! or<ani>e
the93elve3 into a cooperative in3urance entit! for the purpo3e of en<a<in< in the bu3ine33 of
in3urin< life and propert! of cooperative3 and their 9e9ber3. #C('c/
2AR(. 106. (!pe3 of 'n3urance Provided. ; $nder the cooperative in3urance pro<ra9
e3tabli3hed and for9ed b! virtue of the provi3ion3 of thi3 Code" the cooperative in3urance
3ocietie3 3hall provide it3 con3titutin< 9e9ber3 different t!pe3 of in3urance covera<e con3i3tin<
of" but not li9ited to" life in3urance 7ith 3pecial <roup covera<e" loan protection" retire9ent
plan3" endo79ent 7ith health and accident covera<e" fire in3urance" 9otor vehicle covera<e"
bondin<" crop and live3toc8 protection and e?uip9ent in3urance.
2AR(. 107. Applicabilit! of 'n3urance &a73. ; (he provi3ion3 of the 'n3urance Code and all
other la73 and re<ulation3 relative to the or<ani>ation and operation of an in3urance co9pan!
3hall appl! to cooperative in3urance entitie3 or<ani>ed under thi3 Code. (he re?uire9ent3 on
capitali>ation" inve3t9ent3 and re3erve3 of in3urance fir93 9a! be liberall! 9odified upon
con3ultation 7ith the Authorit! and the cooperative 3ector" but in no ca3e 9a! the re?uire9ent3
be reduced to le33 than half of tho3e provided for under the 'n3urance Code and other related
la73.
2AR(. 108. '9ple9entin< Rule3. - ; (he 'n3urance Co99i33ion and the Authorit!" in
con3ultation 7ith the concerned cooperative 3ector" 3hall i33ue the appropriate rule3 and
re<ulation3 i9ple9entin< the provi3ion3 of thi3 Chapter.2
/#C(')N 15. Article3 110" 111" 112" 114 and 115 of Chapter H'. on /pecial Provi3ion3
relatin< to Credit Cooperative of thi3 Code are hereb! tran3ferred to another chapter. Chapter
H'. a3 a9ended 3hall no7 read" a3 follo73: +c'(aC
C-AP(#R H'.
Public /ervice Cooperative3
2AR(. 109. +efinition and Covera<e. ; A public 3ervice cooperative" 7ithin the 9eanin< of
thi3 Code" i3 one or<ani>ed to render public 3ervice3 a3 authori>ed under a franchi3e or
certificate of public convenience and nece33it! dul! i33ued b! the appropriate <overn9ent
a<enc!. /uch 3ervice3 9a! include the follo7in<:
2A1B Po7er <eneration" tran39i33ion" andEor di3tributionC
2A2B 'ce plant3 and cold 3tora<e 3ervice3C
2A4B Co99unication 3ervice3 includin< telephone" tele<raph" and teleco99unication3C
2A5B &and and 3ea tran3portation cooperative3 for pa33en<er andEor car<o. (ran3port
cooperative3 or<ani>ed under the provi3ion3 of #@ecutive )rder No. 898" /erie3 of 1984" 3hall
be <overned b! thi3 ChapterC
2A5B Public 9ar8et3" 3lau<hterhou3e3 and other 3i9ilar 3ervice3C and #a'/+C
2A6B /uch other t!pe3 of public 3ervice a3 9a! be en<a<ed in b! an! cooperative. /uch
cooperative 3hall be pri9aril! <overned b! thi3 Chapter and the <eneral provi3ion3 of thi3 Code
in3ofar a3 the! 9a! be applicable unle33 the! are incon3i3tent here7ith.
2AR(. 110. Re<i3tration Re?uire9ent3. ; $nle33 other7i3e provided in thi3 Code" no public
3ervice cooperative 3hall be re<i3tered unle33 it 3ati3fie3 the follo7in< re?uire9ent3:
2A1B 't3 article3 of cooperation and b!la73 provide for the 9e9ber3hip of the u3er3 andEor
producer3 of the 3ervice of 3uch cooperative3C and
2A2B /uch other re?uire9ent3 a3 9a! be i9po3ed b! the other pertinent <overn9ent
a<encie3 concerned. 'n ca3e there are t7o A2B or 9ore applicant3 for the 3a9e public 3ervice
franchi3e or certificate of public convenience and nece33it!" all thin<3 bein< e?ual" preference
3hall be <iven to a public 3ervice cooperative.
2AR(. 111. Re<ulation of Public /ervice Cooperative3. ; A1B (he internal affair3 of public
3ervice cooperative3 3uch a3 the ri<ht3 and privile<e3 of 9e9ber3" the rule3 and procedure3 for
9eetin<3 of the <eneral a33e9bl!" board of director3 and co99ittee3C for the election and
?ualification3 of officer3" director3" and co99ittee 9e9ber3C allocation and di3tribution of
3urplu3e3C and all other 9atter3 relatin< to their internal affair3 3hall be <overned b! thi3 Code.
2A2B All 9atter3 relatin< to the franchi3e or certificate of public convenience and nece33it! of
public 3ervice cooperative3 3uch a3 capitali>ation and inve3t9ent re?uire9ent3" e?uip9ent and
facilitie3" fre?uencie3" rate-fi@in< and 3uch other 9atter3 affectin< their public 3ervice operation3
3hall be <overned b! the proper <overn9ent a<enc! concerned. acA+'(
2A4B (he Authorit! and the proper <overn9ent a<enc! concerned 3hall =ointl! i33ue the
nece33ar! rule3 and re<ulation3 to i9ple9ent thi3 Chapter.
2A5B (he Authorit! 3hall e3tabli3h a co99ittee for the 9onitorin< of tran3portation 3ervice
cooperative3 co9po3ed of repre3entative3 fro9 the Authorit!" the &and (ran3portation
ranchi3in< and Re<ulator! %oard A&(R%B" the &and (ran3portation )ffice A&()B" )ffice of
(ran3port Cooperative3 A)(CB" other concerned <overn9ent a<encie3" a3 9a! be nece33ar!"
and the National ederation of (ran3portation Cooperative3. A local 9onitorin< co99ittee 3hall
li8e7i3e be e3tabli3hed at the e@ten3ion office3 of the Authorit! to facilitate the 9onitorin< of
tran3portation cooperative3.
