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RepublicofthePhilippines
CongressofthePhilippines
MetroManila

FourteenthCongress
SecondRegularSession

BegunandheldinMetroManila,onMonday,thetwentyeighthdayofJuly,twothousandeight.

RepublicActNo.9520February17,2009

ANACTAMENDINGTHECOOPERATIVECODEOFTHEPHILIPPINESTOBEKNOWNASTHE"PHILIPPINE
COOPERATIVECODEOF2008"

BeitenactedbytheSenateandHouseofRepresentativesofthePhilippinesinCongressassembled::

SECTION1.Articles1,2,3,4and5ofChapter1onGeneralConceptsandPrinciplesofRepublicActNo.6938,
otherwiseknownasthe"CooperativeCodeofthePhilippines,"areherebyamendedtoreadasfollows:

CHAPTERI
GENERALCONCEPTSANDPRINCIPLES

"ARTICLE1.Title.ThisActshallbeknownasthe"PhilippineCooperativeCodeof2008".

"ART. 2. Declaration of Policy. It is the declared policy of the State to foster the creation and growth of
cooperatives as a practical vehicle for promoting selfreliance and harnessing people power towards the
attainment of economic development and social justice. The State shall encourage the private sector to
undertake the actual formation and organization of cooperatives and shall create an atmosphere that is
conducivetothegrowthanddevelopmentofthesecooperatives.

"Toward this end, the Government and all its branches, subdivisions, instrumentalities and agencies shall
ensure the provision of technical guidance, financial assistance and other services to enable said
cooperatives to develop into viable and responsive economic enterprises and thereby bring about a strong
cooperative movement that is free from any conditions that might infringe upon the autonomy or
organizationalintegrityofcooperatives.

"Further,theStaterecognizestheprincipleofsubsidiarityunderwhichthecooperativesectorwillinitiateand
regulate within its own ranks the promotion and organization, training and reserach, audit and support
servicesrelativetocooperativeswithgovernmentassistancewherenecessary.

"ART. 3. GeneralConcepts. A cooperative is an autonomous and duly registered association of persons,

withacommonbondofinterest,whohavevoluntarilyjoinedtogethertoachievetheirsocial,economic,and
cultural needs and aspirations by making equitable contributions to the capital required, patronizing their
productsandservicesandacceptingafairshareoftherisksandbenefitsoftheundertakinginaccordance
withuniversallyacceptedcooperativeprinciples.

"ART. 4. Cooperative Principles. Every cooperative shall conduct its affairs in accordance with Filipino
culture,goodvaluesandexperienceandtheuniversallyacceptedprinciplesofcooperationwhichinclude,but
arenotlimitedto,thefollowing:

"(1)VoluntaryandOpenMembershipCooperativesarevoluntaryorganizations,opentoallpersons
able to use their services and willing to accept the responsibilities of membership, without gender,
social,racial,cultural,politicalorreligiousdiscrimination.

"(2)Democrative Member Control Cooperatives are democratic organizations that are controlled by
theirmemberswhoactivelyparticipateinsettingtheirpoliciesandmakingdecisions.Menandwomen
servingaselectedrepresentatives,directorsorofficersareaccountabletothemembership.Inprimary
cooperatives,membershaveequalvotingrightsofonemember,onevote.Cooperativesatotherlevels
areorganizedinthesamedemocraticmanner.

"(3)MemberEconomicParticipationMemberscontributeequitablyto,anddemocraticallycontrol,the
capital of their cooperatives. At least part of that capital is the common property of the cooperative.
Theyshallreceivelimitedcompensationorlimitedinterest,ifany,oncapitalsubscribedandpaidasa
condition of membership. Members allocate surpluses for any or all of the following purposes:
 developing the cooperative by setting up reserves, part of which should at least be indivisible
benefitting members in proportion to their partonage of the cooperative's bubsiness and, supporting
otheractivitiesapprovedbythemembership.

"(4)AutonomyandIndependenceCooperativesareautonomous,selfhelporganizationscontrolledby
theirmembers.Iftheyenterintoaggreementswithotherorganizations,includinggovernment,orraise
capital from external sources, they shall do so on terms that ensure democratic control of their
membersandmaintaintheircooperativeautonomy.

"(5)Education, Training and Information Cooperatives shall provide education and training for their
members, elected and appointed representatives, managers, and employees, so that they can
contributeeffectivelyandefficientlytothedevelopmentoftheircooperatives.

"(6) Cooperation Among Cooperatives Cooperatives serve their members most effectively and
strengthen the cooperative movement by working together through local, national, regional and
internationalstructures.

(7)ConcernforCommunityCooperativesworkforthesustainabledevelopmentoftheircommunities
throughpoliciesapprovedbytheirmembers.

"ART.5.DefinitionofTerms.Thefollowingtermsshallmean:

"(1)Memberincludesapersoneithernaturalorjuridicalwhoadheringtotheprinciplessetforthinthis
CodeandintheArticlesofCooperative,hasbeenadmittedbythecooperativeasmember

"(2) General Assembly shall mean the full membership of the cooperative duly assembled for the
purpose of exercising all the rights and performing all the obligations pertaining to cooperatives, as
provided by this Code, its articles of cooperation and bylaws: Provided, That for cooperatives with
numerousanddispersedmembership,thegeneralassemblymaybecomposedofdelegateselected
byeachsector,chapterordistrictofthecooperativeinaccordancewiththerulesandregulationsofthe
CooperativeDevelopmentAuthority

"(3) Board of Directors shall mean that body entrusted with the management of the affairs of the
cooperativeunderitsarticlesofcooperationandbylaws

"(4)Committeeshallrefertoanybodyentrustedwithspecificfunctionsandresponsibilitiesunderthe
bylawsorresolutionofthegeneralassemblyortheboardofdirectors

"(5)ArticlesofCooperationmeansthearticlesofcooperationregisteredunderthisCodeandincludes
aregisteredamendmentthereof

"(6) Bylaws means the bylaws registered under this Code and includes any registered amendment
thereof

"(7)Registrationmeanstheoperativeactgrantingjuridicalpersonalitytoaproposedcooperativeandis
evidencedbyacertificateofregistration

"(8)CooperativeDevelopmentAuthorityreferstothegovernmentagencyinchargeoftheregistration
andregulationofcooperativesassuchhereinafterreferredtostheAuthority

"(9)UniversallyAcceptedPrinciplesmeansthatbodyofcooperativeprinciplesadheredtoworldwideby
cooperatives

"(10) Representative Assembly means the full membership of a body of representatives elected by
eachofthesectors,chapterordistrictothecooperativedulyassembledforthepurposeofexercising
suchpowerslawfullydelegateduntothembythegeneralassemblyinaccordancewithitsbylaws

"(11)OfficersoftheCooperativeshallincludethemembersoftheboardofdirectors,membersofthe
different committee created by the general assembly, general manager or chief executive officer,
secretary,treasurerandmembersholdingotherpositionsasmaybeprovidedforintheirbylaws

"(12) Social Audit is a procedure wherein the cooperative assesses its social impact and ethical
performancevisvisitsstatedmission,vision,goalsandcodeofsocialresponsibilityforcooperatives
tobeestablishedbytheAuthorityinconsultationwiththecooperativesector.Itenablesthecooperative
todevelopaprocesswherebyitcanaccountforitssocialperformanceandevaluateitsimpactinthe
communityandbeaccountableforitsdecisionsandactionstoitsregularmembers

"(13)PerformanceAuditshallrefertoanauditontheefficiencyandeffectivenessofthecooperativeas
a whole its management and officers and its various responsibility centers as basis for improving
individualteamoroverallperformanceandforobjectivelyinformingthegeneralmembershiponsuch
performance

"(14) A SingleLine or SinglePurpose Cooperative shall include cooperative undertaking activities

whicharerelatedtoitsmainlineofbusinessorpurpose
 "(15)ServiceCooperativesarethosewhichprovideanytypeofservicetoitsmembers,includingbut
notlimitedto,transport,informationandcommunication,insurance,housing,electric,healthservices,
education,banking,andsavingsandcredit

"(16) Subsidiary Cooperative refers to three or more primary cooperatives, doing the same line of
business, organized at the municipal, provincial, city, special metropolitan political subdivision, or
economiczonescreatedbylaw,registeredwiththeAuthoritytoundertakebusinessactivitiesinsupport
ofitsmembercooperatives."

SEC.2. Articles 6, 7, 9, 10, 11, 12, 13, 14, 16, 17, 18, 20, 21, 23, 24 and 25 of Chapter II on Organization and
RegistrationofthesameCodeareherebyamendedtoreadasfollows:

CHAPTERII
ORGANIZATIONANDREGISTRATION

"ART. 6. Purposes of Cooperatives. A cooperative may be organized and registered for any or all of the
followingpurposes:

"(1)Toencouragethriftandsavingsmobilizationamongthemembers

"(2)Togeneratefundsandextendcredittothemembersforproductiveandprovidentpurposes

"(3)Toencourageamongmemberssystematicproductionandmarketing

"(4)Toprovidegoodsandservicesandotherrequirementstothemembers

"(5)Todevelopexpertiseandskillsamongitsmembers

"(6)Toacquirelandsandprovidehousingbenefitsforthemembers

"(7)Toinsureagainstlossesofthemembers

"(8)Topromoteandadvancetheeconomic,socialandeducationalstatusofthemembers

"(9) To establish, own, lease or operate cooperative banks, cooperative wholesale and retail
complexes,insuranceandagricultural/industrialprocessingenterprises,andpublicmarkets

"(10)Tocoordinateandfacilitatetheactivitiesofcooperatives

"(11)Toadvocateforthecauseofthecooperativemovements

"(12)Toensuretheviabilityofcooperativesthroughtheutilizationofnewtechnologies

"(13)Toencourageandpromoteselfhelporselfemploymentasanengineforeconomicgrowthand
povertyalleviationand

"(14) To undertake any and all other activities for the effective and efficient implementation of the
provisionsofthisCode.

"ART. 7. Objectives and Goals of a Cooperative. The primary objective of every cooperative is to help
improvethequalityoflifeofitsmembers.Towardsthisend,thecooperativeshallaimto:

"(a) Provide goods and services to its members to enable them to attain increased income, savings,
investments,productivity,andpurchasingpower,andpromoteamongthemselvesequitabledistribution
ofnetsurplusthroughmaximumutilizationofeconomiesofscale,costsharingandrisksharing

"(b)Provideoptimumsocialandeconomicbenefitstoitsmembers

"(c)Teachthemefficientwaysofdoingthingsinacooperativemanner

"(d)Propagatecooperativepracticesandnewideasinbusinessandmanagement

"(e)Allowthelowerincomeandlessprivilegedgroupstoincreasetheirownershipinthewealthofthe
nationand

"(f)Cooperatewiththegovernment,othercooperativesandpeopleorientedorganizationstofurtherthe
attainmentofanyoftheforegoingobjectives.

"ART.8.CooperativesNotinRestraintofTrade.Nocooperativeormethodoractthereofwhichcomplies
withthisCodeshallbedeemedaconspiracyorcombinationinrestraintoftradeoranillegalmonopoly,oran
attempttolessencompetitionorfixpricesarbitrarilyinviolationofanylawsofthePhilippines.

"ART. 9. Cooperative Powers and Capacities. A cooperative registered under this Code shall have the
followingpowers,rightsandcapacities:

"(1)Totheexclusiveuseofitsregisteredname,tosueandbesued
 "(2)Ofsuccession

"(3)ToamenditsarticlesofcooperationinaccordancewiththeprovisionsofthisCode

"(4)Toadoptbylawsnotcontrarytolaw,moralsorpublicpolicy,andtoamendandrepealthesamein
accordancewiththisCode

"(5)Topurchase,receive,takeorgrant,hold,convey,sell,lease,pledge,mortgage,andotherwisedeal
with such real and personal property as the transaction of the lawful affairs of the cooperative may
reasonablyandnecessarilyrequire,subjecttothelimitationsprescribedbylawandtheConstitution

"(6)Toenterintodivision,mergerorconsolidation,asprovidedinthisCode

"(7)Toformsubsidiarycooperativesandjoinfederationsorunions,asprovidedinthisCode

"(8)Toavailofloans,beentitledtocreditandtoacceptandreceivegrants,donationsandassistance
fromforeignanddomesticsources,subjecttotheconditionsofsaidloans,credits,grants,donationsor
assistance that will not undermine the autonomy of the cooperative. The Authority, upon written
request, shall provide necessary assistance in the documentary requirements for the loans, credit,
grants,donationsandotherfinancialsupport

"(9) To avail of preferential rights granted to cooperatives under Republic Act No. 7160, otherwise
knownastheLocalGovernmentCode,andotherlaws,particularlythoseinthegrantoffranchisesto
establish, construct, operate and maintain ferries, wharves, markets or slaughterhouses and to lease
public utilities, including access to extension and onsite research services and facilities related to
agricultureandfisheryactivities

"(10)ToorganizeandoperateschoolsinaccordancewithRepublicActNo.9155,GovernanceofBasic
EducationActof2001andotherpertinentlawsand

"(11) To exercise such other powers granted by this Code or necessary to carry out its purpose or
purposesasstatedinitsArticlesofcooperation.

"ART.10.OrganizingaPrimaryCooperative.Fifteen(15)ormorenaturalpersonswhoareFilipinocitizens,
oflegalage,havingacommonbondofinterestandareactuallyresidingorworkingintheintendedareaof
operation,mayorganizeaprimarycooperativeunderthisCode:Provided,Thataprospectivememberofa
primarycooperativemusthavecompletedaPreMembershipEducationSeminar(PMES).

"Any newly organized primary cooperative may be registered as multipurpose cooperative only after
compliancewiththeminimumrequirementsformultipurposecooperativestobesetbytheAuthority.Asingle
purposecooperativemaytransformintoamultipurposeormaycreatesubsidiariesonlyafteratleasttwo(2)
yearsofoperations.

"ART. 11. Economic Survey. Every group of individuals or cooperatives intending to form a cooperative
underthisCodeshallsubmittotheAuthorityageneralstatementdescribing,amongothersthestructureand
purposes of the proposed cooperative: Provided, That the structure and actual staffing pattern of the
cooperativeshallincludeabookkeeperProvided,further,Thattheyshallnotbeallowedtooperatewithout
thenecessarypersonnelandshallalsosubmitaneconomicsurvey,indicatingthereintheareaofoperation,
thesizeofmembership,andotherpertinentdatainaformatprovidedbytheAuthority.

"ART.12.Liability.AcooperativedulyregisteredunderthisCodeshallhavelimitedliability.

"ART. 13. Term. A cooperative shall exist for a period not exceeding fifty (50) years from the date of
registration unless sooner dissolve or unless said period is extended. The cooperative term, as originally
statedinthearticlesofcooperation,maybeextendedforperiodsnotexceedingfifty(50)yearsinanysingle
instance by an amendment of the articles of cooperation, in accordance with this Code: Provided, That no
extensioncanbemadeearlierthanfive(5)yearspriortotheoriginalorsubsequentexpirydate/datesunless
therearejustifiablereasonsforanearlierextensionasmaybedeterminedbytheAuthority.

"ART.14.ArticlesofCooperation. (1) All cooperatives applying for registration shall file with the Authority
the articles of cooperation which shall be signed by each of the organizers and acknowledged by them if
naturalpersons,andbythechairpersonsorsecretaries,ifjuridicalpersons,beforeanotarypublic.

"(2)Thearticlesofcooperationshallsetforth:

"(a)Thenameofthecooperativewhichshallincludethewordcooperative

"(b)Thepurposeorpurposesandscopeofbusinessforwhichthecooperativeistoberegistered

"(c)Thetermofexistenceofthecooperative

"(d)Theareaofoperationandthepostaladdressesofitsprincipaloffice

"(e)Thenames,nationality,andthepostaladdressesoftheregistrants
 "(f)Thecommonbondofmembership

"(g)Thelistofnamesofthedirectorswhoshallmanagethecooperativeand

"(h)Theamountofitssharecapital,thenamesandresidencesofitscontributorsandastatementof
whetherthecooperativeisprimary,secondaryortertiaryinaccordancewithArticle23hereof.

"(3)ThearticlesofcooperationmayalsocontainanyotherprovisionsnotinconsistentwiththisCodeorany
relatedlaw.

"(4)Four(4)copieseachoftheproposedarticlesofcooperation,bylaws,andthegeneralstatementrequired
underArticle11ofthisCodeshallbesubmittedtotheAuthority.

"(5)Nocooperative,otherthanacooperativeunionasdescribedunderArticle25hereof,shallberegistered
unless the articles of cooperation is accompanied with the bonds of the accountable officers and a sworn
statementsofthetreasurerelectedbythesubscribersshowingthatatleasttwentyfivepercentum(25%)of
the authorized share capital has been subscribed and at least twentyfive per centum (25%) of the total
subscription has been paid: Provided, That in no case shall the paidup share capital be less than Fifteen
thousandpesos(P15,000.00).

"TheAuthorityshallperiodicallyassesstherequiredpaidupsharecapitalandmayincreaseiteveryfive(5)
years when necessary upon consultation with the cooperative sector and the National Economic and
DevelopmentAuthority(NEDA).

"ART.15.Bylaws.(1)EachcooperativetoberegisteredunderthisCodeshalladoptbylawsnotinconsistent
withtheprovisionsofthisCode.Thebylawsshallbefiledatthesametimeasthearticlesofcooperation.

"(2)Thebylawsofeachcooperativeshallprovide:

"(a) The qualifications for admission to membership and the payment to be made or interest to be
acquiredasaconditionsfortheexerciseoftherightofmembership

"(b)Therightsandliabilitiesofmembership

"(c)Thecircumstancesunderwhichmembershipisacquired,maintainedandlost

"(d)Theproceduretobefollowedincasesofterminationofmembership

"(e)Theconditionsunderwhichthetransferofashareorinterestofthemembersshallbepermitted

"(f)Therulesandproceduresontheagenda,time,placeandmannerofcalling,convening,conducting
meetings, quorum requirements, voting systems, and other matters relative to the business affairs of
thegeneralassembly,boardofdirectors,andcommittees

"(g) The general conduct of the affairs of the cooperative, including the powers and duties of the
general assembly, the board of directors, committees and the officers, and their qualifications and
disqualifications

"(h)Themannerinwhichthecapital,mayberaisedandthepurposesforwhichitcanbeutilized

"(i)Themodeofcustodyandofinvestmentofnetsurplus

"(j)Theaccountingandauditingsystems

"(k)Themannerofloaningandborrowingincludingthelimitationsthereof

"(l)Themethodofdistributionofnetsurplus

"(m)Themannerofadopting,amending,repealing,andabrogatingbylaws

"(n)Aconciliationormediationmechanismfortheamicablesettlementofdisputesamongmembers,
directors,officersandcommitteemembersofthecooperativeand

"(o)Othermattersincidenttothepurposesandactivitiesofthecooperative.

"ART.16.Registration.AcooperativeformedandorganizedunderthisCodeacquiresjuridicalpersonality
from the date the Authority issues a certificate of registration under its official seal. All applications for
registration shall be finally disposed of by the Authority within a period of sixty (60) days from the filing
thereof, otherwise the application is deemed approved, unless the cause of the delay is attributable to the
applicant:Provided, That in case of a denial of the application for registration, an appeal shall lie with the
Office of the President within ninety (90) days from receipt of notice of such denial: Provided,further, That
failureoftheOfficeofthePresidenttoactontheappealwithinninety(90)daysfromthefilingthereofshall
meanapprovalofsaidapplication.
"ART.17.CertificateofRegistration.AcertificateofregistrationissuedbytheAuthorityunderitsofficialseal
shallbeconclusiveevidencethatthecooperativethereinmentionedisdulyregisteredunlessitisprovedthat
theregistrationthereofhasbeencancelled.

"ART.18.AmendmentofArticlesofCooperationandBylaws.UnlessotherwiseprescribedbythisCodeand
for legitimate purposes, any provision or matter stated in the articles of cooperation and by laws may be
amended by twothirds (2/3) vote of all the members with voting rights, without prejudice to the right of the
dissentingmemberstoexercisetheirrighttowithdrawtheirmembershipunderArticle30.

Boththeoriginalandamendedarticlesand/orbylawsshallcontainallprovisionsrequiredbylawtobesetout
in the articles of cooperation and by laws. Amendments shall be indicated by underscoring or otherwise
appropriatelyindicatingthechangeorchangesmadeandacopyoftheamendedarticlesoramendedbylaws
dulycertifiedunderoathbythecooperativesecretaryandamajorityofthedirectorsstatingthefactthatsaid
amendment or amendments to the articles of cooperation and/or bylaws have been duly approved by the
requiredvoteofthemembers.Allamendmentstothearticleofcooperationand/orbylawsshallbesubmitted
totheAuthority.Theamendmentsshalltakeeffectuponitsapprovalbytheauthorityorwithinthirty(30)days
fromthedateoffilingthereofifnotacteduponbytheAuthorityforacausenotattributabletothecooperative.

"ART. 19. Contracts Executed Prior to Registration and Effects Thereof. Contracts executed between
private persons and cooperatives prior to the registration of the cooperative shall remain valid and binding
betweenthepartiesanduponregistrationofthecooperative.Aformalwrittencontractshallbeadoptedand
madeinthecooperativesnameoronitsbehalfpriortoitsregistration.

"ART.20.DivisionofCooperatives.Anyregisteredcooperativemay,byaresolutionapprovedbyavoteof
threefourths(3/4)ofallthememberswithvotingrights,presentandconstitutingaquorum,resolvetodivide
itself into the two (2) or more cooperatives. The procedure for such division shall be prescribed in the
regulations of the Authority: Provided, That all the requirements set forth in this Code have been complied
withbythenewcooperatives:Provided,further,Thatnodivisionofacooperativeinfraudofcreditorsshallbe
valid.

"ART.21.MergerandConsolidationofCooperatives.(1)Two(2)ormorecooperativesmaymergeintoa
singlecooperativewhichshalleitherbeoneoftheconstituentcooperativesortheconsolidatedcooperative.

"(2) No merger or consolidation shall be valid unless approved by a threefourths (3/4) vote of all the
members with voting rights, present and constituting a quorum of each of the constituent cooperatives at
separategeneralassemblymeetings.Thedissentingmembersshallhavetherighttoexercisetheirrightto
withdrawtheirmembershippursuanttoArticle30.

"(3) The Authority shall issue the guidelines governing the procedure of merger or consolidation of
cooperatives. In any case, the merger or consolidation of cooperatives. In any case, the merger or
consolidationshallbeeffectiveupontheissuanceofthecertificateofmergerorconsolidationbytheAuthority.

"ART.22.EffectsofMergerandConsolidation.Themergerorconsolidationofcooperativesshallhavethe
followingeffects:

"(1)Theconstituentcooperativesshallbecomeasinglecooperativewhich,incaseofmerger,shallbe
thesurvivingcooperative,and,incaseofconsolidation,shallbetheconsolidatedcooperative

"(2)Theseparateexistenceoftheconstituentcooperativesshallcease,exceptthatofthesurvivingor
theconsolidatedcooperative

"(3) The surviving or the consolidated cooperative shall possess al the assets, rights, privileges,
immunitiesandfranchisesofeachoftheconstituentcooperatives

"(4) The surviving or the consolidated cooperative shall possess all the assets, rights, privileges,
immunitiesandfranchisesofeachoftheconstituentcooperativesand

"(5) The surviving or the consolidated cooperative shall be responsible for all the liabilities and
obligation of each of the constituent cooperatives in the same manner as if such surviving or
consolidated cooperative had itself incurred such liabilities or obligations. Any claim, action or
proceedingpendingbyoragainstanysuchconstituentcooperativesmaybeprosecutedbyoragainst
thesurvivingorconsolidatedcooperative,asthecasemaybe.Neithertherightsofcreditorsnorany
lien upon the property of any such constituent cooperatives shall be impaired by such merger or
consolidation.

"ART.23.TypeandCategoriesofCooperatives.(1)TypesofCooperativesCooperativesmayfallunder
anyofthefollowingtypes:

"(a)CreditCooperativeisonethatpromotesandundertakessavingsandlendingservicesamongits
members.Itgeneratesacommonpooloffundsinordertoprovidefinancialassistancetoitsmembers
forproductiveandprovidentpurposes

"(b) Consumers Cooperative is one of the primary purpose of which is to procure and distribute
commoditiestomembersandnonmembers
 "(c)ProducersCooperativeisonethatundertakesjointproductionwhetheragriculturalorindustrial.It
isformedandoperatedbyitsmemberstoundertaketheproductionandprocessingofrawmaterialsor
goodsproducedbyitsmembersintofinishedorprocessedproductsforsalebythecooperativetoits
membersandnonmembers.Anyendproductoritsderivativearisingfromtherawmaterialsproduced
byitsmembers,soldinthenameandfortheaccountofthecooperative,shallbedeemedaproductof
thecooperativeanditsmembers

"(d)MarketingCooperative is one which engages in the supply of production inputs to members and
marketstheirproducts

"(e) Service Cooperative is one which engages in medical and dental care, hospitalization,
transportation, insurance, housing, labor, electric light and power, communication, professional and
otherservices

"(f)MultipurposeCooperativeisonewhichcombinestwo(2)ormoreofthebusinessactivitiesofthese
differenttypesofcooperatives

"(g) Advocacy Cooperative is a primary cooperative which promotes and advocates cooperativism
amongitsmembersandthepublicthroughsociallyorientedprojects,educationandtraining,research
andcommunication,andothersimilaractivitiestoreachouttoitsintendedbeneficiaries

"(h)AgrarianReformCooperativeisoneorganizedbymarginalfarmersmajorityofwhichareagrarian
reform beneficiaries for the purpose of developing an appropriate system of land tenure, land
development,landconsolidationorlandmanagementinareascoveredbyagrarianreform

"(i)CooperativeBankisoneorganizedfortheprimarypurposeofprovidingawiderangeoffinancial
servicestocooperativesandtheirmembers

"(j)DairyCooperativeisonewhosemembersareengagedintheproductionoffreshmilkwhichmaybe
processedand/ormarketedasdairyproducts

"(k)EducationCooperativeisoneorganizedfortheprimarypurposeofowningandoperatinglicensed
educational institutions notwithstanding the provisions of Republic Act No. 9155, otherwise known as
theGovernanceofBasicEducationActof2001

"(l)ElectricCooperativeisoneorganizedfortheprimarypurposedofundertakingpowergenerations,
utilizing renewable energy sources, including hybrid systems, acquisition and operation of
subtransmissionordistributiontoitshouseholdmembers

"(m)Financial Service Cooperative is one organized for the primary purpose of engaging in savings
andcreditservicesandotherfinancialservices

"(n)FishermenCooperative is one organized by marginalized fishermen in localities whose products

aremarketedeitherasfreshorprocessedproducts

"(o)HealthServicesCooperativeisoneorganizedfortheprimarypurposeofprovidingmedical,dental
andotherhealthservices

"(p)HousingCooperativeisoneorganizedtoassistorprovideaccesstohousingforthebenefitofits
regular members who actively participate in the savings program for housing. It is coowned and
controlledbyitsmembers

"(q)InsuranceCooperativeisoneengagedinthebusinessofinsuringlifeandpovertyofcooperatives
andtheirmembers

"(r)TransportCooperativeisonewhichincludeslandandseatransportation,limitedtosmallvessels,
as defined or classified under the Philippine maritime laws, organized under the provisions of this
Code

"(s)WaterServiceCooperativeisoneorganizedtoown,operateandmanagewaterssystemsforthe
provisionanddistributionofpotablewaterforitsmembersandtheirhouseholds

"(t)WorkersCooperative is one organized by workers, including the selfemployed, who are at same
time the members and owners of the enterprise. Its principal purpose is to provide employment and
businessopportunitiestoitsmembersandmanageitinaccordancewithcooperativeprinciplesand

"(u)OthertypesofcooperativeasmaybedeterminedbytheAuthority.

"(2)CategoriesofCooperative Cooperatives shall be categorized according to membership and territorial

considerationsasfollows:

"(a)Intermsofmembership,cooperativeshallbecategorizedinto:

"(i)PrimaryThemembersofwhicharenaturalpersons
 "(ii)SecondaryThemembersofwhichareprimariesand

"(iii)TertiaryThemembersofwhicharesecondarycooperativesand

"(b)Intermsofterritory,cooperativesshallbecategorizedaccordingtoareasofoperationswhichmay
ormaynotcoincidewiththepoliticalsubdivisionsofthecountry.

"ART. 24. Functions of a Federation of Cooperatives. A federation of cooperatives shall undertake the
followingfunctions:

"(a)TocarryonanycooperativeenterpriseauthorizedunderArticle6thatcomplementsaugments,or
supplementsbutdoesnotconflict,completewith,norsupplantthebusinessoreconomicactivitiesofits
members

"(b) To carry on, encourage, and assist educational and advisory work relating to its member
cooperatives

"(c)Torenderservicesdesignedtoencouragesimplicity,efficiency,andeconomyintheconductofthe
business of its member cooperatives and to facilitate the implementation of their bookkeeping,
accounting,andothersystemsandprocedures

"(d) To print, publish, and circulate any newspaper or other publication in the interest of its member
cooperativesandenterprises

"(e)Tocoordinateandfacilitatetheactivitiesofitsmembercooperatives

"(f) To enter into joint ventures with national or international cooperatives of other countries in the
manufactureandsaleofproductsand/orservicesinthePhilippinesandabroadand

"(g)Toperformsuchotherfunctionsasmaybenecessarytoattainitsobjectives.

"A federation of cooperatives may be registered by carrying out the formalities for registration of a
cooperative.

"Registeredcooperativesmayorganizeafederationaccordingtothetypeofbusinessactivityengagedinby
thecooperatives.

"ART. 25. Cooperative Unions. Registered cooperatives and federations at the appropriate levels may
organize or join cooperative unions to represent the interest and welfare of all types of cooperatives at the
provincial,city,regional,andnationallevels.Cooperativeunionsmayhavethefollowingpurposes:

"(a)Torepresentitsmemberorganizations

"(b) To acquire, analyze, and disseminate, economic, statistical, and other information relating to its
membersandtoalltypesofcooperativeswithinitsareaofoperation

"(c)Tosponsorstudiesintheeconomic,legal,financial,socialandotherphasesofcooperation,and
publishtheresultsthereof

"(d)Topromotetheknowledgeofcooperativeprinciplesandpractices

"(e)Todevelopthecooperativemovementintheirrespectivejurisdictions

"(f)Toadvisetheappropriateauthoritiesonallquestionsrelatingtocooperatives

"(g) To raise funds through membership fees, dues and contributions, donations, and subsidies from
localandforeignsourceswhetherprivateorgovernmentand

"(h)Todoandperformsuchothernonbusinessactivitiesasmaybenecessarytoattaintheforegoing
objectives.

"Cooperative unions may assist the national and local governments in the latters development
activitiesintheirrespectivejurisdictions."

SEC. 3. Articles 26, 27, 28, 29, 30, 31 and 32 of Chapter III on Membership of the same Code are hereby
renumberedandamendedtoread,asfollows:

CHAPTERIII
MEMBERSHIP

"ART. 26. Kinds of Membership. A cooperative may have two (2) kinds of members, to wit: (1) regular
membersand(2)associatemembers.

"A regular member is one who has complied with all the membership requirements and entitled to all the
rightsandprivilegesofmembership.Anassociatememberisonewhohasnorighttovotenorbevotedupon
and shall be entitled only to such rights and privileges as the bylaws may provide: Provided, That an
associate who meets the minimum requirements of regular membership, continues to patronize the
cooperativefortwo(2)years,andsignifieshis/herintentiontoremainamembershallbeconsideredaregular
member.

"Acooperativeorganizedbyminorsshallbeconsideredalaboratorycooperativeandmustbeaffiliatedwitha
registeredcooperative.Alaboratorycooperativeshallbegovernedbyspecialguidelinestobepromulgated
bytheAuthority.

"ART. 27. Government Officers and Employees. (1) Any officer or employee of the Authority shall be
disqualified to be elected or appointed to any position in a cooperative: Provided, That the disqualification
doesnotextendtoacooperativeorganizedbytheofficersoremployeesoftheAuthority.

"(2)AllelectiveofficialsoftheGovernmentshallbeineligibletobecomeofficersanddirectorsofcooperatives:
Provided, That the disqualification does not extend to a party list representative being an officer of a
cooperativeheorsherepresentsand

"(3)Anygovernmentemployeeorofficialmay,inthedischargeofisdutiesasamemberinthecooperative,
beallowedbytheendofofficeconcernedtouseofficialtimeforattendanceatthegeneralassembly,board
andcommitteemeetingsofcooperativesaswellascooperativeseminars,conferences,workshops,technical
meetings,andtrainingcourseslocallyorabroad:Provided,That the operationsofthe officeconcernedare
notadverselyaffected.

"ART. 28. Application. An applicant for membership shall be deemed a member after approval of his
membership by the board of directors and shall exercise the rights of member after having made such
payments to the cooperative in respect to membership or acquired interest in the cooperative as may be
prescribedinthebylaws.Incasemembershipisrefusedordeniedbytheboardofdirectors,anappealmay
be made to the general assembly and the latters decision shall be final. For this purpose, the general
assembly may opt to create an appeal and grievance committee, the members of which shall serve for a
period of one (1) year and shall decide appeals on membership application within thirty (30) days upon
receiptthereof.Ifthecommitteefailstodecidewithintheprescribedperiod,theappealisdeemedapproved
infavoroftheapplicant.

"ART.29.LiabilityofMembers.Amembershallbeliableforthedebtsofthecooperativetotheextentofhis
contributiontothesharecapitalofthecooperative.

"ART.30.TerminationofMembership.(1)Amemberofacooperativemay,foranyvalidreason,withdraw
hismembershipfromthecooperativebygivingasixty(60)daynoticetotheboardofdirectors.Subjecttothe
bylaws of the cooperative, the withdrawing member shall be entitled to a refund of his share capital
contribution and all other interests in the cooperative: Provided, That such fund shall not be made if upon
suchpaymentthevalueoftheassetsofthecooperativewouldbelessthantheaggregateamountofitsdebts
andliabilitiesexclusiveofhissharecapitalcontribution.

"(2) The death or insanity of a member in a primary cooperative, and the insolvency or dissolution of a
member in a secondary or tertiary cooperative may be considered valid grounds for termination of
membership: Provided, That in case of death or insanity of an agrarian reform beneficiarymember of a
cooperative,thenextofkinmayassumethedutiesandresponsibilitiesoftheoriginalmember

"(3) Membership in the cooperative may be terminated by a vote of the majority of all the members of the
boardofdirectorsforanyofthefollowingcauses:

"(a) When a member has not patronized any of the services of the cooperative for an unreasonable
periodoftimeasmaybepreviouslydeterminedbytheboardofdirectors

"(b)Whenamemberhascontinuouslyfailedtocomplywithhisobligations

"(c)Whenamemberhasactedinviolationofthebylawsandtherulesofthecooperativeand

"(d)Foranyactoromissioninjuriousorprejudicialtotheinterestorthewelfareofthecooperative.

"A member whose membership the board of directors may wish to terminate shall be informed of such
intended action in writing and shall be given an opportunity to be heard before the said board makes its
decision.Thedecisionoftheboardshallbeinwritingandshallbecommunicatedinpersonorbyregistered
mail to said member and shall be appealable within thirty (30) days from receipt thereof to the general
assembly whose decision shall be final. The general assembly may create an appeal and grievance
committeewhosemembersshallserveforaperiodofone(1)yearandshalldecideappealsonmembership
termination.Thecommitteeisgiventhirty(30)daysfromreceiptthereoftodecideontheappeal.Failureto
decide within the prescribed period, the appeal is deemed approved in favor of the member. Pending a
decisionbythegeneralassembly,themembershipremainsinforce.

"ART. 31. Refund of Interests. All sums computed in accordance with the bylaws to be due from a
cooperativetoaformermembershallbepaidtohimeitherbythecooperativeorbytheapprovedtransferee,
asthecasemaybe,inaccordancewiththisCode."
SEC. 4. Articles 33, 34, 35, 36, 37, 38, 39, 40, 42, 42, 43, 44, 45, 46, 47, 48, 49, 50 and 51 of Chapter IV on
AdministrationofthesameCodeareherebyrenumberedandamendedtoread,asfollows:

CHAPTERIV
ADMINISTRATION

"ART. 32. Composition of the General Assembly. The general assembly shall be composed of such
memberswhoareentitledtovoteunderthearticlesofcooperationandbylawsofthecooperative.

"ART. 32. Powers of the General Assembly. The general assembly shall be composed of such members
whoareentitledtovoteunderthearticlesofcooperationandbylawsofthecooperative.

"ART.33.PowersoftheGeneralAssembly.Thegeneralassemblyshallbethehighestpolicymakingbody
ofthecooperativeandshallexercisesuchpowersasarestatedinthisCode,inthearticlesofcooperation
andinthebylawsofthecooperative.Thegeneralassemblyshallhavethefollowingexclusivepowerswhich
cannotbedelegate:

"(1)Todetermineandapproveamendmentstothearticlesofcooperationandbylaws

"(2)Toelectorappointthemembersoftheboardofdirectors,andtoremovethemforcause.However,
in the case of the electric cooperatives registered under this Code, election of the members of the
boardshallbeheldinaccordancewithitsbylawsorelectionguidelineofsuchelectriccooperativeand

"(3)Toapprovedevelopmentalplansofthecooperative.

"Subject to such other provisions of this Code and only for purposes of prompt and intelligent decision
making,thegeneralassemblymaybeathreefourths(3/4)voteofallitsmemberswithvotingrights,present
andconstitutingaquorum,delegatesomeofitspowerstoasmallerbodyofthecooperative.Thesepowers
shallbeenumeratedunderthebylawsofthecooperative.

"ART.34.Meetings.(1)Aregularmeetingshallbeheldannuallybythegeneralassemblyonadatefixedin
the bylaws, or if not so fixed, on any dated within ninety (90) days after the close of each fiscal year:
Provided,Thatnoticeofregularmeetingsshallbesentinwriting,bypostingorpublication,orthroughother
electronicmeanstoallmembersofrecord.

"(2)Whenevernecessary,aspecialmeetingofthegeneralassemblymaybecalledatanytimebyamajority
voteoftheboardofdirectorsorasprovidedforinthebylaws:Provided,Thatanoticeinwritingshallbesent
one(1)weekpriortothemeetingtoallmemberswhoareentitledtovote.However,aspecialmeetingshall
be called by the board of directors after compliance with the required notice within from at least ten per
centum(10%)ofthetotalmemberswhoreentitledtovotetotransactspecificbusinesscoveredbythecall.

"Iftheboardfailstocallaregularoraspecialmeetingwithinthegivenperiod,theAuthority,uponpetitionof
tenpercentum (10%) of all the members of the cooperative who are entitled to vote, and for good cause
shown, shall issue an order to the petitioners directing them to call a meeting of the general assembly by
givingpropernoticeasrequiredinthisCodeorinthebylaws

"(3) In the case of a newly approved cooperative, a special general assembly shall be called, as far as
practicable,withinninety(90)daysfromsuchapproval

"(4)TheAuthoritymaycallaspecialmeetingofthecooperativeforthepurposeofreportingtothemembers
theresultofanyexaminationorotherinvestigationofthecooperativeaffairsand

"(5)Noticeofanymeetingmaybewaived,expresslyorimpliedly,byanymember.

"ART. 35. Quorum. A quorum shall consist of at least twentyfive per centum (25%) of all the members
entitledtovote.Inthecaseofcooperativebanks,thequorumshallbeasprovidedinArticle99ofthisCode.
InthecaseofelectriccooperativesregisteredunderthisCode,aquorum,unlessotherwiseprovidedinthe
bylaws,shallconsistoffivepercentum(5%)ofallthemembersentitledtovote.

"ART.36.VotingSystem.Eachmemberofaprimarycooperativeshallhaveonlyone(1)vote.Inthecaseof
members of secondary or tertiary cooperatives, they shall have one (1) basic vote and as many incentive
votesasprovidedforinthebylawsbutnotexceedfive(5)votes.Thevotescastbythedelegatesshallbe
deemedasvotescastbythemembersthereof.

"However,thebylawsofacooperativeotherthanaprimarymayprovideforvotingbyproxy.Votingbyproxy
means allowing a delegate of a cooperative to represent or vote in behalf of another delegate of the same
cooperative.

"ART. 37. Composition and Term of the Board of Directors. Unless otherwise provided in the bylaws, the
directionandmanagementoftheaffairsofacooperativeshallbevestedinaboardofdirectorswhichshallbe
composedofnotlessthatfive(5)normorethanfifteen(15)memberselectedbythegeneralassemblyfora
term of two (2) years and shall hold office until their successors are duly elected an qualified, or until duly
removedforcaused.
"ART. 38. Powers of the Board of Directors. The board of directors shall be responsible for the strategic
planning,directionsettingandpolicyformulationactivitiesofthecooperatives.

"ART. 39. Directors. (1) Any member of a cooperative who under the bylaws of the cooperative, has the
righttovoteandwhopossessesallthequalificationsandnoneofthedisqualificationsprovidedinthelawsor
bylawsshallbeeligibleforelectionasdirector.

"(2)Thecooperativemay,byresolutionofitsboardofdirectors,admitasdirectors,orcommitteememberone
appointed by any financing institution from which the cooperative received financial assistance solely to
providetechnicalknowledgenotavailablewithinitsmembership.Suchdirectororcommitteemembernotbe
a member of the cooperative and shall have no powers, rights, nor responsibilities except to provided
technicalassistanceasrequiredbythecooperative.

"(3)Themembersoftheboardofdirectorsshallnotholdanyotherpositiondirectlyinvolvedinthedaytoday
operationandmanagementofthecooperative.

"(4)Anypersonengagedinabusinesssimilartothatofthecooperativeorwhoinanywayhasaconflictof
interestwithit,isdisqualifiedfromelectionasadirectorofsaidcooperative.

"ART.40.MeetingoftheBoardandQuorumRequirement.(1)Inthecaseofprimarycooperatives,regular
meetingsoftheboardofdirectorsshallbeheldatleastonceamonth.

"(2)Specialmeetingsoftheboardofdirectorsmaybeheldatanytimeuponthecallofthechairpersonora
majorityofthemembersoftheboard:Provided,Thatwrittennoticesofthemeetingspecifyingtheagendaof
thespecialmeetingshallbegiventoallmembersoftheboardatleastone(1)weekbeforethesaidmeeting.

"(3)AmajorityofthemembersoftheBoardshallconstituteaquorumortheconductofbusiness,unlessthe
bylawsprovedotherwise.

"(4)Directorscannotattendorvotebyproxyatboardmeetings.

"ART.41.VacancyintheBoardofDirectors.Anyvacancyintheboardofdirectors,otherthanbyexpiration
ofterm,maybefilledbythevoteofatleastamajorityoftheremainingdirectors,ifstillconstitutingaquorum
otherwise,thevacancymustbefilledbythegeneralassemblyinaregularorspecialmeetingcalledforthe
purpose. A director so elected to fill a vacancy shall serve only the unexpired term of his predecessor in
office.

"ART. 42. Officers of the Cooperative. The board of directors shall elect from among themselves the
chairperson and vicechairperson, and elect or appoint other officers of the cooperative from outside of the
boardinaccordancewiththeirbylaws.Allofficersshallserveduringgoodbehaviorandshallnotberemoved
except for cause after due hearing. Loss of confidence shall not be a valid ground for removal unless
evidencedbyactsoromissioncausinglossofconfidenceinthehonestyandintegrityofsuchofficer.Notwo
(2) or more persons with relationships up to the third civil degree of consanguinity or affinity nor shall any
personengagedinabusinesssimilartothatofthecooperativenorwhoinanyothermannerhasinterestsin
conflictwiththecooperativeshallserveasanappointiveofficer.

"ART.43.CommitteesofCooperatives.(1)Thebylawsmaycreateanexecutivecommitteetobeappointed
bytheboardofdirectorswithsuchpowersanddutiesasmaybedelegatedtoitinthebylawsorbyamajority
voteofallthemembersoftheboardofdirectors.

"(2)Thebylawsshallprovideforthecreationofanaudit,election,mediationandconciliation,ethics,andsuch
othercommitteesasmaybenecessaryfortheconductoftheaffairsofthecooperative.Themembersofboth
theauditandelectioncommitteeshallbeelectedbythegeneralassemblyandtherestshallbeappointedby
theboard.Theauditcommitteeshallbedirectlyaccountableandresponsibletothegeneralassembly.Itshall
have the power and duty to continuously monitor the adequacy and effectiveness of the cooperatives
management control system and audit the performance of the cooperative and its various responsibility
centers.

"Unless otherwise provided in the bylaws, the board, in case of a vacancy in the committees, may call an
electiontofillthevacancyorappointapersontofillthesamesubjecttotheprovisionthatthepersonelected
orappointedshallserveonlyfortheunexpiredportionoftheterm.

"ART. 44. Functions, Responsibilities and Training Requirements of Directors, Officers and Committee
Members.thefunctionsandresponsibilitiesofdirectors,officersandcommitteemembers,aswellastheir
trainingrequirements,shallbeinaccordancewiththerulesandregulationsissuedbytheAuthority.

"ART. 45. Liability of Directors, Officers and Committee Members. Directors, officers and committee
members, who are willfully and knowingly vote for or assent to patently unlawful acts or who are guilty of
grossnegligenceorbadfaithindirectingtheaffairsofthecooperativeoracquireanypersonalorpecuniary
interestinconflictwiththeirdutyassuchdirectors,officersorcommitteemembersshallbeliablejointlyand
severallyforalldamagesorprofitsresultingtherefromtothecooperative,members,andotherpersons.

"When a director, officer or committee member attempts to acquire or acquires, in violation of his duty, any
interest or equity adverse to the cooperative in respect to any matter which has been reposed in him in
 confidence, he shall, as a trustee for the cooperative, be liable for damages and shall be accountable for
doubletheprofitswhichotherwisewouldhaveaccruedtothecooperative.

"ART.46.Compensation.(1)Intheabsenceofanyprovisionsinthebylawsfixingtheircompensation,the
directors shall not receive any compensation except for reasonable perdiems:Providedhowever, That the
directors and officers shall not be entitled to any per diem when, in the preceding calendar year, the
cooperativereportedanetlossorhadadividendratelessthantheofficialinflationrateforthesameyear.
Anycompensationotherthanperdiemsmaybegrantedtodirectorsbyamajorityvoteofthememberswith
votingrightsataregularorspecialgeneralassemblymeetingspecificallycalledforthe purpose:Provided,
Thatnoadditionalcompensationotherthanperdiemsshallbepaidduringthefirstyearofexistenceofany
cooperative.

"(2)Thecompensationofofficersofthecooperativeaswellasthemembersofthecommitteeaswellasthe
membersofthecommitteescreatedpursuanttothisCodeoritsbylawsmaybefixedinthebylaws.

"(3)Unlessalreadyfixedinthebylaws,thecompensationofallotheremployeeshallbedeterminedbythe
boardofdirectors.

"ART. 47. Dealings of Directors, Officers, or Committee Members. A contract entered into by the
cooperativewithone(1)ormoreofitsdirectors,officers,andcommitteemembersisvoidable,attheoptionof
thecooperative,unlessallthefollowingconditionsarepresent.

"(1) That the presence of such director in the board meeting wherein contract was approved was not
necessarytoconstituteaquorumforsuchmeeting

"(2)Thatthevoteofsuchdirectorwasnotnecessaryfortheapprovalofthecontract

"(3)Thatthecontractisfairandreasonableunderthecircumstancesand

"(4)Thatinthecaseofanofficerorcommitteemember,thecontractwiththeofficerorcommitteemember
hasbeenpreviouslyauthorizedbythegeneralassemblyorbytheboardofdirectors.

"Whereanyofthefirsttwoconditionssetforthintheprecedingparagraphisabsent,inthecaseofacontract
with a director, such contract may be ratified by a threefourths (3/4) vote of all the members with voting
rights,presentandconstitutingaquoruminameetingcalledforthepurpose:Provided,Thatfulldisclosureof
the adverse interest of the directors involved is made at such meeting, and that the contract is fair and
reasonableunderthecircumstances.

"ART.48.DisloyaltyofaDirector.Adirectorwho,byvirtueofhisoffice,acquiresforhimselfanopportunity
whichshouldbelongtothecooperativeshallbeliablefordamagesandmustaccountfordoubletheprofits
thatotherwisewouldhaveaccruedtothecooperativebyrefundingthesame,unlesshisacthasbeenratified
by a threefourths (3/4) vote of all the members with voting rights, present and constituting a quorum. This
provisionshallbeapplicable,notwithstandingthefactthatthedirectorusedhisownfundsintheventure.

"ART. 49. Illegal Use of Confidential Information. (1) A director or officer, or an associate of a director or
officer,who,forhisbenefitoradvantageorthatofanassociate,makesuseofconfidentialinformationthat,if
generally known, might reasonably be expected to adversely affect the operation and viability of the
cooperative,shallbeheld:

"(a)Liabletocompensatethecooperativeforthedirectlossessufferedbythecooperativeasaresult
oftheillegaluseofinformationand

"(b)Accountabletothecooperativeforanydirectbenefitoradvantagereceivedoryettobereceived
byhimorhisassociate,asaresultofthetransaction.

"(2)Thecooperativeshalltakethenecessarystepstoenforcetheliabilitiesdescribedinsubsection(a)

"ART. 50. Removal. All complaints for the removal of any elected officer shall be filed with the board of
directors.Suchofficershallbegiventheopportunitytobeheard.Majorityoftheboardofdirectorsmayplace
theofficerconcernedunderpreventivesuspensionpendingtheresolutionoftheinvestigation.Uponfindingof
a prima facie evidence of guilt, the board shall present its recommendation for removal to the general
assembly.

"An elective officer may be removed by three fourths (3/4) votes of the regular members present and
constituting a quorum, in a regular or special general assembly meeting called for the purpose. The officer
concernedshallbegivenanopportunitytobeheardatsaidassembly.

SEC. 5. Articles 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62 and 63 of Chapter V on Responsibilities, Rights and
PrivilegesofCooperativesofthesameCodeareherebyrenumberedandamendedtoread,asfollows:

CHAPTERV
RESPONSIBILITIES,RIGHTSANDPRIVILEGESOFCOOPERATIVE

"ART. 51. Address. Every cooperative shall have an official postal address to which all notices and
communicationsshallbesent.SuchaddressandeverychangethereofshallberegisteredwiththeAuthority.
"ART. 52. Books to be Kept Open. (1) Every cooperative shall have the following documents ready and
accessibletoitsmembersandrepresentativesoftheAuthorityforinspectionduringreasonableofficehours
atitsofficialaddress:

"(a)AcopyofthisCodeandallotherlawspertainingtocooperatives

"(b)AcopyoftheregulationsoftheAuthority

"(c)Acopyofthearticlesofcooperationandbylawsofthecooperative

"(d)Aregisterofmembers

"(e) The books of the minutes of the meetings of the general assembly, board of directors and
committee

"(f)Sharebooks,whereapplicable

"(g)Financialstatementand

"(h)Suchotherdocumentsasmaybeprescribedbylawsorthebylaws.

"(2) The accountant or the bookkeeper of the cooperative shall be responsible for the maintenance of the
cooperativeinaccordancewithgenerallyacceptedaccountingpractices.Heshallalsoberesponsibleforthe
productionofthesameatthetimeofauditorinspection.

"Theauditcommitteeshallberesponsibleforthecontinuousandperiodicreviewofthebooksandrecordsof
accounttoensurethattheseareinaccordancewithgenerallyacceptedaccountingpractices.Heshallalso
beresponsiblefortheproductionofthesameatthetimeofauditorinspection.

"(3) Each cooperative shall maintain records of accounts such that the true and correct condition and the
results of the operation of the cooperative may be ascertained therefrom at any time. The financial
statements, audited according to generally accepted auditing standards, principles and practices, shall be
publishedannuallyandshallbekeptpostedinaconspicuousplaceintheprincipalofficeofthecooperative.

"(4)SubjecttothepertinentprovisionsoftheNationalInternalRevenueCodeandotherlaws,acooperative
may dispose by way of burning or other method of complete destruction any document, record or book
pertainingtoitsfinancialandnonfinancialoperationswhicharealreadymorethanfive(5)yearsoldexcept
those relating to transactions which are the subject of civil, criminal and administrative proceedings. An
inventoryoftheauditeddocuments,recordsandbookstobedisposedofshallbedrawnupandcertifiedtoby
theboardsecretaryandthechairmanoftheauditcommitteeandpresentedtotheboardofdirectorswhich
maythereuponapprovethedispositionofsaidrecords.

"ART.53.Reports.(1)Everycooperativeshalldrawupregularreportsofitsprogramofactivities,including
thoseinpursuanceoftheirsociocivicundertakings,showingtheirprogressandachievementsattheendof
everyfiscalyear.Thereportsshallbemadeaccessibletoitsmembers,andcopiesthereofshallbefurnished
toallitsmembersorrecord.ThesereportsshallbefiledwiththeAuthoritywithinonehundredtwenty(120)
daysfromtheendofthecalendaryear.Theformandcontentsofthereportsshallbeasprescribedbythe
rules of the Authority. Failure to file the required reports shall subject the accountable officer/s to fines and
penaltiesasmaybeprescribedbytheAuthority,andshallbeagroundfortherevocationofauthorityofthe
cooperativetooperateassuch.Thefiscalyearofeverycooperativeshallbethecalendaryearexceptasmay
beotherwiseprovidedinthebylaws.

"(2)Ifacooperativefailstomake,publishandfilethereportsrequiredherein,orfailstoincludethereinany
matterrequiredbytheCode,theAuthorityshall,withinfifteen(15)daysfromtheexpirationoftheprescribed
period,sendsuchcooperativeawrittennotice,statingitsnoncomplianceandthecommensuratefinesand
penaltiesthatwillbeimposeduntilsuchtimethatthecooperativehascompliedwiththerequirements.

"ART.54.RegisterofMembersasPrimaFacieEvidence.Anyregisterorlistofmembersshareskeptby
anyregisteredcooperativeshallbeprimafacieevidenceofthefollowingparticularsenteredtherein:

"(1)Thedateonwhichthenameofanypersonwasenteredinsuchregisterorlistofmemberand

"(2)Thedateonwhichanysuchpersonceasedtobeamember.

"ART.55.ProbativeValueofCertifiedCopiesofEntries.(1)Acopyofanyentryinanybook,registerorlist
regularlykeptinthecourseofbusinessinthepossessionofacooperativeshall,ifdulycertifiedinaccordance
withtherulesofevidence,beadmissibleasevidenceoftheexistenceofentryandprimafacieevidenceof
themattersandtransactionsthereinrecorded.

"(2)Nopersonoracooperativeispossessionofthebooksofsuchcooperativeshall,inanylegalproceedings
to which the cooperative is not a party, be compelled to produce any of the books of the cooperative, the
contents of which can be proved and the matters, transactions and accounts therein recorded, unless by
orderofacompetentcourt.
"ART.56.BondingofAccountableOfficers.Everydirector,officer,andemployeehandlingfunds,securities
orpropertyonbehalfofanycooperativeshallbecoveredbyasuretybondtobeissuedforadulyregistered
insurance or bonding company for the faithful performance of their respective duties and obligations. The
boardofdirectorsshalldeterminetheadequacyofsuchbonds.

"Uponthefilingoftheapplicationforregistrationofacooperative,thebondsoftheaccountableofficersshall
berequiredbytheAuthority.SuchbondsshallberenewedmanuallyandtheAuthorityshallaccordinglybe
informedofsuchrenewal.

"ART.57.PreferenceofClaims.(1)Notwithstandingtheprovisionsofexistinglaws,rulesandregulationsto
thecontrary,butsubjecttothepriorclaimoftheAuthority,anydebtduetothecooperativefromthemember
shall constitute a first lien upon any raw materials, production, inputs, and products produced or any land,
building,facilities,equipment,goodsorservicesacquiredandheld,bysuchmemberthroughtheproceedsof
theloanorcreditgrantedbythecooperativetohimforaslongasthesameisnotfullypaid.

"(2) No property or interest on property which is subject to a lien under paragraph (1) shall be sold nor
conveyed to third parties without the prior permission of the cooperative. The lien upon the property or
interest shall continue to exit even after the sale or conveyance thereof until such lien has been duly
extinguished.

"(3)Notwithstandingtheprovisionsofanylawtothecontrary,anysaleorconveyancemadeincontravention
ofparagraph(2)hereofshallbevoid.

"ART.58.InstrumentforSalaryorWageDeduction. (1) A member of a cooperative may, notwithstanding

theprovisionsofexistinglawstothecontrary,executeaninstrumentinfavorofthecooperativeauthorizing
hisemployertodeductfromhis/hersalaryorwages,commutationofleavecreditsandanyothermonetary
benefitspayabletohimbytheemployerandremitsuchamountasmaybespecifiedinsatisfactionofadebt
orotherdemandduefromthemembertothecooperative.

"(2)Upontheexecutionofsuchinstrumentandasmayberequiredbythecooperativecontainedinawritten
request, the employer shall make the deduction in accordance with the agreement and deduction in
accordancewiththeagreementandremitforthwiththeamountsodeductedwithinten(10)daysaftertheend
ofthepayrollmonthtothecooperative.Theemployershallmakethedeductionforaslongassuchdebtor
otherdemandremainsunpaidbytheemployee.

"(3) The term "employer" as used in this article shall include all private firms and the national and local
governmentsandgovernmentownedorcontrolledcorporationswhohaveundertheiremployeramemberof
acooperativeandhaveagreedtocarryoutthetermsoftheinstrumentmentionedinparagraphs(1)and(2)
ofthisarticle.

"(4)Theprovisionsofthisarticleshallapplytoallsimilaragreementsreferredtoinparagraph(1)andwere
enforcedpriortotheapprovalofthisCode.

"(5) Notwithstanding the provisions of existing laws to the contrary, the responsibilities of the employer as
stated in paragraphs (1) and (2) of this articles shall be mandatory: Provided, That in the case of private
employer,theactualandreasonablecostdeductingandremittingmaybecollected.

"ART.59.PrimaryLien.Notwithstandingtheprovisionofanylawwiththecontrary,acooperativeshallhave
primarylienuponthecapital,depositsorinterestofamemberforanydebtduetothecooperativefromsuch
amember.

"ART.60.TaxTreatmentofCooperative.DulyregisteredcooperativesunderthisCodewhichdonottransact
any business with nonmembers or the general public shall not be subject to any taxes and fees imposed
under the internal revenue laws and other tax laws. Cooperatives not falling under this article shall be
governedbythesucceedingsection.

"ART.61. Tax and Other Exemptions. Cooperatives transacting business with both members and non
membersshallnotbesubjectedtotaxontheirtransactionswithmembers.Inrelationtothis,thetransactions
ofmemberswiththecooperativeshallnotbesubjecttoanytaxesandfees,includingnotlimitedtofinaltaxes
on members deposits and documentary tax. Notwithstanding the provisions of any law or regulation to the
contrary,suchcooperativesdealingwithnonmembersshallenjoythefollowingtaxexemptions:

"(1)CooperativeswithaccumulatedreservesandundividednetsavingsofnotmorethanTenmillionpesos
(P10,000,000.00)shallbeexemptfromallnational,city,provincial,municipalorbarangaytaxesofwhatever
nameandnature.Suchcooperativesshallbeexemptfromcustomsduties,advancesalesorcompensating
taxes on their importation of machineries, equipment and spare parts used by them and which are not
availablelocallyacertifiedbythedepartmentoftradeandindustry(DTI).Alltaxfreeimportationsshallnotbe
soldnorthebeneficialownershipthereofbetransferredtoanypersonuntilafterfive(5)years,otherwise,the
cooperativeandthetransfereeorassigneeshallbesolidarilyliabletopaytwicetheamountoftheimposed
taxand/orduties.

"(2) Cooperatives with accumulated reserves and divided net savings of more than Ten million pesos
(P10,000,000.00)shallfeethefollowingtaxesatthefullrate:
 "(a)IncomeTaxOntheamountallocatedforinterestoncapitals:Provided,Thatthesametaxisnot
consequently imposed on interest individually received by members: Provided, further, That
cooperativesregardlessofclassification,areexemptincometaxfromthedateofregistrationwiththe
Authority

"(b)ValueAddedTaxOntransactionswithnonmembers:Provided,however,Thatcooperativesduly
registeredwiththeAuthorityareexemptfromthepaymentofvalueaddedtaxsubjecttoSection109,
subsectionsL,MandNofRepublicActNo.9337,theNationalInternalRevenueCode,asamended:
Provided,ThattheexempttransactionunderSection109(L)shallincludesalesmadebycooperatives
dulyregisteredwiththeAuthorityorganizedandoperatedbyitsmembertoundertaketheproduction
andprocessingofrawmaterialsorofgoodsproducedbyitsmembersintofinishedorprocessproducts
forsalebythe cooperativeto itsmembersandnonmembers:Provided,further, That any processed
productoritsderivativearisingfromtherawmaterialsproducedbyitsmembers,soldinthennameand
fortheaccountofthecooperative:Provided,finally,Thatatleasttwentyfivepercentum(25%)ofthe
net income of the cooperatives is returned to the members in the form of interest and/or patronage
refunds

"(c)Allothertaxesunlessotherwiseprovidedhereinand

"(d)Donationstocharitable,researchandeducationalinstitutionsandreinvestmenttosocioeconomic
projectswithintheareaofoperationofthecooperativemaybetaxdeductible.

"(3)Allcooperatives,regardlessoftheamountofaccumulatedreservesandundividednetsavingsshallbe
exempt from payment of local taxes and taxes on transactions with banks and insurance companies:
Provided,Thatallsalesorservicesrenderedfornonmembersshallbesubjecttotheapplicablepercentage
taxes sales made by producers, marketing or service cooperatives: Provided further, That nothing in this
articleshallprecludetheexaminationofthebooksofaccountsorotheraccountingrecordsofthecooperative
by duly authorized internal revenue officers for internal revenue tax purposes only, after previous
authorizationbytheAuthority.

"(4) In areas where there are no available notaries public, the judge, exercising his ex officio capacity as
notary public, shall render service, free of charge, to any person or group of persons requiring the
administration of oath or the acknowledgment of articles of cooperation and instruments of loan from
cooperativesnotexceedingFiveHundredThousandPesos(P500,000.00).

"(5)Anyregisterofdeedsshallacceptforregistration,freeofcharge,anyinstrumentrelativetoaloanmade
underthisCodewhichdoesnotexceedTwoHundredFiftyThousandPesos(P250,000.00)orthedeedsof
title of any property acquired by the cooperative or any paper or document drawn in connection with any
actionbroughtbythecooperativeorwithanycourtjudgmentrenderedinitsfavororanyinstrumentrelativeto
abondofanyaccountableofficerofacooperativeforthefaithfulperformanceofhisdutiesandobligations.

"(6)CooperativesshallbeexemptfromthepaymentofallcourtandsheriffsfeespayabletothePhilippine
GovernmentforandinconnectionwithallactionsbroughtunderthisCode,orwheresuchactionsisbrought
bytheAuthoritybeforethecourt,toenforcethepaymentofobligationscontractedinfavorofthecooperative.

"(7)Allcooperativesshallbeexemptfromputtingupabondforbringinganappealagainstthedecisionofan
inferior court or for seeking to set aside any third party claim: Provided,ThatacertificationoftheAuthority
showingthatthenetassetsofthecooperativeareinexcessoftheamountofthebondrequiredbythecourt
insimilarcasesshallbeacceptedbythecourtasasufficientbond.

"(8)AnysecurityissuedbycooperativesshallbeexemptfromtheprovisionsoftheSecuritiesActprovided
suchsecurityshallnotbespeculative.

"ART. 62. Privileges of Cooperatives. Cooperatives registered under this Code, notwithstanding the
provisionsofanylawtothecontrary,bealsoaccordedthefollowingprivileges:

"(1) Cooperatives shall enjoy the privilege of depositing their sealed cash boxes or containers,
documents or any valuable papers in the safes of the municipal or city treasurers and other
government offices free of charge, and the custodian of such articles shall issue a receipt
acknowledgingthearticlesreceiveddulywitnessedbyanotherperson

"(2) Cooperatives organized among government employees, notwithstanding any law or regulation to
thecontrary,shallenjoythefreeuseofanyavailablespaceintheiragency,whetherownedorrented
bytheGovernment

"(3) Cooperatives rendering special types of services and facilities such as cold storage, ice plant,
electricity,transportation,andsimilarservicesandfacilitiesshallsecureafranchisetherefore,andsuch
cooperativesshallopentheirmembershiptoallpersonsqualifiedintheirareasofoperation

"(4) In areas where appropriate cooperatives exist, the preferential right to supply government
institutionsandagenciesrice,cornandothergrains,fishandothermarineproducts,meat,eggs,milk,
vegetables,tobaccoandotheragriculturalcommoditiesproducedbytheirmembersshallbegrantedto
thecooperativesconcerned
 "(5) Preferential treatment in the allocation of fertilizers, including seeds and other agricultural inputs
andimplements,andinricedistributionshallbegrantedtocooperativesbytheappropriategovernment
agencies

"(6) Preferential and equitable treatment in the allocation or control of bottomries of commercial
shippingvesselsinconnectionwiththeshipmentofgoodsandproductsofcooperatives

"(7) Cooperatives and their federations, such as farm and fishery producers and suppliers, market
vendorsandsuchothercooperatives,whichhavefortheirprimarypurposetheproductionand/orthe
marketing of products from agriculture, fisheries and small entrepreneurial industries and federations
thereof, shall have preferential rights in the management of public markets and/or lease of public
market facilities, stalls or spaces: Provided, That these rights shall only be utilized exclusively by
cooperatives:Provided,further, That no cooperative forming a joint venture, partnership or any other
similararrangementwithanoncooperativeentitycanutilizetheserights

"(8)Cooperativesengagedincreditservicesand/orfederationsshallbeentitledtoloanscreditlines,
rediscounting of their loan notes, and other eligible papers with the Development Bank of the
Philippines,theLandBankofthePhilippinesandotherfinancialinstitutionsexcepttheBangkoSentral
ngPilipinas(BSP)

"The Philippine Deposit Insurance Corporation (PDIC) and other government agencies, government
owned and controlled corporations and government financial institutions shall provide technical
assistance to registered national federations and unions of cooperatives which have significant
engagement in savings and credit operations in order for these federations and unions to establish
and/orstrengthentheirownautonomouscooperativedepositinsurancesystems

"(9) A public transport service cooperative may be entitled to financing support for the acquisition
and/or maintenance of land and sea transport equipment, facilities and parts through the program of
the government financial institutions. It shall have the preferential right to the management and
operationofpublicterminalsandportswhetherlandorseatransportwherethecooperativeoperates
andonsecuringafranchiseforactiveorpotentialroutesforthepublictransport

"(10) Cooperatives transacting business with the Government of the Philippines or any of its political
subdivisions or any of its agencies or instrumentalities, including governmentowned and controlled
corporationsshallbeexemptfromprequalificationbiddingrequirementsnotwithstandingtheprovisions
ofRepublicActNo.9184,otherwiseknownas,theGovernmentProcurementAct

"(11) Cooperative shall enjoy the privilege of being represented by the provincial or city fiscal or the
Office of the Solicitor General, free of charge, except when the adverse party is the Republic of the
Philippines

"(12)Cooperativesorganizedbyfacultymembersandemployeesofeducationalinstitutionsshallhave
thepreferentialrightinthemanagementofthecanteenandotherservicesrelatedtotheoperationof
theeducationalinstitutionwheretheyareemployed:Provided,Thatsuchservicesareoperatedwithin
thepremisesofthesaideducationalinstitutionand

"(13) The appropriate housing agencies and government financial institutions shall create a special
windowforfinancinghousingprojectsundertakenbycooperatives,withinterestratesandtermsequal
to, or better than those given for socialized housing projects. This financing shall be in the form of
blanket loans or longterm wholesale loans to qualified cooperatives, without need for individual
processing.

"The Authority, in consultation with the appropriate government agencies and concerned cooperative
sector,shallissuerulesandregulationsonallmattersconcerninghousingcooperatives."

SEC. 6. Article 64 of Chapter VI on Insolvency of Cooperatives of the same Code is hereby renumbered and
amendedtoread,asfollows:

CHAPTERVI
INSOLVENCYOFCOOPERATIVES

"ART. 63. Proceeding Upon Insolvency. In case a cooperative is unable to fulfill its obligations to creditors
duetoinsolvency,suchcooperativemayapplyforsuchremediesasitmaydeemfitundertheprovisionsof
ActNo.1956,asamended,otherwiseknownastheInsolvencyLaw.

"NothinginthisArticle,however,precludescreditorsfromseekingprotectionfromsaidinsolvencylaw."

SEC.7.Articles65,66.67,68,69,70and71ofChapterVIIonDissolutionofCooperativesofthesameCodeare
herebyrenumberedandamendedtoread,asfollows:

CHAPTERVII
DISSOLUTIONOFCOOPERATIVES
"ART.64.VoluntaryDissolutionWherenoCreditorsareAffected.Ifthedissolutionofacooperativedoesnot
prejudicetherightsofanycreditorhavingaclaimagainstit,thedissolutionmaybeaffectedbyamajorityvote
oftheboardofdirectors,andbyaresolutiondulyadoptedbytheaffirmativevoteofatleastthreefourths(3/4)
ofallthememberswithvotingrights,presentandconstitutingaquorumatameetingtobehelduponcallof
thedirectors:Provided,Thatthenoticeoftime,placeandobjectofthemeetingshallbepublishedforthree
(3)consecutiveweeksinanewspaperpublishedintheplacewheretheprincipalofficeofsaidcooperativeis
located, or if no newspaper is published in such place, in a newspaper of general circulation in the
Philippines:Provided,further, That the notice of such meeting is sent to each member of record either by
registeredmailorbypersonaldeliveryatleastthirty(30)dayspriortosaidmeeting.Acopyoftheresolution
authorizingthedissolutionshallbecertifiedtobyamajorityoftheboardofdirectorsandcountersignedbythe
boardsecretary.TheAuthorityshallthereuponissuethecertificateofdissolution.

"ART.65.VoluntaryDissolutionWhereCreditorsAreAffected.Wherethedissolutionofacooperativemay
prejudice the rights of any creditor, the petition for dissolution shall be filed with the Authority. The petition
shall be signed by a majority of its board or directors or other officers managing its affairs, verified by its
chairpersonorboardsecretaryoroneofitsdirectorsandshallsetforthallclaimsanddemandsagainstitand
thatitsdissolutionwasresolveduponbytheaffirmativevoteofatleastthreefourths(3/4)ofallthemembers
withvotingrights,presentandconstitutingaquorumatameetingcalledforthatpurpose.

"Ifthepetitionissufficientinformandsubstance,theAuthorityshallissueanorderrecitingthepurposeofthe
petitionandshallfixadatewhichshallnotbelessthanthirty(30)normorethansixty(60)daysaftertheentry
of the order. Before such date, a copy of the order shall be published at least once a week for three (3)
consecutive weeks in a newspaper of general circulation published in the municipality or city where the
principalofficeofthecooperativeissituatedorintheabsenceofsuchlocalnewspaper,inanewspaperof
generalcirculationinthePhilippines,andacopyshalllikewisebepostedforthree(3)consecutiveweeksin
three(3)publicplacesinthemunicipalityorcitywherethecooperativesofficeislocated.

"Uponexpiryofthefive(5)daynoticetofileobjections,theAuthorityshallproceedtohearthepetitionandtry
any issue raised in the objection filed and if the objection is sufficient and the material allegations of the
petitionareproven,itshallissueanordertodissolvethecooperativeanddirectthedispositionofitsassetsin
accordancewithexistingrulesandregulations.Theorderofdissolutionshallsetforththerein:

"(1)Theassetsandliabilitiesofthecooperative

"(2)Theclaimofanycreditor

"(3)Thenumberofmembersand

"(4)Thenatureandextendoftheinterestsofthemembersofthecooperative.

"ART.66.InvoluntaryDissolution.Acooperativemaybedissolvedbyorderofacompetentcourtafterdue
hearingonthegroundsof:

"(1)Violationofanylaw,regulationorprovisionsofitsbylawsor

"(2)Insolvency.

"ART.67.DissolutionbyOrderoftheAuthority.TheAuthoritymaysuspendorrevoke,afterduenoticeand
hearing,thecertificateofregistrationofacooperativeonanyofthefollowinggrounds:

"(1)Havingobtaineditsregistrationbyfraud

"(2)Existingforanillegalpurpose

"(3)Willfulviolation,despitenoticebytheAuthority,oftheprovisionsofthisCodeoritsbylaws

"(4)Willfulfailuretooperateonacooperativebasisand

"(5)Failuretomeettherequiredminimumnumberofmembersinthecooperative.

"ART.68.DissolutionbyFailuretoOrganizeandOperate.Ifacooperativehasnotcommencedbusinessand
its operation within two (2) years after the issuance of its certificate of registration or has not carried on its
business for two (2) consecutive years, the Authority shall send a formal notice to the said cooperative to
showcauseastoitsfailuretooperate.Failureofthecooperativetopromptlyprovidejustifiablecauseforits
failuretooperateshallwarranttheAuthoritytodeleteitsnamefromtherosterofregisteredcooperativesand
shallbedeemeddissolved.

"ART. 69. Liquidation of a Cooperative. Every cooperative whose charter expires by its own limitation or
whose existence is terminated by voluntary dissolution or through an appropriate judicial proceeding shall
neverthelesscontinuetoexistforthree(3)yearsafterthetimeitisdissolvednottocontinuethebusinessfor
whichitwasestablishedbutforthepurposeofprosecutinganddefendingsuitsbyoragainstitsettlement
andclosureofitsaffairsdisposition,conveyanceanddistributionofitspropertiesandassets.

"Atanytimeduringthesaidthree(3)years,thecooperativeisauthorizedandempoweredtoconveyallofits
propertiestotrusteesforthebenefitofitsmembers,creditorsandotherpersonsininterest.Fromandafter
 anysuchconveyance,allinterestswhichthecooperativehadinthepropertiesareterminated.

"Upon the winding up of the cooperative affairs, any asset distributable to any creditor, shareholder or
memberwhoisunknownorcannotbefoundshallbegiventothefederationoruniontowhichthecooperative
isaffiliatedwith.

"Acooperativeshallonlydistributeitsassetsorpropertiesuponlawfuldissolutionandafterpaymentofallits
debts and liabilities, except in the case of decrease of share capital of the cooperative and as otherwise
allowedbythisCode.

"ART. 70. Rules and Regulations on Liquidation. The Authority shall issue the appropriate implementing
guidelinesfortheliquidationofcooperatives."

SEC.8.Articles72,73,74,75,76,77,78,79and80ofChapterVIIIonCapital,Property,andFundsofthesame
Codeareherebyrenumberedandamendedtoread,asfollows:

CHAPTERVIII
CAPITAL,PROPERTY,ANDFUNDS

"ART.71.Capital.Thecapitalizationofcooperativesandtheaccountingproceduresshallbegovernedby
theprovisionsofthisCodeandtheregulationswhichshallbeissued.

"ART.72.CapitalSources.CooperativesregisteredunderthisCodemayderivetheircapitalfromanyorall
ofthefollowingsources:

"(1)Memberssharecapital

"(2)Loansandbarrowingsincludingdeposits

"(3)Revolvingcapitalwhichconsistsofthedeferredpaymentofpatronagerefunds,orinterestonshare
capitaland

"(4) Subsidies, donations, legacies, grants, aids and such other assistance from any local or foreign
institution whether public or private: Provided, That capital coming from such subsides, donations,
legacies,grants,aidsandotherassistanceshallnotbedividedintoindividualsharecapitalholdingsat
anytimebutshallinsteadformpartofthedonatedcapitalorfundofthecooperative.

"Upondissolution,suchdonatedcapitalshallbesubjecttoescheat.

"ART.73.Limitation on Share Capital Holdings. No member of primary cooperative other than cooperative
itselfshallownorholdmorethantenpercentum(10%)ofthesharecapitalofthecooperative.

"Whereamemberofcooperativedies,hisheirshallbeentitledtothesharesofthedecedent:Provided,That
the total share holding of the heir does not exceed ten per centum (10%) of the share capital of the
cooperativeProvided,further,Thattheheirqualifyandisadmittedasmembersofthecooperative:Provided
finally , That where the heir fails to qualify as a member or where his total share holding exceeds ten per
centum(10%)ofthesharecapital,theshareorsharesexcesswillreverttothecooperativeuponpaymentto
theheirofthevalueofsuchshares.

"ART. 74. Assignment of Share Capital Contribution or Interest.Subject to the provisions of this Code, no
membershalltransferhissharesorinterestinthecooperativeoranypartthereofunless.

"(1)Hehasheldsuchsharecapitalcontributionorinterestfornotlessthanone(1)year.

"(2)Theassignmentismadetothecooperativeortoamemberofthecooperativeortoapersonwho
fallswithinthefieldofthemembershipofthecooperativeand

"(3)Theboardofdirectorshasapprovedsuchassignment.

"ART.75.CapitalBuildUp. Te bylaws of every cooperative shall be provided for a reasonable and realistic
member capital buildup program to allow the continuing growth of the members investment in their
cooperativeastheireconomicconditionscontinuetoimprove.

"ART.76.Shares.Theterm"share"referstoaunitofcapitalinaprimarycooperativetheparvalueofwhich
may be fixed to any figure not more than One thousand pesos (P1,000.00). The share of capital of a
cooperativeisthemoneypaidorrequiredtobepaidfortheoperationsofthecooperative.Themethodforthe
issuanceofsharecertificatesshallprescribedinitsbylaws.

"ART.77. Fines. The bylaws of a cooperative may prescribe a fine on unpaid subscribed share capital.
Provided,thatsuchfineisfairandreasonableunderthecircumstances.

"ART.78.InvestmentofCapital.Acooperativemayinvestitscapitalinanyofthefollowing:

"(a)Insharesordebenturesorsecuritiesofanyothercooperative
 "(b)Inanyreputablebankinthelocality,oranycooperative

"(c)InsecuritiesissuedorguaranteedbytheGovernment

"(d)Inrealstateprimarilyfortheuseofthecooperativeoritsmembersor

"(e)Inanyothermannerauthorizedinthebylaws.

"ART.79.RevolvingCapital.Thegeneralassemblyofanycooperativemayauthorizetheboardofdirectors
toraisearevolvingcapitaltostrengthenitscapitalstructurebydeferringthepaymentofpatronagerefunds
andinterestonsharecapitalorbytheauthorizeddeductionofapercentagefromtheproceedsofproducts
sold or services rendered, or per unit of product or services handled. The board of directors shall issue
revolving capital certificates with serial number, name, amount, and rate of interest to be paid and shall
distinctlysetforththetimeofretirementofsuchcertificatesandtheamountstobereturned."

SEC.9.Articles81,82,83,84and85ofChapterIXonAudit,InquiryandMembersRighttoExamineofthesame
Codeareherebyrenumberedandamendedtoread,asfollows:

"ART. 80. AnnualAudit. Cooperatives registered under this Code shall be subject to an annual financial,
performanceandsocialaudit.Thefinancialauditshallbeconductedbyanexternalauditorwhosatisfiesall
thefollowingqualifications:

"(1)Heisindependentofthecooperativeoranyofitssubsidiarythatheisauditingand

"(2)HeisamemberingoodstandingofthePhilippineInstituteofCertifiedPublicAccountants(PICPA)
andisaccreditedbyboththeBoardandAccountancyandtheAuthority.

"ThesocialauditshallbeconductedbyanindependentsocialauditoraccreditedbytheAuthority.

"Performanceandsocialauditreportswhichcontainthefindingsandrecommendationsoftheauditorshallbe
submittedtotheboardofdirectors.

"TheAuthority,inconsultationwiththe cooperativesector,shallpromulgatethe rulesandstandardsforthe

socialauditofcooperatives.

"ART.81.AuditReport. The auditor shall submit to the board of directors and to the audit committee the
financial audit report which shall be in accordance with the generally accepted auditing standards for
cooperativesasjointlypromulgatedbythePhilippineInstituteofCertifiedPublicAccountants(PICPA)andthe
Authority.

"Thereafter,theboardofdirectorsshallpresentthecompleteauditreporttothegeneralassemblyinitsnext
meeting.

"ART.82.NonliabilityforDefamations. The auditor is not liable to any person in an action for defamation
based on any act, done, or any statement made by him in good faith in connection with any matter he is
authorizedorrequiredtodopursuanttothisCode.

"ART.83.RighttoExamine.Amembershallhavetherighttoexaminetherecordsrequiredtobekeptby
thecooperativeunderArticle52ofthisCodeduringreasonablehoursonbusinessdaysandhemaydemand,
inwriting,foracopyofexcerptsfromsaidrecordswithoutchargeexceptthecostofproduction.

"Anyofficerofthecooperativewhoshallrefusetoallowanymemberofthecooperativetoexamineandcopy
excerptsfromitsrecordsshallbeliabletosuchmemberfordamagesandshallbeguiltyofanoffensewhich
shallbepunishableunderArticle140ofthisCode:Provided,Thatifsuchrefusalispursuanttoaresolutionor
orderoftheboardofdirectors,theliabilityunderthisarticleshallbeimposeduponthedirectorswhovotedfor
such refusal: Provided,further, That it shall be a defense to any action under this article that the member
demandingtoexamineandcopyexcerptsfromthecooperativerecordshasimproperlyusedanyinformation
securedthroughanypriorexaminationoftherecordsofsuchcooperativeorwasnotactingingoodfaithor
foralegitimatepurposeinmakinghisdemand.

"ART.84.SafetyofRecords.Everycooperativeshall,atitsprincipaloffice,keepandcarefullypreservethe
recordsrequiredbythisCodetobepreparedandmaintained.Itshalltakeallnecessaryprecautiontoprevent
itsloss,destructionorfalsification."

SEC.10.Articles86and87ofChapterXonAllocationandDistributionofNetSurplusofthesameCodearehereby
renumberedandamendedtoread,asfollows:

CHAPTERX
ALLOCATIONANDDISTRIBUTIONOFNETSURPLUS

"ART.85.NetSurplus.Notwithstandingtheprovisionsofexistinglaws,thenetsurplusofcooperativesshall
bedeterminedinaccordancewithitsbylaws.Everycooperativeshalldetermineitsnetsurplusatthecloseof
everyfiscalyearandatsuchothertimesasmaybeprescribedbythebylaws.
"Anyprovisionoflawtothecontrarynotwithstanding,thenetsurplusshallnotbeconstruedasprofitbutasan
excess of payments made by the members for the loans borrowed, or the goods and services availed by
themfromthecooperativeorthedifferenceoftherightfulamountduetothemembersfortheirproductssold
or services rendered to the cooperative including other inflows of assets resulting from its other operating
activitiesandwhichshallbedeemedtohavebeenreturnedtothemifthesameisdistributedasprescribed
herein.

"ART.86.OrderofDistribution.Thenetsurplusofeverycooperativeshallbedistributedasfollows:

"(1) An amount for the reserve fund which shall be at least ten per centum (10%) of net surplus:
Provided, That, in the first five (5) years of operation after registration, this amount shall not be less
thanfiftypercentum(50%)ofthenetsurplus:

"(a)Thereservefundshallbeusedforthestabilityofthecooperativeandtomeetnetlossesin
its operations. The general assembly may decrease the amount allocated to the reserve fund
whenthereservefundalreadyexceedsthesharecapital.