2AR(. 112. #n<a<e9ent in Allied %u3ine33e3 b! (ran3portation /ervice Cooperative3. ;
/ub=ect to pertinent national la73 and local ordinance3" pri9ar! tran3portation 3ervice
cooperative3 includin< 3econdar! and tertiar! federation of cooperative3 9a! en<a<e in a
bu3ine33 related to tran3portation 3ervice3" includin< but not li9ited to:
2A1B '9portation" di3tribution and 9ar8etin< of petroleu9 product3 in accordance 7ith e@i3tin<
la73C
2A2B )peration of <a3oline 3tation3 and tran3portation 3ervice center3"
2A4B '9portation" di3tribution and 9ar8etin< of 3pare part3 and 3upplie3C and
2A5B *ar8etin< of vehicleEdriver3 in3urance policie3.
2AR(. 114. Rene7al of ranchi3e and .ehicle Re<i3tration. ; Rene7al3 of franchi3e and
vehicle re<i3tration 3hall be <ranted to tran3portation 3ervice cooperative3: Provided" (hat 3uch
cooperative pre3ent3 a certificate of <ood 3tandin< i33ued b! the Authorit!" )(C" and the local
<overn9ent unit concerned a3 proof that it ha3 continuou3l! provided the re?uired public
tran3portation 3ervice3. #Cca+(
2(he Authorit!" in con3ultation 7ith the concerned <overn9ent a<encie3 and cooperative 3ector"
3hall i33ue appropriate rule3 and re<ulation3 pertainin< to the provi3ion3 of thi3 Chapter.2
/#C(')N 15. Article3 115" 116" 117 and 118 of Chapter H. on /pecial Provi3ion3 relatin< to
Cooperative 'n3urance /ocietie3 of the 3a9e Code are hereb! tran3ferred to another chapter.
Chapter H. a3 a9ended 3hall no7 read" a3 follo73:
C-AP(#R H.
Credit Cooperative3
2AR(. 115. Covera<e. ; (hi3 Chapter 3hall appl! to credit cooperative3 and other
cooperative3" includin< 9ultipurpo3e cooperative3" that provide 3avin<3 and credit to their
9e9ber3 onl!. (he re3t of the provi3ion3 of thi3 Code 3hall appl! to the9 in3ofar a3 the 3a9e
are not incon3i3tent 7ith the provi3ion3 of thi3 Chapter.
2AR(. 115. +efinition and )b=ective3. ; A credit cooperative i3 a financial or<ani>ation
o7ned and operated b! it3 9e9ber3 7ith the follo7in< ob=ective3:
2A1B (o encoura<e 3avin<3 a9on< it3 9e9ber3C
2A2B (o create a pool of 3uch 3avin<3 for 7hich loan3 for productive or provident purpo3e3
9a! be <ranted to it3 9e9ber3C and
2A4B (o provide related 3ervice3 to enable it3 9e9ber3 to 9a@i9i>e the benefit fro9 3uch
loan3.
2AR(. 116. )r<ani>ation and Re<i3tration. ; Credit cooperative3 3hall be or<ani>ed and
re<i3tered in accordance 7ith the <eneral provi3ion3 of thi3 Code. /C-(ac
2AR(. 117. )r<ani>ational &in8a<e. ; Credit cooperative3 9a! or<ani>e chapter3 or
3ub3idiarie3" or =oin lea<ue3 and federation3 for the purpo3e of providin< co99onl! needed
e33ential 3ervice3 includin< but not li9ited to the follo7in<:
2A1B 'nterlendin< of 3urplu3 fundC
2A2B *utual benefit3C
2A4B +epo3it <uaranteeC
2A5B %ondin<C
2A5B #ducation and trainin<C
2A6B Profe33ional and technical a33i3tanceC
2A7B Re3earch and develop9entC
2A8B Repre3entationC and
2A9B )ther 3ervice3 needed to i9prove their perfor9ance.
2#@i3tin< 3upport or<ani>ation3 3uch a3 federation3 of credit cooperative3" credit cooperative3 at
the provincial" re<ional and national level3 9a! continue a3 3uch under thi3 Code.2
/#C(')N 16. A ne7 Article i3 in3erted in Chapter H. on Credit Cooperative3 and 3hall no7
read" a3 follo73: /-a'+#
2AR(. 118. Conver3ion of Credit Cooperative3 to inancial /ervice Cooperative3. ; #@i3tin<
credit and 9ultipurpo3e cooperative3 7ith 3avin<3 and credit facilitie3 3hall for9all! infor9 the
Authorit! of it3 intention to continue perfor9in< it3 pre3ent function3. /hould the 3aid
cooperative3 decide to e@erci3e enhanced function3" it 3hall notif! the Authorit! and 3ati3f! the
re?uire9ent3 for conver3ion to financial 3ervice cooperative.2
/#C(')N 17. A ne7 Chapter on inancial /ervice Cooperative3 3hall be in3erted in thi3
Chapter and 3hall read" a3 follo73:
C-AP(#R H.'
inancial /ervice Cooperative3
2AR(. 119. +efinition and unction3 of inancial /ervice Cooperative3. ; A financial 3ervice
cooperative i3 a financial or<ani>ation o7ned and operated b! it3 9e9ber3 and authori>ed to
provide the follo7in< 3ervice3" e@clu3ivel! to it3 9e9ber3: a/A(-#
2AaB (he function3 of credit cooperative3 and other cooperative3" includin< 9ultipurpo3e
cooperative3" that provide 3avin<3 and credit to their 9e9ber3C and
2AbB )ther financial 3ervice3 3ub=ect to re<ulation b! the %/P.
2(he article3 of cooperation and b!la73 of an! financial 3ervice cooperative" or an! a9end9ent
thereto" 3hall be re<i3tered 7ith the Authorit! onl! if acco9panied b! a certificate of authorit!
i33ued b! the %/P" under it3 official 3eal.
2(he authorit! <ranted under thi3 provi3ion 9a! be revo8ed b! the %/P if an! of the <round3 for
receiver3hip 9entioned under /ection 40 of Republic Act No. 7654 and /ection3 54 and 56 of
Republic Act No. 8791 i3 pre3ent or if the financial 3ervice cooperative ha3 7illfull! violated thi3
Code or an! of the related rule3 and re<ulation3.
2(he %/P 3hall i33ue a cea3e and de3i3t order to cooperative3 e@erci3in< the function3 of a
financial 3ervice cooperative 7ithout authorit! fro9 the %/P.
2(he %/P 9a! char<e e?uitable rate3 or fee3" a3 9a! be pre3cribed b! the *onetar! %oard for
licen3in<" e@a9ination and other 3ervice3 7hich it render3 under thi3 Code. a-/Cc#
2$pon the favorable certification of the %/P and the prior approval of the Authorit!" a
cooperative" the 9ain purpo3e of 7hich i3 to perfor9 3avin<3 and credit function3" 9a! convert
to financial 3ervice cooperative 3ub=ect to the re?uired ?ualification3 and procedure3 provided
under thi3 Code and in the i9ple9entin< rule3 and re<ulation3.
2AR(. 120. *e9ber3hip and Affiliation. ; A financial 3ervice cooperative 3hall have t7o A2B
t!pe3 of 9e9ber3:
2A1B Re<ular 9e9ber3" 7ho are natural per3on3C and
2A2B A33ociate 9e9ber3" 7ho are natural per3on3 but 7ho do not i99ediatel! ?ualif! under
the re?uire9ent3 for 9e9ber3hip 3et out in the b!la73 of the cooperative. All a33ociate
9e9ber3 7ho are natural per3on3 3hall be <iven t7o A2B !ear3 to beco9e re<ular 9e9ber3.
ailure to convert 7ithin 3aid period 3hall 9ean auto9atic 7ithdra7al of their a33ociate
9e9ber3hip. (he! 9a!" ho7ever" re-appl! a3 re<ular 9e9ber3 after t7o A2B !ear3. c-/'+a
2*inor3 7ho are dependent3 of re<ular 9e9ber3 can ?ualif! a3 a33ociate 9e9ber3. 1hen the!
reach the a<e of 9a=orit! and 7ithin t7o A2B !ear3 fro9 acceptance of their a33ociate
9e9ber3hip" the! have the option to convert into re<ular 9e9ber3. A3 a33ociate 9e9ber3"
the! 9a! open account3" depo3it fund3 and 7ithdra7 fro9 their account" 3ub=ect to the b!la73
and rule3 of the cooperative" and the rule3 and re<ulation3 of the Authorit!" not7ith3tandin< the
provi3ion3 of e@i3tin< la73 to the contrar!.
2AR(. 121. Re<ulation and /upervi3ion. ; (he Authorit! 3hall e@erci3e lead re<ulator!
po7er3 and 3upervi3ion over the operation3 of the financial 3ervice cooperative3" to 7it:
2A1B '33ue rule3 and re<ulation3 for the 3afe and 3ound conduct of operation3 of financial
3ervice cooperative3C
2A2B #3tabli3h 3tandard3 of operation for unifor9 application to all financial 3ervice
cooperative3C
2A4B Pre3cribe ratio3" ceilin<3" li9itation3" or other for93 of re<ulation on the different t!pe3 of
account3 and practice3 of financial 3ervice cooperative3" 7hich 3hall" confor9 to internationall!
accepted 3tandard3C
2A5B 'nve3ti<ate to deter9ine 7hether a financial 3ervice cooperative i3 conductin< it3
bu3ine33 in a 3afe and 3ound 9annerC +#'CaA
2A5B Conduct re<ular e@a9ination of the boo83 of account3" record3 and other docu9ent3 of
financial 3ervice cooperative3C
2A6B 'n?uire into the 3olvenc! and li?uidit! of a financial 3ervice cooperative3C
2A7B Pre3cribe appropriate fee3 for 3upervi3ion and e@a9ination of financial 3ervice
cooperative3 to" a9on< other3" 9onitor and over3ee that e@i3tin< la73 and re<ulation3 are
co9plied 7ithC
2A8B Pa33 upon and revie7 the ?ualification3 and di3?ualification3 of individual3 elected or
appointed director3 or officer3 and di3?ualif! tho3e found unfitC
2A9B +i3?ualif!" 3u3pend or re9ove an! director or officer 7ho co99it3 or o9it3 an act 7hich
render hi9 unfit for the po3itionC
2A10B /elect" de3i<nate and deputi>e federation3" throu<h an approved accreditation criteria"
that 7ill 3upervi3e pri9ar! financial 3ervice cooperative3 and i33ue ba3ic <uideline3 thereforC
2A11B Re?uire the 3ub9i33ion of relevant report3 fro9 the deputi>ed 3upervi3orC 'Ac(aC
2A12B Provide re9edial 9ea3ure3 in the operation3 of financial 3ervice cooperative3 that are in
a 3tate of continuin< inabilit! or un7illin<ne33 to 9aintain a period of li?uidit! at the re?ue3t of
the deputi>ed 3upervi3or or 7hen the deputi>ed 3upervi3or fail3 to perfor9 it3 function3C
2A14B Accredit e@ternal auditor3 in accordance 7ith 3tandard3 for audit and financial reportin<
in cooperation 7ith the P'CPAC and
2A15B Appoint a con3ervator or a receiver a3 9a! be nece33ar! 3ub=ect to the rule3 and
re<ulation3 to be pro9ul<ated b! the Authorit! in coordination 7ith the %/P" ta8in< into
con3ideration the <round3" po7er3 and procedure3 under /ection3 29 and 40 of Republic Act
No. 7654 a3 9a! be dee9ed appropriate to financial 3ervice cooperative3.