"Anysumrecoveredonitemspreviouslychargedtothereservefundshallbecreditedtosuch
fund.

"(b)Thereservefundshallnotbeutilizedforinvestment,otherthanthoseallowedinthisCode.
Such sum of the reserve fund in excess of the share capital may be used at anytime for any
project that would expand the operations of the cooperative upon the resolution of the general
assembly.

"(c)Uponthedissolutionofthecooperative,thereservefundshallnotbedistributedamongthe
members.Thegeneralassemblymayresolves:

"(i)Toestablishausufructuarytrustfundforthebenefitofanyfederationoruniontowhich
thecooperativeisaffiliatedand

"(ii) To donate, contribute, or otherwise dispose of the amount for the benefit of the
community where the cooperative operates. If the members cannot decide upon the
disposal of the reserve fund, the same shall go to the federation or union to which the
cooperativeisaffiliated.

"(2)Anamountfortheeducationandtrainingfund,shallnotbemorethantenpercentum(10%)ofthe
netsurplus.Thebylawsmayprovidethatcertainfeesoraportionthereofbecreditedtosuchfund.The
fundshallprovideforthetraining,developmentandsimilarothercooperativeactivitiesgearedtowards
thegrowthofthecooperativemovement:

"(a) Half of the amounts transferred to the education and training fund annually under this
subsectionshallbespentbythecooperativeforeducationandtrainingpurposeswhiletheother
half may be remitted to a union or federation chosen by the cooperative or of which it is a
member. The said union or federation shall submit to the Authority and to its contributing
cooperativesthefollowingschedules:

"(i) List of cooperatives which have remitted their respective Cooperative Education and
TrainingFunds(CETF)

"(ii)Businessconsultancyassistancetoincludethenatureandcostand

"(iii)Othertrainingactivitiesundertakenspecifyingthereinthenature,participantsandcost
ofeachactivity.

"(b) Upon the dissolution of the cooperative, the unexpended balance of the education and
trainingfundappertainingtothecooperativeshallbecreditedtothecooperativeeducationand
trainingfundofthechosenunionorfederation.

"(3) An amount for the community development fund, which shall not be less than three per centum
(3%)ofthenetsurplus.Thecommunitydevelopmentfundshallbeusedforprojectsoractivitiesthat
willbenefitthecommunitywherethecooperativeoperates.

"(4) An optional fund, a land and building, and any other necessary fund the total of which shall not
exceedsevenpercentum(7%).

"(5)Theremainingnetsurplusshallbemadeavailabletothemembersintheformofinterestonshare
capitalnottoexceedthenormalrateofreturnourinvestmentsandpatronagerefunds:Provided,That
anyamountremainingaftertheallowableinterestandthepatronagerefundhavebeendeductedshall
becreditedtothereservefund.

"The sum allocated for patronage refunds shall be made available at the same rate to all patrons of the
cooperativeinproportiontotheirindividualpatronage:Provided,That:
 "(a)Inthecaseofamemberpatronwithpaidupsharecapitalcontribution,hisproportionateamountof
patronage refund shall be paid to him unless he agrees to credit the amount to his account as
additionalsharecapitalcontribution

"(b)Inthecaseofamemberpatronwithunpaidsharecapitalcontribution,hisproportionateamountof
patronage refund shall be credited to his account until his account until his share capital contribution
hasbeenfullypaid

"(c) In the case of a nonmember patron, his proportionate amount of patronage refund shall be set
asideinageneralfundforsuchpatronsandshallbeallocatedtoindividualnonmemberpatronsonly
uponrequestandpresentationofevidenceoftheamountofhispatronage.Theamountsoallocated
shallbecreditedtosuchpatrontowardpaymentoftheminimumcapitalcontributionformembership.
Whenasumequaltothisamounthasaccumulatedatanytimewithinaperiodspecifiedinthebylaws,
suchpatronshallbedeemedandbecomeamemberofthecooperativeifhesoagreesorrequestsand
complieswiththeprovisionsofthebylawsforadmissiontomembershipand

"(d) If within any period of time specified in the bylaws, any subscriber who has not fully paid his
subscribed share capital or any nonmember patron who has accumulated the sum necessary for
membership but who does not request nor agree to become a member or fails to comply with the
provisionsofthebylawsforadmissiontomembership,theamountsoaccumulatedorcreditedtotheir
account together with any part of the general fund for nonmember patrons shall be credited to the
reservefundortotheeducationandtrainingfundofthecooperative,attheoptionofthecooperative."

SEC.11. Articles 88, 89, 90, 91, 92, 93, 94 and 95 of Chapter XI on the Special Provisions Relating to Agrarian
ReformCooperativesofthesameCodeareherebyrenumberedretitledandamendedtoread,asfollows:

CHAPTERXI
AGRARIANREFORMCOOPERATIVES

"ART. 87. Coverage. The provisions of this Chapter shall primarily govern agrarian reform cooperatives:
Provided,ThattheprovisionsoftheotherchaptersofthisCodeshallapplysuppletorilyexceptinsofarasthis
Chapterotherwiseprovides.

"ART. 88. Definition and Purpose. An agrarian reform cooperative is one organized by marginal farmers,
majority of which are agrarian reform beneficiaries, for the purpose of developing an appropriate system of
landtenure,landdevelopment,landconsolidationorlandmanagementinareascoveredbyagrarianreform.

"Anagrarianreformcooperativeasdefinedshallbeorganizedforanyorallofthefollowingpurposes:

"(1) To develop an appropriate system of land tenure, land development, land consolidation or land
managementinareascoveredbyagrarianreform

"(2) To coordinate and facilitate the dissemination of scientific methods of production, and provide
assistanceinthestorage,transport,andmarketingoffarmproductsforagrarianreformbeneficiaries
andtheirimmediatefamily,hereinafterreferredtoas"beneficiaries"

"(3) To provide financial facilities to beneficiaries for provident or productive purposes at reasonable
costs

"(4) To arrange and facilitate the expeditious transfer of appropriate and suitable technology to
beneficiariesandmarginalfarmersatthelowestpossiblecost

"(5)Toprovidesocialsecuritybenefits,health,medicalandsocialinsurancebenefitsandothersocial
and economic benefits that promote the general welfare of the agrarian reform beneficiaries and
marginalfarmers

"(6) To provide nonformal education, vocational/technical training, and livelihood programs to

beneficiariesandmarginalfarmers

"(7)Toactasconduitsforexternalassistanceandservicestothebeneficiariesandmarginalfarmers

"(8) To undertake a comprehensive and integrated development program in agrarian reform and
resettlement areas with special concern for the development of agrobased, marinebased, and
cottagebasedindustries

"(9)Torepresentthebeneficiariesonanyorallmattersthataffecttheirinterestand

"(10) To undertake such other economic or social activities as may be necessary or incidental in the
pursuitoftheforegoingpurposes.

"ART.89.CooperativeEstate.Landholdingslikeplantations,estatesorhaciendasacquiredbytheStatefor
the benefitofthe workersinaccordancewiththe ComprehensiveAgrarianReformProgramwhichshallbe
collectivelyownedbytheworkerbeneficiariesunderacooperativesetup.
 "ART.90.Infrastructure.Inagrarianreformandresettlementareas,theGovernmentshallgranttoagrarian
reform cooperatives preferential treatment in the construction, maintenance and management of roads,
bridges,canals,wharves,ports,reservoirs,irrigationsystems,waterworkssystems,andotherinfrastructures
withgovernmentfunding.Forthispurpose,theGovernmentshallprovidetechnicalassistance,facilitiesand
equipmenttosuchagrarianreformcooperatives.

"ART. 91. Lease of Public Lands. The Government may lease public lands to any agrarian reform
cooperative for a period not exceeding twentyfive (25%) years, subject to renewal for another twentyfive
(25)yearsonly:Provided,Thattheapplicationforrenewalshallbemadeone(1)yearbeforetheexpirationof
the lease: Provided,further, That such lease shall be for the exclusive use and benefit of the beneficiaries
andmarginalfarmerssubjecttotheprovisionsoftheComprehensiveAgrarianReformProgram.

"ART. 92. Preferential Right. In agrarian reform areas, an agrarian reform cooperative shall have the
preferentialrightinthegrantoffranchiseandcertificateofpublicconvenienceandnecessityfortheoperation
of public utilities and services: Provided, That it meets the requirements and conditions imposed by the
appropriate government agency granting the franchise or certificate of public convenience and necessity. If
thereisanelectricserviceproviderinthearea,itshallupontherequestofanagrarianreformcooperative,
immediately provide electric services to the agrarian reform areas. If the electric service provider fails to
provide the services requested within a period of one (1) year, the agrarian reform cooperative concerned
mayundertaketoprovidetheelectricservicesintheareathroughitsownresources.Allinvestmentsmadeby
thesaidagrarianreformcooperativefortheelectrificationoftheagrarianreformresettlementareasshallbe
thesubjectofsaletotheelectricserviceprovideronceittakesontheservice.

"ART. 93. Privileges. Subject to such reasonable terms and conditions as the Department of Agrarian
Reform(DAR)andtheAuthoritymayimpose,agrarianreformcooperativesmaybegiventheexclusiveright
todoanyorallofthefollowingeconomicactivitiesinagrarianreformandresettlementareas

"(1) Supply and distribution of consumer, agricultural, aquacultural, and industrial goods, production
inputs, and raw materials and supplies, machinery, equipment, facilities and other services and
requirementsofthebeneficiariesandmarginalfarmersatreasonableprices

"(2)Marketingoftheproductsandservicesofthebeneficiariesinlocalandforeignmarkets

"(3) Processing of the members products into finished consumer or industrial goods for domestic
consumptionorforexport

"(4) Provision of essential public services at cost such as power, irrigation, potable water, passenger
and/or cargo transportation by land or sea, communication services, and public health and medical
careservices

"(5)Management,conservation,andcommercialdevelopmentofmarine,forestry,mineral,water,and
other natural resources subject to compliance with the laws and regulations on environmental and
ecologicalcontrolsand

"(6)Provisionoffinancial,technological,andotherservicesandfacilitiesrequiredbythebeneficiaries
intheirdailylivesandlivelihood.

"The Government shall provide the necessary financial and technical assistance to agrarian reform
cooperativestoenablethemtodischargeeffectivelytheirpurposesunderthisarticle.TheDAR,theAuthority
and the BSP shall draw up a joint program for the organization and financing of the agrarian reform
cooperatives subject of this Chapter. The joint program shall be geared towards the beneficiaries gradual
assumptionoffullownershipandmanagementcontroloftheagrarianreformcooperatives.

"ART. 94. Organization and Registration. Agrarian reform cooperatives may be organized and registered
under this Code only upon prior written verification by the DAR to the effect that the same is needed and
desiredbythebeneficiariesresultsofastudythathasbeenconductedfairlyindicatetheeconomicfeasibility
oforganizingthesameandthatitwillbeeconomicallyviableinitsoperationsandthatthesamemaynowbe
organizedandregisteredinaccordancewithrequirementsofthisCode.

"TheAuthority,inconsultationwiththeconcernedgovernmentagenciesandcooperativesector,shallissue
appropriaterulesandregulationspertainingtotheprovisionsofthisChapter."

SEC.12. Articles 96, 97 and 98 of Chapter XII on the Special Provisions on Public Services Cooperatives of the
sameCodeareherebytransferredtoanotherchapter.ChapterXIIasamendedshallnowread,asfollows:

CHAPTERXII
COOPERATIVEBANKS

"ART. 95. Governing Law. The provisions of this Chapter shall primarily govern cooperative banks
registeredunderthisCodeandtheotherprovisionsofthisCodeshallapplytothemonlyinsofarastheyare
notinconsistentwiththeprovisionscontainedinthisChapter.

"ART.96.Supervision.ThecooperativebanksregisteredunderthisCodeshallbeunderthesupervisionof
theBSP.TheBSP,uponconsultationwiththeAuthorityandtheconcernedcooperativesector,shallformulate
guidelines regarding the operations and the governance of cooperative banks. These guidelines shall give
duerecognitiontotheuniquenatureandcharacterofcooperativebanks.Tothisend,cooperativebanksshall
providefinancialandbankingservicestoitsmembers.

"ART. 97. Organization, Membership and Establishment of a Cooperative Bank. (1) Cooperative
organizationsdulyestablishedandregisteredunderthisCodemayorganizeacooperativebank,whichshall
likewise be considered a cooperative registrable under provisions of this Code subject to the requirements
andrequisiteauthorizationfromthe BSP.Onlyonecooperativebankmaybeestablishedineachprovince:
Provided,Thatanadditionalcooperativebankmaybeestablishedinthesameprovincetocatertotheneeds
in the same province to cater to the needs of the locality depending on the economic conditions of the
provinceasmaybedeterminedbytheBSP:Provided,further,Thattheadditionalcooperativebankshallbe
locatedintheCityormunicipalityotherthatthecityormunicipalitywherethefirstcooperativebankislocated.

"(2) Membership in a cooperative bank shall either be regular or associate. Regular membership shall be
limited to cooperative organizations which are holders of common shares of the bank. Associate members
arethosesubscribingandholdingpreferredsharesofthebank,whichmayincludebutarenotlimitedtothe
following:

"(a)Individualmembersofthebanksmemberprimarycooperativesand

"(b) Samahang Nayon and Municipal Katipunan ng mga Samahang Nayon (MKSN) which held
commonsharesofcooperativebankspriortotheeffectivityofthisActshallapplyforconversiontofull
pledged cooperatives in order to maintain their status as regular members of cooperative banks:
Provided, That they shall notify the cooperative bank concerned their intention to convert within a
period of ninety (90) days from the effectivity of this Act. Samahang Nayon and MKSN are hereby
given a period of one (1) year from the effectivity of this Act to complete their conversion as
cooperatives. Cooperative bank shall exert reasonable efforts to inform their member Samahang
Nayon and MKSN to finally convert or to give the notice of conversion within the prescribed period.
Upon the failure of the Samahang Nayon and MKSN to finally convert to a fullpledged cooperative
withinthemaximumperiodofone(1)year,thecooperativebankconcernedmayconvertthecommon
sharesheldbysuchassociationstopreferredshares.

"(3) The articles of cooperative and bylaws of a cooperative bank, or any amendment thereto, shall be
registeredwiththeAuthorityonlywhenaccompaniedbyacertificateofauthorityissuedbytheBSP,underits
officialseal.

"ART. 98. AdministrationofCooperativeBanks. To maintain the quality of bank management and accord
appropriate protection to depositors and the public in general, the BSP shall prescribed the fit and proper
qualifications of bank directors and officers for the purposes of this article, giving due recognition to the
uniquenatureandcharacterofcooperativebanks.

"NotwithstandingtheprovisionsofthisCode,thenumber,computationandtermoftheboardofdirectorsshall
bedefinedinthearticlesofcooperationandbylawsofthecooperativebank.

"ART. 99. Quorum and Voting Rights. The quorum requirement for general assembly meetings, whether
special or regular, shall be one half plus one of the number of voting shares of all the members in good
standing.Inthemeetingsoftheboardofdirectors,whetherspecialorregular,thequorumrequirementshall
beonehalfplusoneofallthemembersoftheboardofdirectors.Eachdirectorshallonlyhaveonevote.

"Notwithstanding the provisions of this Code to the contrary, the quorum requirement for amendments of
articles of cooperation and bylaws shall be threefourths (3/4) vote of all the members with voting rights,
presentandconstitutingaquorum.AllothervotingrequirementsshallbeasprescribedbytheBSP.

"Thevotingrightsofthemembersshallbeproportionatetothenumberoftheirpaidupshares.

"ART. 100. Powers, Functions and Allied Undertakings of Cooperative Banks. A cooperative bank shall
primarily provide financial, banking and credit services to cooperative organizations and their members.
However, the BSP may prescribe appropriate guidelines, ceilings and conditions on borrowing of a
cooperativeorganizationfromacooperativebank.

"Thepowersandfunctionsofacooperativebankshallbesubjecttosuchrulesandregulationsasmaybe
promulgatedbytheBSP.

"InadditiontothepowersgrantedbythisCodeandotherexistinglaws,anycooperativebankmayperform
anyorallofthebankingservicesofferedbyothertypesofbankssubjecttothepriorapprovaloftheBSP.

"ART.101.CapitalRequirementsofCooperativeBanks.(1)Acooperativebankshallhaveaminimumpaid
upcapitalinsuchamountasmayberequiredbytheBSP.

"The BSP may prescribe rules and regulations on the types of shares a cooperative bank may issue,
includingthetermsthereofandrightsappurtenanttheretotodeterminecompliancewithlawsandregulations
governing capital and equity structure of banks: Provided, That cooperative banks shall issue par value
sharesonly.
 "(2)TheBarrioSavingsFund(BSF)andBarrioGuaranteeFund(BGF)collected/deductedbyvariousbanks
throughoutthecountryfromtheloanproceedsoffarmerborrowerswhoweremembersofcooperativesand
Samahang Nayon in compliance with Presidential Decree No. 175 and accompanying letters of instruction,
which are still floating and outstanding either as active or dormant deposit accounts in the books of those
banks,shallbedepositedtothecooperativebanklocatedintheprovincewherethedepositorybanksofBSF
and BGF are located, or if there is no cooperative bank in the province. The BSP, in coordination with the
Authority,shallcomeupwiththeimplementingguidelinesonhowtocredittheownersofthefunds.

"Thosefundswhoseownerscouldnotbelocatedoridentifiedshallbesubjecttoescheat.

"ART. 102. Privileges and Incentives of Cooperative Banks. The cooperative banks registered under this
Codeshallbegiventhesameprivilegesandincentivesgrantedtotheruralbanks,privatedevelopmentbank,
commercial banks, and all other banks to rediscount notes with the BSP, the Land Bank of the Philippines,
andothergovernmentbankswithoutaffectinginanywaytheprovisionsofthisCode.

"(1)SubjecttotheapprovaloftheBSP,acooperativebankshallpublishastatementofitsfinancialstatement
ofitsfinancialcondition,includingthoseofitssubsidiariesandaffiliatesinsuchtermsunderstandabletothe
laymanandinsuchfrequencyasmaybeprescribedbytheBSP,inEnglishorFilipino,atleastonceevery
quarterinanewspaperoflocalcirculationinthecityorprovincewheretheprincipalofficeislocatedor,ifno
newspaperispublishedinthesameprovinces,theninanewspaperpublishedinthenearestcityorprovince
orinanewspaperofgeneralcirculation.TheBSP,however,mayallowthepostingofthefinancialstatements
of the cooperative bank in conspicuous places it may determine in lieu of the publication required in the
precedingsentencewhenwarrantedbythecircumstances.

"However, in cases of foreclosure of mortgages covering loans granted by a cooperative bank, and the
executionofjudgmentsthereoninvolvingrealpropertiesandlevieduponbyasheriff,itshallbeexemptfrom
publication requirement where the total amount of the loan, excluding interest and other charges due and
unpaid, does not exceed Two hundred fifty thousand (P250,000.00) or such amount as the BSP may
prescribe,asmaybewarrantedbytheprevailingeconomicconditionsandbythenatureandcharacterofthe
cooperativebanks.Itshallbesufficientpublicationinsuchcasesifthenoticeofforeclosureandexecutionof
judgment are posted in conspicuous areas in the cooperative banks premises, the municipal hall, the
municipalpublicmarket,thebarangayhall,orthebarangaypublicmarket,iftherebeanywheretheproperty
mortgaged is situated, within a period of sixty (60) days immediately preceding the public auction or the
execution of judgment. Proof of publication as required herein shall be accomplished by an affidavit of the
sherifforofficerconductingtheforeclosuresaleorexecutionofjudgment,andshallbeattachedtotherecord
ofthecase.

"(2) A cooperative bank shall be allowed to foreclosure lands mortgaged to its subject to the provisions of
RepublicActNo.6657,otherwiseknownasComprehensiveAgrarianReformLawof1988.

"ART. 103. AssistancetoCooperativeBanks. In accordance with existing policies, government agencies,

governmentownedorcontrolledcorporationsandfinancialinstitutionsshallprovideassistance,technicalor
otherwise, to cooperative banks to permit them to grow, develop and perform their role in countryside
developmenttowardsasustainablenationaleconomicdevelopment.Wheneveracooperativebankorganized
underthisCodeisinastateofcontinuinginabilityorunwillingnesstomaintainaperiodofliquidity,theBSP
may designate one of its officials or a person of recognized competence, preferably with experience in
cooperativebankingandfinance,asconservatorofthe saidbankpursuantto theappropriateprovisionsof
existingbankinglaws.

"ART.104.ApplicabilityofBankingLawsandRegulations.Withrespecttotheprovisionsandgovernanceof
thecooperativebanks,theprovisionsofthebankinglaws,rulesandregulationsshallprevail,notwithstanding
Section71ofRepublicActNo.8791,otherwiseknownastheGeneralBankingActof2000.

"The BSP and the Authority, in consultation with the concerned cooperative sector, shall issue
appropriaterulesandregulationspertainingtotheprovisionsofthisChapter."

SEC.13. Articles 99, 100, 101, 102, 103, 104, 105, 106, 107, 108 and 109 of Chapter XIII on Special Provisions
Relating to Cooperative Banks of the same Code are hereby transferred to another chapter. Chapter XIII as
amendedshallnowread,asfollows

CHAPTERXIII
INSURANCECOOPERATIVE

"ART. 105. Cooperative Insurance Societies. Existing cooperatives may organize themselves into a
cooperative insurance entity for the purpose of engaging in the business of insuring life and property of
cooperativesandtheirmembers.

"ART.106.TypesofInsuranceProvided.Underthecooperativeinsuranceprogramestablishedandformed
bythevirtueoftheprovisionsofthisCode,thecooperativeinsurancesocietiesshallprovideitsconstituting
members different types of insurance coverage consisting of, but not limited to, life insurance with special
group coverage, loan protection, retirement plans, endowment, motor vehicle coverage, bonding, crop and
livestockprotectionandequipmentinsurance.
 "ART. 107. ApplicabilityofInsuranceLaws. The provisions of the Insurance Code and all other laws and
regulations relative to the organization and operation of an insurance company shall apply to cooperative
insuranceentitiesorganizedunderthisCode.Therequirementsoncapitalization,investmentsandreserves
ofinsurancefirmsmaybeliberallymodifieduponconsultationwiththeAuthorityandthecooperativesector,
butinnocasemayberequirementtobereducedtolessthanhalfofthoseprovidedforundertheInsurance
Codeandotherrelatedlaws.

"ART. 108. Implementing Rules. The Insurance Commission and the Authority, in consultation with the
concernedcooperativesector,shallissuetheappropriaterulesandregulationsimplementingtheprovisions
ofthisChapter."

SEC.14.Articles110,111,112,113and114ofChapterXIVonSpecialProvisionsrelatingtoCreditCooperativeof
thisCodeareherebytransferredtoanotherchapter.ChapterXIVasamendedshallnowread,asfollows:

CHAPTERXIV
PUBLICSERVICECOOPERATIVES

"ART.109.DefinitionandCoverage.Apublicservicecooperative,withinthemeaningofthisCode,isone
organizedtorenderpublicservicesasauthorizedunderafranchiseorcertificateofpublicconvenienceand
necessitydulyissuedbytheappropriategovernmentagency.Suchservicesmayincludethefollowing:

"(1)Powergeneration,transmission,and/ordistribution

"(2)Iceplantsandcoldstorageservices

"(3)Communicationservicesincludingtelephone,telegraph,andcommunications:

"(4) Land and sea transportation cooperatives for passenger and/or cargo. Transport cooperatives
organizedundertheprovisionsofExecutiveOrderNo.898,Seriesof1983,shallbegovernedbythis
Chapter.

"(5)Publicmarkets,slaughterhousesandothersimilarservicesand

"(6)Suchothertypesofpublicservicesasmaybeengagedinbyanycooperative.Suchcooperative
shallbeprimarilygovernedbythisChapterandthegeneralprovisionsofthisCodeinsofarastheymay
beapplicableunlesstheyareinconsistentherewith.

"ART. 110. Registration Requirements. Unless otherwise provided in this Code, no public service
cooperativeshallberegisteredunlessitsatisfiesthefollowingrequirements.

"(1)Itsarticlesofcooperationandbylawsprovideforthemembershipoftheusersand/orproducersof
theserviceofsuchcooperativesand

"(2) Such other requirements as may be imposed by the other pertinent government agencies
concerned. In case there are two (2) or more applicants for the same public service franchise or
certificate of public convenience and necessity, all things being equal, preference shall be given to a
publicservicecooperative.

"ART.111.RegulationofPublicServiceCooperatives.(1)Theinternalaffairsofpublicservicecooperatives
suchastherightsandprivilegesofmembers,therulesandproceduresformeetingsofthegeneralassembly,
board of directors and committees for the election and qualifications of officers, directors, and committee
membersallocationanddistributionofsurplusesandallothermattersrelatingtotheirinternalaffairsshallbe
governedbythisCode.

"(2) All matters relating to the franchise or certificate of public convenience and necessity of public service
cooperativessuchascapitalizationandinvestmentrequirements,equipmentandfacilities,frequencies,rate
fixing and such other matters affecting their public service operations shall be governed by the proper
governmentagencyconcerned.

"(3)TheAuthorityandthepropergovernmentagencyconcernedshalljointlyissuethenecessaryrulesand
regulationstoimplementthisChapter.

"(4) The Authority shall establish a committee for the monitoring of transportation service cooperatives
composedofrepresentativesfromtheAuthority,theLandTransportationFranchisingandRegulatoryBoard
(LTFRB), the Land Transportation Office (LTO), Office of Transport Cooperatives (OTC), other concerned
governmentagencies,asmaybenecessary,andtheNationalFederationofTransportationCooperatives.A
localmonitoringcommitteeshalllikewisebeestablishedattheextensionofficesoftheAuthoritytofacilitate
themonitoringoftransportationcooperatives.

"ART. 112. Engagement in Allied Business by Transportation Service Cooperatives. Subject to pertinent
national laws and local ordinances, primary transportation service cooperatives including secondary and
tertiaryfederationofcooperativesmayengageinabusinessrelatedtotransportationservice,includingbut
notlimitedto:

"(1)Importation,distributionand,marketingofpetroleumproductsinaccordancewithexistinglaws
 "(2)Operationofgasolinestationsandtransportationservicecenters

"(3)Importation,distributionandmarketingofsparepartsandsuppliesand

"(4)Marketingofvehicle/driversinsurancepolicies.

"ART.113.RenewalofFranchiseandVehicleRegistration.Renewalsoffranchiseandvehicleregistration
shallbegrantedtotransportationservicecooperatives:Provided,Thatsuchcooperativepresentsacertificate
ofgoodstandingissuedbytheAuthority,OTC,andthelocalgovernmentunitconcernedasproofthatithas
continuouslyprovidedtherequiredpublictransportationservices.

"TheAuthority,inconsultationwiththeconcernedgovernmentagenciesandcooperativesector,shallissue
appropriaterulesandregulationspertainingtotheprovisionsofthisChapter."

SEC. 15. Articles 115, 116, 117 and 118 of Chapter XV on Special Provisions relating to Cooperative Insurance
SocietiesofthesameCodeareherebytransferredtoanotherchapter.ChapterXVasamendedshallnowread,as
follows:

CHAPTERXV
CREDITCOOPERATIVES

"ART. 114. Coverage. This Chapter shall apply to credit cooperatives and other cooperatives, including
multipurposecooperatives,thatprovidesavingsandcredittotheirmembersonly.Therestoftheprovisionsof
thisCodeshallapplytotheminsofarasthesamearenotinconsistentwiththeprovisionsofthisChapter.

"ART.115.DefinitionandObjectives.Acreditcooperativeisafinancialorganizationownedandoperatedby
itsmemberswiththefollowingobjectives:

"(1)Toencouragesavingsamongitsmembers

"(2) To create a pool of such savings for which loans for productive or provident purpose may be
grantedtoitsmembersand

"(3)Toproviderelatedservicestoenableitsmemberstomaximizethebenefitfromsuchloans.

"ART. 116. Organization and Registration. Credit cooperatives shall be organized and registered in
accordancewiththegeneralprovisionsofthisCode.

"ART. 117. Organizational Linkage. Credit cooperatives may organize chapters or subsidiaries, or join
leaguesandfederationsforthepurposeofprovidingcommonlyneededessentialservicesincludingbutnot
limitedtothefollowing:

"(1)Interlendingofsurplusfund"(2)Mutualbenefits"(3)Depositguarantee"(4)Bonding"(5)Educationand
training"(6)Professionalandtechnicalassistance"(7)Researchanddevelopment"(8)Representationand"
(9)Otherservicesneededtoimprovetheirperformance.

"Existing support organizations such as federations of credit cooperatives, credit cooperatives at the
provincial,regionalandnationallevelsmaycontinueassuchunderthisCode."

SEC.16.AnewArticleisinsertedinChapterXVonCreditCooperativesandshallnowread,asfollows:

"ART. 118. Conversion of Credit Cooperatives to Financial Service Cooperatives. Existing credit and
multipurposecooperativeswithsavingsandcreditfacilitiesshallformallyinformtheAuthorityofitsintentionto
continue performing its present functions. Should the said cooperatives decide to exercise enhanced
functions, it shall notify the Authority and satisfy the requirements for conversion to financial service
cooperative."

SEC. 17. A new Chapter on Financial Service Cooperatives shall be inserted in this Chapter and shall read, as
follows:

CHAPTERXVI
FINANCIALSERVICECOOPERATIVES

"ART.119.DefinitionandFunctionsofFinancialServicesCooperatives.Afinancialservicecooperativeisa
financial organization owned and operated by its members and authorized to provide the following service,
exclusivelytoitsmembers:

"(a) The functions of credit cooperatives and other cooperatives, including multipurpose cooperatives, that
providesavingsandcredittotheirmembers,and"(b)OtherfinancialservicessubjecttoregulationbytheBSP.

"Thearticlesofcooperationandbylawsofanyfinancialservicecooperative,oranyamendmentthereto,shall
beregisteredwiththeAuthorityonlyifaccompaniedbyacertificateofauthorityissuedbytheBSP,underits
officialseal.
"The authority granted this provision may be revoked by the BSP if any of the grounds for receivership
mentionedunderSection53and56ofRepublicActNo.8791ispresentorifthefinancialservicecooperative
haswillfullyviolatedthisCodeofanyoftherelatedrulesandregulations.

"TheBSPshallissueaceaseanddesistordertocooperativesexercisingthefunctionofafinancialservice
cooperativewithoutauthorityfromtheBSP.

"The BSP may charge equitable rates or fees, as may be prescribed by the Monetary Board for licensing,
examinationandotherserviceswhichitrendersunderthisCode.

"UponthefavorablecertificationoftheBSPandthepriorapprovaloftheAuthority,acooperative,themain
purpose of which is to perform savings and credit functions, may convert to financial service cooperative
subjecttotherequiredqualificationsandproceduresprovidedunderthisCodeandintheimplementingrules
andregulations.

"ART. 120. Membership and Affiliation. A financial service cooperative shall have the two (2) types of
members:

"(1)Regularmembers,whoarenaturalpersonsand

"(2)Associatemembers,whoarenaturalpersonsbutwhodonotimmediatelyqualifyundertherequirements
formembershipsetoutinthebylawsofthecooperative.Allassociatememberswhoarenaturalpersonsshall
be given two (2) years to become regular members. Failure to convert within the said period shall mean
automaticwithdrawaloftheirassociatemembership.Theymay,however,reapplyasregularmembersafter
two(2)years.

"Minors who are dependents of regular members can qualify as associate members. When they reach the
age of majority and within two (2) years from acceptances of their associate membership, they have the
optiontoconvertintoregularmembers.Asassociatemembers,theymayopenaccounts,depositfundsand
withdrawfromtheiraccount,subjecttothebylawsandrulesofthecooperative,andtherulesandregulations
oftheAuthority,notwithstandingtheprovisionsofexistinglawstothecontrary.

"ART. 121. Regulation and Supervision. The Authority shall exercise lead regulatory powers and
supervisionovertheoperationsofthefinancialservicecooperatives,towit:

"(1) Issue rules and regulations for the safe and sound conduct of operations of financial service
cooperatives

"(2)Establishstandardsofoperationforuniformapplicationtoallfinancialservicecooperatives

"(3)Prescriberatios,ceilings,limitations,orotherformsofregulationonthedifferenttypesofaccounts
and practices of financial service cooperatives which shall, conform to internationally accepted
standards

"(4)Investigatetodeterminewhetherafinancialservicecooperativeisconductingitsbusinessinasafe
andsoundmanner

"(5)Conductregularexaminationofthebooksofaccounts,recordsandotherdocumentsoffinancial
servicecooperatives

"(6)Inquireintothesolvencyandliquidityofafinancialservicecooperatives

"(7) Prescribe appropriate fees for supervision and examination of financial service cooperatives to
amongothers,monitorandoverseethatexistinglawsandregulationsarecompliedwith

"(8) Pass upon and review the qualifications and disqualifications of individuals elected or appointed
directorsorofficersanddisqualifythosefoundunfit

"(9) Disqualify, suspend or remove any director or officer who commits or omits an act which render
himunfitfortheposition

"(10) Select, designate and deputize federations, through an approved accreditation criteria, that will
superviseprimaryfinancialservicecooperativesandissuebasicguidelinestherefor

"(11)Requirethesubmissionofrelevantreportsfromthedeputizedsupervisor

"(12)Provideremedialmeasuresintheoperationsoffinancialservicecooperativesthatareinastate
ofcontinuinginabilityorunwillingnesstomaintainaperiodofliquidityattherequestofthedeputized
supervisororwhenthedeputizedsupervisorfailstoperformitsfunctions

"(13) Accredit external auditors in accordance with standards for audit and financial reporting in
cooperationwiththePICPAand

"(14)Appointaconservatororareceiverasmaybenecessarysubjecttotherulesandregulationsto
be promulgated by the Authority in coordination with the BSP, taking into consideration the grounds,
 powers and procedures under Sections 29 and 30 of Republic Act No. 7653 as may be deemed
appropriatetofinancialservicecooperatives.

"TheAuthorityshallincludeinitsrulesandregulations,appropriatesanctionsandpenalties,onthefinancial
service cooperatives, its members, officers and responsible persons, for any action that fails to adhere to
sound and prudent management practices or are inconsistent with the provisions of this Code, other
applicablelawsoncooperatives,rules,regulations,circularsorordersissuedbytheAuthority,andrequirethe
cooperativetoundertakecorrectiveorremedialmeasuresrelativethereto.

"TheBSPisauthorizedtoconductriskbasedsupervisionandexaminationoffinancialservicecooperatives
asitmaydeemnecessary.

"ART. 122. Promulgation of Rules and Regulations. The BSP, in coordination with the Authority, shall
prescribetheappropriateprudentialrulesandregulationsapplicabletothefinancialservicecooperatives.

"Subject to the regulations of the BSP, the banking laws, rules and regulations shall have suppletory
applicationtofinancialservicescooperatives:Provided,however,Thattheprovisionsonaccesstoborrowing
or financial assistance to be extended by the BSP of the Philippine Deposit Insurance Corporation (PIDC)
shallnotapplytofinancialservicecooperatives:Provided,further,Thatthedepositliabilitiesofthefinancial
servicecooperativesshallnotbeinsuredbythePDIC.

"ART. 123. Financial Service Cooperative Federations. Financial service cooperatives may organize
themselves into financial service cooperative may organize themselves into financial service cooperative
federations, and register their federation with the Authority. These financial service cooperative federations
may be deputized by the Authority as the supervisor of their members, and they shall have the following
functions:

"(a) Develop standards and provide services for the benefit of its affiliates and their members in
accordancewiththerulesandregulationsoftheAuthority

"(b)Definecommonobjectivesandcoordinateactivitiesforthefinancialservicecooperativefederation

"(c)Establishandadministerfundssuchasliquidityfund,loanfund,investmentfund,stabilizationfund
andsuchotherfunds

"(d)Establishasavingsguaranteesystemfortheprotectionoftheiraffiliates'memberdepositorswithin
three(3)yearsfromtheapprovalofthisCode

"(e)Exerciseonsiteandoffsitesupervisorypoweroveritsmembers

"(f)Provideremedialassistancetoitsmembersconcerningtheiroperationsandmanagement

"(g)Actastheliquidatorandwhenapplicable,sequesterpropertiestosatisfyanobligationsecuredby
amortgagewhenauthorizedbytheAuthorityand

"(h)Transmitrelevantandrequiredinformationregardingtheoperationsandperformanceofmember
cooperativestotheAuthority.

"The Authority and other government agencies, governmentowned or controlled corporations and
government financial institutions shall provide technical and such other assistance that may be allowed by
theircharterstofinancialservicecooperativefederationsfortheestablishmentand/orstrengtheningoftheir
respective cooperative savings guarantee system. The technical assistance to be provided shall include,
amongothers,trainingsupervisionandexamination.

"ART.124.DesignationofExistingUnitattheCooperativeDevelopmentAuthoritytoPerformRegulatoryand
SupervisoryFunctions.Withinsix(6)monthsfromtheapprovalofthisCode,theAuthorityshalldesignate
the unit to formulate and implement the necessary regulations, rules, policies, guidelines and standards
applicable solely to financial service cooperatives and deputized federations in the performance of their
savings,creditandsuchotherrelatedenhancedfinancialserviceoperations.

"TheDepartmentofFinance,theBSPandotherconcernedgovernmentagenciesshallprovidetechnicaland
trainingsupportfortheeffectiveandefficientimplementationoftheregulatoryandsupervisoryfunctionsand
responsibilitiesoftheAuthority.

"ART. 125. Prohibition. The terms credit cooperative, financial service cooperative and financial service
cooperative federation shall be used exclusively by those who are duly registered under this Code, and no
person,groupofpersons,ororganizationsshallusethesaidtermsunlessdulyregisteredwiththeAuthority.
ViolationsofthisprohibitionshallbepunishableinaccordancewithArticle140ofthisCode."

SEC.18.AnewChapteronElectricCooperativesshallbeinsertedandshallread,asfollows:

CHAPTERXVII
ELECTRICCOOPERATIVE
"ART.126.Coverage.TheprovisionsofthisCodeshallapplytoallelectriccooperativesregisteredwiththe
Authority.ThisshallalsocovernewdistributionutilitiesthatwillregisterwiththeAuthority.

"Electriccooperativesmayundertakepowergenerationutilizingrenewableenergysources,includinghybrid
systems,acquisitionandoperationofsubtransmissionordistributionasitsprimarypurposes.

"ART. 127. Registration of Electric Cooperatives. The registration of an electric cooperative with the
Authority under this Code shall be submitted for approval to the members through a referendum, called for
thepurposeasprovidedforunderArticles183and129ofthisCode.

"ART.128.VotingRequirementforRegistration.Incompliancewiththereferendumasavotingprocedure,
therequirednumberofvotesforregistrationwiththeAuthorityshallbetwentypercent(20%)ofallmembers
ingoodstanding.

"ART. 129. Documents to be Submitted for Registration with the Authority. For purposes of registration,
electriccooperativesshallsubmitthefollowingdocuments:

"(a) Copy of the board resolution certifying to the result of the vote approved through a referendum
approvingtheregistrationofthecooperativewiththeAuthorityincompliancewithArticle128

"(b)Certifiedcopyofthearticlesofincorporation/cooperationandbylawsasrequiredbytheAuthority

"(c)Dulyauditedfinancialstatementsforthepasttwo(2)years

"(d)Listofnamesofincumbentboardofdirectorsandtheiraddressescertifiedbytheboardsecretary
andattestedbythechairperson

"(e) Within six (6) months from the registration, the treasurer shall submit a sworn statement of the
authorized share capital, the subscribed share capital of members and the amount of paidup share
capitalreceivedbythetreasurerand

"(f)Bondsofaccountableofficers.

"ART.130.RegistrationOptionsofElectricCooperatives.ElectricCooperativesregisteredwiththeNational
ElectrificationAdministration(NEA)underPresidentialDecreeNo.269,asamendedwhichoptnottoregister
withtheAuthorityareallowedtoretainthewordcooperativeintheirregisterednames:Provided,Thatthey
shallnotbeentitledtothebenefitsandprivilegesunderthisCode.

"ART. 131. Role of the Energy Regulatory Commission. All rates and tariffs of electric cooperatives
registeredundertheAuthorityshallbesubjecttotherulesonapplicationandapprovalofandbytheEnergy
RegulatoryCommissionfordistributionutilities.

"ART. 132. Effects of Registration with the Authority. (1) Upon the effectivity of this Code, electric
cooperativesthataredulyregisteredwiththeAuthority,andissuedacertificateofregistration,shallnolonger
be covered by Presidential Decree No. 269, as amended by Presidential Decree No. 1645: Provided,That
electriccooperativesregisteredwiththeAuthorityshallnowbecoveredbytheprovisionsofthisCodeaswell
as future rules and issuances of the Authority: Provided, however, That the security of tenure and the
collective bargaining agreement between the cooperative management and the employees shall be
respected,withnodiminutionoftheirexistingsalaries,emoluments,ranksandotherbenefits

"(2)TheelectriccooperativesregisteredwiththeAuthoritywithexistingloansobtainedfromNEAafterJune
26,2001shallcontinuetoobservethetermsofsuchloansuntilfullpaymentorsettlementthereof

"(3)Exceptasprovidedintheimmediatelyprecedingparagraph,theNEAshallnolongerexerciseregulatory
orsupervisorypowersonelectriccooperativesdulyregisteredwiththeAuthority

"(4) Electric cooperatives registered with the Authority are entitled to congressional allocations, grants,
subsidiaries and other financial assistance for rural electrification which can be coursed through the
DepartmentofEnergy,theAuthorityand/orlocalgovernmentunits.Theelectriccooperativesregisteredunder
this Code can avail of the financial services and technical assistance provided by the government financial
institutions and technical development agencies on terms respecting their independence as autonomous
cooperatives

"(5) All condoned loans, subsidies, grants and other assistance shall form part of the donated capital and
fundsoftheelectriccooperativesandassuch,itshallnotbesold,tradednorbedividedintoshareholdingsat
any time these donated capital/fund shall be valuated for the sole purpose of determining the equity
participation of the members: Provided, That in the case of dissolution of the cooperative, said donated
capitalshallbesubjecttoescheatand

"(6) Electric cooperatives registered and confirmed with the Authority under Republic Act No. 6938 and
RepublicActNo.6939areherebydeemedregisteredunderthisCode.