2(he Authorit! 3hall include in it3 rule3 and re<ulation3" appropriate 3anction3 and penaltie3" on
the financial 3ervice cooperative3" it3 9e9ber3" officer3 and re3pon3ible per3on3" for an! action
that fail3 to adhere to 3ound and prudent 9ana<e9ent practice3 or are incon3i3tent 7ith the
provi3ion3 of thi3 Code" other applicable la73 on cooperative3" rule3" re<ulation3" circular3 or
order3 i33ued b! the Authorit!" and re?uire the cooperative to underta8e corrective or re9edial
9ea3ure3 relative thereto. a/(#C'
2(he %/P i3 authori>ed to conduct ri38-ba3ed 3upervi3ion and e@a9ination of financial 3ervice
cooperative3 a3 it 9a! dee9 nece33ar!.
2AR(. 122. Pro9ul<ation of Rule3 and Re<ulation3. ; (he %/P" in coordination 7ith the
Authorit!" 3hall pre3cribe the appropriate prudential rule3 and re<ulation3 applicable to the
financial 3ervice cooperative3.
2/ub=ect to the re<ulation3 of the %/P" the ban8in< la73" rule3 and re<ulation3 3hall have
3uppletor! application to financial 3ervice3 cooperative3: Provided" ho7ever" (hat the provi3ion3
on acce33 to borro7in<3 or financial a33i3tance to be e@tended b! the %/P or the Philippine
+epo3it 'n3urance Corporation AP+'CB 3hall not appl! to financial 3ervice cooperative3:
Provided" further" (hat the depo3it liabilitie3 of the financial 3ervice cooperative3 3hall not be
in3ured b! the P+'C.
2AR(. 124. inancial /ervice Cooperative ederation3. ; inancial 3ervice cooperative3
9a! or<ani>e the93elve3 into financial 3ervice cooperative federation3" and re<i3ter their
federation 7ith the Authorit!. (he3e financial 3ervice cooperative federation3 9a! be deputi>ed
b! the Authorit! a3 the 3upervi3or of their 9e9ber3" and the! 3hall have the follo7in< function3:
+#ac'(
2AaB +evelop 3tandard3 and provide 3ervice3 for the benefit of it3 affiliate3 and their 9e9ber3
in accordance 7ith the rule3 and re<ulation3 of the Authorit!C
2AbB +efine co99on ob=ective3 and coordinate activitie3 for the financial 3ervice cooperative
federationC
2AcB #3tabli3h and ad9ini3ter fund3 3uch a3 li?uidit! fund" loan fund" inve3t9ent fund"
3tabili>ation fund and 3uch other fund3C
2AdB #3tabli3h a 3avin<3 <uarantee 3!3te9 for the protection of their affiliate3D 9e9ber-
depo3itor3 7ithin three A4B !ear3 fro9 the approval of thi3 CodeC
2AeB #@erci3e on-3ite and off-3ite 3upervi3or! po7er over it3 9e9ber3C
2AfB Provide re9edial a33i3tance to it3 9e9ber3 concernin< their operation3 and
9ana<e9entC -aA'#/
2A<B Act a3 the li?uidator and 7hen applicable" 3e?ue3ter propertie3 to 3ati3f! an obli<ation
3ecured b! a 9ort<a<e 7hen authori>ed b! the Authorit!C and
2AhB (ran39it relevant and re?uired infor9ation re<ardin< the operation3 and perfor9ance of
9e9ber-cooperative3 to the Authorit!.
2(he Authorit! and other <overn9ent a<encie3" <overn9ent-o7ned or controlled corporation3
and <overn9ent financial in3titution3 3hall provide technical and 3uch other a33i3tance that 9a!
be allo7ed b! their charter3 to financial 3ervice cooperative federation3 for the e3tabli3h9ent
andEor 3tren<thenin< of their re3pective cooperative 3avin<3 <uarantee 3!3te9. (he technical
a33i3tance to be provided 3hall include" a9on< other3" trainin< 3upervi3ion and e@a9ination.
2AR(. 125. +e3i<nation of #@i3tin< $nit at the Cooperative +evelop9ent Authorit! to
Perfor9 Re<ulator! and /upervi3or! unction3. ; 1ithin 3i@ A6B 9onth3 fro9 the approval of
thi3 Code" the Authorit! 3hall de3i<nate the unit to for9ulate and i9ple9ent the nece33ar!
re<ulation3" rule3" policie3" <uideline3 and 3tandard3 applicable 3olel! to financial 3ervice
cooperative3 and deputi>ed federation3 in the perfor9ance of their 3avin<3" credit and 3uch
other related enhanced financial 3ervice operation3. A'-+cC
2(he +epart9ent of inance" the %/P and other concerned <overn9ent a<encie3 3hall provide
technical and trainin< 3upport for the effective and efficient i9ple9entation of the re<ulator! and
3upervi3or! function3 and re3pon3ibilitie3 of the Authorit!.
2AR(. 125. Prohibition. ; (he ter93 Dcredit cooperativeD" Dfinancial 3ervice cooperativeD" and
Dfinancial 3ervice cooperative federationD 3hall be u3ed e@clu3ivel! b! tho3e 7ho are dul!
re<i3tered under thi3 Code" and no per3on" <roup of per3on3" or or<ani>ation3 3hall u3e the 3aid
ter93 unle33 dul! re<i3tered 7ith the Authorit!. .iolation3 of thi3 prohibition 3hall be puni3hable
in accordance 7ith Article 150 of thi3 Code.2
/#C(')N 18. A ne7 Chapter on #lectric Cooperative3 3hall be in3erted and 3hall read" a3
follo73:
C-AP(#R H.''
#lectric Cooperative3
2AR(. 126. Covera<e. ; (he provi3ion3 of thi3 Code 3hall appl! to all electric cooperative3
re<i3tered 7ith the Authorit!. (hi3 3hall al3o cover ne7 di3tribution utilitie3 that 7ill re<i3ter 7ith
the Authorit!. +'#AC-
2#lectric cooperative3 9a! underta8e po7er <eneration utili>in< rene7able ener<! 3ource3"
includin< h!brid 3!3te93" ac?ui3ition and operation of 3ubtran39i33ion or di3tribution a3 it3
pri9ar! purpo3e3.
2AR(. 127. Re<i3tration of #lectric Cooperative3. ; (he re<i3tration of an electric
cooperative 7ith the Authorit! under thi3 Code 3hall be 3ub9itted for approval to the 9e9ber3
throu<h a referendu9" called for the purpo3e a3 provided for under Article3 128 and 129 of thi3
Code.
2AR(. 128. .otin< Re?uire9ent for Re<i3tration. ; 'n co9pliance 7ith the referendu9 a3 a
votin< procedure" the re?uired nu9ber of vote3 for re<i3tration 7ith the Authorit! 3hall be t7ent!
percent A20FB of all 9e9ber3 in <ood 3tandin<.
2AR(. 129. +ocu9ent3 to be /ub9itted for Re<i3tration 7ith the Authorit!. ; or purpo3e3
of re<i3tration" electric cooperative3 3hall 3ub9it the follo7in< docu9ent3:
2AaB Cop! of the board re3olution certif!in< to the re3ult of the vote approved throu<h a
referendu9 approvin< the re<i3tration of the cooperative 7ith the Authorit! in co9pliance 7ith
Article 128C +(cACa
2AbB Certified cop! of the article3 of incorporationEcooperation and b!la73 a3 re?uired b! the
Authorit!C
2AcB +ul! audited financial 3tate9ent3 for the pa3t t7o A2B !ear3C
2AdB &i3t of na9e3 of incu9bent board of director3 and their addre33e3 certified b! the board
3ecretar! and atte3ted to b! the chairper3onC
2AeB 1ithin 3i@ A6B 9onth3 fro9 the re<i3tration" the trea3urer 3hall 3ub9it a 37orn 3tate9ent
of the authori>ed 3hare capital" the 3ub3cribed 3hare capital of 9e9ber3" and the a9ount of
paid-up 3hare capital of 9e9ber3 and the a9ount of paid-up 3hare capital received b! the
trea3urerC and
2AfB %ond3 of accountable officer3.
2AR(. 140. Re<i3tration )ption3 of #lectric Cooperative3. ; #lectric cooperative3 re<i3tered
7ith the National #lectrification Ad9ini3tration AN#AB under Pre3idential +ecree No. 269" a3
a9ended" 7hich opt not to re<i3ter 7ith the Authorit! are allo7ed to retain the 7ord DcooperativeD
in their re<i3tered na9e3: Provided" (hat the! 3hall not be entitled to the benefit3 and privile<e3
under thi3 Code. (A/c'+
2AR(. 141. Role of the #ner<! Re<ulator! Co99i33ion. ; All rate3 and tariff3 of electric
cooperative3 re<i3tered under the Authorit! 3hall be 3ub=ect to the rule3 on application and
approval of and b! the #ner<! Re<ulator! Co99i33ion for di3tribution utilitie3.
2AR(. 142. #ffect3 of Re<i3tration 7ith the Authorit!. ; A1B $pon the effectivit! of thi3 Code"
electric cooperative3 that are dul! re<i3tered 7ith the Authorit!" and i33ued a certificate of
re<i3tration" 3hall no lon<er be covered b! Pre3idential +ecree No. 269" a3 a9ended b!
Pre3idential +ecree No. 1655: Provided" (hat electric cooperative3 re<i3tered 7ith the Authorit!
3hall no7 be covered b! the provi3ion3 of thi3 Code a3 7ell a3 future rule3 and i33uance3 of the
Authorit!: Provided" ho7ever" (hat the 3ecurit! of tenure and the collective bar<ainin<
a<ree9ent bet7een the cooperative 9ana<e9ent and it3 e9plo!ee3 3hall be re3pected" 7ith no
di9inution of their e@i3tin< 3alarie3" e9olu9ent3" ran83 and other benefit3C
2A2B (he electric cooperative3 re<i3tered 7ith the Authorit! 7ith e@i3tin< loan3 obtained fro9
the N#A after Iune 26" 2001 3hall continue to ob3erve the ter93 of 3uch loan3 until full pa!9ent
or 3ettle9ent thereofC
2A4B
2A5B #lectric cooperative3 re<i3tered 7ith the Authorit! are entitled to con<re33ional
allocation3" <rant3" 3ub3idie3 and other financial a33i3tance for rural electrification 7hich can be
cour3ed throu<h the +epart9ent of #ner<!" the Authorit! andEor local <overn9ent unit3. (he
electric cooperative3 re<i3tered under thi3 Code can avail of the financial 3ervice3 and technical
a33i3tance provided b! the <overn9ent financial in3titution3 and technical develop9ent
a<encie3 on ter93 re3pectin< their independence a3 autono9ou3 cooperative3C
2A5B All condoned loan3" 3ub3idie3" <rant3 and other a33i3tance 3hall for9 part of the
donated capital and fund3 of the electric cooperative3 and a3 3uch" it 3hall not be 3old" traded
nor be divided into 3hareholdin<3 at an! ti9eC the3e donated capitalEfund 3hall be valuated for
the 3ole purpo3e of deter9inin< the e?uit! participation of the 9e9ber3: Provided" (hat in the
ca3e of di33olution of the cooperative" 3aid donated capital 3hall be 3ub=ect to e3cheatC and
-ACa/c
2A6B #lectric cooperative3 re<i3tered and confir9ed 7ith the Authorit! under Republic Act No.
6948 and Republic Act No. 6949 are hereb! dee9ed re<i3tered under thi3 Code.
2AR(. 144. /hare Capital in the #lectric Cooperative3. ; (he electric cooperative 3hall i33ue
and di3tribute 3hare certificate3 under the na9e of their 9e9ber3" ta8in< into con3ideration their
previou3 e?uit! contribution3" the a9orti>ation co9ponent throu<h the pa!9ent3 9ade" capital
build-up and other capital contribution3.