"ART. 133. Share Capital in the Electric Cooperatives. The electric cooperative shall issue and distribute
share certificates under the name of their members, taking into consideration their previous equity
 contributions, the amortization component through the payments made, capital buildup and other capital
contributions.

"ART.134.CancellationofRegistrationwiththeAuthority.Thecancellationoftheregistrationofanelectric
cooperativeshallbegrantedbytheAuthorityasprovidedunderArticles64to70ofthisCode.

"The Authority, in consultation with the concerned cooperative sector, shall issue appropriate rules and
regulationspertainingtotheprovisionsofthisChapter."

SEC.19. Articles 119, 120 and 121 of Chapter XVI on Miscellaneous Provisions of the same Code are hereby
amendedandshallnowread,asfollows:

CHAPTERXVIII
MISCELLANEOUSPROVISIONS

"ART.135.ComplianceWithOtherLaws.TheLaborCodeandallotherlaborlaws,theSocialSecurityAct,
theMedicalCareAct,andallothersociallegislations,andallotherlawsandexecutiveordersshallapplyto
cooperativesdulyregisteredunderthisCode.

"ART. 136. Register of Cooperatives. The Authority shall establish a register which shall contain a
chronological entry of the name of every cooperative registered or dissolved under this Code together with
thebasicinformationrequiredforregistrationordissolutionandanyotherinformationconsidereduseful.The
Authority shall publish annually a list of existing cooperatives, cooperatives under dissolution and those
whoseregistrationarecancelledduringtheyeartogetherwithsuchinformationoneachofthemasmaybe
prescribedintherulesandregulations.

"ART. 137. Settlement of Disputes, Conciliation, and Mediation Proceedings. Disputes among members,
officers,directors,andcommitteemembers,andintracooperative,intercooperative,intrafederationorinter
federation disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or
mediationmechanismsembodiedinthebylawsofcooperativesandinsuchotherapplicablelaws.

"Theconciliationandmediationcommitteeofthecooperativeshallfacilitatetheamicablesettlementofintra
cooperativedisputesanddisputesamongmembers,officers,directors,andcommitteemembers.

"Should such conciliation or mediation proceeding fail, the matter shall be settled through voluntary
arbitration: Provided, however, That before any party can validly file a complaint with the Authority for
voluntaryarbitration,itmustfirstsecureacertificationfromitsconciliationandmediationcommitteeandfrom
itsconciliationandmediationcommitteeandfromthecooperativeunionorfederationtowhichitbelongsthat
despitealleffortstosettletheissues,thesamehavefailed.

"The jurisdiction of the voluntary arbitrators shall be exclusive and original and their decisions shall be
appealabletotheOfficeofthePresident.TheAuthorityshallissueandadopttheproperrulesofprocedure
governing arbitration as the primary and exclusive mode for dispute resolution in accordance with the
AlternativeDisputeResolutionActof2004.

"Forthispurpose,theAuthorityshallconstitutealistofqualifiedvoluntaryarbitrators."

SEC.20. A new article is inserted in Chapter XVIII on the Miscellaneous Provisions of the same Code and shall
read,asfollows:

"ART.138.JointCongressionalOversightCommitteeonCooperative(JCOCC).Thereisherebycreateda
Joint Congressional Oversight Committee composed of the Chairman of the Senate Committee on
Cooperatives and the Chairman of the House Committee on Cooperatives Development, with four (4)
memberseachfrombothHouses.ThesaidmembersshallbedulyappointedbytheSenatePresidentand
the Speaker of the House of Representatives from the members of the respective committee based on the
proportionalrepresentationofthepartiesorcoalitiontherein.

"TheJointOversightCommitteeshallreviewandapprovetheimplementingrulesandregulationsofthisCode
andmonitoritsproperimplementation.

"The annual appropriate for the oversight committee shall be charged to the budget of both Houses of
CongressintheGeneralAppropriationsAct(GAA)."

SEC.21.Article122isherebydeleted.Articles123,124,125,126,127,128,129and130ofChapterXVIIonFinal
ProvisionsofthisCodeareamendedtoread,asfollows:

CHAPTERXIX
FINALPROVISIONS

"ART. 139. Implementing Rules and Regulations. The Authority shall issue rules and regulations to
implementthoseprovisionsofthisCodewhichexpresslycallfortheissuancethereof.Thisparagraphshall
notapplytothosecaseswhereinaspecificprovisionofthisCodeexpresslydesignatesparticulargovernment
agencieswhichshallissuetheregulationscalledforbyanyprovisionofthisCode.

"ART.140.PenalProvisions.Thefollowingactsoromissionsaffectingcooperativesareherebyprohibited:
"(1) The use of the word cooperative by any person or of persons or organizations, unless duly
registeredasacooperativeunderthisCodeexceptasprovidedforunderArticle130hereof.Incaseof
violation, the individual or individuals concerned, or in the case of an organization, its officers and
directorsshall,uponconviction,eachsufferthepenaltyofimprisonmentofnotlessthantwo(2)years
normorethanfive(5)yearsandafinenotexceedingTwentythousandpesos(P20,000.00)orbothat
thediscretionofthecourt

"TheAuthoritymaymotuproprio,initiatecomplaintsforviolationsofthisprovision.

"(2)Anypersonwhowillfullyattemptsinanymannertoevadeordefeattaxinviolationoftheprovisions
ofArticles60and61ofthisCodeshallinadditionthereof,bepunishedbyafineofnotlessthanThirty
thousand pesos (P30,000.00) but not more than One hundred thousand pesos (P100,000.00) and
sufferimprisonmentofnotlessthantwo(2)yearsbutnotmorethanfour(4)years:Provided,Thatthe
conviction or acquittal obtained under this Article shall not be a bar to the filing of a civil suit for the
collectionoftaxes

"(3) Direct or indirect violation or circumvention of the provisions of Articles 60 and 61 of this Code
committee by any public official or employee of any bureau, office or agency of the government that
deprives,diminishesorinanymannerhindersorrestrictsanydulyregisteredcooperativefromthefull
enjoymentoftheexemptionfromthepaymentofthetaxes,feesandchargesenumeratedtherein,shall
upon conviction, suffer a penalty of not less that one (1) year but not more than five (5) years
imprisonmentorafineintheamountofnotlessthanFivethousandpesos(P5,000.00)orbothatthe
discretionofthecourtandshallfurtherbedisqualifiedtoholdanyotheroffice

"(4) Direct or indirect interference or intervention by any public official or employee into the internal
affairsofacooperativeofwhichheisnotamember,suchas,butnotlimitedto,thefollowing:

"(a) Influencing the election or appointment of officers, directors, committee members and
employees through public or private endorsement or campaign for or against any person or
groupofpersons

"(b)Requiringpriorclearancesforanypolicyordecisionwithinthecooperative

"(c) Requesting or demanding for the creation of positions or organizational units, or

recommendinganypersonforappointment,transfer,orremovalfromhispositionor

"(d)Anyotheractsinimicaloradversetotheautonomyandindependenceofcooperatives.

"(5)Adirector,officerorcommitteememberwhoviolatedtheprovisionsofArticle45ontheLiabilityof
Directors,OfficersandCommitteeMembers,Article48ontheDisloyaltyofaDirector,andArticle49on
the Illegal Use of Confidential Information shall upon conviction suffer a fine of not less than Five
hundredthousandpesos(P500,000.00)normorethanFivehundredthousandpesos(P500,000.00)or
imprisonment of not less than five (5) years but not more than ten (10) years or both at the courts
discretion

"(6) The following are considered offenses punishable by a penalty of imprisonment of not less than
one(1)yearnormorethanfive(5)yearsorafineofnotmorethanFiftythousandpesos(P50,000.00)
orbothatthediscretionofthecourt:

"(a) Omission or refusal to furnish any information, report or other document that is required
underthisCode

"(b) Providing information, reports or other documents to the Authority that are required under
thisCodewhichthepersonknowstobefalseormisleading

"(c)OmissionorrefusaltokeepabookorregisterunderthisCodeortomaketherequiredentry
therein

"(d)MakinganentryrequiredunderthisCodeinabookorregister,whichthepersonknowsto
befalseormisleading

"(e) Hindering an authorized person from making an inspection, audit, examination or

investigationrequiredunderthisCode

"(f)FailuretocomplywithanorderorwritteninstructionsissuedorgivenbytheAuthority

"(g)Violationoftheprovisionsregardingtransactionswitharestrictedpartyand

"(h) Abetting, counseling, allowing, authorizing or commanding another person to commit an

offensepunishablebythisCode:Provided,Thatincasetheviolatorisacooperativeorjuridical
person,thepenaltyshallbeimposedonitsdirectorsandofficers.

"(7)AnyviolationofanyprovisionofthisCodeforwhichnopenaltyisimposedshallbepunishedby
imprisonmentofnotlessthansix(6)monthsnormorethanone(1)yearandafineofnotlessthanOne
thousandpesos(P1,000.00),orbothatthediscretionofthecourt.
 "In case of violation of any provision of this Code, the individual or individuals, and in the case of
organizationsorgovernmentagencies,itsofficers,anddirectorsshall,uponconvictionbyaCourt,eachsuffer
apenaltyofnotlessthantwo(2)yearsbutnotmorethanfive(5)yearsimprisonmentorafineintheamount
ofnotlessthanTwentythousandpesos(P20,000.00),orbothatthediscretionofthecourt.Inthecaseofa
public official or employee, the offender shall upon conviction, suffer the accessory penalty of temporary
absolutedisqualification.

"ART.141.PrintingandDistribution.(1)TheNationalPrintingOfficeshallpublishthisCodeintheOfficial
Gazetteinfullwithinsixty(60)daysfromthedateofapprovalthereof.CopiesofthisCodeshallbegivento
every department, agency and instrumentality of the National Government, including regional, provincial
officesandlocalgovernmentsincludinggovernmentownedandcontrolledcorporations.

"(2) All duly registered cooperatives and their federations, unions and associations, and cooperative
corporationsshallbegivenone(1)copyeachatcost.Thereafter,everynewlyregisteredcooperativeshallbe
issued at cost a copy of this Code and the regulations promulgated thereon together with its certificate of
registration.

"ART.142.InterpretationandConstruction.IncaseofdoubtastothemeaningofanyprovisionofhisCode
or the regulations issued in pursuance thereof, the same shall be resolved liberally in favor of the
cooperativesandtheirmembers.

"ART.143.RepealingClause.ExceptasexpresslyprovidedbythisCode,PresidentialDecreeNo.175and
all other laws, or parts thereof, inconsistent with any provision of this Code shall be deemed repealed:
Provided,ThattheprovisionsofSections3,5,and7ofPresidentialDecreeNo.1645,ExecutiveOrderNo.
623,seriesof2007.RevenueRegulationNo.202001,andalllaws,decrees,executiveorders,implementing
rulesandregulations,BIRcirculars,memorandumorders,lettersofinstruction,localgovernmentordinances,
orpartsthereofinconsistentwithanyoftheprovisionsofthisActareherebyrepealed,amendedormodified
accordingly.

"ART.144. Transitory Provisions. (1) All cooperatives registered and confirmed with the Authority under
RepublicActNo.6938andRepublicActNo.6939,areherebydeemedregisteredunderthiscode,andanew
certificateofregistrationshallbeissuedbytheauthority:Provided,Thatsuchcooperativeshallsubmittothe
nearestofficeoftheauthorityacopyoftheircertificateofregistrationorcertificateofconfirmation,thearticles
ofcooperation,theirbylaws,andtheirlatestauditedfinancialstatementwithinone(1)yearfromtheeffectivity
ofthiscode,otherwisetheshallbedeemedcancelledmotuproprio.

"(2) Following the issuance of the new certificate of registration, the registered cooperatives shall secured
theircertificateoftaxexemptionfromthenearestofficeoftheBureauofInternalRevenue(BIR):Provided,
Thatsuchexemptionsshallbevalidoffive(5)yearsfromthedateofissue:Provided,further,Thatallunpaid
assessments of previously registered cooperative shall be the subject of compromise settlement on terms
favorabletosuchcooperativeand:Provided,finally,ThattheBIRandtheauthorityshallbejointlyissuethe
necessaryregulationsonthisexemptionandcompromisewithinninety(90)daysfromtheeffectivityfromthis
Code.

"(3) Registration of electric cooperatives with the Authority shall not be considered as a transferred of
ownershipofitsassetsandliabilitiesnorshallitconstituteachangeinthenature,structure,andstatusofthe
cooperative.SaidregistrationshallnotresultintherevocationofthecondonedloansunderRepublicActNo.
9136,otherwiseknownastheElectricPowerIndustryReformAct:Provided,Thatelectriccooperativeswith
existingloansshallnotbesubjecttothecontrolandsupervisionsofitscreditorsandshallonlybelimitedto
thefulfillmentofeachcivilobligations.

"ART.145. Separabilty Clause. Should any part of this code be declared unconstitutional, the validity of
remainingprovisionhereofshallremaininfullandeffect.

"ART.146.EffectivityClause.Thiscodeshalltakeeffectfifteen(15)daysfromitspublicationinanewspaper
ofgeneralcirculation.

Approved,

(Sgd.)PROSPEROC.NOGRALES (Sgd.)JUANPONCEENRILE
SpeakeroftheHouseof PresidentoftheSenate
Representatives

ThisActwhichisaconsolidationofSenateBillNo.2264andHouseBillNo.4312wasfinallypassedbytheSenate
andtheHouseofRepresentativesonDecember16,2008.

(Sgd.)MARILYNB.BARUAYAP (Sgd.)EMMALIRIOREYES
SecretaryGeneral SecretaryofSenate
HouseofRepresenatives

Approved:FEB17,2009
 (Sgd.)GLORIAMACAPAGALARROYO
PresidentofthePhilippines

TheLawphilProjectArellanoLawFoundation

RULESANDREGULATIONIMPLEMENTINGCERTAINPROVISIONS
OFTHEPHILIPPINECOOPERATIVECODEOF2008
(REPUBLICACTNO.9520)

PursuanttotheprovisionofArt.139ofRepublicActNo.952otherwiseknownasthePhilippineCooperativeCode
of 2008, the Cooperative Development Authority hereby issues the following rules and regulations implementing
certainprovisionsofthesaidCode.

TITLESANDDEFINITIONS

Section1.Title.TheseRulesshallbeknownasthe"RulesandRegulationsImplementingCertainProvisions
ofthePhilippineCooperativeCodeof2008."

Section2.DefinitionofTerms.ForthepurposeoftheseRulesandregulations,thefollowingtermsaredefinedas
follows:

(1)Alternative Dispute Resolution shall refer to any process or procedure used to resolve a dispute or
controversy,otherthanbyadjudicationofapresidingJudgeofCourtoranofficerofagovernmentagency,in
which a neutral third party participates to assist in the resolution of issue, which includes arbitration,
mediation,conciliation,earlyneutralevaluation,minitrial,oranycombinationthereof.

(2)Arbitrator shall refer to the person appointed to render an Award/Decision, alone or with others, in a
disputethatisthesubjectofanArbitrationAgreement.

(3)AreaofBusinessOperationshallrefertotheprincipalplaceofbusinessofacooperativewherethe
cooperativeconductsitsbusinessasprovidedforintheirArticlesofCooperativeandBylaws.

(4)AreaofOperationshallrefertotheareawherethecooperativememberscomefromasprovidedforin
theirArticlesofCooperationandBylaws.

(5) Articles of Cooperation shall refer to the Articles of Cooperation registered under the Code, with
includesaregisteredamendmentthereto,ifapplicable.

(6)AssociateMembershallrefertomemberofacooperativewhohasnorighttovoteorbevotedupon
andshallbeentitledonlytosuchrightsandprivilegesastheBylawsmayprovide.

(7)AuthorityshallrefertotheCooperativeDevelopmentAuthority(CDA).

(8)AuthorizedShareCapitalshallrefertothecapitalizationofthecooperativeasprescribedintheArticles
ofCooperation

(9)Award/Decision shall refer to any partial or final decision by an Arbitrator in resolving the issue in a
controversy.

(10)BoardofLiquidators/TrusteesshallrefertothebodyappointedbytheBoardofDirectorsorelected
bytheGeneralAssemblythatshallcausetheliquidationofthecooperativeincaseofvoluntarydissolutionor
appointedbytheAuthority/Courtincaseofinvoluntarydissolutionofacooperative.

(11)BondofMembershipshallrefertotheconditionswheremembersassociatethemselvestoattaintheir
commongoalsandobjectiveswhichmayeitherberesidential,occupational,associational,andinstitutional.

(12) ByLaws shall refer to the Bylaws registered under the Code which includes any registered
amendmentsthereto.

(13) Capital shall refer to the sum total of member's share capital including deposits, revolving capital,
subsidies,donations,legacies,grants,aids,landstructures,plants,equipmentfacilities,machinesandother
assetsofacooperative.

(14)Certificate of Merger shall refer to the document issued by the Authority evidencing registration of
merger.

(15)CodeshallrefertotheRepublicActsNo.9520,otherwiseknownasthePhilippineCooperativeCodeof
2008.

(16)Conciliationshallrefertotheprocesswherebyaneutralthirdpartytakesavigorousandactiverolein
assisting disputants to formulate between and among them an acceptable solution in order to reach an
amicablesettlement.
(17)Conservator shall refer to any person appointed by the Authority empowered to take charge of the
assets,liabilities,andthemanagementofthecooperative,afterfindingthatthecooperativeisinthestateof
continuingilliquidityorunwillingnesstomaintainaconditionofliquiditywhichisdeemedadequatetoprotect
theinterestofmembersandcreditorsofthecooperative.

(18) Consolidation shall refer to a union of two or more existing cooperatives belonging to the same
categorytoaformanewcooperativecalledtheconsolidatedcooperative.

(19) Constituent Cooperatives shall refer to two or more existing cooperatives which are parties to a
mergerorconsolidation.

(20) Credit Cooperative shall refer to one that promotes and undertakes savings and lending services
amongitsmembers.Itgeneratesacommonpooloffundsinordertoprovidefinancialassistanceandother
relatedfinancialservicestoitsmembersforproductiveandprovidentpurposes.

(21)CumulativeInterestshallrefertotheinterestduetoamemberthatmustbeaddedtoinfutureinterest
ifitisnotpaidwhendue.

(22)Delayinthesubmissionofreportsshallrefertothefailureofthecooperativestosubmitareporton
time.

(23) Dispute shall refer to intra/inter cooperative controversy or grievance from any violation or
disagreement over any provisions, including any violations of the rights and conditions of membership
providedinthecooperativeBylawsand/orintheCooperativeCode,whichmaybethesubjectofaformalor
informalrequestforconciliation/mediationorarbitrationassistancesoughtbyeitheroneorbothparties.

(24) Dissenting Member shall refer to a member present during the meeting and who actually voted
againsttheproposedactivity/projectofacooperative.

(25)Divisionshallrefertotheactofspitingasinglecooperativeintotwoormorecooperatives,whereinthe
original cooperative shall be dissolved and the resulting cooperatives shall acquire separate and distinct
juridicalpersonalities.

(26)DonatedCapital shall refer to the subsidies, grants, donations and aids received by the cooperative
fromanyperson,whethernaturalorjuridical,localorforeignbothgovernmentandprivate.

(27)EscheatshallrefertotherightoftheStatetosucceedtopropertyeitherrealorpersonal,whennoheir
orrightfulclaimantcanbefoundthroughanappropriatelegalproceeding.

(28)Equityshallrefertotheexcessofcooperativeassetsoverliabilities.

(29)FinancialStatementsshallrefertothemeansi.e.StatementofFinancialCondition(BalanceSheet),
Statement of Operation (Statement of Net Surplus) and Statement of Cash Flows, by which the financial
information accumulated and processed in financial accounting, is periodically communicated to those who
useit.

(30)FinancialServiceCooperative(FSC)shallrefertooneorganizedfortheprimarypurposeofengaging
insavingandcreditservicesandotherfinancialservicesregulatedbytheBangkoSentralngPilipinas(BSP).

(31) General Assembly shall refer to the full membership of the cooperative duly assembled for the
purposeofexercisingalltherightsandperformingalltheobligationspertainingtocooperatives,asprovided
bythisCode,itsCooperationandBylaws.

(32)GuardianCooperativeshallrefertodulyregisteredcooperativetowhichalaboratorycooperativeis
affiliatedwith.

(33)InternalControlshallrefertoallthesystemandproceduresadoptedtosafeguardthecooperative's
assets, check the accuracy and reliability of its accounting data, promote operational efficiency and
encourageadherencetoprescribedmanagerialpolicies.

(34) Involuntary Dissolution shall refer to the termination of the juridical personality of the cooperative
throughanappropriatejudicialproceedingorbyOrderoftheAuthority.

(35) Laboratory Cooperative shall refer to a cooperative duly recognized by the Authority, formed and
managed principally by minors and is affiliated with another registered cooperative which is called the
guardiancooperative.

(36)Liquidationshallrefertotheprocessofsettlementandclosureofthecooperativeaffairs,disposition,
conveyanceanddistributionofitsassets.

(37)Mediationshallrefertotheprocessinwhichamediator,selectedbythedisputingparties,facilitiesa
communication and negotiation, and assists the parties in reaching a voluntary agreement regarding a
dispute.
(38) Merger shall refer to a union of two or more existing cooperatives belonging to the same category
wherebythesurvivingcooperative,retainingitsidentity,absorbsoneormoreconstituentcooperatives/s.

(39)Minorshallrefertoanindividualbeloweighteen(18)yearsofagebutatleastseven(7)yearsold.

(40) Multipurpose Cooperative shall refer to a cooperative, which combines two (2) or more of the
businessactivitiesofthedifferenttypesofcooperativesasenumeratedunderArt.23oftheCode.

(41)Networthshallrefertoequityinclusiveofmember'sequity,donations,grantsandreservefundsless
unbooked allowance for probable losses on loans, investment and other assets and other capital
adjustmentsasmayberequiredbytheCDA.

(42)NumerousandDispersedMembershipshallrefertoacooperativewhosemembershipareinlarge
numberandgeographicallyscattered/distributedbyreasonofgeographicallocation,workshiftorothersimilar
conditionsmakingitimpossibleanddifficulttoconducttheirgeneralassemblymeeting.

(43)PaidupShareCapitalshallrefertotheportionofthesubscribedsharecapital,whichhasbeenpaid
bythemembersofthecooperative.

(44) Parent Cooperative shall refer to a cooperative, which initiates the organizational of another
cooperative called a subsidiary cooperative and provides technical, managerial, and financial assistance
thereto.

(45)PatronageRefundshallrefertotheamountreturnedtoindividualmemberswhopatronizethegoods
andservicesofthecooperativeinproportiontotheirindividualpatronage.

(46)PlanofMergerorConsolidationshallrefertoawrittendocumentcontainingtheproposedmergeror
consolidationofcooperativesdulyapprovedbytheGeneralAssemblyofeachoftheconstituentcooperatives
atseparateGeneral/RepresentativeAssemblyMeetings.

(47)PrimaryCooperativeshallrefertoacooperative,themembersofwhicharenaturalpersons.

(48)ReceivershallrefertoanypersonofrecognizedcompetenceappointedbytheAuthorityempoweredto
take charge of all the assets and liabilities of the cooperative administer the same for the benefit of its
creditorsandexercisesuchotherpowersasprovidedundertheRevisedRulesofCourt.

(49)Registrationshallrefertotheoperativeactgainingjuridicalpersonalitytoaproposedcooperativeas
evidencedbyaCertificateofRegistration.

(50)RepresentativeAssemblyshallrefertothefullmembershipofthebodyofrepresentativeselectedby
eachofthesectors,chaptersordistrictsofthecooperativedulyassembledforthepurposeofexercisingsuch
powerslawfullydelegateduntothembythegeneralassemblyinaccordancewithitsBylaws.

(51)Reportsshallrefertoanydocumentsorstatementrequiredfromcooperativestobesubmittedtothe
Authorityonaregularbasis.

(52) Representative/Delegate shall refer to a member duly elected during the sector, chapter or district
meetingswhoshallrepresenthis/hersector,chapterordistricttotherepresentativeassemblymeeting.

(53)RevolvingCapital shall refer to the amount available out of the deferred payment of the patronage
refund and interest on share capital of the members or by authorized deduction of a percentage from the
product sold or per unit of product handled by the cooperative. The Board of Director shall issue revolving
capital certificates with serial number, name, amount, and rate of interest to be paid and shall distinctly set
forththetimeofretirementofsuchcertificatesandtheamountstobereturned.

(54)RiskAssetshallrefertothetotalassetsminuscashonhand,evidencesofindebtedness,loanstothe
extentcoveredbyholdoutsorassignmentsofdeposits,landsownedusedforoperations,buildingsandland
improvements net of depreciation, furniture and fixtures and equipment net of depreciation, real estate
mortgage loan and other nonrisk items as the Authority may, from time to time, authorized to be deducted
fromtotalassets.

(55)Sanctions shall refer to the penalties provided for in the cooperative bylaws, these rules, and other
administrativeissuances,theCodeandotherrelatedlaws

(56)SecondaryCooperativeshallrefertoacooperativethemembersofwhichareprimaries.

(57) Sector, Chapter or District shall refer to a division of a cooperative, which may be by reason of
geographicallocation,scopeofoperation,cluster,workshiftorsuchothersimilarsubgroupings.

(58)Settlementshallrefertoanycompromiseorarrangementsbetweenthedisputantstosettlethematters
indisputeandthusdisposeofcontroversy.Thetermmaybeusedinthesenseof"payment"or"adjustment"
dependinguponthecircumstancesunderwhich,andtheconnectioninwhich,useofthetermismade.

(59) Sequential Election of Representative/Delegate shall refer to the election of the representatives
duringthemeetingsheld,oneaftertheother,indifferentdaysand/oratvariousvenues,byseveralsectors,
 chaptersordistrictsofacooperativeforthepurposeofelectingtheirrespectiveRepresentatives/Delegatesto
therepresentativeassemblymeeting.

(60)ShareCapitalshallrefertothemoneypaidorrequiredtobepaidbythemembersfortheconductof
theoperationsofthecooperative.

(61) Simultaneous Election of Representatives/Delegates shall refer to the election of the

representatives during the meetings held, on the same day and at various venues, by several sectors,
chapters,ordistrictsofacooperativeforthepurposeofelectingtheirrespectiveRepresentatives/Delegates
totherepresentativeassemblymeeting.

(62)SubmissionAgreementshallrefertothewrittenagreementsignedbythedisputingpartiestosubmit
thedisputetovoluntaryarbitration.

(63) Subsidiary Cooperative shall refer to any organization all or minority of whose membership or
shareholderscomefromacooperativecalledaparentcooperative,organizedforanyotherpurposedifferent
fromthatof,andreceivestechnical,managerial,andfinancialassistancefromthesaidparentcooperative.

(64)TertiaryCooperativeshallrefertoacooperative,themembersofwhicharesecondarycooperative.

(65) Total Average Share Month shall refer to the sum total of the average share month, which is
determined by adding the monthly ending balances of the member's share capital and dividing the sum by
twelve(12)months. 1avvphi1

(66) Unpaid Subscription shall refer to the subscribed share capital, which is not yet fully paid by a
member.

(67)VoluntaryArbitration shall refer to a dispute resolution process wherein any intra/inter cooperative
dispute is settled by a voluntary arbitrator/s chosen by the disputing parties from a list of qualified and
accreditedarbitrators,whoshalldecideonthemeritsofthecasebyrenderinganaward.

(68) Voluntary Arbitrator/Arbitrators shall refer to any authorized employee of the Authority or an
accreditedprivateindividualchosenbythepartiestohear,decide,andrenderanawardinadispute.

(69)VoluntaryDissolutionshallrefertotheterminationofthejuridicalpersonalityofthecooperativeatits
owninitiativeorinstanceaftercomplyingwiththerequirementssetforthintheCodeandtheserules.

RULE1
REPRESENTTATIVEASSEMBLY

Section1.LegalBasis.TheLegalbasisforthisruleisArt.5(2),(10)oftheCode,quotedasfollows:

"(2) General Assembly shall mean the full membership of the cooperative duly assembled for the
purpose of exercising all rights and performing all the obligations pertaining to cooperatives, as
provided by this Code, its articles of cooperation and bylaws. Provided that for cooperatives with
numerousanddispersedmembership,thedistrictofthecooperativeandinaccordancewiththerules
andregulationsoftheCooperativeDevelopmentAuthority."

"(10)RepresentativeAssemblyshallrefertothefullmembershipofthebodyofrepresentativeelected
by each of the sector, chapter, or district of the cooperative duly assembled for the purpose of
exercisingsuchpowerslawfullydelegateduntothembythegeneralassemblyinaccordancewithits
bylaws"

Section2.ApplicabilityThisruleshallapplytocooperatives,whichbyreasonofhavingnumerousanddispersed
membership, the conduct of the general assembly meetings becomes extremely difficult Provided, That the
adoptionofrepresentativeassemblyshallbestipulatedinthecooperativeBylaws,whichshallspecifythefollowing
matters:

a.Thebasisfordividingthecooperativeintosector,chapter,ordistrict

b.Theminimumnumberofregularmemberstocomposeeachsector,chapter,ordistrict

c.Thequorumrequiredinthesector,chapter,ordistrictassemblymeeting

d. The number of Representative/s or Delegate/s to be elected to represent the total number of the
regularmembersinthesector,chapter,ordistrict

e.ThetermofofficeoftheRepresentativeorDelegate

f.ThequalificationanddisqualificationoftheRepresentativeorDelegate

g.Thepowers,functionandresponsibilitiesoftheRepresentativeorDelegate

h.Theelectionofthesector,chapter,ordistrictRepresentativeorDelegate
 i.Vacancyinthesector,chapter,ordistrictRepresentativeorDelegate

j.Theresignationorremovalaswellastheappealofthesector,chapter,ordistrictRepresentativeor
Delegate

k.Thesector,chapter,ordistrictassemblymeetings

l.Thequorumrequiredintherepresentativeassemblymeeting

m.ThepowersoftheRepresentativeAssembly

n.Theconductoftherepresentativemeeting

o.TheeligibilityoftheRepresentative/DelegatetobeelectedasOfficersofthecooperativeand

p.Othermattersrelevanttotheconductorrepresentativeassemblymeeting.

Section3.DivisionofCooperativeintoSector,Chapter,orDistrict.TheNumberofthemembersofthecooperative,
whichshallbeatleastOneThousand(1,000)andthegeographicallocation,scopeofoperationcluster,workshift,
orothersimilarconditionsshallbethebasisindividingthecooperativeintosector,chapter,ordistrict.

Section4.CompositionoftheRegularMembersofEachSector,Chapter,orDistrict.TheBylawsshallprovidefor
thenumberoftheregularmemberstocomposeeachsector,chapter,ordistrict,whichshallnotbelessthanone
hundred(100)members.

Section 5. Quorum Requirement for Sector, Chapter, or District. At least twentyfive per centum (25%) of the
membersentitledtovoteineachsector,chapter,ordistrictshallconstituteaquorum.

Section 6. Number of Sector, Chapter, or District Representative. The number of sector, chapter, or district
Representative or Delegate to be elected shall be provided in the Bylaws but in no case, shall be less than ten
percent(10%)ofthetotalnumberoftheregularmembersentitledtovoteofthesector,chapter,ordistrict.

Section 7. Term of Office of the Sector, Chapter, or District Representatives. The term of office of the
RepresentativeorDelegateshallbeprovidedintheBylawsbutnotexceedtwo(2)years,whichshallcommenceon
thefirstregularrepresentativeassemblymeeting.

Section 8. Qualifications and Disqualifications of the Representative or Delegate. The sector, chapter, or district
representative or delegate shall possess all the qualifications and none of the disqualifications as provided in the
cooperativeBylaws.

Section 9. Powers, Functions, and Responsibilities of the Representative or Delegate. The Representative or
Delegateshallhavethefollowingpowers,functions,andresponsibilities:

(1)Torepresentthesector,chapter,ordistrictintheRepresentativeAssemblyMeeting

(2) To decided for and in behalf of the sector, chapter, or district he/she represents in the Representative
AssemblyMeetingand

(3) To inform his/her sector, chapter, or district of what transpired during the Representative Assembly
Meeting.

Section 10. Election of Sector, Chapter, or District Representative or Delegate. Each sector, chapter, or district
duringtheGeneralAssemblymeetingapprovingtheadoptionoftheRepresentativeAssemblyshallelectitsLocal
electionCommitteethatwillconducttheelectionofsector,chapter,ordistrictRepresentative/Delegatetobeheldno
laterthansixty(60)daysbeforethescheduledateoftheregularrepresentativeassemblymeetingasprovidedforin
theBylaws.

The Board of Directors shall direct sector, chapter, or district Local Election Committee to conduct the sector,
chapter, or district assembly meeting to elect its Representative/s or Delegate/s, which may be held either
simultaneouslyorsequentially.

In case the sector, chapter, or district failed to elect its Representative/s or Delegate/s, the right to send its
Representative/sorDelegate/sonthatparticularrepresentativeorassemblymeetingshallbedeemedandwaived.

Section11.VacancyintheSector,Chapter,orDistrictRepresentativeorDelegate.Anyvacancyshallbefilledupin
accordancewiththeprovisionsofthecooperativeBylaws.TheDelegateorRepresentativeelected/appointedtofill
avacancyshallserveonlytheunexpiredtermofhis/herpredecessor.

Section 12. Resignation and Removal of Sector, Chapter, or District Representative or Delegate. The sector,
chapter, or district Representative or Delegate may resign, for valid reason, as Representative or Delegate of his
sector,chapter,ordistrict.Uponthereceiptofthenotice,theBoardofDirectorsshallactontheresignationletter
within sixty (60) days otherwise, the resignation shall be deemed approved. Any sector, chapter, or district
Representative/Delegate may be removed by a vote of threefourths (3/4) of all the members with voting rights
present and constituting a quorum at a sector, chapter, or district meeting called for the purpose on the following
grounds:
 1.Failuretoattendtheimmediateprecedingrepresentativeassemblymeetingforunjustifiablereason

2.NonperformanceofanyfunctionsandresponsibilitiesstatedintheBylaws

3. Any violation of the provisions of the Code, the Bylaws of the cooperative and other issuances of the
Authorityand

4.Anyactsoromissionsinimicalorprejudicialtotheinterestofthecooperative.

Duringthesamemeeting,thesector,chapter,ordistrictshallfillthevacancy.IncasetheremovedRepresentativeor
DelegateisanincumbentOfficeroftheCooperative,his/herpositionshallbedeclaredvacantandshallbefilledup
in accordance with the Rule of Succession as provided for in the Bylaws of the Cooperative. Unless otherwise
provided for in their Bylaws, such successor shall not necessarily assume the position of his/her predecessor.
However,inthecaseofthemembershipinthecommittee,thevacatedmembershipshallbefilledupbytheBoard
ofDirectorsoftheCooperativefromamongtheRepresentatives/Delegates.

Section 13. Sector, Chapter, or District Assembly Meeting. The sector, chapter, or district meetings of the
cooperativeadoptingthisschemeshallbeasfollows:

a.Regular

b.Special

Theregularmeetingshallbeconductedtoelectthesector,chapter,ordistrictRepresentativesorDelegatesandfor
suchotherpurposesasmaybeprovidedintheBylaws.

Thespecialmeetingshallbeconductedtoreportwhathastranspiredduringtherepresentativeassemblymeeting
andforsuchotherpurposesasmaybeprovidedintheBylaws.

In either case, the conduct of the meeting shall be called and presided by the Lead Representative of Delegate.
Such Lead Representative or Delegate shall be Representative or Delegate who obtained the highest number of
votesduringthelastsector,chapter,ordistrictelection.

Section 14. Quorum Requirements for Representative Assembly. At least twentyfive per centum (25%) of all
Representatives/Delegatesshallconstituteaquorumfortherepresentativeassemblymeeting.

Section15. Power of the Representative Assembly. The Representative Assembly shall exercise the powers as
providedforintheBylaws.

Section16.ConductofRepresentativeAssemblyMeeting.RepresentativeAssemblyMeetingshallbeconductedin
accordancewiththeprovisionofthecooperativeBylaws.Intheabsencethereof,thefollowingshallbeobserved:

1.Therepresentativeassemblymeetingshallbeheldinaccordancewiththe orderofbusinessaddressing
theagendapreparedbytheBoardofDirectors

2.Thechairpersonorinhis/herabsence,theViceChairpersonoranymemberoftheBoardofDirectorsshall
presideoverthemeeting

3.TheElectionCommitteeshallsupervisetheelectionoftheBoardofDirectorsandcommitteemembersof
thecooperativeand

4. Each Representative or Delegate shall be entitled to one (1) vote. The Votes of the sector, chapter, or
districtRepresentativesorDelegatesshallbeconsideredthevotesofallthemembersofthesector,chapter,
ordistricttheyrepresent.

ThedecisionoftheRepresentativeAssemblyshallbeconsideredavalidcooperativeact.

Section17.EligibilityoftheRepresentativeorDelegatetobeelectedasOfficersoftheCooperative.TheOfficersof
thecooperativeshallcomefromtheRepresentative/sorDelegate/softhesector,chapter,ordistrict.TheseOfficer
shall be elected during the Representative Assembly Meeting for a term fixed in the Bylawsbutnotexceedinga
termoftwo(2)yearsandshallholdofficeuntiltheirsuccessoraredulyelectedandqualified,oruntildulyremoved
forcause.

The term of office of the Officer of the Cooperative at the time of adoption of the Representative Assembly shall
expireonthefirstrepresentativeassemblymeeting.

RULE2
SUBSIDIARYCOOPERATIVE

Section1.LegalBasis.ThelegalbasisforthisRuleisArt.5(16)oftheCode,quotedasfollows

"Art.5(16)SubsidiaryCooperativereferstoanyorganizationallormajorityofwhosemembershipor
shareholders come from a cooperative, organized for any other purpose different from that of, and
receives technical, managerial and financial assistance from, a cooperative, in accordance with the
rulesandregulationsoftheAuthority."
Section2.GeneralRequirements.Aparentcooperativemayorganizeasubsidiarycooperativeprovidedthat:

1. It has been in operation for at least two (2) years and has incurred no losses for the two (2) preceding
yearsofoperation.

2.IthasanetworthofatleastTenMillionPesos(Php10,000,000.00)asshowninitslatestAuditedFinancial
Statements.

3.AllormajorityoftheMembersoftheParentCooperativearewillingtobecomemembersoftheSubsidiary
Cooperative.

4.ThebusinessoftheSubsidiaryCooperativeshallbedifferentfromthatoftheParentCooperative.

5. The creation of a Subsidiary Cooperative and the technical, managerial and financial assistance to be
providedshallbeapprovedbyatleastthreefourths(3/4)voteofmembersofParentsCooperativewithvoting
rights present and constituting a quorum in a regular special general assembly/representative assembly
meetingcalledforthepurpose.

Section3.DocumentaryRequirementsforRegistrationofSubsidiaryCooperatives.Inadditiontotherequirements
forregistrationofanewcooperative,anapplicantSubsidiaryCooperativeshallsubmitaresolutionfromtheParent
CooperativeapprovingthecreationofsuchSubsidiaryCooperativeandacceptingtheresponsibilitiestherewith.

Section4.Conditions.ThefollowingconditionsshallbeconsideredintheregistrationandoperationofSubsidiary
Cooperative:

1. Only assistance in the form of technical, managerial and financial assistance shall be provided by the
ParentCooperativetoitsSubsidiaryCooperative

2.DirectorsorOfficersoftheParentCooperativecannotbeelectedorappointedasOfficersoftheSubsidiary
Cooperative.However,theParentCooperativethroughitsGeneralAssemblymayappointitsRepresentative
toactasExOfficiomemberoftheBoardofDirectorsoftheSubsidiaryCooperative

3. The Management Staff of the Parent Cooperative cannot be at the time the Management Staff of the
SubsidiaryCooperative

4. Transfer of shares of members and other related interests from Parent Cooperative to Subsidiary
Cooperativeandviceversaareprohibitedand

5.IncaseofdissolutionoftheParentCooperative,theSubsidiaryCooperativecannotbearecipientofany
grant,donationsorotherinterestsfromtheParentCooperativeandviceversa.

Section 5. Name of Subsidiary Cooperative. The subsidiary Cooperative shall include in its name the word
"SubsidiaryCooperativeof(NameofParentCooperative)".

Section6.AssistanceforParentCooperative.Thefinancialassistancetobeprovidedshallnotexceedten(10%)of
thenetworthoftheParentCooperative.Thetechnicalandmanagerialassistanceshalldependupontheneedsof
theSubsidiaryCooperativeandcapacityoftheParentCooperative,whichshallbetakenupinthebookatactual
cost.

The terms and conditions of the financial assistance provided by the Parent Cooperative to the Subsidiary
CooperativeshallbegovernedbyaMemorandumofAgreemententeredintobybothparties.