2AR(. 145. Cancellation of Re<i3tration 7ith the Authorit!. ; (he cancellation of the
re<i3tration of an electric cooperative 3hall be <ranted b! the Authorit! a3 provided under
Article3 65 to 70 of thi3 Code.
2(he Authorit!" in con3ultation 7ith the concerned cooperative 3ector" 3hall i33ue appropriate
rule3 and re<ulation3 pertainin< to the provi3ion3 of thi3 Chapter.2
/#C(')N 19. Article3 119" 120 and 121 of Chapter H.' on *i3cellaneou3 Provi3ion3 of the
3a9e Code are hereb! a9ended and 3hall no7 read" a3 follo73: /A-'(C
C-AP(#R H.'''
*i3cellaneou3 Provi3ion3
2AR(. 145. Co9pliance 1ith )ther &a73. ; (he &abor Code and all other labor la73" the
/ocial /ecurit! Act" the *edical Care Act" and all other 3ocial le<i3lation3" and all other la73
and e@ecutive order3 3hall appl! to cooperative3 dul! re<i3tered under thi3 Code.
2AR(. 146. Re<i3ter of Cooperative3. ; (he Authorit! 3hall e3tabli3h a re<i3ter 7hich 3hall
contain a chronolo<ical entr! of the na9e of ever! cooperative re<i3tered or di33olved under
thi3 Code to<ether 7ith the ba3ic infor9ation re?uired for re<i3tration or di33olution and an!
other infor9ation con3idered u3eful. (he Authorit! 3hall publi3h annuall! a li3t of e@i3tin<
cooperative3" cooperative3 under di33olution and tho3e 7ho3e re<i3tration are cancelled durin<
the !ear to<ether 7ith 3uch infor9ation on each of the9 a3 9a! be pre3cribed in the rule3 and
re<ulation3.
2AR(. 147. /ettle9ent of +i3pute3" Conciliation" and *ediation Proceedin<3. ; +i3pute3
a9on< 9e9ber3" officer3" director3" and co99ittee 9e9ber3" and intra-cooperative" inter-
cooperative" intra-federation or inter-federation di3pute3 3hall" a3 far a3 practicable" be 3ettled
a9icabl! in accordance 7ith the conciliation or 9ediation 9echani393 e9bodied in the b!la73
of cooperative3 and in 3uch other applicable la73.
2(he conciliation and 9ediation co99ittee of the cooperative 3hall facilitate the a9icable
3ettle9ent of intra-cooperative di3pute3 and di3pute3 a9on< 9e9ber3" officer3" director3" and
co99ittee 9e9ber3. '(#cA+
2/hould 3uch conciliation or 9ediation proceedin<3 fail" the 9atter 3hall be 3ettled throu<h
voluntar! arbitration: Provided" ho7ever" (hat before an! part! can validl! file a co9plaint 7ith
the Authorit! for voluntar! arbitration" it 9u3t fir3t 3ecure a certification fro9 it3 conciliation and
9ediation co99ittee and fro9 the cooperative union or federation to 7hich it belon<3 that
de3pite all effort3 to 3ettle the i33ue3" the 3a9e have failed.
2(he =uri3diction of the voluntar! arbitrator3 3hall be e@clu3ive and ori<inal and their deci3ion3
3hall be appealable to the )ffice of the Pre3ident. (he Authorit! 3hall i33ue and adopt the
proper rule3 of procedure <overnin< arbitration a3 the pri9ar! and e@clu3ive 9ode for di3pute
re3olution in accordance 7ith the Alternative +i3pute Re3olution Act of 2005.
2or thi3 purpo3e" the Authorit! 3hall con3titute a li3t of ?ualified voluntar! arbitrator3.2
/#C(')N 20. A ne7 article i3 in3erted in Chapter H.''' on the *i3cellaneou3 Provi3ion3 of the
3a9e Code and 3hall read" a3 follo73:
2AR(. 148. Ioint Con<re33ional )ver3i<ht Co99ittee on Cooperative3 AIC)CCB. ; (here i3
hereb! created a Ioint Con<re33ional )ver3i<ht Co99ittee co9po3ed of the Chair9an of the
/enate Co99ittee on Cooperative3 and the Chair9an of the -ou3e Co99ittee on
Cooperative3 +evelop9ent" 7ith four A5B 9e9ber3 each fro9 both -ou3e3. (he 3aid 9e9ber3
3hall be dul! appointed b! the /enate Pre3ident and the /pea8er of the -ou3e of
Repre3entative3 fro9 the 9e9ber3 of the re3pective co99ittee3 ba3ed on the proportional
repre3entation of the partie3 or coalition therein. prcd
2(he Ioint )ver3i<ht Co99ittee 3hall revie7 and approve the i9ple9entin< rule3 and
re<ulation3 of thi3 Code and 9onitor it3 proper i9ple9entation.
2(he annual appropriation for the over3i<ht co99ittee 3hall be char<ed to the bud<et of both
-ou3e3 of Con<re33 in the ,eneral Appropriation3 Act A,AAB.2
/#C(')N 21. Article 122 i3 hereb! deleted. Article3 124" 125" 125" 126" 127" 128" 129 and 140
of Chapter H.'' on inal Provi3ion3 of thi3 Code are a9ended to read" a3 follo73:
C-AP(#R H'H
inal Provi3ion3
2AR(. 149. '9ple9entin< Rule3 and Re<ulation3. ; (he Authorit! 3hall i33ue rule3 and
re<ulation3 to i9ple9ent tho3e provi3ion3 of thi3 Code 7hich e@pre33l! call for the i33uance
thereof. (hi3 para<raph 3hall not appl! to tho3e ca3e3 7herein a 3pecific provi3ion of thi3 Code
e@pre33l! de3i<nate3 particular <overn9ent a<encie3 7hich 3hall i33ue the re<ulation3 called for
b! an! provi3ion of thi3 Code. (CaA-'
2AR(. 150. Penal Provi3ion3. ; (he follo7in< act3 or o9i33ion3 affectin< cooperative3 are
hereb! prohibited:
2A1B (he u3e of the 7ord DcooperativeD b! an! per3on or of per3on3 or or<ani>ation3" unle33
dul! re<i3tered a3 a cooperative under thi3 Code e@cept a3 provided for under Article 140
hereof. 'n ca3e of violation" the individual or individual3 concerned" or in the ca3e of an
or<ani>ation" it3 officer3 and director3 3hall" upon conviction" each 3uffer the penalt! of
i9pri3on9ent of not le33 than t7o A2B !ear3 nor 9ore than five A5B !ear3 and a fine not
e@ceedin< (7ent! thou3and pe3o3 AP20"000.00B or both at the di3cretion of the courtC
2(he Authorit! 9a! 9otu proprio" initiate co9plaint3 for violation3 of thi3 provi3ion.
2A2B An! per3on 7ho 7illfull! atte9pt3 in an! 9anner to evade or defeat ta@ in violation of the
provi3ion3 of Article3 60 and 61 of thi3 Code 3hall" in addition to other penaltie3 provided b! la7"
upon conviction thereof" be puni3hed b! a fine of not le33 than (hirt! thou3and pe3o3
AP40"000.00B but not 9ore than )ne hundred thou3and pe3o3 AP100"000.00B and 3uffer
i9pri3on9ent of not le33 than t7o A2B !ear3 but not 9ore than four A5B !ear3: Provided" (hat the
conviction or ac?uittal obtained under thi3 article 3hall not be a bar to the filin< of a civil 3uit for
the collection of ta@e3C
2A4B +irect or indirect violation or circu9vention of the provi3ion3 of Article3 60 and 61 of thi3
Code co99itted b! an! public official or e9plo!ee of an! bureau" office or a<enc! of the
<overn9ent that deprive3" di9ini3he3 or in an! 9anner hinder3 or re3trict3 an! dul! re<i3tered
cooperative fro9 the full en=o!9ent of the e@e9ption fro9 the pa!9ent of the ta@e3" fee3 and
char<e3 enu9erated therein" 3hall upon conviction" 3uffer a penalt! of not le33 than one A1B !ear
but not 9ore than five A5B !ear3 i9pri3on9ent or a fine in the a9ount of not le33 than ive
thou3and pe3o3 AP5"000.00B or both at the di3cretion of the court and 3hall further be
di3?ualified to hold an! other officeC +(a/'c
2A5B +irect or indirect interference or intervention b! an! public official or e9plo!ee into the
internal affair3 of a cooperative of 7hich he i3 not a 9e9ber" 3uch a3" but not li9ited to" the
follo7in<:
2AaB 'nfluencin< the election or appoint9ent of officer3" director3" co99ittee 9e9ber3 and
e9plo!ee3 throu<h public or private endor3e9ent or ca9pai<n for or a<ain3t an! per3on or
<roup of per3on3C
2AbB Re?uirin< prior clearance for an! polic! or deci3ion 7ithin the cooperativeC
2AcB Re?ue3tin< or de9andin< for the creation of po3ition3 or or<ani>ational unit3" or
reco99endin< an! per3on for appoint9ent" tran3fer" or re9oval fro9 hi3 po3itionC or
2AdB An! other act3 ini9ical or adver3e to the autono9! and independence of cooperative3.
2A5B A director" officer or co99ittee 9e9ber 7ho violated the provi3ion3 of Article 55 on the
&iabilit! of +irector3" )fficer3 and Co99ittee *e9ber3" Article 58 on the +i3lo!alt! of a
+irector" and Article 59 on the 'lle<al $3e of Confidential 'nfor9ation 3hall upon conviction 3uffer
a fine of not le33 than ive thou3and pe3o3 AP5"000.00B nor 9ore than ive hundred thou3and
pe3o3 AP500"000.00B or i9pri3on9ent of not le33 than five A5B !ear3 but not 9ore than ten A10B
!ear3 or both at the courtD3 di3cretionC
2A6B (he follo7in< are con3idered offen3e3 puni3hable b! a penalt! of i9pri3on9ent of not
le33 than one A1B !ear nor 9ore than five A5B !ear3 or a fine of not 9ore than ift! thou3and
pe3o3 AP50"000.00B or both at the di3cretion of the court:
2AaB )9i33ion or refu3al to furni3h an! infor9ation report or other docu9ent that i3 re?uired
under thi3 CodeC /(-Aa+
2AbB Providin< infor9ation" report3 or other docu9ent3 to the Authorit! that are re?uired
under thi3 Code 7hich the per3on 8no73 to be fal3e or 9i3leadin<C
2AcB )9i33ion or refu3al to 8eep a boo8 or re<i3ter re?uired under thi3 Code or to 9a8e the
re?uired entr! thereinC
2AdB *a8in< an entr! re?uired under thi3 Code in a boo8 or re<i3ter" 7hich the per3on 8no73
to be fal3e or 9i3leadin<C
2AeB -inderin< an authori>ed per3on fro9 9a8in< an in3pection" audit" e@a9ination or
inve3ti<ation re?uired under thi3 CodeC
2AfB ailure to co9pl! 7ith an order or 7ritten in3truction3 i33ued or <iven b! the Authorit!C
2A<B .iolation of the provi3ion3 re<ardin< tran3action3 7ith a re3tricted part!C and
2AhB Abettin<" coun3elin<" allo7in<" authori>in< or co99andin< another per3on to co99it an
offen3e puni3hable b! thi3 Code: Provided" (hat in ca3e the violator i3 a cooperative or =uridical
per3on" the penalt! 3hall be i9po3ed on it3 director3 and officer3. /A(+-#
2A7B An! violation of an! provi3ion of thi3 Code for 7hich no penalt! i3 i9po3ed 3hall be
puni3hed b! i9pri3on9ent of not le33 than 3i@ A6B 9onth3 nor 9ore than one A1B !ear and a fine
of not le33 than )ne thou3and pe3o3 AP1"000.00B" or both at the di3cretion of the court.