Section7.EffectofDissolutionofParentorSubsidiaryCooperative.Thedissolutionofeithercooperativeshallnot
affecttheexistenceoftheother.

RULE3
MULTIPURPOSECOOPERATIVE

Section1.LegalBasis.ThelegalbasisforthisRuleisArticle10oftheCodequotedasfollows:

"Art. 10. Organizing a Primary Cooperative. Any newly organized primary cooperative may be
registeredasmultipurposecooperativeonlyaftercompliancewiththeminimumrequirementsformulti
purpose cooperatives to be set by the Authority. A singlepurpose cooperative may transform into a
multipurposeormaycreatesubsidiariesonlyafteratleasttwo(2)yearsofoperation."

Section2.Coverage.ThisRuleshallcover(a)alltypesofnewlyorganizedprimarycooperativewithcombinedtwo
(2)ormorebusinessactivitiesofdifferenttypesofcooperativeasprovidedforinArt.23oftheCode,(b)asingle
purpose cooperative desiring to transform itself into a multipurpose cooperative after at least two (2) years of
operation.

Section3.Minimum Capitalization Requirements. Only those cooperative with a minimum paidup capital of One
HundredThousandPesos(P100,00.00)orasrequiredinthefeasibilitystudywhicheverishighershallqualifiedto
registerasamultipurposecooperativeorcantransformintoamultipurposecooperative.

Section4.Requirementsforregistration.ThefollowingdocumentsshallbesubmittedtotheAuthority:
 (1)ForanewlyorganizedMultiPurposeCooperative:

1.NameVerificationSlip

2.ArticlesofCooperativeandByLaws

3.Treasurer'sAffidavit

4.SuretyBondofAccountableOfficers

5.CertificatesofPreMembershipEducationSeminar(PMES)

6.EconomicSurvey

7.UndertakingtoChangeNameintheeventthatanothercooperativehasacquiredpriorrighttothe
useoftheproposedname

8.FavorableEndorsementfromOthergovernmentAgencies,ifapplicable

9.DetailedFeasibilityStudyindicatingviabilityoftheproposedbusinessactivity

10.UndertakingtocomplywiththeauditingandaccountingstandardsprescribedbytheAuthorityand

11.Registrationfee.

(2)ForexistingcooperativesdesiringtobetransformedintoaMultiPurposeCooperative:

1.NameVerificationSlip,incaseofchangeofname

2.AmendedArticlesofCooperativeandByLaws

3.AResolutioncertifiedbythecooperative'sSecretaryandbythemajorityoftheBoardofDirectors
statingthefactthatsaidamendmentshavebeendulyapprovedbyatleasttwothirds(2/3)voteofall
thememberswithvotingrights

4.SuretyBondofAccountableOfficers

5.AuditedFinancialStatementshowingprofitableoperationsforthepasttwo(2)years

6.UndertakingtoChangeNameintheeventthatanothercooperativehasacquiredapriorrighttothe
useoftheproposedname

7.FavorableEndorsementfromOtherGovernmentAgencies,ifapplicable

8.DetailedFeasibilityStudyindicatingviabilityoftheproposedbusinessactivities

9.Certificatethatthecooperativehascompliedwiththeauditingandaccountingstandardsprescribed
bytheAuthority

10.Proofofbusinesstrackrecordsofthecooperativeand

11.AmendmentFee.

Section5.BookofAccounts.ThenewandexistingcooperativestransformedintoaMultiPurposeCooperativeare
requiredtomaintainseparateBookofAccountsforeachbusinessactivity.

RULE4
DIVISIONOFCOOPERATIVES

Section1.LegalBasis.ThelegalbasisforthisRuleisArt.20oftheCode,quotedasfollows:

"Art.20.DivisionofCooperatives.Anyregisteredcooperative,maybyaresolutionapprovedbyavote
ofthreefourths(3/4)ofallthememberswithvotingrights,presentandconstitutingaquorum,resolve
todivideitselfintotwo(2)ormorecooperatives.Theprocedureforsuchdivisionshallbeprescribedin
the regulations of the Authority. The new cooperatives shall become legally established upon
registration with the Authority: Provided, That all the requirements set forth in this Code have been
complied with by the new cooperatives: Provided, further, That no division of cooperative in fraud of
creditorsshallbevalid."

Section2.Procedures.Thefollowingproceduresshallbeobservedinthedivisionofcooperatives:

1.ApprovalofProposaltoDivide

2.FormulationofPlanofDivision

3.PresentationandApprovalofthePlanofDivisiontotheGeneralAssembly
 4.PostingandPublicationoftheNoticeofDivision

5.WrittenNotificationtoCreditors

6.FilingwiththeAuthorityoftheRequiredDocumentsfortheRegistrationofDivisionand

7.IssuanceoftheCertificateofRegistration.

Section3.Proposal of Division. The majority members of the Board of Directors or at least ten percent (10%) of
memberswithvotingrightsmayproposefordivision,whichmustbeapprovedbyatleastmajorityofthemembersof
thecooperativewithvotingrightspresentandconstitutingaquoruminageneral/representativeassemblymeeting
calledforthepurpose.Uponapprovaloftheproposaltodivide,acommitteetoformulatethePlanofDivisionshall
beconstitutedbytheGeneral/RepresentativeAssembly.

Section4.PreferenceofMembers.UponapprovalbytheGeneral/RepresentativeAssemblyinthemeetingcalled
for the purpose, members of the original cooperative shall be allowed within two (2) weeks to choose the new
cooperativetheyprefertojoin.Themanagementoftheoriginalcooperativeshallthentransferthemember'sshare
andallotherintereststohis/herchosencooperative.

Section 5. Presentation and Approval of the Plan of Division. The Board of Directors shall call a
General/RepresentativeAssemblymeetingtoactionsuchPlanofDivisionwithnoticetoallmembersofrecordand
Creditorsatleastthirty(30)dayspriortothescheduledmeeting.ThePlanofDivisionshallbeapprovedbyavoteof
threefourths (3/4) of all members with voting rights, present and constituting a quorum in such
general/representativeassemblymeeting.

Section6.RightofaDissentingMember.Adissentingmembershallbeentitledtoarefundofhis/hersharecapital
andallotherinterestsunderArt.30oftheCode.

Section7.ContentsofthePlanofDivision.ThePlanofDivisionmustincludethefollowing:

1.Therationaleorjustificationforthedivisionofthecooperative

2.AFinancialStatementdulycertifiedbyanindependentCertifiedPublicAccountantincludingascheduleof
assets,liabilitiesandsharecapitalofthecooperativeintendingtodivide

3.Aproposedrevaluationofassets,determinationofliabilities,statutoryreserves,undividednetsurplusand
members'sharecapital

4.Listofallthereceivablesofthecooperative

5.ListofalltheCreditorsandtheirrespectiveclaimsagainstthecooperative

6. Procedure for the division of assets, allocation and settlement of the obligations and the collection of
receivablesofthecooperative

7.Feasibilitystudyensuringtheviabilityandsustainabilityofbothcooperatives

8. List of members showing their share capital contributions certified by the Secretary and attested by the
BoardChairpersonofthecooperative

9.Theproposedname,addressandareaofoperationofthenewcooperativesand

10.BenefitpackageforManagementStafftobeaffectedbytheplan.

Section 8. Publication. Within seven (7) days after the date of approval of the division of the cooperative, the
Secretary of the cooperative, duly noted by the Chairperson, shall publish such plan of division once a week for
three(3)consecutiveweeksinanewspaperofgeneralcirculationwithinitsareaofoperation.Saidpublicationmay
alsobesupplementedbyradioandtelevisionannouncements.

Alternatively,theannouncementofthedivisionmayalsobedonebypostinginatleastthree(3)conspicuouspublic
placesforthree(3)consecutiveweekswithinitsareaofoperation.

Likewise,letters/noticesdulysignedbytheChairpersonannouncingsuchdivisionshallbesentbytheSecretaryof
thecooperativethroughregisteredmailstotheircreditors.

Section 9. Objection by a Third Party. Within fifteen (15) days from the day of posting or from the last day of
publication,apartymayfileanobjectionoroppositiontothePlanofDivisionbeforetheAuthority,copyfurnishedthe
cooperativeconcerned,whichshallbedecidedwithinsixty(60)daysfromreceiptoftheobjectionoropposition.If
theobjectionoroppositionismeritorious,inordernottoprejudicetheinterestofthethirdparty,theAuthorityshall
causethedefermentordisapprovaloftheregistrationofthenewcooperatives.

After the lapse of the period to file an objection/opposition and no objection/opposition has been filed or after all
objections/oppositionshavebeenresolved,thecooperativecanfileitsapplicationforregistration.
Section 10. Additional Requirements for Registration. In addition to the regular requirements for registration of
cooperatives,thefollowingdocumentsshallbefiledwiththeAuthority:

1. The resolution of division as approved by the General/Representative Assembly duly certified by the
SecretaryanddulynotedbytheChairperson

2.ThePlanofDivisionincludingallitsattachments

3.TheMinutesoftheGeneral/RepresentativeAssemblyMeetingapprovingthePlanofDivision

4.TheFinancialStatementsofeachofthenewcooperativesdulycertifiedbytherespectiveTreasurersand
Chairpersons

5.ProofofNoticeofPublicationand/orpostingoftheannouncementofsuchdivision

6.ProofofNoticetotheCreditors

7.WrittenAgreementtoSettleObligationand

8.OriginalCertificateofRegistration.

Section11.IssuanceofCertificate.Oncetheregistrationrequirementsarefoundtobecompletedandinorder,the
AuthorityshallissuetheCertificatesofRegistrationtothenewcooperatives.TheCertificateofRegistrationofthe
originalcooperativeshallbesurrenderedtotheAuthorityforcancellation.

Section 12. Effect of Registration. Cooperatives formed and organized under this Rule shall acquire juridical
personalityfromthedatetheAuthorityissuesaCertificatesofRegistrationundertheAuthority'sofficialseal.

RULE5
GUIDELINESGOVERNINGTHEPROCEDUREFOR
MERGERORCONSOLIDATION

Section1.LegalBasis.ThelegalbasesforthisRuleareArticles21and22oftheCode,quotedasfollows:

"Art.21.MergerandConsolidationofCooperatives.

Two (2) or more cooperatives may merge into a single cooperative, which shall be either one of the
constituentcooperativesortheconsolidatedcooperatives.

Nomergerorconsolidationshallbevalidunlessapprovedbythreefourths(3/4)voteofallmembers
with voting rights, present and constituting a quorum of each of the constituent cooperatives at
separate general assembly meetings. The dissenting members shall have the right to exercise their
righttowithdrawtheirmembershippursuanttoArticle30.

(3) The Authority shall issue the guidelines governing the procedure of merger or consolidation of
cooperatives. In any case, the merger or consolidation shall be effective upon the issuance of the
CertificateofMergerorConsolidationbytheAuthority.

Art. 22. Effects of Merger and Consolidation. The merger or consolidation of the cooperatives shall
havethefollowingeffects:

(1) The constituent cooperatives shall become a single cooperative, which in case of merger
shall be the surviving cooperative, and in case of consolidation, shall be the consolidated
cooperative.

(2) The separate existence of the constituent cooperatives shall cease, except that of the
survivingortheconsolidatedcooperative.

(3)Thesurvivingortheconsolidatedcooperativeshallpossessallrights,privileges,immunities
andpowersandshallbesubjecttoallthedutiesandliabilitiesofacooperativeorganizedunder
thisCode

(4)Thesurvivingortheconsolidatedcooperativeshallpossessalltheassets,rights,privileges,
immunitiesandfranchisesofeachoftheconstituentcooperativesand

(5) The surviving or the consolidated cooperative shall be responsible for all the liabilities and
obligations of each of the constituent cooperatives in the same manner as if the surviving or
consolidated cooperative had itself incurred such liabilities or obligations. Any claim, action, or
proceeding pending by or against any such constituent cooperatives may be prosecuted by or
against the surviving or consolidated cooperative, as the case may be. Neither the rights of
creditors nor any lien upon the property of any of such constituent shall be impaired by such
mergerorconsolidation."

Section2.PartiestotheMergerorConsolidation.Onlycooperativesbelongingtothesamecategorycanbeparties
to Merger or Consolidation. A primary cooperative can only merge or consolidate with a primary cooperative, a
secondarywithasecondarycooperative,andatertiarywithatertiarycooperative.

Section3.Procedures.ThefollowingaretheprocedurestotheMergerorConsolidationofcooperatives:

1. Approval of the proposal to merge or consolidate by the General/Representative Assembly of each

constituentcooperatives

2.FormulationofPlanofMergerorConsolidationbytherepresentativesoftheconstituentcooperatives

3. Presentation to and Approval of the Plan of Merger or Consolidation by the General/Representative

Assemblyofeachconstituentcooperatives

4.FormulationoftheAmendment/NewArticlesofCooperationandBylaws

5.Posting/PublicationofMergerorConsolidation

6. Written Notification to Creditors through registered mail with return card and other applicable electronic
means

7.FilingwiththeAuthoritytherequireddocumentsfortheregistrationofmergerorconsolidationand

8.IssuanceofCertificateofRegistrationofMerger/ConsolidationbytheAuthority.

Section 4. Contents of Plan of Merger or Consolidation. The Plan of Merger or Consolidation shall include the
following:

1.StatementofPurposeofsuchMergerorConsolidation

2. The Registered Names, Addresses and Registration/Confirmation Numbers, Contact Details and
RespectiveAreasofOperationoftheConstituentCooperatives

3.TheProposedAmendmentstotheSurvivingCooperative'sArticlesofCooperationandBylaws,incaseof
MergerandwithrespecttoConsolidation,theProposedArticlesofCooperationandBylaws

4.ListofMembersofeachConstituentCooperativesshowingtheirShareCapitalContributiondulycertified
bytherespectiveBoardSecretariesandattestedbytherespectiveBoardChairpersons

5.TheName,AddressandAreaofOperationoftheSurvivingCooperative,incaseofMerger,theProposed
Name,AddressandAreaofOperation,incaseofConsolidation

6.FeasibilityStudyindicatingtheViabilityandSustainabilityoftheMerging/ConsolidatingCooperatives

7. The Audited Financial Statements as of the immediate preceding year including the schedule of assets,
liabilitiesandcapitalofthemergingorconsolidatingcooperativesand

8.PackageBenefitsoftheManagementStafftobeaffectedbythePlan.

Section5.ProposalofMergerorConsolidation.TheProposaltoMergeorConsolidatemaybemadebytheBoard
of Directors or by at least ten percent (10%) of the members with voting rights. It shall be approved by at least
majority of the members of each of the constituent cooperatives with voting rights, present and constituting a
quoruminseparategeneral/representativeassemblymeetingscalledforthepurpose.

During the same meeting, the General/Representative Assembly shall appoint or elect the representatives to the
jointcommitteetodraftthePlanofMergerorConsolidation.

Section6.ApprovalofthePlanofMergerorConsolidation.ThePlanofMergerorConsolidationjointlypreparedby
representatives from the constituent cooperatives shall be submitted for approval to the members of each
constituentcooperativeatseparategeneral/representativeassemblymeetingsdulycalledforthepurpose.Noticeof
suchmeetingshallbegiventoallmembersoftherespectivecooperative,servedeitherpersonally,orbyregistered
mailwithreturncardorelectronicmeanswithintheperiodasindicatedintheirBylaws.

Theaffirmativevoteofmembersrepresentingatleastthreefourths(3/4)ofallmemberswithvotingrights,present
and constituting a quorum of each of the constituent cooperatives at separate general/representative assembly
meetingsshallbenecessaryfortheapprovalofthePlanofMergerorConsolidation,oramendmentsthereto,ifany.

Section7.TheArticlesofCooperationandByLaws.IncaseofMerger,theAmendedArticlesofCooperationand
ByLaws, if applicable, shall be attested by the Incumbent Directors of the Surviving Cooperative while in
Consolidation,theArticlesandByLawsshallbesignedbytheCooperatingDirectors.

Section8.Posting/Publication.AnnouncementoftheMergerorConsolidationmaybedonebypostinginatleast
three (3) conspicuous places in their respective areas of operation or publication in a newspaper of general
circulationonceaweekforthree(3)consecutiveweeks.Saidpublicationmayalsobesupplementedbyradioand
televisionannouncementsoranyotherelectronicmeansofcommunication.
Section9.NoticetoCreditorsandInvestors.TheOfficersoftheMergingorConsolidatingCooperativesshallalso
send letters by registered mail with return card to the Creditors and investors of their respective cooperatives
announcingsuchMergerorConsolidation.

Section10.Objection/sbyaThirdParty. Within fifteen (15) days after the date of posting or from the last day of
publication, a third party may file an objection or opposition to the Plan of Merger or Consolidation before the
Authority which shall be decided within sixty (60) days from receipt of the objection or opposition. Finding the
objectionoroppositionmeritorious,inordernottoprejudicetheinterestofthethirdparty,theAuthoritywillcausethe
defermentordisapprovaloftheregistrationoftheMergerorConsolidation.

After the lapse of the period to file an objection/opposition and no objection/opposition has been filed or after all
objections/oppositionshavebeenresolved,thecooperativecanfileitsapplicationforregistration.

Section11.AdditionalRequirementsforRegistration.TheOfficersofthemergedorconsolidatedcooperativesshall
filewiththeAuthoritythefollowingadditionalrequirementsforregistration:

A.ForMerger

1.TheOriginalCertificateofRegistrationoftheabsorbedcooperative

2.TheGeneral/RepresentativeAssemblyresolutionsofbothconstituentcooperativesapprovingthePlanof
MergerdulycertifiedbytheSecretariesandattestedbytherespectiveChairpersons

3.Theexcerptsfromtheminutesofthegeneral/representativeassemblymeetingstatingamongothersthe
approvaloftheMerger

4.CertificationoftheSecretariesdulyattestedbytheChairpersonsoftheconstituentcooperativesthatthere
wasaquorumandtherequirednumberofvotesfortheapprovalwasmet

5.TheapprovedPlanofMergerandallitsattachmentsasrequiredunderSection4ofthisRule

6. The proposed amendment to the Articles of Cooperation and Bylaws of the Surviving Cooperative, if
necessary

7.SuretyBondofAccountableOfficers

8.ProofofPublication/PostingoftheAnnouncementofMerger

9.ProofofNoticetoCreditors

10.WrittenAgreementtosettleObligations

11.TheoriginalCertificateofRegistrationoftheSurvivingCooperative

12.Favorableendorsementfromtheconcernedgovernmentagencyifnecessary/applicableand

13.RegistrationfeeinaccordancewiththeScheduleofFeesprescribedbytheAuthority.

B.ForConsolidation

1.TheOriginalCertificateofRegistrationofbothconstituentcooperatives

2. The General/Representative Assembly resolutions approving the consolidation of the cooperative duly
certifiedbytheSecretariesandattestedbytheChairpersonsoftheConsolidatingCooperatives

3. The excerpts from the minutes of the General/Representative Assembly meetings of the Consolidating
Cooperatives with their respective attendance sheets duly certified by the Secretary and Chairperson or
PresidingOfficer

4.CertificationoftheSecretariesdulyattestedbytheChairpersonsoftheConstituentCooperativesthatthere
wasaquorumandtherequirednumberofvotesfortheapprovalwasmet

5.TheapprovedPlanofConsolidationandallitsattachmentsasrequiredunderSection4ofthisRule

6.TheEconomicSurvey

7.TheproposedArticlesofCooperationandBylawsoftheConsolidatedCooperative

8.SuretyBondofAccountableOfficers

9.ProofofPublication/Postingoftheannouncementofconsolidation

10.ProofofNoticetoCreditors

11.WrittenAgreementtosettleObligations
 12.TheoriginalCertificatesofRegistrationoftheConsolidatingCooperatives

13.UndertakingtoChangeNameintheeventthatanothercooperativehasacquiredpriorrighttotheuseof
theproposednameand

14.RegistrationfeeinaccordancewiththeScheduleofFeesprescribedbytheAuthority.

Section12.IssuanceofCertificate.Oncetheregistrationrequirementsarecompliedwith,theAuthorityshallissue
theCertificateofMerger,ornewCertificateofRegistrationincaseofconsolidation.TheCertificateofRegistrationof
theoriginalcooperativesshallbesurrenderedtotheAuthority.

RULE6
GUIDELINESFORLABORATORYCOOPERATIVES

Section1.LegalBasis.ThelegalbasisforthisRuleisthethirdparagraphofArt.26oftheCode,quotedasfollows:

"Art.26.KindsofMembership. A cooperative organized by minors shall be considered a laboratory

cooperative and must be affiliated with a registered cooperative. A laboratory cooperative shall be
governedbyspecialguidelinestobepromulgatedbytheAuthority."

Section2.OrganizationofLaboratoryCooperative.Fifteen(15)ormoreminorswhoareFilipinocitizens,actually
residing in the community or enrolled in an educational institution within or near the area of operation of the
Guardian Cooperative or out of school minor actually residing in the community, may organize a Laboratory
Cooperativecomposedofminors,whichshallbeseven(7)yearsoldbutbeloweighteen(18)yearsofage.

Section3.PurposesofLaboratoryCooperatives.ALaboratoryCooperativeshallbeorganizedforanyorallofthe
followingpurposes:

1.Toserveasatraininggroundforitsmemberstopreparethemformembershipinregularcooperatives

2.Toteachthevalueofthriftandsavingmobilizationamongitsmembers

3.Toinstillcooperativevalues,principles,financialdisciplineandleadershipskillsamongitsmembers

4.TopromoteandadvanceFilipinosocialandculturalvalues,ecologicalawarenessandsustainable
development.

Section4.ContentsoftheArticlesofCooperation.TheArticlesofCooperationofaLaboratoryCooperativesigned
byeachoftheorganizersshallprovidethefollowing:

1.Thenameofthecooperativewhichshallincludethewords"LaboratoryCooperative"

2.Thepurposeorpurposesforwhichitisorganized

3.Thetermofexistence

4.Theareaofoperationsandthepostaladdressoftheprincipalofficeofthelaboratorycooperative

5.Theareaofoperationsandthepostaladdressoftheprincipalofficeoftheguardiancooperative

6.Thenames,nationality,birthdates,andpostaladdressesofthecooperators

7.Thenames,andpostaladdressesofmembersoftheboardofdirectorsofitsguardiancooperativeand

8.Theamountofitssharecapital,thenames,andaddressesofitsmembers.

Section5.ContentsoftheByLaws.TheBylawsofaLaboratoryCooperativeshallprovideforthefollowing:

1.Thequalificationsforadmissiontomembershipandthepaymenttobemadeorinteresttobeacquiredasa
conditiontotheexerciseoftherightofmembership

2.Therightsandliabilitiesofmembership

3.Thecircumstancesunderwhichmembershipisacquired,maintainedandlost

4.Theprocedurestobefollowedincasesofterminationofmembership

5.Theconditionsunderwhichthetransferofashareorinterestofthemembersshallbepermitted

6. The rules and procedures on the agenda, time, place and manner of calling, convening, conducting
meetings, quorum requirements, voting systems, and other matters relative to the business affairs of the
generalassembly,boardofdirectors,andcommittees

7. The general conduct of the affairs of the cooperative, including the powers and duties of the General
Assembly,theboardofdirectors,committeesand,officers,andtheirqualificationsanddisqualifications
 8.Themannerinwhichthecapitalmayberaisedandthepurposesforwhichitcanbeutilized

9.Theaccountingandauditingsystems

10.Themethodofdistributionofnetsurplus

11.Themannerofadoptingandamendingbylaws

12.Othermattersincidenttothepurposesandactivitiesofthecooperative.

Section 6. Capitalization Requirements. The Laboratory Cooperative shall include in its Bylaws a program on
continuousCapitalBuildUp.

Section7.Affiliation.ALaboratoryCooperativemustbeaffiliatedwithadulyregisteredcooperative,tobeknownas
theGuardianCooperative,beforetheauthorityshallissueaCertificateofRecognition.

A Laboratory Cooperative primarily composed of students from a particular school shall be affiliated with the
school'scooperative,ifany.IftheLaboratoryCooperativeiscomposedprimarilyofoutofschoolminors,itshallbe
affiliatedwithacooperativeofitschoicewithinornearestitsareaofoperation.

Intheabsenceofadulyregisteredcooperativeintheareaorrefusalofadulyregisteredcooperativetoacceptthe
affiliation of a Laboratory Cooperative, the said Laboratory Cooperative may request assistance from the nearest
CDAOfficeinidentifyingapossibleGuardianCooperative.

Section8.ResponsibilityoftheGuardianCooperative.TheGuardianCooperativeshallsupervise,monitor,andact
for and in behalf of the Laboratory Cooperative in their dealings, transactions with third parties when capacity to
contractisrequired.

It shall be responsible for the cooperative education and training of all officers and members of the laboratory
cooperative.

SubmissionofreportstotheAuthorityontheactivitiesandeconomicoperationsoftheLaboratoryCooperativeshall
likewisebetheresponsibilityoftheGuardianCooperative.

Section9.LiabilityoftheGuardianCooperative.TheGuardianCooperativeexercisingparentalauthoritymaybe
liableforanyviolationsinthecooperative'soperation.

Section 10. Requirements for Recognition of Laboratory Cooperative. A Laboratory Cooperative seeking
recognitionassuchshallsubmit,throughtheGuardianCooperative,thefollowingrequirementstotheAuthorityfor
theissuanceofaCertificateofRecognition:

1.ArticlesofCooperationandBylawsand

2.ResolutionoftheBoardofDirectorsoftheGuardianCooperativeacceptingitsresponsibilityandliabilityas
GuardianoftheLaboratoryCooperative.

Section 11. Issuance of Certificate of Recognition. A Certificate of Recognition shall be issued by the Authority
under its official seal upon compliance with all the requirements set forth by this rule. The Certificate shall be
conclusiveevidencethattheLaboratoryCooperativethereinmentionedisdulyrecognizedunlesssuchrecognition
hasbeenearlierrevoked.

The issuance of the Certificate of Recognition does not bestow upon a Laboratory Cooperative with a juridical
personality.

Section 12. Termination of Membership. The following shall be conditions for termination of membership in a
LaboratoryCooperative:

1.Uponreachingtheageofmajority(18yearsofage)

2.ThoseprovidedunderArt.30oftheCodeand

3.SuchotherconditionsasmaybeprovidedforintheBylaws.

Section13.RefundofShareCapital. Upon termination of membership, the former member shall be entitled to a

refundofhissharecapitalcontributionandallotherinterestsintheLaboratoryCooperativeinaccordancewithArt.
31oftheCode.

Section14.OptionofMemberWhoReachestheAgeofMajority.Anymemberreachingtheageofmajoritymayopt
tojointheGuardianCooperativeuponcomplianceofalltherequirementsformembership.

Section15.Limitation.AGuardianCooperativeshallsuperviseonlyone(1)laboratorycooperative.

RULE7
FUNCTIONS,RESPONSIBILITIESANDTRAININGREQUIREMENTSOFDIRECTORS,OFFICERSAND
COMMITTEEMEMBERS
Section1.LegalBasis.ThelegalbasisforthisRuleisArt.44oftheCode,quotedasfollows:

"Art.44.Functions,Responsibilities,andTrainingRequirementsofDirectors,Officers,andCommittee
Members.Thefunctionsandresponsibilitiesofthedirectors,officersandcommitteemembers,aswell
as their training requirements shall be in accordance with the rules and regulations issued by the
Authority."

Section2.OfficersoftheCooperative.TheOfficersofthecooperativeshallincludetheMembersoftheBoardof
Directors, Members of the Different Committees created by the General Assembly, General Manager or Chief
ExecutiveOfficer,Secretary,TreasurerandMembersholdingotherpositionsasmaybeprovidedforintheirBylaws.
Assuchtheyareentrustedwiththepowerofexercisingauthoritywithinthescopeoftheirdefinedfunctionswhichis
permanentinnatureandincludetheexerciseofcontrolanddiscretionintheperformanceoftheirduly.

Section3.CommitteesofCooperatives.TheBylawsshallprovideforthecreationofthefollowingcommittees:

1.AuditCommittee

2.ElectionCommittee

3.MediationandConciliationCommittee

4.EthicsCommitteeand

5.OtherCommitteesasmaybenecessaryfortheconductoftheaffairsofthecooperative.

ThemembersofAuditElectionCommitteesshallbeelectedbytheGeneralAssemblywhiletheBoardofDirectors
shallappointtherest.

Section4.FunctionsandResponsibilitiesoftheOfficersoftheCooperative.

4.1BoardofDirectors.

4.1.1TheBoardofDirectorsshallhavethefollowingfunctionsandresponsibilities:

a.Providegeneralpolicydirection

b.Formulatethestrategicdevelopmentplan

c.Determineandprescribetheorganizationalandoperationalstructure

d. Review the Annual Plan and Budget and recommend for the approval of the General/Representative
Assembly

e.Establishpoliciesandproceduresfortheeffectiveoperationandensureproperimplementationofsuch

f. Evaluate the capability and qualification and recommended to the General/Representative Assembly the
engagementoftheservicesofanExternalAuditor

g.AppointthemembersoftheMediation/ConciliationandEthicsCommitteesandotherOfficersasspecified
intheCodeandcooperativeBylaws

h.DecideelectionrelatedcasesinvolvingtheElectionCommitteeoritsmembers

i.ActontherecommendationoftheEthicsCommitteeoncasesinvolvingviolationsofCodeofGovernance
andEthicalStandardsand

j. Perform such other functions as may be prescribed in the Bylaws or authorized by the
General/RepresentativeAssembly.

4.1.2TheChairpersonshall:

a.SettheagendafoeboardmeetingsincoordinationwiththeothermembersoftheBoardofDirectors

b.PresideoverallmeetingsoftheBoardofDirectorsandoftheGeneral/Representativeassembly

c.Signcontracts,agreements,certificatesandotherdocumentsonbehalfofthecooperativeasauthorizedby
theBoardofDirectorsorbytheGeneral/RepresentativeAssembly

d.IssueCertificateofNonAffiliationwithanyFederationorUnionand

e. Perform such other functions as may be authorized by the Board of Directors or by the
General/RepresentativeAssembly.

4.1.3TheViceChairpersonshall:

a.PerformalldutiesandfunctionsoftheChairpersonintheabsenceofthelatter
 b.ToactasexofficioChairpersonoftheEducationandTrainingCommitteeand

c.Performsuchotherdutiesasmaybedelegatedtohim/herbytheBoardofDirectors.

4.2Treasurer.TheTreasurershall:

a.EnsurethatallcashcollectionsaredepositedinaccordancewiththepoliciessetbytheBoardofDirectors

b. Have custody of all funds, securities, and documentation's relating to all assets, liabilities, income and
expenditures

c.Monitorandreviewthefinancialmanagementoperationsofthecooperative,subjecttosuchlimitationsand
controlasmaybeprescribedbytheBoardofDirectors

d.Maintainfullandcompleterecordsofcashtransactions

e.MaintainaPettyCashFundandDailyCashPositionReportandPerformsuchotherfunctionsasmaybe
prescribedintheBylawsorauthorizedbytheGeneral/RepresentativeAssembly.

4.3Secretary.TheSecretaryshall:

a.Keepanupdatedandcompleteregistryofallmembers

b. Record, prepare and maintain records of all minutes of meetings of the Board of Directors and the
General/RepresentativeAssembly

c. Ensure that necessary Board of Directors actions and decisions are transmitted to the management for
complianceandimplementation

d.IssueandcertifythelistofmemberswhoareingoodstandingentitledtovoteasdeterminedbytheBoard
ofDirectors

e.PrepareandissueShareCertificates

f. Serve notice of all meetings called and certify the presence of quorum of all meetings of the Board of
DirectorsandtheGeneral/RepresentativeAssembly

g.KeepcopyTreasure'sreportsandotherreports

h.KeepandmaintaintheShareandTransferBook

i.Serveascustodianofthecooperativesealand

Perform such other functions as may be prescribed in the Bylaws or authorized by the General/ Representative
Assembly.

4.4ElectionCommittee.TheElectionCommitteeshall:

a. Formulate election rules and guidelines and recommended to the General/Representative Assembly for
approval

b.ImplementelectionrulesandguidelinesdulyapprovedbytheGeneral/RepresentativeAssembly

c.Recommendednecessaryamendmentstotheelectionrulesandguidelines,inconsultationwiththeBoard
ofDirectors,fortheGeneral/RepresentativesAssembly'sapproval

d.Supervisetheconduct,mannerandprocedureofelectionandotherelectionrelatedactivitiesandacton
thechangesthereto

e.Canvassandcertifytheresultsoftheelection

f.Proclaimthewinningcandidates

g. Decide election and other election related cases except those involving the Election Committee or its
membersand

h. Perform such other functions as prescribed in the Bylaws or authorized by the General/Representative
Assembly.

4.5AuditCommittee.Thecommitteeshall:

a.Monitortheadequacyandeffectivenessofthecooperative'smanagementandcontrolsystem

b.Audittheperformanceofthecooperativeanditsvariousresponsibilitycenters
 c.Reviewcontinuouslyandperiodicallythebooksofaccountandotherfinancialrecordstoensurethatthese
areinaccordancewiththecooperativeprinciplesandgenerallyacceptedaccountingprocedures

d.Submitreportsontheresultoftheinternalauditandrecommendnecessarychangesonpoliciesandother
relatedmattersonoperationtotheBoardofDirectorsandGeneral/RepresentativeAssembly

e. Perform such other functions as may be prescribed in the Bylaws or authorized by the
General/RepresentativeAssembly.

4.6MediationandConciliationCommittee.Thecommitteeshall:

a.FormulateanddeveloptheConciliationMediationProgramandensurethatitisproperlyimplemented

b.MonitorConciliationMediationprogramandprocesses

c.SubmitsemiannualreportsofcooperativecasestotheAuthoritywithinfifteen(15)daysaftertheendof
everysemester

d.AcceptandfileEvaluationReports

e.SubmitrecommendationsforimprovementtotheBoardofDirectors

f.RecommendtotheBoardofDirectorsanymemberofthecooperativeforConciliationMediationTrainings
asCooperativeConciliatorMediator

g.IssuetheCertificateofNonSettlement(CNS)

h. Perform such other functions as may be prescribed in the Bylaws or authorized by the
General/RepresentativeAssembly.

4.7EthicsCommittee.Thecommitteeshall:

a. Develop Code of Governance and Ethical Standards to be observed by the members, officers and
employees of the cooperative subject to the approval of the Board of Directors and ratification of the
General/RepresentativeAssembly

b.Disseminate,promoteandimplementtheapprovedCodeofGovernanceandEthicalstandards

c.MonitorcompliancewiththeCodeofGovernanceandEthicalStandardsandrecommendtotheBoardof
Directorsmeasurestoaddressthegap,ifany

d. Conduct initial investigation or inquiry upon receipt of a complaint involving Code of Governance and
EthicalStandardsandsubmitreporttotheBoardofDirectorstogetherwiththeappropriatesanctions.

e.RecommendethicalrulesandpolicytotheBoardofDirectors

f. Perform such other functions as may be prescribed in the Bylaws or authorized by the
General/RepresentativeAssembly.

4.8OtherCommittees.OtherCommitteesthatmaybecreatedshallassistintheformulationofpoliciesandrules
and in the implementation of the service of the cooperative. Their powers, functions, and responsibilities shall be
definedintheBylaws.

4.9GeneralManager.TheGeneralManagershall:

a. Oversee the overall day to day business operations of the cooperative by providing general direction,
supervision, management and administrative control over all the operating departments subject to such
limitationsasmaybesetforthbytheBoardofDirectorsortheGeneral/RepresentativeAssembly

b.Formulateandrecommendincoordinationwiththeoperatingdepartmentsunderhis/hersupervision,the
Cooperative'sAnnualandMediumTermDevelopmentPlan,programsandprojects,forapprovaloftheBoard
ofDirectorsandratificationoftheGeneral/RepresentativeAssembly

c.ImplementthedulyapprovedplansandprogramsoftheCooperativeandanyotherdirectiveorinstruction
oftheBoardofDirectors.

d.ProvideandsubmittotheBoardofDirectorsmonthlyreportsonthestatusoftheCooperative'soperation
visvisitstargetsandrecommendappropriatepolicyoroperationalchanges,ifnecessary

e.RepresenttheCooperativeinanyagreement,contract,businessdealing,andinanyotherofficialbusiness
transactionasmaybeauthorizedbytheBoardofDirectors

f.Ensurecompliancewithalladministrativeandotherrequirementsofregulatorybodiesand

g. Perform such other functions as may be prescribed in the Bylaws or authorized by the
General/RepresentativeAssembly.
Section5.TrainingRequirementsfortheOfficersoftheCooperative.Officersofthecooperativeshallberequiredto
undergonecessarytrainingconductedbycooperatives,Federationsand/orothertrainersortraininginstitutionsduly
accredited by the Authority. The training program should contain the minimum requirements in the
module/curriculumasprescribedbythe Authority.The initialcoursesoranyequivalentsubstitutethereofmustbe
undertaken.

A.BoardofDirectors

1.BasicCooperativeCourseprimarilyon:

a.ArticlesofCooperativeandBylaws

b.CooperativeVision

c.CooperativeMission

d.CooperativeStrategicPlan

e.FundamentalsofCooperative

f.PoliciesandProgramsofCooperatives

g.CooperativeCodeof2008(RA9520)

h.ImplementingRulesandRegulationsofRA9520

2.CooperativeManagementandGovernance.

3.PolicyDevelopment.

4.FinancialManagement.

5.ConflictManagement.

6.ParliamentaryProcedure

7.LeadershipandValuesReorientation

8.StrategicPlanning

9.OrientationonLaborandOtherRelatedLaws

B.Secretary

1.BasicCooperativeCourse

2.RecordsManagementforNonFinancialTransaction

3.ParliamentaryProcedure

4.BasicComputerProgram

C.Treasurer

1.BasicCooperativeCourse

2.RecordsManagement(FinancialTransaction)

3.BasicAccountingforNonAccountants

4.CooperativeStandards

5.InvestmentandBankingProcedures

6.FinancialManagement

D.AuditCommittee

1.BasicCooperativeCourse

2.AuditManagement

3.RecordsManagement

4.BasicAccountingforNonAccountant

5.CooperativeStandards
 6.InternalControlincludingInventorySystem

7.BasicComputerProgram

E.ElectionCommittee

1.BasicCooperativeCourse

2.RecordsManagement

3.RulesFormulation

4.LeadershipandValueReorientation

5.BasicComputerProgram

F.EthicsCommittee

1.BasicCooperativeCourse

2.LeadershipandValuesReorientation

3.ConflictManagement

4.RecordsManagement

5.BasicComputerProgram

G.Mediation/ConciliationCommittee

1.BasicCooperativeCourse

2.LeadershipandValuesReorientation

3.ConflictManagement

4.RecordsManagement

5.EffectiveCommunication

6.BasicComputerProgram

H.GeneralManager/ChiefExecutiveOfficer

1.BasicCooperativeCourse

2.CooperativeManagementandGovernance

3.CooperativeStandards

4.HumanResourceManagement

5.EffectiveCommunicationSkills

6.EntrepreneurialandBusinessManagementCourse

7.LaborandotherrelatedLaws

8.LeadershipandValuesReorientation

9.ComputerLiteracyCourse

10.StrategicPlanningandManagement

Section6.Compliance.Thetrainingisrequiredforallcooperativeofficers.Incaseswheretheincumbenthasnot
undergone the required training program, he/she shall undergo such training within twelve (12) months from the
effectivityofthisRule.Noncompliancewiththerequiredtrainingsshallbeconsideredgroundsfordisqualification
for future election or appointment until such time that he/she has complied with all the trainings required for the
position.

Section7.DurationofTrainingsAttended. All trainings attended by cooperative officers shall be considered valid

compliance with the intent of this Rule for a period of five (5) years from date of issuance of the Certificate of
Training.Afterwhich,theyshallberequiredtoundergoretrainingofthesame.

Section8.TransitoryPeriod.Allcooperativesareherebygiventwo(2)yearsfromeffectivityofthisRuletocomply
withtheTrainingRequirementsasprovidedabove.
 RULE8
REPORTSREQUIREDFORCOOPERATIVE

Section1.LegalBasis.ThelegalbasisforthisruleisArt.53ofthisCode,quotedasfollows:

"Art.53.Report.

(1)Everycooperativeshalldrawupregularreportsofitsprogramofactivities,includingthoseinpursuanceof
theirsociocivicundertakings,showingtheirprogressandachievementsattheendofeveryfiscalyear.The
reports shall be made accessible to its members of record. These reports shall be filed with the Authority
withinonehundredtwenty(120)daysfromtheendofthecalendaryear.Theformandcontentsofthereports
shallbeprescribedbytherulesofAuthority.Failuretofiletherequiredreportsshallsubjecttheaccountable
officer/stofinesandpenaltiesasmaybeprescribedbytheAuthority,andshallbeagroundfortherevocation
ofauthorityofthecooperativetooperateassuch.Thefiscalyearofeverycooperativeshallbethecalendar
year,exceptasmaybeotherwiseprovidedinthebylaws.

(2)Ifacooperativefailstomake,publishandfilethereportsrequiredherein,orfailstoincludethereinany
matter required by this Code, the Authority within fifteen (15) days from the expiration of the prescribed
period, send such cooperative a written notice stating its noncompliance and the commensurate fines and
penaltiesthatwillbeimposeduntilsuchtimethatthecooperativehascompliedwiththerequirement."

Section2.RequiredRegularReports.ThefollowingreportsshallsubmittedtotheAuthority:

1.CooperativeAnnualPerformanceReport(CAPR)

2.SocialAuditReportincludingitsprogramofactivitiesinpursuanceofitssociocivicundertakingsshowing
itsachievementsandendofeveryfiscalyear

3.PerformanceReport

4.AuditedFinancialStatementsdulystamped"Received"bytheBIRand

5.ListofOfficersandTrainingsUndertaken/Completed.

Section3.AdditionalReportsforFederationsandUnions.FederationsandUnionsshallsubmittotheAuthoritythe
followingadditionalreports:

1. List of cooperatives which have remitted their respective Cooperative Education and Training Funds
(CETF)

2.Businessconsultancyassistancetoincludethenatureandcostand

3.Othertrainingactivitiesundertakenspecifyingthereinthenature,participants,andcostofeachactivity.

Section 4. Filling. All registered cooperatives shall file with the Authority a copy of the required reports either
throughpersonal,registeredmailcourier,orelectronicmeans,withinonehundredtwenty(120)daysfromtheendof
everyyearcalendaryear.

Section5.PreparationoftheRequiredReports.Thereportsshallbetypewrittenorprintedinaformprescribedby
theAuthority.TheChairpersonandtheGeneralManagershallcertifytothetruthfulnessofthestatementcontained
inthereports.

Section6.Preparation of the Submit Reports on Time. Failure to submit reports on time shall be considered as
DelayorDefault.However,ifthefailuretosubmitreportsontimeisduetofortuitouseventssuchasfireandother
natural calamities and public disorders including strike or lockout or a national emergency which affects the
operation of the cooperative, the failure shall not be considered a delay. Provided, That the Authority shall be
officiallynotifiedoftheoccurrenceofsuchfortuitousevents.

Delayordefaultshallcommenceonthedayfollowingthelastdayrequiredforthesubmissionofreports.However,
should the last day of filing falls on a nonworking day in the locality where the reporting cooperative is situated.
DelayorDefaultshallstarttorun\onthedayfollowingthenextworkingday.

ForthepurposeofestablishingDelayorDefault,thedateofacknowledgementbytheAuthorityappearingonthe
copies of such reports filed or submitted or mailing postmarked on the envelope/the date of registry or special
deliveryreceipt,orthedatetheelectronicmailwassentasthecasemaybeshallbeconsideredasthedateoffiling.

Section 7. Sanction For Delayed Submission. Failure to file the required reports on time shall subject the
AccountableOfficertopayafineofPhp100.00perdayofdelay.

Within thirty (30) calendar days upon receipt of Statement of Accounts, the Accountable Officer may request for
Reconsiderationofsuchfineonthegroundsoffortuitouseventandcourtlitigation/order,whichtheAuthorityshall
act upon within sixty (60) calendar days otherwise the sanctions, shall be deemed lifted. The decision of the
Authorityshallbecomefinalandexecutory.
Otherthantheimpositionofmonetarypenalties,theAuthoritymaydissolve/revoke,afterdueprocess,theauthority
ofthecooperativetooperateassuch.

RULE9
GUIDELINESFORTHELIQUIDATIONOFCOOPERATIVES

Section1.LegalBasis.ThelegalbasesfortheRuleareArt.69,70andpar.2,Art.72(4)ofthecode,quotedas
follows:

"Art.69.LiquidationofaCooperative.Everycooperativewhosecharterexpiresbyitsownlimitationor
whose existence is terminated by voluntary dissolution or through an appropriate judicial proceeding
shallneverthelesscontinuetoexistforthree(3)yearsafterthetimeitisdissolved,nottocontinuethe
business for which was established but for the purpose of prosecuting and defending suits by or
against it settlement6 and closure of its affairs, disposition, conveyance and distribution of its
propertiesandasset.

Atanytimeduringthesaidthree(3)years,thecooperativeisauthorizedandempoweredtoconveyallitsproperties
to trustees for the benefit of its members, creditors and other persons in interest. From and after any such
conveyance,allinterestswhichthecooperativehadinthepropertiesareterminated.

Uponthewindingupthecooperativeaffairs,any6assetdistributabletoanycreditor,shareholderormember(s)who
isunknownorcannotbefoundshallbegiventothefederationoruniontowhichthecooperativeisaffiliatedwith.

Acooperativeshallonlydistributeitsassetsorpropertiesuponunlawfuldissolutionandafterpaymentofallitsdebts
andliabilities,exceptinthecaseofdecreaseofsharecapitalofthecooperativeandasotherwiseallowedbythis
Code."

"Art.70.RulesandRegulationsonLiquidation.TheAuthorityshallissuetheappropriateimplementing
guidelinesfortheliquidationofcooperatives."

"Art.72.CapitalSources.xxx

(b) Subsidies, donations, legacies, grants, aids and such other assistance from any local or foreign institution
whetherpublicorprivate:Provided,Thatcapitalcomingfromsuchsubsidies,donations,legacies,grants,aidsand
otherassistanceshallnotbedividedintoindividualsharecapitalholdingatanytimebutshallinsteadfrompartof
thedonatedcapitalorfundofthecooperative.

Upondissolution,suchdonatedcapitalshallbesubjecttoescheat."

Section2.CoverageofLiquidation.TheseGuidelinesshallcoverthefollowing:

1.Cooperativeswhosecharterexpiresbyitsownlimitation.

2.Cooperativeswhoseexistenceisterminatedbyvoluntarydissolution.

3.Cooperativeswhoseexistenceisterminatedbyappropriatejudicialproceedings.

Section3.ModeofLiquidation.ThemannerofliquidationorwindingupmaybeprovidedforinthecooperativeBy
laws and this would prevail unless it is inconsistent with law. In this jurisdiction, the cooperative may avail of the
followingmodesofliquidation:

(1) Liquidation by cooperative itself through a Board of Liquidators. The members of cooperative
entitledtovoteshallelectfromamongthemselvestheirBoardLiquidatorsand/or

ByconveyingallthecooperativeassetstoTrusteeorTrusteeswhowilltakechargeofliquidation.

Section4.ProcedureofLiquidation.Thefollowingprocedureshallbeobservedinliquidation:

1.ConstitutionoftheBoardofLiquidators/Trustees.

2.InventoryofAssetsandLiabilitiesoftheCooperative.

3. Payments of Creditors in accordance with the Provisions of the New Civil Code on the Preference and
ConcurrenceofCredits.

4.TransferoftheStatutoryFundstotheintendedbeneficiaries.

5.Distributionoftheremainingassets.

6.SubmissionoftheBoardofLiquidators/TrusteesoftheLiquidation'sFinalReport.

7. Cancellation of the Certificates of Registration and delisting of the name of the cooperative in the
CooperativeRegistry.

Section5.BoardofLiquidators/Trustees.
Withinsixty(60)daysfromreceiptoftheOrderofDissolutionfromtheAuthorityorcompetentCourt,theboardof
Directorsshallselect/constitutetheBoardofLiquidators/Trustees.IntheeventtheBoardofDirectorsfailsorrefuses
toconstitutetheBoardofLiquidators/Trustees,atleasttwentyfivepercent(25%)ofthemembersentitledtovote
shall convene and select/appoint the Liquidators/Trustees. In case the Board of Directors and the
General/Representative Assembly fail to select the Board of Liquidators/Trustees, the Authority shall appoint the
same.

TheBoardofLiquidators/Trusteesshallnotbelessthanthree(3)butnotmorethanfive(5)members.Theyshall
taketheiroathofofficebeforetheAuthoritypriortoassumptionoftheirfunctionsandresponsibilities.

TheBoardofLiquidators/TrusteesshallpostanadequatebondasmaybefixedbytheAuthorityduringtheperiodof
liquidation,tobepaidoutofthefundsofthecooperative.

The Board of Liquidators/Trustees shall be allowed to receive a reasonable honorarium to be paid out from the
fundsofthecooperativewhichshallbeequaltobutnotlessthanthehonorariumbeingreceivedbytheBoardof
Directorsofthecooperativebeforeitsdissolution.

Section 6. Functions, Powers and Obligations of the Board of Liquidators/Trustees. The Board of
Liquidators/Trusteesshall:

1.MakeaninventoryofallassetsandtobedetermineallliabilitiesincludingShareCapitalholdings

2.Preservetheexistingassetsofthecooperative

3.Convertallassetsofthecooperativeintocash

4.Paytheoutstandingobligationsincludinganyandallvalidclaimsagainstthecooperative

5.DistributeremainingassetspursuanttotheprovisionoftheCodeandthisRulesand

6.MakefinalreportontheliquidationandsubmitthesametotheAuthority.

Section 7. Power to Sue and Be Sued. In the discharge of the abovementioned functions, the Board of
Liquidators/Trustees may sue and be sued under the name of the cooperative in order to protects and defend its
rightsandinterests.

Section8.Payment of Creditors. Payment of creditors shall be in accordance with the contract upon which it is
basedandtheprovisionoftheNewCivilCodeonthePreferenceandConcurrenceofCredits.

Section 9. Statutory Funds. All the statutory funds established by the cooperative shall be disposed of in
accordancewiththeprovisionforArt.86oftheCode.

Section10.TreatmentofDonatedCapital.Allstudies,donations,legacies,grants,aidsandsuchotherassistance
fromanylocalorforeigninstitutionswhetherpublicorprivateshallbesubjectedtoescheat.

Section11.DistributionofAssets.SubjecttotheprecedingsectionsanduponwrittenauthorityfromtheAuthority,
anyassetsremainingafterthepaymentsofthecooperative'sobligationstoitscreditorsshallbedistributedtothe
membersinpaymentsoftheirrespectivesharecapital.Iftheremainingassetsisnotsufficienttopaythefullshare
capitalcontributionofthemembers,thedistributionshallbedoneinproportiontotheircapital.

Section12.UndistributedAssets.Afterthewindingupoftheaffairsofthecooperative,theassetsdistributableto
creditorormemberwhosewhereasaboutisunknownorcannotbefoundshallbegiventothefederation/unionto
which the cooperative is affiliated with, for cooperative development, at the option of the Board of
Liquidators/Trustees.Incaseofnonaffiliation,theundistributedassetsshallbegiventothecommunitywherethe
cooperativeoperated.

Section13.PeriodsAllowedfortheWindingUpoftheAffairsoftheCooperative.Thedissolvedcooperativeshall
continuetoexistforthree(3)yearsfromtheissuanceoftheOrderofDissolution.Thepurposeofwhichisnotto
continuethebusinessforwhichitwasestablishedbutforpurposeofprosecutinganddefendingsuitsfiledoragainst
thecooperative,settlementandclosureofitsaffairs,distributionofitsassets.

Nevertheless, at any time during the said three (3) year period, the cooperative is authorized and empowered to
convey all its properties to Trustees for the benefits of its members, creditors and other persons in interest, after
which,allinterestwhichthecooperativehadinpropertiesareterminated.

Section 14. Submission of the Board of Liquidators/Trustees' Financial Report. The Cooperative Board of
Liquidators/Trustees shall submit a final report to the members of the liquidated cooperative and to the Authority,
Federation,orUniontowhichthecooperativeisaffiliatedwith.

UponreceiptoftheFinalReportoftheBoardofLiquidators/Trusteesandfindingthatsaidfinalreportiscomplete
and in order, the Authority shall release the Liquidators/Trustees from their duties and functions. Thereafter shall
effectthecancellationoftheCertificateofRegistrationofthesubjectcooperativeanddelistingofthenameofthe
cooperativeintheCooperativeRegistry.
ForfailuretosubmittheFinalReporttheBoardofLiquidators/Trusteesshallnotbereleasedfromtheirdutiesand
functions,hencenoclearanceshallbeissuedbytheAuthority.

Section15.SummaryProceedings. For cooperative with assets of not more that One Hundred Thousand Pesos
(P100,000.00)asshownintheAuditedFinancialStatementsandwithnoknowncreditors,theAuthoritymaychoose
toinitiatesummaryproceedings.

ThefollowingdocumentsshallberequiredtobesubmittedbytheBoardofDirectorstotheAuthority:

1.ScheduleofAssets

2.ProposalofDistributionofAssetstoitsmembers

3.ListofintendedbeneficiariesoftheStatutoryFunds

4.AffidavitofNoCreditorsand

5.AuditedFinancialStatement

After due evaluation by the Authority, the same shall issues a written authority to the Board of Directors to
distributedtheassetsofthecooperative.Afterwhich,theBoardofDirectorsshallsubmitafinalreport.

Section16.SuppletoryLaws.TheprovisionsofChapterTwo(2)andThree(3)oftitle19ontheConcurrenceand
PreferenceofCreditundertheNewCivilCodeandtheprovisionsofRule104oftheRevisedRulesofCourtonthe
VoluntaryDissolutionofCorporationsshallbeusedassuppletoryrules.

Section17.Exception.TheAuthority,atitsowndiscretion,mayoutrightlycanceltheCertificateofRegistrationofa
cooperationofacooperativewhichhasbeenproventohavenoassets,orincasethecooperativecannolongerbe
locateddespitethebesttolocateit.SuchfactsshallbestatedintheOrderofCancellation.

RULE10
CAPITALIZATIONANDACCOUNTINGPROCEDURESOFCOOPERATIVES

Section1.LegalBasis.ThelegalbasisforthisRuleisArt.71oftheCode,quotedasfollows:

"Art.71.Capital.TheCapitalizationofcooperativesandtheaccountingproceduresshallbegoverned
bytheprovisionsofthisCodeandtheregulationswhichshallbeissued."

Section2.CapitalSources. Capitalization of a duly registered cooperative may be derived from any or all of the
followingsources

1.Members'ShareCapital

2.LoansandBorrowingIncludingDeposits

3.RevolvingCapitalwhichconsistofthedeferredpaymentofpatronagerefunds,orinterestonsharecapital
and

4.Subsidies,donations,legacies,grants,aidsandsuchotherassistancefromanylocalorforeigninstitution
whether public or private Provided, That capital coming from such subsidies, donations, legacies, grants,
aids and other assistance shall not be divided into individual share capital holdings at any time but shall
insteadformpartofthedonatedcapitalorfundofthecooperative.

Section3.ShareCapital.TheShareCapitalofacooperative,thepervalueofwhichmaybefixedatanyfigurenot
morethanOneThousandPesos(P1,000.00),mayconsistofcommonsharecapitalandpreferredsharecapitalif
thelatterisprovidedforunderthecooperative'sArticlesofCooperationandBylaws.Thesharecapitalcontribution
ofthemembersshallbeconsideredasequity.Provided,thatitshallnotbewithdrawnandshouldnotbeusedin
offsettingobligationswhetherpastdueorcurrentwhilethemembershipsubsists.

(a)CommonShareCapitalshallbeissuedonlytoregularmembers.Itsholdersshallbeentitledtovoteand
bevotedundertheprincipleofoneman,onevoteprinciple,andshallreceiveinterest,theratewhichshould
notexceededthenormalrateoninvestment.

(b)PreferredShareCapitalmaybeissuedtoregularandassociatemembers.However,associateMembers
shall not be eligible to vote nor be voted on account of such shareholdings but shall be entitled to, among
othersthefollowing:

1.PreferenceinthepaymentofinterestasprovidedforintheBylawsofthecooperativeand

2.Incaseofliquidation,priorityinthedistributiononPreferredShareCapitalshallbeprescribedinthe
Bylawsofthecooperative.

Section4.PreferredShares.IssuanceandlimitationonPreferredShareCapitalshallbeprescribedintheBylaws
ofthecooperative.
Section5.CapitalBuildUp.TheBylawsofeverycooperativeshallprovideforareasonableandrealisticmember
capitalbuildupprogramtoallowthecontinuinggrowthofthemembers'investmentintheircooperativeastheirown
economicconditionscontinuetoimprove.

Section6.LimitationonShareCapitalHoldings.Nomemberofaprimarycooperativeotherthatacooperativeitself
shallownorholdmerethantenpercent(10%)ofthesharecapitalofthecooperative.InthecaseofSecondaryand
TertiaryCooperatives,membersshouldownnotmorethattenpercent(10%)ofthesharecapitalofthecooperative.

Section7.FinesonUnpaidSubscribedSharecapital.TheBylawsofacooperativeshallprescribeafineonunpaid
subscribedsharecapital.Provided,thatsuchfineisfairandreasonableunderthecircumstancesasdeterminedby
theBoardofDirectors.

Section8.AssignmentofShareCapitalContributionorInterest.SubjecttotheprovisionofR.A.9520,nomember
shalltransferhis/hersharesorinterestinthecooperativeoranypartthereofunless:

1.He/Shehasheldsuchsharecapitalcontributionorinterestfornotlessthanone(1)year

2.Theassignmentismadetothecooperativeortoapersonwhofallswithinthefieldofmembershipofthe
cooperativeand

3.TheBoardofDirectorshasapprovedsuchassignment.

Section9.InterestonShareCapital.InterestonShareCapitalshallnotexceedtheRateofReturnonInvestment.

UnlessotherwiseprovidedforintheBylawsofthecooperative,sharecapitalshallearninteresttheRateofInterest
shallbecomputedasfollows:

X(NetSurpluslessStatutoryReserves)
RateofInterest =
TotalAverageShareMonth

Where:XshallbeapercentagetobedeterminedbytheBoardofDirectorsallocatedforinterestonsharecapital.

NoallocationofinterestonsharecapitalshallbemadewithouttheapprovaloftheBoardofDirectorswhichmay
increaseordecreaseanyorboth.

Payment of interest, unless otherwise provided for in the Bylaws, must be made on such date as may be
determinedbytheBoardofDirectors.TheGeneral/RepresentativeAssembly',owever,upontherecommendationof
the Board of Directors, may defer the payment of such interest including Patronage Refund to raise Revolving
Capital.

Nocumulativeinterestshallbeallowedforanykindorclassofshareissuedbythecooperative.

ShareCapitalshallreceiveastrictlylimitedRateofInterest.

Section10.WithdrawalofShareCapital. A member of a cooperative may, for any valid reason, withdraw his/her
membershipfromthecooperativebygivingasixty(60)daysnoticetotheBoardofDirectors.SubjecttotheBylaws
ofthecooperative,thewithdrawingmembershallbeentitledtoarefundofhis/hersharecapitalcontributionandall
otherinterestsinthecooperative.Provided,Thatsuchrefundshallnotbemadeifuponsuchpaymentthevalueof
theassetsofthecooperativewouldbelessthantheaggregateamountofitsdebtsandliabilitiesexclusiveofhis/her
sharecapitalcontribution.

Section11.PatronageRefund.TheprincipleofPatronageRefundisaprincipleofaequitywhereinanequalrightof
memberstoparticipateintheorganizationandtoequitablyshareinthebenefitsaccruingisestablished.Underthe
principle, the Net Surplus shall not be construed as profit, but as excess payments made by them from the
cooperativeandwhichshallbedeemedtohavebeenreturnedtothemifthesameisdistributedasprescribedby
theCodeandbythisRule.Provided,however,Thattheamountallocatedforpatronagerefundshallnotbelessthan
thirty percent (30%) of the net surplus after deducting the statutory reserves based on the principle of equity.
Provided,further,thatinnocaseshalltherateofpatronagerefundbemorethantwicetherateofinterestonshare
capital.

Section12.AccountingProcedure.Theaccountingsystemtobeinstalled/maintainedinthecooperativeshallbein
accordance with the generally accepted accounting principles and practices, taking into consideration cooperative
principles and practices. The cooperative shall use the Standard Chart of Accounts and its accompanying
AccountingManualprescribedbytheAuthority.

RULE11
SOCIALAUDITOFCOOPERATIVE

Section1.LegalBasis.ThelegalbasisforthisRuleisArt.80,paragraph4,5and6oftheCode,quotedasfollows:

"Art. 80. Annual Audit. Cooperatives registered under this Code shall be subject to an annual
financial,performanceandsocialaudit."
 "ThesocialauditshallbeconductedbyanindependentsocialauditoraccreditedbytheAuthority."

"TheAuthorityinconsultationwiththecooperativesector,shallpromulgatedtherulesandstandardsfor
thesocialauditofcooperatives."

Section2.Coverage.Allregisteredcooperativesregardlessoftypesandcategoriesshallbesubjecttosocialaudit.

Section3.SocialAudit.Itisaprocedurewherethecooperativeassessesitssocialimpactandethicalperformance
visvisitsstatedmission,vision,goalsandcodeofsocialresponsibility.Itisaprocesstoassessthecooperative's
contributionfortheupliftmentofthestatusnotonlytoitsmembers'economicneedsbutalsosocialneedsandthe
community where it operates. The cooperative's actual performance and accomplishment are compared to its
vision, goals, and social responsibility as it relates to the impact not only to the community but to its regular
membersastheimmediatebeneficiaryofthedecisionsandactionsitpromulgated,passedandimplemented.Social
Auditwillserveascontrolmechanismtoaccountforitssocialperformanceandevaluateitsimpactinthecommunity
takingintoaccountthecommunitydevelopmentfundwhichshallbeusedforprojectsoractivitiesthatwillbenefitthe
communitywherethecooperativeoperates.

Section 4. Objectives/Uses of Social Audit. Social Audit validates the support of the cooperative to the seventh
cooperative principles on the "Concern Community" and determines whether the cooperative work for the
community's sustainable development through policies approved by their members. The audit focuses not only to
theeconomicsideofthecooperativebutalsothesocialaspectoftheorganizationandappraisesthecooperative
performance as valuebased organization usually participative, user and community oriented and nonprofit but
serviceorganizationandhowitssocialresponsibilityforitsmembersandthecommunityasawholewasfulfilled.
SocialAuditingisthesystematicreviewoftheattitudes,values,behavior,anddegreeofinteractionofpeoplewithin
thecooperativeaswellasthepolicies,programsandactivitiesbeingimplementedbythecooperative.

Section5.Components and Social Audit Indicators. The Social Audit of the cooperative shall consists of but not
limitedtothefollowingmajorcomponents/categorieswithitsobjectives:

1.Membership.Todeterminetheeffectivenessofthecooperativeinmeetingtheneedsofitsmembersvisvisthe
socioeconomicupliftmentandempowermentofthemembers.

2.Assetsbuilding.Todeterminethecooperatives'performanceinbuildingupitseconomiccapacitytorespondtoits
socialresponsibilityanddevelopmentincomegeneratingundertakingsforitsmembers.

3.CommunityInvolvementandSolidarity.Todeterminethedegreeofcommunity,social,environmentalinvolvement
and solidarity of the cooperative. In relation to this, all cooperatives are encourage to promote environmental
awarenessandinstillenvironmentalprotectionandconservationtotheirmembersandthecommunitywherethey
operate, and as far as practicable to conduct treeplanting activities in the community where they operate or its
immediateenvirons.

4.Informationaccessinganddissemination.Todeterminethecapabilityofthecooperativetoaccess,processand
disseminate information from/to its members and community. It looks into the function of the organization as an
empoweringandresponsivemechanism.

5.Gender,Youth,Elderly,Children,andPersonswithDisability.Todeterminehowthecooperativehascontributed
inthesocialcapitaldevelopmentforthewelfareoftheyouth,theelderly,children,andpersonswithdisabilityand
thepromotionofthegenderfaircultureandpractices.

6.LeadershipandOrganizationalManagement.Tohighlighttheattributesoftheleaders/officersofthecooperative
andefficiencyinmanagingtheaffairsoftheorganizationasitrelateswithitsmembersandwithgovernment.

Section6.SocialAuditManual.TheAuthorityshalldevelopaSocialAuditManualthatwillbeusedforthepurpose.

Section7.Applicability.AllregisteredcooperativesshallsubmittotheAuthoritytheAnnualsocialAuditReportas
conductedbyanIndependentSocialAuditoraccreditedbytheAuthority.

Section8.Sanctions.ThefailureofthecooperativestotheAuthorityoftherequiredSocialAuditReportconducted
by the Accredited Independent Social Auditor shall mean noncompliance with the required reports and will be
metedwithcorrespondingpenaltiesinaccordancewithR.A.9520.

Section9.TransitoryPeriod.Allcooperativeareherebygiventwo(2)yearsfromeffectivityofthisRuletocomply
withtheSocialAuditRequirementsasprovidedabove.

RULE12
FINANCIALSERVICECOOPERATIVE(FSC)

Section1.LegalBasis.ThelegalbasisforthisRuleisArt.121(1)and(14)oftheCode,quotedasfollows:

"Art. 121. Regulation and Supervision. The Authority shall exercise lead regularity powers and
supervisionovertheoperationsofthefinancialservicecooperatives,towit:

(1)Issuerulesandregulationsforthesafeandsoundoperationsoffinancialservicecooperatives.xxx
(14) Appoint a conservator or a receiver as may be necessary subject to the rules and regulations to be
promulgated by the Authority in coordination with the BSP, taking into consideration the grounds, powers and
proceduresunderSections29and30ofRepublicAct.No.7653asmaybedeemedappropriatetofinancialservice
cooperatives.

TheAuthorityshallincludeinitsrulesandregulationappropriatesanctionsandpenalties,onthefinancialservice
cooperatives, its members, and officers and responsible, its members, officers and responsible persons, for any
actionthatfailstoadheretosoundandprudentmanagementpracticesorareinconsistentwiththeprovisionsofthis
Codexxx."

Section2.FunctionsofFSC.AFSCisafinancialorganizationownedandoperatedbyitsmembersandauthorized
to provide the following services, exclusively to its members: (a) the functions of credit cooperatives and other
cooperatives,includingmultipurposecooperatives,thatprovidesavingsandcredittotheirmembersand(b)other
financialservicessubjecttoregulationbytheBSP.

Section 3. Coverage. (1) All Financial Service Cooperative organized for the primary purpose of engaging in
savings and credit services and other financial services, and (2) Existing cooperatives with savings and credit
facilitieswhichhasformallynotifiedtheAuthorityoftheirintentiontoexerciseenhancedfunctionsandsatisfiedthe
requirementsofCDAforconversiontoFinancialServiceCooperative.

Section4.Registration.TheArticlesofCooperationandBylawsofanyFSC,oranyamendmentthereto,shallbe
registeredwiththeAuthorityonlyifaccompaniedbyaCertificateofAuthorityissuedbytheBSP,underitsofficial
seal. Existing cooperative engaged in credit and multi purpose activities, after it has notified the Authority of its
decision to exercise enhanced functions and satisfied the requirements for the conversion to Financial Service
Cooperative,shallregisteritsamendedArticlesofCooperationandBylawstotheAuthorityuponapprovalofthe
AuthorityandfavorablecertificationoftheBSP.

Section5.Revocation of Authority. The authority granted, may be revoked by the BSP if any of the grounds for
receivershipmentionedunderSection30ofRepublicAct.No.7653,otherwiseknownasTheNewCentralBankAct
andsections53and56ofRepublicActNo.8791,otherwiseknownasAnActProvidingfortheRegulationofthe
Organization and Operations of Banks, QuasiBanks, Trust Entities and for Other Purposes are present or if the
FSChaswillfullyviolatedtheCodeoranyoftherelatedrulesandregulations.

Section6.MinimumCapitalizationRequirements.OnlythosecooperativeswithminimumPaidupcapitalofatleast
Ten Million pesos (Php 10,000,000.00) shall qualify to register as FSC without prejudice to additional capital
requirementsthatmaybeprescribedbytheBSPforaparticularfinancialserviceregulatedbytheBSPthatwillbe
offeredbytheFSC.

Section7.Documentary Requirements. In addition to the documents required by the authority for registration of
newcooperative/amendments,thefollowingshallbelikewisesubmitted:

1.CertificateofAuthorityfromBSP

2.ResolutionoftheBoardstatingthat:

2.1Thefunctionoroneofthefunctionsofthecooperativeshallbesavings,creditandotherfinancial
services

2.2TheamountofpaidupcapitalallocatedforsuchpurposesshallbeatleastTenMillionPesos(Php
10,000,000.00)

3. Undertaking to accomplish within a year from the issuance of Certificate of Registration to establish the
business site equipped with facilities, forms, stationeries, and vault and provide required special
training/seminarforofficersofthecooperative

4.AuditedFinancialStatementoftheimmediatelyprecedingyearincaseofexistingcooperative

5.Otherpapers,whichmayberequiredbyAuthority.

Section8.ReportorialRequirements.TheFSCshallsubmittheregularreportsasprovidedunderSection2ofRule
8ofthisRule.

Section9.MembershipandAffiliation.AFSCshallhavetwo(2)typesofmembers:(1)Regularmembers,whoare
naturalpersonsand(2)Associatememberswhoarenaturalpersonsbutwhodonotimmediatelyqualifyunderthe
requirements for membership set out in the Bylaws of the cooperative. All associate members who are natural
personsshallbegiventwo(2)yearstobecomeregularmembers.Failuretoconvertwithinsaidperiodshallmean
automaticwithdrawaloftheirassociatemembership.Theymay,however,reapplyasregularmembersaftertwo(2)
years.Minorswhoaredependentsofregularmemberscanqualifyasassociatemembers.Whentheyreachtheage
ofmajorityandwithintwo(2)yearsfromacceptanceoftheirassociatemembership,theyhavetheoptiontoconvert
into regular members. As associate members, they may open accounts, deposit funds, and withdraw from their
account, subject to the Bylaws and rules of the cooperative, and the rules and regulations of the Authority,
notwithstandingtheprovisionsofexistinglawstothecontrary.
Section 10. Officers. The officers of the FSC shall be composed of the Members of the Board of Directors,
CommitteeMembers,GeneralManagerorChiefExecutiveOfficer,Secretary,TreasurerandMembersholdingother
positionsasmaybeprovidedforintheirBylaws.

Section11.BondingofAccountableOfficers.EveryDirector,Officer,andEmployeeshandlingfunds,securities,or
property on behalf of the FSC shall be covered by a surety bond to be issued by a duly registered insurance or
bondingcompanyforthefaithfulperformanceoftheirrespectivedutiesandobligations.TheBoardofDirectorsshall
determinetheadequacyofsuchbonds.

Section12.Compensation.IntheabsenceofanyprovisionintheBylawsfixingtheircompensation,theDirectors,
shall not receive any compensation except for reasonable per diems: Provided, however, That the Directors and
Officersshallnotbeentitledtoanyperdiemwhen,intheprecedingcalendaryear,thecooperativereportedanet
lossorhaddividendratelessthantheofficialinflationratefortheyear.Anycompensationotherthanperdiemsmay
begrantedtoDirectorsbyamajorityvoteofthememberswithvotingrightsataregularorspecialgeneralassembly
meetingspecificallycalledforthepurpose:Providedfurther,Thatnoadditionalcompensationotherthanperdiems
shallbepaidduringthefirstyearofexistenceoftheFSC.Providedfinally,Thattheimmediatelyprecedingproviso
shallnotapplytocooperativeswhichconvertedintoFinancialServiceCooperative.ThecompensationofOfficersas
wellastheMembersoftheCommitteecreatedpursuanttotheCodeoritsBylawsmaybefixedinBylaws.

Section13.RemovalofOfficers.AllcomplaintsfortheremovalofanyelectedOfficershallbefiledwiththeBoardof
Directors.SuchOfficershallbegiventheopportunitytobeheard.MajorityoftheBoardofDirectorsmayplacethe
Officer concerned under preventive suspension pending the resolution of the investigation which period shall be
specifiedintheBylawsorpoliciesofthecooperativedulyapprovedbytheGeneral/RepresentativeAssembly.Upon
findingofaprimafacieevidenceofguilt,theBoardofDirectorsshallpresentitsrecommendationforremovaltothe
General/RepresentativeAssembly.

AnElectiveOfficermayberemovedbythreefourths(3/4)voteoftheregularmemberspresentandconstitutinga
quorum in a regular or special general assembly meeting called for the purpose. The Officer concerned shall be
givenanopportunitytobeheardatsaidassembly.

Section14.Networth. The Net Worth of the FSC shall, at all times, not be less than an amount equal to eight
percent (8%) of its risk assets. The net worth positions should be sufficient to meet competitive pressure and
adverseeconomicconditionsastheyarise.Itshouldenhancethesafetyofthemembers'shareandkeeppacewith
growthinFSCassets.

Section 15. Deposit and Borrowing Operations. Savings and Time Deposits with FSC may be opened with a
minimumamounttobedeterminedbytheBoardofDirectors.Onlymembersanditsaffiliatelaboratorycooperative
may open savings and/or time deposit accounts. The FSC, through the Board of Directors as authorized by the
GeneralAssembly,mayborrowfromanysourceatthebesttermsorconditionsavailableandinsuchamountthat
maybeneeded.

Section16.ReserveRequirementsagainstDepositLiabilities.FSCshallmaintainaLiquidityReserveFundthatwill
berestrictedinnatureequivalenttoatleasttwopercent(2%)oftheirsavingsandtimedepositliabilities.

Section17.Loans.TheBoardofDirectorsshallberesponsibleforsettingloanpoliciesandlendingprocedures.It
shallcomplywiththeprovisionsofR.A.3765,otherwiseknownasthe"TruthinLendingAct"andshallmakethetrue
andeffectivecostofborrowing,anintegralpartofeveryloancontract.

Section18.InvestmentProgram.Asoundinvestmentprogramshallbethesoleresponsibilityandaccountabilityof
theBoardofDirectors.ThescopeoftheprogramwilldependlargelyontheFSCsizeandtheextentofitssurplus
funds. Investment policies should be in writing and should address the safety, liquidity and yield, diversification,
delegationofauthority,andvaluation/assessmentofsecurities.TheFSCshallnotinvestinanysingleentitymore
than20%ofitsnetworth.

Section 19. Internal Control. The FSC shall adopt a proper plan of organization, accounting control, accounting
system, administrative control, internal control standards, accounting records procedures and other measures to
safeguardtheFSC'sassets,checktheaccuracyandreliabilityofaccountingdata,promoteoperationalefficiency,
andencourageadherencetoprescribedmanagerialpolicies.

Section20.PerformanceStandards.Apolicyoftransparencyandopennessmustbealwaysmaintainedwhereby
theBooksofAccounts,General/RepresentativeAssembly,BoardResolutionsandCommitteeReportsareproperly
kept and made accessible to members, and the regular financial statements are periodically prepared and made
knowntothemembers,totheAuthorityandtootherpartiesinterestedintheFSC'soperations.

Section 21. Standard Chart of Accounts. All FSCs shall adopt the Standard Chart of Accounts and its
accompanying Accounting Manual for Credit and Other Types of Cooperatives with Credit Service issued by the
Authority.

Section22.ManualofRulesandRegulations.TheAuthorityshalldevelopaManualthatwillcover:(1)theRules
and Regulations for the safe and sound conduct of operations of Financial Service Cooperatives (2) Rules and
RegulationsfortheappointmentofaConservatororaReceiverasmaybenecessaryincoordinationwiththeBSP,
takingintoconsiderationthegrounds,powersandproceduresunderSection29and30ofRepublicActNo.7653as
maydeemedappropriatetoFinancialServiceCooperativesand(3)theappropriatesanctionsandpenaltiesonthe
FinancialServiceCooperatives,itsMembers,OfficersandResponsiblePersons,foranyactionthatfailstoadhere
tosoundandprudentmanagementpracticesorareinconsistentwiththeprovisionsoftheCode,otherapplicable
lawsoncooperatives,rules,regulations,circularsorordersissuedbytheAuthority,andrequirethecooperativeto
undertakecorrectiveorremedialmeasuresrelativethereto.

The appropriate prudential Rules and Regulations applicable to the Financial Service Cooperatives will be
developedbytheBSP,incoordinationwiththeAuthority.

Section 23. Prohibition. The terms 'Credit Cooperatives', 'Financial Service Cooperative', and 'Financial Service
CooperativeFederation'shallbeusedexclusivelybythosewhoaredulyregisteredundertheCode,andnoperson,
groupofpersons,ororganizationshallusethesaidtermsunlessdulyregisteredwiththeAuthority.Violationsofthis
prohibitionshallbepunishableinaccordancewithArt.140oftheCode.

RULE13
VOLUNTARYARBITRATION

Section1.LegalBasis.ThelegalbasisforthisRuleisArt.137oftheCodequotedasfollows:

"Art. 137. Settlement of Disputes, Conciliation, and Mediation Proceedings. Disputes among
members, officers, directors, and committee members, and intracooperative, intercooperative, intra
federation or intrafederation disputes shall, as far as practicable, be settled amicably in accordance
withtheconciliationormediationmechanismembodiedinthebylawsofcooperativesandinsuchother
applicablelaws.

The conciliation and mediation committee of the cooperative shall facilitate the amicable settlement of intra
cooperativedisputesanddisputesamongmembers,officers,directors,andcommitteemembers.

Should such conciliation and mediation proceedings fail, the matter shall be settled through voluntary arbitration:
Provided, however, That before any party can validly file a complaint with the Authority for voluntary arbitration, it
must first secure a certification from its conciliation and mediation committee and from the cooperative union or
federationtowhichitbelongsthatdespitealleffortstosettletheissues,thesamehavefailed.

Thejurisdictionofthevoluntaryarbitrationshallbeexclusiveandoriginalandtheirdecisionsshallbeappealableto
theOfficeofthePresident.TheAuthorityshallissueandadopttheproperrulesofproceduregoverningarbitration
astheprimaryandexclusivemodefordisputeresolutioninaccordancewiththeAlternativeDisputeResolutionAct
of2004.

Forthispurpose,theAuthorityshallconstitutealistofQualifiedVoluntaryArbitrators."

Section 2. Exclusive and Original Jurisdiction of the Voluntary Arbitrator/Arbitrator. The Voluntary
Arbitrator/Arbitrator mutually chosen by the parties shall have exclusive and original jurisdiction over the dispute,
andtheirdecisionshallbeappealabletotheOfficeofthePresidentoftheRepublicofthePhilippines.

Section 3. Powers/Authority of the Voluntary Arbitrator/s. The Voluntary Arbitrator/s shall have the following
powers/authority:

a.Toholdhearingsandtoreceiveevidencenecessarytoresolvetheissue/ssubjectofthedispute.

b. To require any person to attend hearing/s as witness or to cause production of documents when the
relevancyandthematerialitythereofarevitaltotheresolutionofthecase.

c.Toadministeroath.

d. To cite contempt any person disturbing the proceeding and/or who willfully defy lawful orders of the
VoluntaryArbitrator/Arbitrators.

e.ToissueaWritofExecution,ifnecessary.

f.Toexercisesuchotherpowersandfunctionsasmaybenecessarytoresolvethedispute.

Section 4. Nature of Proceedings. Voluntary Arbitration is an administrative proceeding. The technical rules
applicabletocourtorjudicialproceedingsmaynotapplystrictly.However,therequirementsofdueprocessmustbe
observedatalltimes.Thehearingmayproceedevenintheabsenceofanyparty,providedthepartieswereduly
notified and their failure to appear in such scheduled meeting is unjustified as determined by the Voluntary
Arbitrator/shandlingtheproceedings.

Section 5. Coverage. All intra/inter cooperative disputes not resolved amicably in accordance with the
Conciliation/MediationMechanismsembodiedintheBylawsofacooperativeshallbegovernedbythisRule.

Section 6. Commencement of Action. Any party of a dispute not resolved through Conciliation/Mediation
Proceeding in the primary and union/federation level can commence an action for Voluntary Arbitration by filing a
VerifiedComplaintwiththeAuthority.

Inthecaseofaprimarycooperativeaffiliatedwithanyfederation/union,thecomplaintshallbeaccompaniedbya
CertificateofNonSettlementissuedbythesaidfederation/uniontowhichtheprimarycooperativeisaffiliatedwith.
Inthecaseofaprimarycooperativenotaffiliatedwithanyfederationorunion,thecomplaintshallbeaccompanied
by a Certificate of NonSettlement issued by the Conciliation/Mediation Committee of such primary cooperative
together with a Certificate of NonAffiliation with any Federation/Union signed by the Chairperson of the Board of
Directorsofthesamecooperative.

Section7.VenueofAction.AllcomplaintsshallbefiledwithCDAExtensionOfficehavingadministrativejurisdiction
over the cooperatives. However, for complaints involving cooperatives registered with the Central Office such
complaintshallbefiledwiththelatter.

Section8.ContentsoftheComplaint.Thecomplaintshallcontain:

1.TheNamesandAddressesoftheComplainant/sandRespondent/s

2.ABriefDescriptionoftheComplaintandtheDocumentaryEvidences,ifanyand

3.TheReliefPrayedFor.

Section9.Parties to the Dispute. The Party who filed the complaint shall be called the "Complainant/s" and the
Partycomplainedofshallbecalledthe"Respondent/s".

Section 10. Procedures. Upon receipt of the Complaint, the Authority shall issue a Notice/Summons to the
Respondent/s to file Answer/Comment. Upon receipt of the Answer/Comment, a Preliminary Conference shall be
scheduled.

Section11.PreliminaryConference.ANoticeshallbesenttoallpartiesconcerned,indicatingthetimeanddateof
theconference.TheNoticeshallbeservedonCounsel,oronthepartywhohasnoCounsel.Itshallbethedutyof
the parties or their Counsel to appear at the Preliminary Conference. The nonappearance of a party may be
excusedonlyifavalidcauseisshownthereforeorifaRepresentativeshallappearinhis/herbehalffullyauthorized
in writing. The unjustified failure of the Complaint to appear in the Preliminary Conference shall be cause for
dismissal of the complaint. A similar failure on the part of the Respondent at the first instance, a second
Notice/Summonsshallbeissued.NoncompliancewiththesecondNotice/SummonsbytheRespondent/sshallbe
causeforthedismissalofthecomplaint.However,aCertificateofNonResolutionmaybeissueduponrequestof
theComplainant.

WhenevertheRespondent'swhereaboutsareunknownorcannotbeascertainedbydiligentinquiry,thenoticemay
be effected by publication in a newspaper of general circulation at the expense of the complainant, otherwise the
complaintshallbedismissed.However,aCertificateofNonResolutionmaybeissuedtotheComplainant.

Should the parties appear in the Preliminary Conference, the parties shall be required to sign a Submission
Agreement.