2(he cooperative or an! of it3 9e9ber3 can file a ca3e a<ain3t an! officer or e9plo!ee of the
%ureau of 'nternal Revenue or of an! other <overn9ent a<enc! 7ith the )9bud39an" Civil
/ervice Co99i33ion" other appropriate <overn9ent a<enc! or the court3 of la7.
2'n ca3e of violation of an! provi3ion of thi3 Code" the individual or individual3" and in the ca3e of
or<ani>ation3 or <overn9ent a<encie3" it3 officer3" and director3 3hall" upon conviction b! a
Court" each 3uffer a penalt! of not le33 than t7o A2B !ear3 but not 9ore than five A5B !ear3
i9pri3on9ent or a fine in the a9ount of not le33 than (7ent! thou3and pe3o3 AP20"000.00B" or
both at the di3cretion of the court. 'n the ca3e of a public official or e9plo!ee" the offender 3hall
upon conviction" 3uffer the acce33or! penalt! of te9porar! ab3olute di3?ualification. A(-C+a
2AR(. 151. Printin< and +i3tribution. ; A1B (he National Printin< )ffice 3hall publi3h thi3
Code in the )fficial ,a>ette in full 7ithin 3i@t! A60B da!3 fro9 the date of approval thereof.
Copie3 of thi3 Code 3hall be <iven to ever! depart9ent" a<enc! and in3tru9entalit! of the
National ,overn9ent" includin< re<ional" provincial office3 and local <overn9ent3 includin<
<overn9ent-o7ned and controlled corporation3.
2A2B All dul! re<i3tered cooperative3 and their federation3" union3 and a33ociation3" and
cooperative corporation3 3hall be <iven one A1B cop! each at co3t. (hereafter" ever! ne7l!
re<i3tered cooperative 3hall be i33ued at co3t a cop! of thi3 Code and the re<ulation3
pro9ul<ated thereon to<ether 7ith it3 certificate of re<i3tration.
2AR(. 152. 'nterpretation and Con3truction. ; 'n ca3e of doubt a3 to the 9eanin< of an!
provi3ion of thi3 Code or the re<ulation3 i33ued in pur3uance thereof" the 3a9e 3hall be
re3olved liberall! in favor of the cooperative3 and their 9e9ber3.
2AR(. 154. Repealin< Clau3e. ; #@cept a3 e@pre33l! provided b! thi3 Code" Pre3idential
+ecree No. 175 and all other la73" or part3 thereof" incon3i3tent 7ith an! provi3ion of thi3 Code
3hall be dee9ed repealed: Provided" (hat the provi3ion3 of /ection3 4" 5" and 7 of Pre3idential
+ecree No. 1655" #@ecutive )rder No. 624" 3erie3 of 2007" Revenue Re<ulation No. 20-2001"
and all la73" decree3" e@ecutive order3" i9ple9entin< rule3 and re<ulation3" %'R circular3"
9e9orandu9 order3" letter3 of in3truction" local <overn9ent ordinance3" or part3 thereof
incon3i3tent 7ith an! of the provi3ion3 of thi3 Act are hereb! repealed" a9ended or 9odified
accordin<l!. #/'caC
2AR(. 155. (ran3itor! Provi3ion3. ; A1B All cooperative3 re<i3tered and confir9ed 7ith the
Authorit! under Republic Act No. 6948 and Republic Act No. 6949" are hereb! dee9ed
re<i3tered under thi3 Code" and a ne7 certificate of re<i3tration 3hall be i33ued b! the Authorit!:
Provided" (hat 3uch cooperative3 3hall 3ub9it to the neare3t office of the Authorit! a cop! of
their certificate of re<i3tration or certificate of confir9ation" the article3 of cooperation" their
b!la73" and their late3t audited financial 3tate9ent3 7ithin one A1B !ear fro9 the effectivit! of
thi3 Code" other7i3e the! 3hall be dee9ed cancelled 9otu proprio.
2A2B ollo7in< the i33uance of the ne7 certificate of re<i3tration" the re<i3tered cooperative3
3hall 3ecure their certificate of ta@ e@e9ption fro9 the neare3t office of the %ureau of 'nternal
Revenue A%'RB: Provided" (hat 3uch e@e9ption3 3hall be valid for a period of five A5B !ear3 fro9
the date of i33ue: Provided" further" (hat all unpaid a33e339ent3 of previou3l! re<i3tered
cooperative3 3hall be the 3ub=ect of co9pro9i3e 3ettle9ent on ter93 favorable to 3uch
cooperative3C and: Provided" finall!" (hat the %'R and the Authorit! 3hall =ointl! i33ue the
nece33ar! re<ulation3 on thi3 e@e9ption and co9pro9i3e 7ithin ninet! A90B da!3 fro9 the
effectivit! of thi3 Code.
2A4B Re<i3tration of electric cooperative3 7ith the Authorit! 3hall not be con3idered a3 a
tran3fer of o7ner3hip of it3 a33et3 and liabilitie3 nor 3hall it con3titute a chan<e in the nature"
3tructure" and 3tatu3 of the cooperative. /aid re<i3tration 3hall not re3ult in the revocation of the
condoned loan3 under Republic Act No. 9146" other7i3e 8no7n a3 the #lectric Po7er 'ndu3tr!
Refor9 Act: Provided" (hat electric cooperative3 7ith e@i3tin< loan3 3hall not be 3ub=ect to the
control and 3upervi3ion of it3 creditor3 and 3hall onl! be li9ited to the fulfill9ent of it3 civil
obli<ation3.
2AR(. 155. /eparabilit! Clau3e. ; /hould an! part of thi3 Code be declared
uncon3titutional" the validit! of the re9ainin< provi3ion3 hereof 3hall re9ain in full force and
effect.
2AR(. 156. #ffectivit! Clau3e. ; (hi3 Code 3hall ta8e effect fifteen A15B da!3 fro9 it3
publication in a ne73paper of <eneral circulation.2 '(+-cA
Approved: ebruar! 17" 2009
Publi3hed in the )fficial ,a>ette" .ol. 105" No. 12" p. 1648 on *arch 24" 2009.
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