Section 12. Contents of the Submission Agreement. The Agreement shall contain, among other things, the
followingmatters:

1.TheagreementtosubmittoVoluntaryArbitration

2.Thespecificissue/sordispute/stobesubmittedforresolution

3.ThenameoftheVoluntaryArbitrator/schosenbytheparties

4.ThemannerofpayingthecostofarbitrationproceedingsincludingtheArbitrator'sfee

5.Thenameofthepublicofficialwhomthepartiesmaydesignatetoexecutethefinaldecisionoraward,if
necessaryand

6.TheAgreementtoperformorabidebytheDecision/Award.

Section 13. Arbitration Proceedings. All parties to the dispute shall attend the arbitration proceedings. The
attendanceofanythirdpartyortheexclusionofanywitnessintheproceedingshallbedeterminedbytheVoluntary
Arbitrator/s. Hearings may be adjourned for a valid cause or upon agreement of the parties. Unless the parties
agree otherwise, it is mandatory for the Voluntary Arbitrator/s to render a Decision or Award within thirty (30)
calendardaysfromthedatethepartiesagreedtosubmitthecaseforresolution.

Section 14. Decision/Award. The final disposition of the issue/s submitted to Voluntary Arbitration is the
Decision/Award.

The Decision or Award must be stated in clear, concise and definite terms. It shall include the facts and the law
and/orcontractuponwhichtheDecision/AwardisbasedandshallbesignedbytheVoluntaryArbitrator/s.Acopyof
thisDecision/AwardshallbefurnishedtheAuthority.

Section15.Extent of Decision/Award. The Voluntary Arbitrator/s shall have the power to decide only the matters
whichhavebeensubmittedforarbitration.

Section 16. Enforcement/Execution of Decision/Award. The parties shall comply voluntarily and faithfully the
Decision/Award. In instances of noncompliance, a Motion to Enforce or Execute may be filed with the Voluntary
Arbitrator/swhomayissueaWritExecutionrequiringeitherthesheriffoftheAuthority,ifany,ortheregularcourtsor
any public official whom the parties may designate in the submission agreement to execute the final decision or
award.

Section17.AppealtotheOfficeofthePresidentoftheRepublicofthePhilippines.TheDecision/Awardrendered
shallbeappealabletotheOfficeofthePresidentoftheRepublicofthePhilippines.TheAppealistakenbyfilinga
NoticeofAppealwithinfifteen(15)daysafterreceiptofthecopyoftheDecision/Awardappealedfrom.Ifnoappeal
isfiledwithinthetimeasprovidedherein,suchDecision/Awardbecomesfinalandexecutory.

Section 18. Stenographic Notes/Transcript. The Voluntary Arbitrator/Arbitrator shall arrange the taking of
stenographicnotes/transcriptofthetestimonywhenoneormorepartiesrequestsucharecord,andsuchpartyor
partiesthereofassumepaymentofthecost.

Section19.Cost of Arbitration and Arbitrator's Fee. Unless agreed otherwise, the parties shall equally share the
costoftheproceedingsincludingtheArbitrator'sFee.

Section20.AccreditationofVoluntaryArbitrator/s.TheAuthorityshallissueguidelinesconcerningtheaccreditation
anddelistingofVoluntaryArbitrator/saswellasthelistofqualifiedVoluntaryArbitrator/s.

COMMONPROVISIONS

Section 1. Requirements. A copy of these Rules shall be among the documents required to be kept ready and
accessibleforinspectionandexaminationbythemembersofthecooperativeandtheAuthorityinaccordancewith
Art.52oftheCode.

Section 2. Interpretation. Unless otherwise stated in these Rules, in case of doubt as to the meaning of any
provisionoftheseRules,thesameshallberesolvedandinterpretedliberallyinfavorofthecooperativesandtheir
members.

Section 3. Suppletory Rule. Bureau of Local Government Finance Memorandum Circular No. ____ and Bangko
SentralngPilipinasCircularNo.682,S2010shallfrompartoftheseRules.SpecialRules,Circulars,Ordersand
otherissuancesbyappropriategovernmentagenciesinpursuanceoftheprovisionsoftheCodeandtheseRules,
andnotinconsistentthereto,shallhavesuppletoyapplicationtotheseRules.

Section4.Mandate.TheAuthorityismandatedtoimplementandenforcetheseRulesandRegulations.

Section5.Applicability.TheprovisionsofthisRuleshallapplytoRules1to13.

Section6.Separability.IfanyprovisionoftheseRulesandRegulationsisdeclarednullandvoidorunconstitutional,
theotherprovisionsnotaffectedtherebyshallcontinuetobeinforceandeffect.

Section7.Amendment.TheseRulesandRegulationsshallbesubjecttoautomaticreviewthree(3)yearsafterthe
effectivitythereof.Anyamendmentthereto,shallbesubjecttothereviewandapprovaloftheJCOCC.

Section8.Effectivity.TheseRulesandRegulationsshalltakeeffectfifteen(15)daysafterpublicationintheOfficial
Gazetteorinanewspaperorgeneralcirculation.

RECOMMENDINGAPPROVAL:

FORTHEBOARDOFADMINISTRATORS
COOPERATIVEDEVELOPMENTAUTHORITY

LECIRAV.JUAREZ
Chairman

ThisImplementingRulesandRegulations(PartI)wasapprovedbytheJointCongressionalOversightCommittee
onCooperativesduringitsmeetingonFebruary16,2010attheSenateofthePhilippines,PasayCitypursuantto
Article138ofRA9520.

ForJointCongressionalOversightCommitteeonCooperatives

FortheSenateofthePhilippines: FortheHouseoftheRepresentatives:

Sen.JUANMIGUELF.ZUBIRI Rep.ERNESTOC.PABLO
Chair,SenatePanel Chair,HousePanel

TheLawphilProjectArellanoLawFoundation

RULESANDREGULATIONSIMPLEMENTING
THESPECIALPROVISIONSOFTHEPHILIPPINECOOPERATIVECODEOF2008
(REPUBLICACTNO.9520)

TITLEANDDEFINITIONS
Section1.Title.TheseRulesshallbeknownasthe"RulesandRegulationsImplementingtheSpecialProvisionsof
thePhilippineCooperativeCodeof2008."

Section2.DefinitionofTerms.ForthepurposeoftheseRulesandRegulations,thefollowingtermsaredefinedas
follows:

1.AccreditationshallrefertotheactoftheOTCBoardofDirectorsrecognizetheTransportationService
Cooperatives and which shall take place after registration with the CDA as evidenced by a Certificate of
Accreditation.

2.AgrarianReformAreashallrefertotheareasubjecttothecoverageofComprehensiveAgrarianReform
Program(CARP)/ComprehensiveAgrarianReformProgramExtensionwithReform(CARPER).

3. Agrarian Reform Beneficiaries (ARBs) shall refer to the qualified beneficiaries of Comprehensive
AgrarianReformProgram(CARP)asdefinedunderSection22,ChapterVIIofR.A.6657.

4.AgrarianReformCommunity(ARC)shallrefertoacommunitycomposedandmanagedbyARBswho
arewillingtobeorganizedandtoundertaketheintegrateddevelopmentofanareaand/ortheirorganizations
or cooperatives as defined under RA 9700, otherwise known as the Comprehensive Agrarian Reform
ProgramExtensionwithReform(CARPER)Act.

5.Agrarian Reform Cooperative shall refer to one organized by marginal farmers majority of which are
AgrarianReformBeneficiariesdulyregisteredwiththeAuthorityforthepurposeofdevelopinganappropriate
system of land tenure, land development, land consolidation or land management in areas covered by
agrarian reform and for other purposes as provided by law. The same shall also refer to Agrarian Reform
BeneficiariesCooperative(ARBCoop)asdefinedinDARAdministrativeOrderNo.05,Seriesof2009.

6.AuthorityshallrefertoCooperativeDevelopmentAuthority(CDA).

7.BFADshallrefertoBureauofFoodandDrugs.

8. Blanket Loan/Wholesale Loan shall refer to a housing loan contracted/obtained by a housing

cooperative intended to identify memberbeneficiaries for land acquisition, land improvement, house
construction,homeimprovement,orrenovationandothersimilarpurposes.

9.BSPshallrefertoBangkoSentralPilipinas.

10.CGSshallrefertotheCertificateofGoodStandingissuedbytheAuthoritytoalltypesofcooperatives.
Transportation Service Cooperative shall also secure another CGS from OTC or LGU, whichever is
applicable.

11.CLOAshallrefertotheCertificateofLandOwnershipAward.

12.CommissionshallrefertotheInsuranceCommission.

13. Cooperative Education and Transport Operation Seminar (CETOS) shall refer to seminars
conducted by CDA and/or OTC for the purpose of providing continuing education on cooperative and
transport operation to enhance the knowledge and capability of the officers as well as the members of the
TransportationServiceCooperative.

14. Cooperative Housing Program shall refer to an alternative housing approach, in partnership with
government/nongovernment agencies involved in a housing program, undertaken by a financially and
organizationallystablecooperativetoaddressthehousingproblemsofitsmembersprimarilythelowincome
earners through its own cooperative efforts in planning and direct production of affordable, decent and
adequatehousingunits.

15.CPCN/Franchise/Permit shall refer to the Certificate of Public Convenience and Necessity issued by
the appropriate government agencies which authorizes the grantee thereof to render the appropriate public
service.

16.DairyCooperativeshallrefertoonewhosemembersareengagedintheproductionoffreshmilkwhich
maybeprocessedand/ormarketedasdairyproducts.

17.DistributionofElectricityshallrefertotheconveyanceofelectricpowerbyadistributionutilitythrough
itsdistributionsystempursuanttotheprovisionsoftheEPIRALaw.

18.Distribution of Utility shall refer to any Electric Cooperative, private corporation, governmentowned
utility,orexistinglocalgovernmentunitwhichhasanexclusivefranchisetooperateadistributionsystemin
accordancewiththeEPIRALaw.

19.DARshallrefertotheDepartmentofAgrarianReform.

20.DOHshallrefertoDepartmentofHealth.

21.DOTCshallrefertoDepartmentofTransportationandCommunications.
22. Electric Cooperative shall refer to one organized for the primary purpose of undertaking power
generation, utilizing renewable energy sources, including hybrid system, acquisition and operation of
subtransmissionordistributiontoitshouseholdmembers.

23.ExtensionOffices shall refer to the offices of the Authority covering one geopolitical region each as
theirareaofjurisdiction.

24.EPIRAshallrefertotheElectricPowerIndustryReformActof2001.

25.GSISshallrefertotheGovernmentServiceInsuranceSystem.

26.HighRise/CondominiumHousingshallrefertotheconstructionofatleastfive(5)storeyresidential
buildinginhighdensityurbanandruralareastoprovidehousingtolowincomeearners.

27.HDMFshallrefertotheHomeDevelopmentMutualFundorPagIBIGFund.

28.HLURBshallrefertotheHousingandLandUseRegulatoryBoard.

29.HousingBeneficiariesshallrefertoregularmembersingoodstandingoftheHousingCooperativewho
activelyintheBylawsanddulyapprovedinternalpoliciesofthecooperative.

30.HousingCooperativeshallrefertooneorganizedtoassistorprovideaccesstohousingforthebenefit
of its regular members who actively participate in the savings program for housing. It is coowned and
controlledbyitsmembers.

31. Insurance Cooperative shall refer to one engaged in the business of insuring life and property of
cooperativesandtheirmembers.ItshallalsorefertoCooperativeInsuranceSocieties(CIS).

32. Insurance Like Activity shall refer to any activity involving regular collection of premiums, fees,
contributions,orchargespriortotheoccurrenceofcontingenteventandthepaymentofguaranteedbenefits
upontheoccurrenceofsuchevent.

33.LBPshallrefertotheLandBankofthePhilippines.

34.LGUshallrefertoLocalGovernmentUnit.

35.LTFRBshallrefertotheLandTransportationFranchisingandRegulatoryBoard.

36.LTOshallrefertotheLandTransportationOffice.

37.LWUAshallrefertotheLocalWaterUtilitiesAdministration,createdunderPD198,asamended.

38.MARINAshallrefertoMaritimeIndustryAuthority.

39.MarginalFarmersshallrefertofarmerswhoaretillinganareaofnotmorethanthree(3)hectares.

40. Medium Rise Housing shall refer to the construction of a maximum of four (4) storey residential
buildinginhighdensityurbanandruralareastoprovidehousingtolowincomeearners.

41.MemberinGoodStandingshallrefertoonewhoisaregularmemberandhascompliedwithallthe
requisites for membership. One who possesses all the qualifications and none of the disqualifications
providedintheCooperativeBylawsasascertainedbytheBoardofDirectorsandhastherighttovoteandbe
votedupon.

42.MicroInsuranceshallrefertoanactivityprovidingspecificinsurance,insurancelike,andothersimilar
products and services that meet the needs of the lowincome sector for risk protection and relief against
distress,misfortuneandothercontingentevents.Thisshallincludeallformsofinsurance,insurancelikeand
othersimilaractivities,asmaybedefinedbyconcernedregulatorybodieswithfeaturessuchas:premiums,
contributions, fees or charges collected/deducted prior to the occurrence of a contingent event and
guaranteedbenefitsprovideduponoccurrenceofacontingentevent.

43. MicroInsurance Product shall refer to a financial product or service that meets the risk protection
needsofthepoorwheretheamountofpremiums,contributions,feesorchargescomputedonadailybasis
does not exceed five percent (5%) of the current daily minimum wage rate for nonagricultural workers in
Metro Manila, as approved by the National Wages Productivity Board (NWPB)/Regional Tripartite Wages
ProductivityBoard(RTWPB)andthemaximumsumofguaranteedbenefitsisnotmorethan500timesthe
dailyminimumwageratefornonagriculturalworkersinMetroManila.

44.NDAshallrefertoNationalDairyAuthority.

45.NextofKinshall,forpurposesofsuccession,refertoannaturalpersonwhoisanheirofanagrarian
reformbeneficiaryandwhoisqualifiedtobeamemberofthecooperativeasARBunderitsBylawsandas
determinedbyDAR.

46.NHAshallrefertotheNationalHousingAuthority.
 47.NWRBshallrefertotheNationalWaterResourcesBoard,createdunderPD424.

48.OTCshallrefertotheOfficeofTransportationCooperatives.

49.PCGshallrefertothePhilippineCoastGuard.

50. Referendum shall refer to a mechanism of securing the approval of the general membership of an
ElectricCooperativeonissuesaffectingitsregistration,operation,andmanagement.

51.RegularInsuranceProductshallrefertoallotherinsurancepoliciesnotcoveredbyMicroInsurance
Product.

52.RenewableEnergyResourcesshallreferto energyresourcesthat donohaveanupperlimitonthe

total quality to be used. Such resources are renewable on a regular basis and the renewable rate is rapid
enoughtoconsideravailabilityoveraninfinitetime.Theseincludeamongothers,biomass,solar,wind,hydro
andoceanenergy.

53.RTWPBshallrefertotheRegionalTripartiteWagesProductivityBoard.

54.SSSshallrefertotheSocialSecuritySystem.

55.SocializedHousingshallrefertothehousingprogramandprojectundertakenbythegovernmentand
private sector for the underprivileged and homeless which may also be undertaken by a Housing
Cooperative. This includes sites and services development, longterm financing and liberalized terms on
interestpayments.

56.SubtransmissionAssets shall refer to the facilities related to the power delivery service below the
transmission voltages and based on the functional assignment of assets, including, but not limited to
stepdown transformers used solely by load customers, associated switchyard/substation, control and
protective equipment, reactive compensation equipment to improve customer power factor, overhead lines,
and the land where such facilities/equipment are located. These include NPC assets linking transmission
systemandthedistributionsystemwhichareneitherclassifiedasgenerationnortransmission.

57.SupplyofElectricityshallrefertothesaleofelectricitybyapartyotherthanageneratororadistributor
inthefranchiseareaofadistributionutilityusingthewiresofthedistributionutilityconcerned.

58.TechnicalPlanshallrefertoalltechnicaldocumentsrequiredinplanningahousingprojectnamely,the
barchartandconstructionschedule,systematicdevelopmentplan,thearchitecturalanddetailedengineering
andhousingdesign,contractdocuments,technicalandmaterialspecification.

59.TransmissionofElectricityshallrefertotheconveyanceofelectricitythroughthehighvoltagesystem.

60.TransportationServiceCooperativeshallrefertoonewhichengagesinlandandseatransportation,
limited to small vessels, as defined or classified under the Philippine Maritime laws, organized under the
provisionoftheCode.

61.UrbanAreas shall refer to all cities regardless of their population density and to municipalities with a
populationdensityofatleast500personspersquarekilometer.

62. Urbanizable Areas shall refer to the sites and lands within display marked and great potential of
becomingurbanareaswithintheperiodoffive(5)years.

63. Water Tariff shall refer to the water rate charged to customers/members for water consumption as
determinedbythecooperativeandapprovedbytheNWRB.

64.WaterPermitshallrefertotheauthoritytoappropriateandusewater.

65.WaterRightshallrefertotheprivilegegrantedbythegovernmenttoappropriateandusewater.

66.WaterServiceCooperativeshallrefertoadulyregisteredcooperativeorganizedtoown,operate,and
managewatersupplysystemsfortheprovisionanddistributionofpotablewaterforitsmembers/consumers.

67.WaterSupply shall refer to the supply of potable water as provided by the cooperative for domestic,
industrial,commercial,andotheruses.

68.WorkerBeneficiariesshallrefertoanaturalpersonwhorendersserviceforavalueasanemployeeor
laborerinanagriculturalenterpriseorfarmwithinanARC,regardlessofwhetherhiscompensationispaidon
adaily,weekly,monthlyor"pakyaw"basis.

RULEIHOUSINGCOOPERATIVES

PursuanttotheprovisionsofArt.62(13)(par.2)underChapterVofRepublicActNo.9520,otherwiseknownasthe
Philippine Cooperative Code of 2008, the Cooperative Development Authority in consultation with NHA, HDMF,
SSS,LBP,andconcernedcooperativesectorherebypromulgatesthefollowingrulesandRegulationsfortheproper
guidanceandcomplianceofHousingCooperatives.
Section 1. Coverage. This Rule shall cover all cooperatives duly registered with the Authority under R.A. 9520
organizedtoassistorprovideaccesstohousingforthebenefitofitsregularmembers.

Section 2. Organization. Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having a
commonbondofinterestandactuallyresidingorworkingintheintendedareaofoperation,mayorganizeahousing
cooperative.

Section 3. Purpose and Objectives. A Housing Cooperative shall be organized for any or all of the following
purposes:

(1)Tofacilitateaccessand/orprovideaffordablehousingunitstoitsmembers

(2)Tocreatearesourcemobilizationprogramtoensurefinancialstabilityforthecooperative

(3) To foster and strengthen the principles of cooperativism by promoting a comprehensive and integrated
community development program which are planned and managed by the cooperative members thereby
ensuringasustainedandselfreliantcooperativecommunity.

(4)Todevelopcollaborativeeffortsandpartnershipwithothercooperatives,CDA,NHA,GSIS,HDMF,SSS,
LBP, DBP, HLURB and other government agencies, financial institutions and entities thereby assuring
availabilityofresourcesandlowercostofhousingdevelopment.

(5)Toexpandthecooperativesbusinessoperationsbystabilizingtheavailableresourcesforthecontinuing
productionofhousingunitsforitsmembers.

(6)Toundertakesuchothereconomicorsocialactivitiesasmaybenecessaryorincidentalinthepursuitof
theforegoingpurposes.

Section4.HousingProgramsandactivities.HousingCooperativesmayengageinthefollowingactivities:

a.SocializedHousing

b.MediumRisePublicandPrivateHousing

c.HighRise/CondominiumHousing

d.Student/FacultyDormitoryHousing

e.ProductionandDistributionofHousingMaterials

f.EstateManagementand

g.Othersimilaractivities.

Section5.RegistrationJurisdiction. Housing Cooperatives shall file their application for registration with the CDA
ExtensionOffice,whichshallhavejurisdictionoverthesaidcooperatives.

Section 6. Capitalization. For purposes of registration with the Authority, a housing cooperative shall have a
minimumpaidupcapitalizationofFifteenThousandPesos(P15,000.00).

Section7.RequirementsforRegistration.Thefollowingshallbecompliedwithuponfilingofapplication:

A.NewApplicant

(1)NameVerificationSlip

(2)ArticlesofCooperationandbyLaws

(3)SwornStatementofthetreasurerelectedbythesubscribersshowingthatatleast`twentyfiveper
centum(25%)oftheauthorizedsharecapitalhasbeensubscribedandatleasttwentyfivepercentum
(25%)ofthetotalsubscriptionhasbeenpaid:Provided,Thatinnocaseshallthepaidupsharecapital
belessthanFifteenThousandPesos(15,000.00)

(4)SurelyBondofAccountableOfficershandlingfunds,propertiesandsecurities

(5)PreMembershipEducationSeminar(PMES)

(6)EconomicSurvey

(7)PreFeasibilityStudyofthehousingprojectsundertakingasreviewedbyNHA

(8)UndertakingtoChangeNameintheeventthatanothercooperativehasacquiredpriorrighttothe
useoftheproposednameand

(9)RegistrationFee.
 B.ExistingCooperative

(1)AmendedArticlesofCooperationandBylaws

(2)AResolutioncertifiedbytheBoardSecretaryandbythemajorityoftheBoardofDirectorsstating
thatthesaidamendmentshavebeendulyapprovedbyatleasttwothirds(2/3)voteofthemembers
withvotingrights

(3)AuditedFinancialStatementsshowingprofitableoperationsforthepasttwo(2)years

(4)PrefeasibilitystudyofthehousingprojectsundertakingasreviewedbyNHA

(5)Proofofbusinesstrackrecordofthecooperativeand

(6)AmendmentFee.

Section 8. Financing and Technical Assistance. The Authority, in coordination with appropriate government
agenciesandfinancialinstitutions,shallassistthehousingcooperativeinavailingtechnicalandfinancialassistance
foritshousingprojects.

For this purpose, a special window for the financing of the housing projects shall be created by the appropriate
housing agencies and government financial institutions. The financing shall be in the form of blanket loans or
wholesaleloanstoqualifiedhousingcooperatives,withinterestratesandtermsequalto,orbetterthanthosegiven
forsocializedhousingprojectswithoutneedforindividualprocessing.

Section 9. Documentary Requirements in Availing for Technical and/or Financial Assistance. The cooperative in
availing technical and/or financial assistance shall file its application with the appropriate government financial
institutions.

Forthispurpose,theapplicantcooperativeshallcomplywiththedocumentaryrequirementsasmayberequiredby
suchappropriategovernmentfinancialinstitution.

Section10.Conditions for the Proposed Housing Project. The proposed housing project of the cooperative shall
havethefollowingfeaturesascertifiedbytheNHA:

1. Availability of Land Suitable for Housing. The land proposed for housing is classified as a safe and
buildableareaandnotaffectedbyanygovernmentinfrastructureproject,agriculturalorindustrialreserve.

2.LandOwnership. The land is owned by the cooperative or there is an ongoing negotiation between the
landownerandcooperativethroughaContracttoSellorReservationAgreementbetweenthelandownerand
thecooperativeandthatthelandisfreefromanyliensandencumbrances.

3. Target Beneficiaries. The proposed housing project should have at least 30 initial target member
beneficiaries.

Section11.Membership.MembershipinHousingCooperativesshallbeopentoallnaturalpersonswhomeetthe
qualificationsformembershipprescribedinthecooperativeBylaws.

Section 12. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Housing
Cooperativesuchas:

a.Exerciseofrightsandprivilegesofmembers

b.FormulationofrulesandproceduresandtheconductofmeetingsofGeneralAssembly,BoardofDirectors
andCommittees.

c.MannerofelectionandqualificationsofOfficers,DirectorsandCommitteeMembers

d.Allocationanddistributionofsurplusand

e.OthermattersrelatingtotheinternalaffairsofHousingCooperatives.

All matters relating to the technical aspects of the housing program and such other similar matters affecting the
HousingCooperativesshallberegulatedbytheNHAorHLURBasthecasemaybe.

Section13.Joint Monitoring and Evaluation Committee. The Joint Monitoring and Evaluation Committee shall be
composedofCDA,astheleadagency,NHA,HLURB,HDMF,SSS,GSIS,LBP,DBP,concernedcooperativesector
andotherappropriategovernmentagenciesandfinancialinstitutions.

TheCommitteeshallhavethefollowingfunctions:

1. To formulate joint standards for the proper implementation, monitoring, organization, management, and
development of cooperative housing project all matters relating to the organizations, management, and
developmentofthecooperativehousingprojects.

2.TorecommendchangestothisIRRfromtimetotimeiftheneedarises.
 3.Toassistinsettlinginter/intracooperativedisputes.

4.TosubmitannualaccomplishmentreporttotheAuthority.

Section 14. Settlement of Disputes. Intra/inter cooperative disputes shall, as far as impracticable, be settled
amicablythroughtheconciliationandmediationmechanismembodiedintheBylawsofthecooperative,whichshall
be in accordance with the CDA Guidelines for the Implementation of ConciliationMediation for Cooperative
Disputes,andinapplicablelaws.

Should such conciliationmediation proceedings fail, the matter may be settled through voluntary arbitration or in
courtofcompetentjurisdiction.

However,incaseswherethedispute/sfallwithinthejurisdictionoftheNHAorHLURB,thesameshallbereferredto
thesaidagencyanditshallberesolvedinaccordancewiththeNHAorHLURBregulations.

RULEIIAGRARIANREFORMCOOPERATIVES

PursuanttotheprovisionsofArt.93(6)andArt.94(par.2)underChapterXIofRepublicAct.No.9520,otherwise
knownasthePhilippineCooperativeCodeof2008,theAuthorityinconsultationwiththeDAR,BSP,LBP,andthe
concerned cooperative sector hereby promulgates the following rules and regulations for proper guidance and
complianceofAgrarianReformCooperatives.

Section 1. Coverage. This Rule shall cover all Agrarian Reform Cooperatives duly registered with the Authority
underR.A.No.9520.

Section2.Organization.Atleastfifteen(15)marginalfarmersmajorityofwhichareAgrarianReformBeneficiaries
inanagrarianreformareasmayorganizedanAgrarianReformCooperative.

Section3.PurposesandObjectives.AgrarianReformCooperativesshallbeorganizedforanyorallofthefollowing
purposes:

(1) To develop an appropriate system of land tenure, land development, land consolidation or land
managementinareascoveredbyagrarianreform

(2)Tocoordinateandfacilitatethedisseminationofscientificmethodsofproductionandprovideassistancein
theprocessing,storage,transport,andmarketingoffarmproductsforAgrarianReformBeneficiariesandtheir
immediatefamilies,hereinafterreferredtoas"beneficiaries"

(3)Toprovidefinancialfacilitiestobeneficiariesforprovidentorproductionpurposesatreasonablecosts

(4) To arrange and facilitate the expeditious transfer of appropriate and suitable technology to beneficiaries
andmarginalfarmersatthelowestpossiblecosts

(5) To provide social security benefits, health, medical and social insurance benefits and other social and
economicbenefitsthatpromotethegeneralwelfareoftheagrarianreformbeneficiariesandmarginalfarmers

(6) To provide a nonformal education, vocational/technical training and livelihood program to beneficiaries
andmarginalfarmers

(7)Toactaschannelsforexternalassistanceandservicestothebeneficiariesandmarginalfarmers

(8)Toundertakeacomprehensiveandintegrateddevelopmentprograminagrarianreformandresettlement
areaswithspecialconcernforthedevelopmentofagrobased,marinebased,andcottagebasedindustries

(9)Torepresentthebeneficiariesonanyorallmattersthataffecttheirinterestand

(10)Toundertakesuchothereconomicorsocialactivitiesasmaybenecessaryorincidentalinthepursuitof
theforegoingpurposes. 1avvphi

Section4.RegistrationJurisdiction.AgrarianReformCooperativesshallfiletheirdulyaccomplishedapplicationfor
registrationwiththeCDAExtensionOffice,whichshallhavejurisdictionoverthesaidcooperatives.

Section5.RegistrationRequirements.Thefollowingshallbecompliedwithuponfilingofapplication:

(1)NameVerificationSlip

(2)ArticlesofCooperationandByLaws

(3)SwornStatementoftheTreasurerelectedbythesubscribersshowingthatatleasttwentyfivepercentum
(25%)oftheauthorizedsharecapitalhasbeensubscribedandatleasttwentyfivepercentum(25%)ofthe
totalsubscriptionhasbeenpaid:Provided,ThatinnocaseshallthepaidupsharecapitalbelessthanFifteen
ThousandPesos(P15,000.00)

(4)SuretyBondofAccountableOfficers
 (5)PreMembershipEducationSeminar(PMES)

(6)EconomicSurvey

(7)UndertakingtoChangeNameintheeventthatanothercooperativehasacquiredpriorrighttotheuseof
theproposedname

(8)MotherCLOAincaseofplantationbasedARBs

(9)WrittenverificationfromtheDARtotheeffectthatthecooperativeorganizationisneededanddesiredby
the beneficiaries results of a study that has bee conducted fairly indicate the economic feasibility of
organizing the same and that will be economically viable in the operations that at least majority of the
members are Agrarian Reform Beneficiaries, and the same may now be organized and registered in
accordancewiththerequirementsofthePhilippineCooperativeCodeof2008and

(10)Registrationfee.

Section 6. Cooperative Name. All cooperatives organized for any or all of the purposes/objectives enumerated
under Section 3 of this Rule shall always bear the word "Agrarian Reform" whether engaged in the operation of
publicutilitiesandservicesand/orotherbusinessactivities/services.

ExistingARBCoopsshallamendtheircooperativenametoconformtothisSection.

Section7.AmendmentsofArticlesofCooperationandBylaws.AgrarianReformCooperativeintendingtoengage
intheoperationofpublicutilitiesandservicesshallamenditsArticlesofCooperationandByLawstolegallyprovide
for such services. IT shall also comply with the other requirements imposed by the Authority and the appropriate
governmentagenciesforcooperativesengagedinpublicutilitiesandservices.

Section8.Capitalization.ForpurposesofregistrationwiththeAuthority,AgrarianReformCooperativesshallhavea
minimumpaidupcapitalizationofFifteenThousandPesos(P15,000.00).

However, to engage in the operation of public utilities and services, the minimum capitalization shall be in
accordancewiththeRulesandRegulationsprescribedbytheAuthorityforMultiPurposecooperativesunderRule3
oftheRulesandRegulationsImplementingCertainProvisionsofthePhilippineCooperativeCodeof2008(Republic
ActNo.9520)andbytheconcernedgovernmentagency.

In case the ARB Coop engages in Transport Service, it shall comply with the other requirements prescribed in
Section5,Rule5oftheseRulesandRegulation.

Section9.MembershipTerminationandValuationand/orTransferofShareCapital.AgrarianReformCooperative,
otherthanplantationbasedAgrarianReformCooperativeshallbegovernedbyArticles30,31and74ofRA9520
andtheBylawsoftheCooperative.

However, plantationbased Agrarian Reform Cooperative which is covered by collective Certificate of Land
Ownership Award (CLOA), shall be governed by the joint DARCDA Administrative Order No. 09, Series of 2008
entitled "Revised Rules and Regulations on ARB Membership Status and Valuation and/or Transfer of PaidUp
Share Capital in Agrarian Reform PlantationBased Cooperatives dated September 4, 2008" including any
amendmentstheretoorsubsequentissuances.

Section 10. Privileges. Subject to reasonable terms and conditions that may be imposed by the DAR and the
Authority,anAgrarianReformCooperativesdulyregisteredwiththeAuthoritymaybegivenexclusiverighttodoany
orallofthefollowingeconomicactivitiesinagrarianreformandresettlementareas:

(1)Supplyanddistributionofconsumer,agricultural,aquacultural,andindustrialgood,productioninputs,and
raw material and supplies, machinery, equipment, facilities and other services and other services and
requirementsofthebeneficiariesandmarginalfarmersatreasonableprices

(2)Marketingoftheproductsandservicesofthebeneficiariesinlocalandforeignmarkets

(3) Provision of essential public services at cost such as power, irrigation, potable water, passenger and/or
cargotransportationbylandorsea,communicationservices,andpublichealthandmedicalcareservices

(4) Management, conservation, and commercial development of marine, forestry, mineral, water and other
natural resources subject to compliance with the laws and regulations on environmental and ecological
controlsand

(5)Provisionoffinancial,technological,andotherservicesandfacilitiesrequiresbythebeneficiariesintheir
dailylivesandlivelihood.SuchtermsandconditionsshallbejointlyformulatedbytheDARandtheAuthority.

Section11.PreferentialRight/Treatment.Inanagrarianreformandresettlementareas,adulyregisteredAgrarian
ReformCooperativesshallhavepreferentialright/treatmentformthegovernmentinthefollowingmatters:

(1)Intheconstruction,maintenanceandmanagementofroads,bridges,canals,wharves,ports,reservoirs,
irrigationsystems,waterworkssystems,andotherinfrastructureswithgovernmentfunding
 Thetechnicalassistance,facilitiesandequipmentstosuchagrarianreformcooperativesshallbeprovidedby
theGovernment.

(2)InthegrantofFranchiseandCertificateofPublicConvenienceandNecessityfortheoperationofpublic
utilities and services: Provided, that it meets the requirements and conditions imposed by the appropriate
governmentagencygrantingtheFranchiseorCertificateofPublicConvenienceandNecessity,

In case of electric service provider in the area, it shall, upon the request of an Agrarian Reform Cooperative,
immediatelyprovideelectricservicestotheagrarianreformareas.Iftheelectricserviceprovidedfailstoprovidethe
servicesrequestedwithinaperiodofone(1)year,theAgrarianReformCooperativemayundertaketoprovidethe
electric services in the area through its own resources. All investments made by the said Agrarian Reform
Cooperativefortheelectrificationoftheagrarianreformresettlementareasshallbesubjecttotheelectricservices
provideronceittakesontheservice.

Section12.LeaseofPublicLands.AgrarianReformCooperativemayleasepubliclandsforaperiodnotexceeding
twentyfive(25)years,subjecttorenewalforanothertwentyfive(25)yearsonly,providedtheapplicationforrenewal
shall be made one (1) year before the expiration of the lease and such lease shall be for the exclusive use and
benefitofthebeneficiariesandmarginalfarmerssubjecttotheprovisionsoftheCARP,asamended..

Section 13. Cooperative Estates. Landholdings like plantations, estates, or haciendas acquired by the State in
accordancewiththeCARP,asamended,forthebenefitoftheworkersshallbecollectivelyownedthroughaMother
CLOAbytheworkerbeneficiariesunderacooperativesetup.

Section14.Assistance.TheGovernmentshallprovidethenecessaryfinancialandtechnicalassistancetoAgrarian
ReformCooperativestoenablethemtodischargethepurposesandobjectivesunderSection3ofthisRulewhich
shallbeinaccordancewithajointprogramfortheorganizationandfinancingoftheAgrarianReformCooperatives.
Thejointprogramshallbegearedtowardsthegradualassumptionoffullownershipandmanagementcontrolofthe
cooperativeestatebytheAgrarianReformCooperatives.

Section15.RegulatoryPower.TheAuthorityshallhavethepowertoregulatetheinternalaffairsofAgrarianReform
Cooperativesuchas:

a.Exerciseofrightsandprivilegesofmembers

b.FormulationofrulesandproceduresandtheconductofmeetingsofGeneralAssemble,BoardofDirectors
andCommittees

c.MannerofelectionandqualificationsofOfficers,Directors,andCommitteeMembers

d.Allocationanddistributionofsurplusand

e.OthermattersrelatingtotheinternalaffairsofAgrarianReformCooperatives.

Allmattersrelatingtolandacquisition,developmentofanappropriatesystemoflandtenure,landdevelopment,land
consolidation,orlandmanagementinareascoveredbyagrarianreformandsuchothersimilarmattersaffectingthe
AgrarianReformCooperativesshallberegulatedbytheDAR.

AllmattersrelatingtolandvaluationandassessmentshallberegulatedbytheLBP.

Section16.FinancingProgram.AnyFinancingProgramtobeavailedofbyARBCoopsshallbeinaccordancewith
thejointprogramtobedevelopedbytheDAR,theBSP,andtheAuthority.

Section 17. Settlement of Disputes. Intra/inter cooperative disputes shall other than land disputes, as far as
practicable,besettledamicablythroughtheconciliationandmediationmechanismembodiedintheBylawsofthe
cooperative,whichshallbeinaccordancewiththeCDAGuidelinesfortheImplementationofConciliationMediation
forCooperativeDisputesandinapplicablelaws.

Shouldsuchconciliationmediationproceedingsfail,themattermaybesettledthroughvoluntaryarbitrationorin
courtofcompetentjurisdiction.

However,incaseswherethedispute/sfallwithinthejurisdictionoftheDAR,thesameshallbereferredtothesaid
agencyanditshallberesolvedinaccordancewiththeDARregulation.

RULEIIIINSURANCECOOPERATIVES

Pursuant to the provisions of Art. 108 under Chapter XIII of Republic Act. No. 9520, otherwise known as the
Philippine Cooperative Code of 2008, the Commission and the Authority in consultation with the concerned
cooperativesectorherebypromulgatethefollowingrulesandregulationsfortheproperguidanceandcomplianceof
theInsuranceCooperatives.

Section1.Coverage.ThisRulesshallcoverallInsuranceCooperativesdulyregisteredunderR.A.9520organized
forthepurposeofengaginginthebusinessofinsuringlifeandpropertyofcooperativesandtheirmembers.

Section2.Organization.Fifteen(15)ormoredulyregisteredcooperativesmayorganizeasInsuranceCooperative.
Section 3. Purposes and Objectives. An Insurance Cooperative shall provide its constituting members different
types of insurance coverage consisting of, but not limited to, life insurance with special group coverage, loan
protection,retirementplans,endowmentwithhealthandaccidentcoverage,fireinsurance,motorvehiclecoverage,
bonding,crop,livestockprotectionandequipmentinsurance.

Itmayalsoprovide"microinsuranceproducts"andregularinsurancetocooperativesanditsmembers.

Section4.Membership.MembershipinInsuranceCooperativeshallbeopentoalldulyregisteredcooperativesof
alltypesandcategories

Section5.RegistrationJurisdiction.Anyapplicantcooperativeproposingtoengageintothebusinessofinsuringlife
andpropertyofcooperativesandtheirmembersshallfiletheirdulyaccomplishedapplicationforregistrationwiththe
CDACentralOfficeRegistrationDivision.

Section6.Capitalization.AnInsuranceCooperativeregisteredwiththeAuthoritypursuanttothisRuleshallsecure
aCertificateofAuthorityfromtheCommissionwithintwo(2)yearsfromthedateofitsregistration.Failuretosecure
thesameshallbeagroundfortherevocation/cancellationofthecertificateofRegistration.

SaidCertificateofAuthorityshallbevaliduntilthe30thdayofJuneoftheyearfollowingitsissuance.

Section8.SuspensionorRevocationofCertificateofAuthority.TheCommissionmay,afterduenoticeandhearing,
suspendorrevoketheCertificateofAuthorityissuedtoanInsurancecooperativeforviolationofanyexistinglaws,
rulesorregulations,oranyprovisionsoftheInsuranceCode.

Section 9. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Insurance
Cooperativesuchas:

a.Exerciseofrightsandprivilegesofmembers

b. Formulation of rules and procedures and the conduct of meetings of the General Assembly, Board of
DirectorsandCommittees

c.MannerofelectionandqualificationsofOfficers,Directors,andCommitteeMembers

d.Allocationanddistributionofnetsurplusand

e.OthermattersrelatingtotheinternalaffairsofInsuranceCooperatives.

All matters relating to the organization and operations concerning insurance business of such Insurance
CooperativeshallberegulatedbytheCommissionasprovidedforintheInsuranceCodeandotherrelatedlaws.

Section 10. Joint Committee. In order to fully implement the provisions of this Rule, a Joint Committee, to be
composed of two (2) representatives each from the Authority and the Commission and a representative from the
InsuranceCooperativesshallbeformed.TherepresentativefromtheAuthorityshallChairoftheCommittee.

TheJointCommitteeshallbeconstitutedwithinthirty(30)daysuponeffectivityoftheseRulesandRegulations.

Section11.FunctionsoftheJointCommittee.TheJointCommitteeshallhavethefollowingfunctions:

1.TooverseetheimplementationofthisRule

2.ToensurecompliancewiththeadministrativeandotherrequirementsoftheAuthorityandtheCommission

3.TomakerecommendationontheamendmentofthisRuleasmaybenecessaryand

4.Suchotherfunctionastheneedarises.

Section12.Limitation. Cooperatives intending to engage in insurance, insurance like, and other similar activities
shallregisterwiththeAuthorityandsecureaCertificateofAuthorityfromtheCommission.

However,CISarenotallowedtoservetheinsuranceneedsofothercooperativesthatarenotmemberownersof
theCIS.ACISservingtheinsuranceneedsofnonmembercooperativesandthegeneralpublicshallberequiredto
getacommercialinsurancelicensefromtheInsuranceCommission.

PrimaryCooperativeswhicharenotregisteredandlicensedtooperateasInsuranceCooperative,areprohibitedto
engage in insurance, insurance like and other similar activities with their members. However, those already
engaginginsuchshallbegiventwo(2)yearstransitionperiodtoundertakeanyofthefollowingoptions:

Toorganizeaninsurancecooperativewithotherprimarycooperativesthathavethesameinsurancelikebusiness
activity

(2)TojoinanexistingInsuranceCooperative

(3)Topartnerwithlicensedmicroinsuranceprovidersand

(4)TobuyamicroInsuranceproductthroughalicensedagentorbroker.
AllexistingInsuranceCooperativewithmemberswhicharenoncooperativeand/orcooperativeorientedsocieties
and organizations are hereby given five (5) year period to terminate and remove such entities from their member
registry. Failure to comply within the given period shall constitute a violation of this Rule and shall be dealt with
accordancewiththeprovisionofRA9520andotherapplicablelaws.

Section13.Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through
conciliationmediationmechanismembodiedinthecooperativebylaws,whichshallbeinaccordancewiththeCDA
Guidelines for the Implementation of Conciliation of Cooperative Disputes, and applicable laws. Should such
conciliationmediationproceedingsfail,themattermaybesettledthroughvoluntaryarbitrationbytheAuthorityorin
courtofcompetentjurisdiction.

However,incaseswherethedispute/sfallwithinthejurisdictionoftheCommission,thesameshallbereferredto
thesaidagencyanditshallberesolvedinaccordancewiththeCommissionregulation.

RULEIVWATERSERVICECOOPERATIVES

Pursuant to the provisions of Art. 111 (3) under Chapter XIV of Republic Act. No. 9520, otherwise known as the
Philippine Cooperative Code of 2008, the Authority in consultation with the NWRB, the LWUA, and concerned
cooperativeherebypromulgatesthefollowingrulesandregulationsfortheproperguidanceandcomplianceofthe
WaterServiceCooperative.

Section1.Coverage. This Rule shall apply to all cooperative duly registered with the Authority under R.A. 9520
whosemainpurposeoroneofitspurposesistoown,operate,andmanagewatersupplysystemsfortheprovision
anddistributionofpotablewatertoitsmembersandothercustomers.

Section 2. Organization. Fifteen (15) or more natural person who are Filipino citizens, of legal age, having a
commonbondofinterestandactuallyresidingorworkingintheintendedareaofoperation,mayorganizeaWater
ServiceCooperative.

Section3.MembershipinWaterServiceCooperative.MembershipinWaterServiceCooperativeiscomposedof
twokinds:

a.RegularMember refers to a natural person (memberconsumer) with water service connection with the
righttovoteduponandentitledtoalltherightsandprivilegesofmembershipundertheCode.

b.AssociateMemberreferstoanaturalpersonotherthanaregularmemberofthehousehold.Itshallalso
refertomemberinstitutionorentityavailingoftheservicesofWaterserviceCooperative,suchas,butnot
limited to: corporation, industrial and commercial establishment, joint venture, other cooperative, place
worship,localgovernmentbuildingorfacility,etc,asmayberepresentedbytheheadofsuchestablishmentor
entity,butisnotentitledtovoteandbevotedupon.However,shallbeentitledtothepreferentialrightsand
privilegesasindicatedintheCooperativeBylawsandundertheCode.

Section4.RequirementsforRegistration.Thefollowingshallbecompliedwithuponfilingofapplication:

(1)NameVerificationSlip

(2)ArticlesofCooperationandBylaws

(3)Swornstatementofthetreasurerelectedbythesubscribersshowingthatatleasttwentyfivepercentum
(25%)oftheauthorizedsharecapitalbelessthanFifteenThousandPesos(P15,000.00)

(4)SurelyBondofAccountableOfficershandlingfundspropertiesandsecurities

(5)CertificateofPreMembershipEducationSeminar(PMES)

(6)EconomicSurvey

(7)UndertakingtoChangeNameintheeventthatanothercooperativehasacquiredpriorrighttotheuseof
theproposedname

(8) Land Ownership (any of the following: Certificate of Title Declaration. Lease Agreement, Deed of
Donation,DeedofSale,etc.)

(9) Well Drilling Data (in case of existing groundwater source ) including Physical & Chemical Analysis of
waterand

(10)Registrationfee.

Section5.RegistrationJurisdiction.WaterServiceCooperativesshallfiletheirapplicationwiththeCDAExtension
Office,whichshallhavejurisdictionoverthesaidcooperatives.

Section6.Capitalization.ForpurposesofregistrationwiththeAuthority,aWaterServiceCooperativeshallhavea
minimumpaidupcapitalizationofFifteenThousandPesos(P15,000.00).
Section7.ServiceArea.ThecooperativeshallonlyprovideserviceswithintheareaspecifiedintheCPC.Incaseof
expansion,thecooperativeshallapplyforanextensionofserviceareawiththeNWRB.

Section 8. Water Permit. Every Water Service Cooperative shall secure a water permit from the NWRB in
accordancewiththeprovisionsoftheWaterCodeofthePhilippines.

Section9.RequirementsforFilingWaterPermitApplications.Allapplicationsshallbefiledintheprescribedform,
sworntobytheapplicantsandsupportedbythefollowingdocuments:

1.Fordomesticpurpose

1.DulyaccomplishedWaterPermitApplicationandNotices

2.LandOwnership(anyofthefollowing:CertificateofTitle,TaxDeclaration,LeaseAgreement,Deed
ofDonation,DeedofSale,etc

3.CertificateofConformancefromtheLWUA

4. Vicinity map/Location Plan with scale : 1:10,000 or scale 1:500 showing the exact location of the
pointofdiversion

5.SubdivisionPlan(ifapplicable)

6.WelldrillingData(incaseofexistinggroundwatersource):and

7.ClearancefromDOH,ifreuseofwastewaterforhumanconsumption.

2.ForMunicipalUse

1.Proofoflandownershipof,legaltitleto,orrighttouse,thepropertyonwhichthewatersourceis
situated

2.CertificateofRegistrationwiththeAuthority

3.CertificateofConformancefromLWUA

4. Vicinity map/Location Plan with scale : 1:10,000 or scale 1:500 showing the exact location of the
pointofdiversion

5.SubmissionPlan(ifapplicable)

6.WellDrillingData(incaseofexistinggroundwatersourceauthenticatedbythewelldriller)including
PhysicalandChemical,Analysiswater

7. Environmental Compliance Certificate (for projects considered as Environmentally Critical Projects

Areas) or Certificate of NonCoverage from the Department of Environment and Natural Resources
RegionalOfficeand

8.SuchotherdocumentsthatmayberequiredbytheNWRB.

Section10.RequirementsfortheIssuanceofCPCandTariffApproval.Thefollowingdocumentsarerequiredtobe
submittedforanApplicationforaCPCandApprovalofTariff:

1.CertificateofRegistrationfromtheAuthority

2.ArticlesofCooperationandByLaws

3.SpecialPowerofAttorneyauthorizingthesignatorytosignandfiletheapplication

4.FavorableEndorsementfromLWUA

5.Approvedwaterpermitsand/orMOAwithwaterserviceprovider,incaseofbulkwatersupply

6.Officialreceiptofannualwatercharge(s)

7.ClearancethatapplicanthasnounpaidfeesandchargesfromNWRB

8.Planofwaterdistributionsystem

9.Planelevationandcrosssectionalviewsoftank/reservoir

10.Planelevationandcrosssectionalviewsofpumphouse,machineryandequipment

11.CertificateofPotability

12.LatestAuditedFinancialStatementsforthelasttwoyears,ifapplicable
 13.ActualBalancesheetshowingBalanceSheetitemsforwateroperationsforthelast2years,ifnot
available,submitthefollowing:

a.AccountsreceivableWaterSupply

b.MaterialsInventory

c.PropertyandEquipmentinService,atcost

d.AccumulatedDepreciation

e.CustomersDeposits

14.Itemizedlistofassetsentitledtoreturnasoftheendofthelasthistoricalyear.Thisshouldsupportthe
PropertyandEquipmentinServicereferredtoinitem10above

15. Actual Income Statement showing Income Statement items for water operations for the last 2 years, if
applicable

16.Businessplanforthenext5years

17.ProjectedFinancialStatementforfiveyearswiththefollowing:

a.IncomeStatement

b.BalanceSheet

c.Assumptions

18.Itemizedlistofnewinvestmentsforthenext5years

19.Proposedscheduleofwaterratesand

20.LevelsofServiceagreedwithconsumerscommensuratewithproposedrates.

Section11.RegulatoryPower.TheAuthorityshallhavethepowertoregulatetheinternalaffairsofWaterService
Cooperative,suchas:

a.Exerciseofrightsandprivilegesofmembers

b. Formulation of rules and procedures and the conduct of meetings of the General Assembly, Board of
DirectorsandCommittees

c.MannerofelectionandqualificationsofOfficers,Directors,andCommitteeMembers

d.AllocationandDistributionofsurplusand

e.OthermattersrelatingtotheinternalaffairsofWaterServiceCooperatives.

AllmattersrelatingtotheCertificateofPublicConveniencesuchascapitalization

and investment requirements, equipment and facilities, water tariff, and such other matters affecting their water
serviceoperationsshallbegovernedbytheNWRB.

Section12.ROLEOFLWUA.TheLWUAshallhavethefollowingrolesrelatingtoWaterServiceCooperative:

1.Toprovidetechnicalassistancesuchascapacitybuilding

2.Toassistinthedeterminationofwaterpotabilityand

3.Suchotherassistanceasmayberequestedbythecooperatives.

Section13.PreferentialRights.Whenevertwoormorepublicserviceentitieshavecompetinginterestswithrespect
to the granting and renewal of CPC and one is an Water Service Cooperative duly registered with the Authority
underR.A.9520,theNWRBshallaccordpreferencetothelatteroveranytypeofpublicserviceentity.

Section14.ResponsibilityofWaterServiceCooperative.EveryWaterServiceCooperativeshalloperate,maintain,
andprovidesafeandadequatepotablewaterservice.Inallcaseswherepracticable,theconcernedWaterService
Cooperativeshallgivenoticetoitsmemberconsumersinadvanceofanycontemplatedinterruptionofwatersupply
and the probable duration thereof in the area(s) affected. In addition, the Water Service Cooperative's
responsibilitiesshallinclude:

1.ServiceStandards

a.ServiceCoverage
 b.WaterQuality

c.ReliabilityofSupply

2.OperationalPerformance

a.OperationalEfficiency

b.FinancialViability

3.CustomerService

a.ServiceRequestandComplaints

b.StandardResponseTime

4.OperatingPoliciesandProceduresonBillingandCollection

5.ProtectionofMemberConsumers

InrelationtothisSection,thecooperativeshalldevelopitsownCustomerServiceCodeconsistentwithitsBylaws
andincompliancewiththeNWRBEconomicRegulatoryGuidelines.

Section 15. Reporting Requirements. All Water Service Cooperatives shall submit reports to the Authority as
requiredunderRule8oftheRulesandRegulationsImplementingCertainProvisionsofthePhilippineCooperative
Code of 2008 (RA 9250). Other reports required by the NWRB, the DOH and other government agencies shall
likewisebesubmittedtotheconcernedagency.

Section16.SanctionsandPenalties.AllWaterServiceCooperativeshallbesubjectedtocorrespondingSanctions
andPenaltiesasmaybeimposedbytheAuthorityandtheNWRBforviolationornoncompliancewithadministrative
andstatutoryrequirements.

Section17.RequirementsforRenewalofCPC.TheCPCshallbevalidforfive(5)yearsandrenewablepriortoits
expirydate.Thefollowingrequirementstobesubmitted:

1.BoardResolutionauthorizingthesignatorytosignandfiletheapplication

2.CertificateofGoodStandingissuedbytheAuthority

3.ApprovedWaterPermits

4.OfficialreceiptsofAnnualWaterchange

5.OfficialreceiptofSupervisionandRegulationFee

6.ClearancethatapplicanthasnounpaidfeesandchargesfromtheNWRB

7.PlanofWaterDistributionSystem

8.Planelevationandcrosssectionalviewsoftank/reservoir

9.Planelevationandcrosssectionalviewsofpumphouse,machineryandequipment

10.CertificateofPotability

11.AnnualReportsforthelastfiveyears

12.LatestAuditedFinancialStatementforthelastfiveyears

13. Actual Balance Sheet showing Balance Sheet items for water operations for the last 5 years, if not
available,submitthefollowing:

a.AccountReceivableWaterSupply

b.MaterialsInventory

c.PropertyandEquipmentinService,atcost

d.AccumulatedDepreciation

e.Customers'Deposits

14.Itemizedlistofassetsentitledtoreturnasoftheendofthelasthistoricalyear.Thisshouldsupportthe
PropertyandEquipmentinServicereferredtoinitem13(c)above

15.ActualIncomeStatementshowingIncomeStatementitemsforwateroperationsforthelast5years
 16.Businessplanforthenext5years

17.ProjectedFinancialStatementforfiveyearswiththefollowing:

a.IncomeStatement

b.BalanceSheet

c.Assumptions

18.Itemizedlistofnewinvestmentsforthenext5years

19.ProposedScheduleofWaterTariffand

20.LevelsofServiceagreedwithconsumerscommensuratewithproposedrates.

Section18.SecuringofWaterPermitand/orCPC.WaterServiceCooperativeincludingMultiPurposeCooperative
withwaterserviceoperationisrequiredtosecurewaterpermitfromtheNWRB.

ForWaterServiceCooperativeoperatingwithoutwaterpermitand/orCPC,theAuthorityshallreportthematterto
the NWRB for appropriate action. The NWRB shall notify the Authority of whatever action taken on the matter.
Henceforth, failure of the cooperative to legalize its operation within two (2) years from the date of referral to the
NWRB,thesameshallbeconsideredavalidgroundfortherevocationofitsCertificateofRegistration,afterdue
process.

Section19.ActionontheApplicationforCPC.Uponsubmissionofthecompleterequirementsfortheissuanceof
CPC,theNWRBshallapproveorrejectthesamewithinsix(6)monthsfromdateofreceiptthereof.

Section20.Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through
conciliationmediationmechanismembodiedinthecooperativebylaws,whichshallbeinaccordancewiththeCDA
GuidelinesfortheImplementationofConciliationMediationofCooperativeDisputes,andapplicablelaws.

Should such conciliationmediation proceedings fail, the matter may be settled through voluntary arbitration or in
courtofcompetentjurisdiction.

However,incaseswheretheissue/sfallwithinthejurisdictionoftheNWRB,thesameshallbereferredtothesaid
agencyanditshallberesolvedinaccordancewiththeNWRBregulation.

RULEVTRANSPORTATIONSREVICECOOPERATIVES

PursuanttotheprovisionsofArt.113(par.2)underChapterXIVofRepublicAct.No.9520,otherwiseknownasthe
PhilippineCooperativeCodeof2008,theAuthorityinconsultationwiththeDOTC,LTO,LTFRB,MARINA,OTCand
theconcernedcooperativesector,herebypromulgatesthefollowingrulesandregulationsfortheproperguidance
andcomplianceofTransportationServiceCooperatives.

Section 1. Coverage. This Rule shall cover all Transportation Service Cooperatives duly registered with the
AuthorityunderRA9520whichareorganizedtorenderpublicservicessuchaslandandsea/watertransportation
services, limited to small vessels, for the safe conveyance of passengers and/or cargo. Transportation Service
Cooperative organized under the provisions of Executive Order No. 898, Series of 1983, shall be governed by
ChapterXIVofRA9520,andbythisRule.

Section2.Allied Businesses by Transportation Service Cooperative. Subject to pertinent national laws and local
ordinances, primary Transportation Service Cooperatives including secondary and tertiary federation of
cooperatives,mayengageinabusinessrelatedtotransportationservice,includingbutnotlimitedto:

(1)Importation,distributionandmarketingofpetroleumproductsinaccordancewithexistinglaws

(2)Operationofgasolinestationsandtransportationservicecenters

(3)Importation,distributionandmarketingofsparepartsandsuppliesand

(4)Marketingofvehicle/driversinsurancepolicies.

Section3.Multipurpose Cooperatives intending to engage in Transportation Service. Multipurpose cooperatives

intending to engage in regular passenger and/or cargo services as an additional activity shall comply with the
foregoingrequirements:

1.AmendedArticleofCooperationandByLaws

2.CETOS

3. Franchise and vehicle units requirement, as provided in this Rule and other requirements as may be
prescribedbyappropriateregulatoryagenciesand

4.AmendmentFee.
Section4.RegistrationJurisdiction.TransportationServiceCooperativeshallfileitsdulyaccomplishedregistration
documentswiththeCDAExtensionOfficewhereitsprincipalofficeislocated,whichshallhavejurisdictionoverthe
saidcooperative.

Section5.Capitalization.ForpurposesofregistrationwithCDA,TransportationServiceCooperativesshallhavea
minimumpaidupcapitalizationofFifteenThousandPesos(P15,000.00).

However, to operate as such, the minimum capitalization and number of cooperatively owned units shall be in
accordancewiththerulesandregulationsprescribedbytheconcernedgovernmentagencyasshownbelow:

TYPEOFTRANSPORTATION MINIMUM MINIMUMNO.

SERVICE CAPITALIZATION OFUNITS
COOPERATIVE

A.LAND
Tricycle P15,000.00 5

Jeepney P30,000.00 5

Taxi P30,000.00 5

AUV/FX/Van P30,000.00 5

MiniBus/BusP 50,000.00 2
TrucksforHire P50,000.00 2

B.WATER

Ship P10,000,000.00 1

FerryBoat P5,000,000.00 1

MotorizedBanca P100,000.00 1

Section6.RegistrationRequirements.Thefollowingshallbecompliedwithuponfilingofapplication:

(1)NameVerificationSlip

(2)ArticlesofCooperationandBylaws

(3)SwornStatementofthetreasurerelectedbythesubscribersshowingthatatleasttwentyfivepercentum
(25%)oftheauthorizedsharecapitalhasbeensubscribedandleasttwentyfivepercentum(25%)ofthetotal
subscription has been paid: Provided, That in no case shall the paidup share capital be less than Fifteen
ThousandPesos(P15,000.00)

(4)PreMembershipEducationseminar(PMES)

(5)CooperativeEducationandTransportOperationSeminar(CETOS)

(6)SuretyBondOfAccountableOfficershandlingfunds,propertiesandsureties

(7)EconomicSurvey

(8)UndertakingtoChangeNameintheeventthatanothercooperativehasacquiredpriorrighttotheuseof
theproposedname

(9)UndertakingtocomplywiththeauditingandaccountingstandardsprescribedbytheAuthority

(10)Otherrequirementsasmayberequiredbylawand

(11)RegistrationFee.

Section7.RegulatoryPower.TheAuthorityshallhavethepowertoregulatetheinternalaffairsofTransportation
ServiceCooperative,suchas:

a.Exerciseofrightsandprivilegesofmembers

b. Formulation of rules and procedures and the conduct of meetings of the General Assembly, Board of
DirectorsandCommittees

c.MannerofelectionandqualificationsofOfficers,Directors,andCommitteeMembers

d.Allocationanddistributionofsurplusand

e.OthermattersrelatingtotheirinternalaffairsofTransportationServiceCooperatives.
Allmattersrelatingtothe FranchiseorCertificateofPublicConvenienceandNecessityofTransportationService
Cooperativessuchascapitalizationandinvestmentrequirements,equipmentandfacilities,frequencies,ratefixing,
registration, dropping and substitution of units, and such other matters affecting their transportation service
operationsshallbegovernedbythefollowinggovernmentagency:

(a)ForlandtransportationLTFRB/LTO/OTC

(b)ForwatertransportationMARINA/PCG

(c)FortricycleLGU/LTO/OTC

In case there are two (2) or more applicants for the same public service Franchise or Certificate of Public
Convenience and Necessity, all things being equal, preference shall be given to a Transportation Service
Cooperativebytheconcernedgovernmentagency.

Section 8. Monitoring Committee. The Authority shall establish a committee for the monitoring of Transportation
Service Cooperative composed of representative from the Authority, who shall be ExOfficio Chairperson thereof,
the LTO, LTFRB, OTC, LGU, and other concerned government agencies as may be necessary, and the National
Federation of Transportation Cooperatives. Said Committee shall be organized within thirty (30) days from the
effectivityofthisRuleandestablishitsowninternalrulesastoitsoperation,conductofmeeting,andothermatters
necessarytoexercisesuchfunctions.

TheAuthorityshalllikewisecreateaLocalMonitoringCommitteeinitsextensionofficestofacilitatethemonitoring
oftheseTransportationServiceCooperatives.SaidCommitteeshalllikewisebeorganizedwithinninety(90)days
fromthereceiptoftherulesandfunctionsformulatedbytheNationalCommitteeconveneeveryquartertodischarge
itsfunctionsandappointaSecretaryfromamongitsmembers.

ThepermanentSecretariatshallcomefromtheAuthority.

TheCommitteeshallhavethefollowingfunctions:

(1)TooverseetheimplementationofthisRule

(2)TorecommendchangesonthisRulefromtimetotimeifaneedarises

(3)Toassistasfaraspracticablethecooperativeinsettlinginterandintracooperativedisputes

(4) To submit quarterly accomplishment report including recommendation/resolution to be adopted in the

settlementoftheaforesaiddisputestotheCDABoardofAdministratorsthroughtheExecutiveDirectorandto
theOTCBoardofDirectorsthroughitsExecutiveDirectorcopyfurnishedallagenciesinvolved.

Section 9. Continuing Education and Training. The concerned government agencies shall coordinate to support
registered cooperatives by extending seminars for the purpose of continuing education on cooperative and other
related trainings in order to enhance the knowledge and capability of the officers as well as members of the
cooperative.TheconcernedagenciesinvolvedintheTransportationServiceCooperativeshallformatrainer'steam
whichshallformulatededucationalprogram/moduletobeusedinthetrainingseminar.

Section10.RenewalofFranchiseandVehicleRegistration.Renewalsoffranchiseandvehicleregistrationshallbe
grantedtoTransportationServiceCooperativesprovidedsuchcooperativepresentsaCertificateofGoodStanding
from the Authority and the OTC. In the case of Tricycle Transportation Service Cooperative, a Certificate of
OperationfromtheLocalGovernmentUnitconcernedshallberequiredasproofthatithascontinuouslyprovided
therequiredpublictransportationservices.

Section 11. Settlement of Disputes. Intra/Inter cooperative dispute shall be settled as far as practicable through
conciliationmediationmechanismembodiedinthecooperativebylaws,whichshallbeinaccordancewiththeCDA
GuidelinesfortheImplementationofConciliationMediationofCooperativeDisputes,andapplicablelaws.

Should such conciliationmediation proceedings fail, the matter may be settled through voluntary arbitration or in
courtofcompetentjurisdiction.

However,incaseswheretheissue/sfallwithinthejurisdictionoftheDOTC,LTFRB,LTO,MARINA,andOTCthe
sameshallbereferredtothesaidagenciesandshallberesolvedinaccordancewiththeirregulations.

RULEVIELECTRICCOOPERATIVES

PursuanttotheprovisionsofArt.134(par.2)underChapterXVIIofRepublicActNo.9520,otherwiseknownasthe
Philippine Cooperative Code of 2008, the Authority in consultation with the concerned cooperative sector hereby
promulgatesthefollowingrulesandregulationsfortheproperguidanceandcomplianceofElectricCooperatives.

Section 1. Purposes and Objectives. Electric Cooperatives shall be organized to undertake power generation
utilizing new and renewable energy sources, including hybrid systems, acquisition, and operation of sub
transmissionand/ordistributionandsupplyofelectricityasitsprimarypurposes.However,itshallnotbeprecluded
toventureintoanyotherpurposethatotherlaws,rules,regulations,andtheirownBylawsmayallowaslongasitis
related to the primary purpose and objective of the cooperative. It shall also continue to undertake the
implementation of the Rural Electrification Program in their respective areas of coverage in consonance with the
termsandconditionsappurtenanttotheirCertificatesofFranchiseprovidedtherightoftheElectricCooperativesto
exercise the power of eminent domain in furtherance of the rural electrification program, shall not be diminished,
insteaditshallbeinfullforceandeffect,subjecttotherequirementsoftheConstitutionandexistingrelevantlaws.

Section 2. Coverage. This Rule shall apply to all Electric Cooperatives registered with the Authority under R.A.
9520thatmayundertakepowergenerationutilizingrenewableenergysources,includinghybridsystems,acquisition
andoperationofsubtransmissionordistributionasitsprimarypurposes.ThisRuleshallalsocovernewdistribution
utilitiesthatwillregisterwiththeAuthority.

Section3.CooperativePrinciplesandPractices. Electric Cooperatives registered with the Authority shall conduct

theiraffairsinaccordancewithFilipinoculture,goodvaluesandexperienceandtheuniversallyacceptedprinciples
ofcooperationwhichinclude,butarenotlimitedto,thefollowing:

1.VoluntaryandOpenMembershipElectricCooperativesarevoluntaryorganizations,opentoallpersons
able to use their services and willing to accept the responsibilities of membership, without gender, social,
racial,politicalorreligiousdiscrimination

2.DemocraticMemberControlElectricCooperativesaredemocraticorganizationsthatarecontrolledby
theirmemberswhoactivelyparticipateinsettingtheirpoliciesandmakingdecisions.Menandwomenserving
aselectedrepresentatives,directors,orofficersareaccountabletothemembership.Inprimarycooperatives,
membershaveequalvotingrightsofonemember,onevote.Cooperativesatotherlevelsareorganizedinthe
samedemocraticmanner

3. Member Economic Participation Members of the Electric Cooperatives contribute equitably to, and
democraticallycontrol,thecapitaloftheircooperative.Atleastpartofthatcapitalisthecommonpropertyof
thecooperative.Theyshallreceivelimitedcompensationorlimitedinterest,ifany,oncapitalsubscribedand
paid as a condition of membership. Members allocate surpluses for any or all of the following purposes:
developing the cooperative by settingup reserves, part of which should at least be indivisible benefiting
members in proportion to their patronage of the cooperative's business and supporting other activities
approvedbythemembership

4.AutonomyandIndependenceElectricCooperativesareautonomous,selfhelporganizationscontrolled
by their members. If they enter into agreements with other organizations, including government, or raise
capitalfromexternalsources,theyshalldosoontermsthatensuredemocraticcontroloftheirmembersand
maintaintheircooperativeautonomy

5. Education, Training and Information Electric Cooperatives shall provide education, training and
informationfortheirmembers,electedandappointedrepresentatives,managers,andemployeessothatthey
cancontributeeffectivelyandefficientlytothedevelopmentoftheircooperatives

6. Cooperation Among Cooperatives Electric Cooperatives serve their members most effectively and
strengthenthecooperativemovementbyworkingtogetherthroughlocal,national,regionalandinternational
structuresand

7. Concern for Community Electric Cooperatives work for the sustainable development of their
communitiesthroughpoliciesapprovedbytheirmembers.

Section 4. Membership in the Electric Cooperatives. Membership in Electric Cooperatives registered with the
Authorityshallhavethefollowingtypes:

a.RegularMember refers to a natural person (memberconsumer) with electrical service connection who
hastherighttovoteandbevoteduponandentitledtoalltherightsandprivilegesofmembershipunderthe
Code.

b.AssociateMemberreferstoamemberinstitutionorentityavailingoftheservicesofelectriccooperative,
such as, but not limited to: corporation, industrial and commercial establishment, joint venture, other
cooperative, place of worship, local government building or facility, etc, as represented by its head of such
establishment or entity, but is not entitled to vote and be voted upon. However, shall be entitled to the
preferentialrightsandprivilegesasindicatedinthebylawsandundertheCode.

Section 5. Registration Requirements. The following are the requirements for the registration of electric
cooperativeswhichshallbesubmittedinfour(4)copiestotheAuthority:

A.RegistrationDocuments:

a.1ForexistingelectriccooperativenotregisteredwiththeAuthority:

1. certificate true copy of the board resolution certifying the result of the vote approved through a
referendum approving the registration of the cooperative with the Authority in compliance with Article
128

2.CertifiedcopyofArticlesofCooperationandByLaws

3.Dulyauditedfinancialstatementforthepasttwo(2)immediatelyprecedingyears
 4.ListofnamesofincumbentBoardofDirectorsandtheiraddressescertifiedbytheBoardSecretary
andattestedtobytheChairperson

5.SwornStatementoftheTreasureroftheauthorizedsharecapital,thesubscribedsharecapitalofthe
members, and the amount of paidup share capital of members and the amount of paidup share
capitalreceivedbytheTreasurer,tobesubmittedwithinsix(6)monthsfromtheregistrationand

6.SuretyBondofAccountableOfficershandlingfunds,propertiesandsureties

a.2Fornewelectriccooperatives:

1.NameVerificationSlip

2.CertifiedtruecopyoftheGrantFranchise

3.ArticlesofCooperationandBylaws

4.SwornStatementofthetreasurerselectedbythesubscribersshowingthatatleasttwentyfiveper
centum(25%)oftheauthorizedsharecapitalhasbeensubscribedandatleasttwentyfivepercentum
(25%)ofthetotalsubscriptionhasbeenpaid:Provided,Thatinnocaseshallthepaidupsharecapital
belessthanFifteenThousandPesos(P15,000.00)

5.SurelyBondAccountableOfficershandlingfunds,propertiesandsureties

6.CertificateofPreMembershipEducationseminar(PMES)

7.EconomicSurvey

8.UndertakingtoChangeNameintheeventthatanothercooperativehasacquiredpriorrighttothe
useoftheproposedname

9.Detailedfeasibilitystudyindicatingviabilityoftheproposedbusinessactivityand

10.UndertakingtocomplywiththeauditingandaccountingstandardsprescribedbytheAuthority.

a.3.ElectricCooperativeDeemedRegisteredunderArt.144oftheCode:

1.CertificateofRegistrationand/orCertificateofConfirmation

2.ArticlesofCooperationandBylawsand

3.Latestauditedfinancialstatement.

The said documents shall be submitted to the nearest office of the Authority of to the CDA Central Office, at the
optionofthe Cooperative.Uponsubmissionofthe abovementioneddocuments,the Authorityshallissuethe new
certificateofregistrationtotheCooperative.

B.RegistrationfeeasprescribedbytheAuthority.

Section6.JurisdictionUponRegistration.ElectricCooperativeintendingtoregisterwiththeAuthorityshallfiletheir
applicationwiththeCDAExtensionOffice,whichshallhavejurisdictionoverthesaidcooperativesuponapprovalof
theirregistration.However,ifanelectriccooperativeoptedtoregisterwiththeCDACentralOfficeasprovidedforin
the preceding Section, and such registration has been processed and approved by the CDA Central Office, such
registration shall be forwarded to the CDA Extension Office where the cooperative is located and the same
ExtensionOfficeshallassumejurisdictionoverthesaidcooperative.

Section 7. Registration Options. Electric Cooperatives registered with the National Electrification Administration
(NEA)underPresidentialDecreeNo.269,asamended,whichoptnottoregisterwiththeAuthority,areallowedto
retaintheworld"cooperative"intheirregisterednames,buttheyshallnotbeentitledtothebenefitsandprivileges
providedunderR.A.9520.

Section 8. Registration of Electric Cooperatives. The registration on an Electric Cooperative with the Authority
under Article 127 of the Code shall be submitted for approval to the members through a referendum, as a voting
procedure,speciallycalledforsuchpurpose.

The required number of votes for registration with the Authority shall be twenty percent (20%) of all members in
goodstandingwithintheareaofcoverage.Noproxyvotingshallbeallowed.

UnlessotherwiseprovidedintheBylawsofthecooperative,thetermmemberingoodstandingshallbeasdefined
intheCodeofinthisRule.

Section9.ProcedureintheConductofReferendumforregistrationwiththeAuthority.IncompliancewithArt.128
ofRA9520hereunderaretheproceduresinconductingthesame:

A.BODInitiatedReferendum.TheBoardofDirectorsshallundertakethefollowing:
 1.IssueNoticereferendumindicatingthefollowing:

a.DateofReferendum

b.ModeofConductoftheReferendumwhichmayeitherbe:

b.1surveyFormand

b.2AssemblyMeetingintherespectivedistrictswhichmaybesimultaneoussequential.

2. Posting/Publication of Notice of referendum shall be done not later than 30 days prior to the scheduled
conductofreferendum.

3.Identificationofmembersingoodstandingbasedonthequalificationanddisqualificationprovisionsinthe
Bylaws.

4. Provision of Referendum Questionnaire Form to qualified members to vote whether to register or not to
registerwiththeAuthority.

5.CollectionofQuestionnaireformsandcanvassingofVotesbythecooperative'sElectionCommittee.

6.Reportingoftheresultsofthecanvassing,i.e.favorornotfavor.

7.CertificationbytheElectionCommitteeastotheresultofthereferendumdulynotedbythemajorityofthe
BoardofDirectors.

B.MemberConsumerInitiatedreferendum.IncasetheBoardofDirectorsshallrefusetoconductareferendum,
the MemberConsumers may initiate a referendum through a petition duly signed by at least three hundred (300)
membersofeachdistrictofthecooperationwhoareentitledtovotebyfillingthesametotheBoardofDirectors.
TheBoardofDirectorsshallactwithinthirty(30)daysfromreceiptthereofwhethertograntordenysaidpetition.
Failure of the Board of Directors to act within the given period or the denial of the petition, the petitioners may
conductmotupropriothesaidreferendumthroughtheproceduresaboveprescribed.Theresultofthereferendum
shallbecertifiedbyacommitteedesignatedduringtheconductofareferendumtosupervisethesame.

Thegeneralmembershipthroughtheirproponentsforreferendumshallsubmitallthedocumentaryrequirementsfor
resignation to the concerned CDA Extension Office, which may register the applicant Electric Cooperative upon
findingthatallthedocumentsforregistrationarecompleteandinorder.

Section10.AmendmentsofExistingArticlesofCooperationandBylaws.Anyprovisionoranypartthereofinthe
existingArticlesofCooperationandBylawsofthecooperative,whicharefoundtobeinconsistentorcontrarytothe
provisions of the Code and of this Rule shall be amended accordingly. Such amendments shall conform to the
provisionofArt.18oftheCode.SaidapplicationforamendmentsshallbefiledwiththeconcernedCDAExtension
OfficeortheCDACentralOffice,attheoptionoftheCooperative,infour(4)copiesforregistration.

Section11.Capitalization.AnelectriccooperativeshallnotberegisteredwiththeAuthorityunlessitcomplieswith
thefinancialrequirementsofminimumpaidupcapitalizationofFiveMillionPesos(P5,000,000.00).

Section 12. Share Capital in the Electric Cooperatives. Electric Cooperatives shall issue and distribute share
certificatesunderthenameofeachoftheirmembers.Saidsharecertificatesshalltakeintoconsideration,among
others, the previous equity contributions, and the amortization component, through the payments made, capital
buildupandothercapitalcontributions.Theinterestonsharecapitalshallbepaidtothemembersinaccordance
withtheprovisionofSec.9,Rule10oftheRulesandRegulationsImplementingCertainProvisionsofthePhilippine
CooperativeCodeof2008(RA9520).

Section13.QuorumRequirement. Unless otherwise provided in the Bylaws of the Electric Cooperative, quorum
shallbefivepercentum(5%)ofallthemembersentitledtovote.

Section14.TermofOffice.UnlessotherwiseprovidedintheBylawsoftheElectricCooperative,thetermofoffice
ofthemembersoftheBoardshallnotexceedtwo(2)years,however,theyshallbeeligibleforreelection.

Section15.ratesandTariffs. All electricity rates and tariffs of electric cooperatives registered under the Authority
shallbesubjecttotherulesonapplicationandapprovalofandbytheEnergyRegulatoryCommission.

Section16.Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through
conciliationmediationmechanismembodiedinthecooperativebylaws,whichshallbeinaccordancewiththeCDA
GuidelinesfortheImplementationofConciliationofCooperativeDisputes,andapplicablelaws.

Should such conciliationmediation proceedings fail, the matter may be settled through voluntary arbitration or in
courtofcompetentjurisdiction.

However,incaseswheretheissue/sfallwithinthejurisdictionoftheEnergyRegulatoryCommission,thesameshall
bereferredtothesaidagencyandshallberesolveinaccordancewiththisregulation.

RULEVIIDAIRYCOOPERATIVES
PursuanttotheprovisionsofRepublicAct.No.9520,otherwiseknownasthePhilippineCooperativeCodeof2008,
the Cooperative development Authority and National Dairy Authority hereby promulgated the following rules and
regulationsfortheguidanceandcomplianceoftheDairyCooperatives.

Section1.Coverage.ThisRuleshallcoveralldairyCooperativesdulyregisteredunderR.A.9520organizedforthe
purposeofengagingintheprocurement,processingandmarketingofmilkanddairyproducts.

Section 2. Organization. Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having a
common bond interest and actually residing or working in the intended area of operation, may organize a dairy
cooperative.

Section3.PurposesandObjectives.ADairyCooperativeshallbeorganizedforanyorallofthefollowingpurpose:

1.Tostandardizethequality,uniformlyofgradeofmilk,andotherdairyproducts

2.Toassistitsmembersaguaranteedmarketoutlet,tobargainforthebestpricetermspossibleinthemarket
place, including overorder premiums in milk marketing orders, and to market the milk efficiently, i.e.,
balancingplantneeds,divertingmilksurpluses,andassemblingproducermilkandtohavethehighestquality
producermilkpossibleinthemarketand

3.Toeffectivelyrepresenttheirconstitutingmembersinthelegislative,regulatoryandpublicrelationsarenas.

Section4.Membership.MembershipinDairyCooperativeshallbeopentoalldairyfarmers.

Section5.RegistrationJurisdiction.AnyapplicantDairyCooperativeshallfileitsdulyaccomplishedapplicationfor
registrationwiththeVDAExtensionOffice,whichshallhavejurisdictionoverthesaidcooperative.

Section6.RegistrationRequirements.Thefollowingshallbecompiledwithuponfilingofapplication:

1.NameVerification

2.ArticlesofCooperationandBylaws

3.SwornStatementofthetreasurerelectedbythesubscribersshowingthattheleasttwentyfivepercentum
(25%)oftheauthorizedsharecapitalhasbeensubscribedandatleasttwentyfivepercentum(25%)ofthe
totalsubscriptionhasbeenpaid:Provided,ThatinnocaseshallthepaidupsharecapitalbelessthanFifteen
ThousandPesos(P15,000.00)

4.PremembershipEducationSeminar(PMES)

5.SuretyBondAccountableOfficeshandlingfunds,propertiesandsureties

6.EconomicSurvey

7.UndertakingtoChangeNameintheeventthatanothercooperativeacquiredpriorrighttotheuseofthe
proposedname

8.UndertakingtocomplywiththeauditingandaccountingstandardsprescribedbytheAuthority

9.Otherrequirementsasmayberequiredbylawand

10.Registrationfee.

Section 7. Capitalization. A Dairy Cooperative shall have a minimum paidup capitalization of at least Fifteen
ThousandPesos(P15,000.00).

Section 8. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Dairy
Cooperative,suchas:

a.Exerciseofrightsandprivilegesofmembers

b. Formulation of Rules and procedures and the conduct of meetings of the General Assembly, Board of
DirectorsandCommittees

c.MannerofelectionandqualificationsofOfficers,Directors,andCommitteeMembers

d.Allocationanddistributionofnetsurplusand

e.OthermattersrelatingtotheinternalaffairsofDairyCooperatives.

All matters relating to the technical and operations concerning dairy business of such Dairy Cooperative shall be
regulatedbyNDA,DOHBFADandotherconcernedgovernmentagency.

Section 9. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through
conciliationmediationmechanismembodiedinthecooperativebylawsandinapplicablelaws.
Shouldsuchconciliationmediationproceedingsfail,themattermaybesettledthroughvoluntaryarbitrationbythe
AuthorityoradjudicationbytheCommissionorinaCourtofcompetentjurisdiction.

However,incaseswheretheissue/sfallwithinthejurisdictionoftheNDA,DOHBFADthesameshallbereferredto
thesaidagenciesandshallberesolvedinaccordancewiththeirregulations.

COMMONPROVISIONS

Section 1. Requirements. A copy of these Rules shall be among the documents required to be kept ready and
accessibleforinspectionandexaminationbythemembersofthecooperativeandtheAuthorityinaccordancewith
Art.52oftheCode.

Section 2. Interpretation. Unless otherwise stated in these Rules, In case of doubt as to the meaning of any
provisionoftheseRules,thesameshallberesolvedandinterpretedliberallyinfavorofthecooperativesandtheir
members.

Section3.SuppletoryRule. Special Rules, Circulars, Orders and other issuances by the appropriate government
agencies in pursuance of the provisions of the Code and these Rules, and not inconsistent thereto, shall have
suppletoryapplicationtotheseRules.

Section4.Mandate.TheAuthorityismandatedtoimplementandenforcetheseRulesandRegulations.

Section5.Separability.IfanyprovisionoftheseRulesandRegulationsisdeclarednullandvoidorunconstitutional,
theotherprovisionsnotaffectedtherebyshallcontinuetobeinforceandeffect.

Section6.Amendment.TheseRulesandRegulationsshallbesubjecttoautomaticreviewthree(3)yearsafterthe
effectivitythereof.Anyamendmentthereto,shallbesubjecttothereviewandapprovaloftheJCOCC.

Section7.Effectivity.TheseRulesandRegulationsshalltakeeffectfifteen(15)daysafterpublicationintheOfficial
Gazetteorinanewspaperofgeneralcirculation.

RECOMMENDINGAPPROVAL:

THEBOARDOFADMINISTRATORSCOOPERATIVEDEVELOPEMNTAUTHORITY

LECIRAV.JUAREZ
Chairman

ThisImplementingRulesandRegulations(PartI)wasapprovedbytheJointCongressionalOversightCommittee
onCooperativesduringitsmeetingonFebruary16,2010attheSenateofthePhilippines,PasayCitypursuantto
Article138ofRA9520.

MembersoftheJointCongressionalOversightCommitteeonCooperatives.

FortheSenateofthePhilippines: FortheHouseoftheRepresentatives:

Sen.JUANMIGUELF.ZUBIRI Rep.ERNESTOC.PABLO
Chair,SenatePanel Chair,HousePanel

TheLawphilProjectArellanoLawFoundation