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Address of co-operatives.
SEC. 49. Address of co-operatives.—Every co-operative shall have an official postal address registered with the Administrator in accordance with the regulations, to which all notices and communications shall be sent, and shall send to the Administrator notice of every change thereof.
Copy of Act, regulations, etc., to be open for inspection.
SEC. 50. Copy of Act, regulations, etc., to be open for inspection.—Every co-operative shall keep open to its members and representatives of the Co-operatives Administration Office for inspection free of charge at all reasonable times at its official address: A copy of this Act; A copy of the regulations; A copy of the article of incorporation and by-laws of the co-operative; A register of members; The minute book of the meetings of board of directors and general assemblies; and Such other documents as may be prescribed in the regulations.
Maintenance of books, records, and accounts and their production.
SEC. 51. Maintenance of books, records, and accounts and their production.—The president of a co-operative shall cause the up-to-date keeping of books, records and accounts in the manner prescribed by the regulations and shall be responsible for the production of the same at the time of audit, inspection and inquiry. All the books, records and accounts so kept shall not be removed outside of the headquarters of a co-operative, except upon orders of courts or of the Administrator.
Duty to account and publish financial statements.
SEC. 52. Duty to account and publish financial statements.—Each co-operative shall maintain records and accounts in such a manner that the true and correct condition and the results of the operation of the business of the co-operative may be ascertained therefrom at any time, and the financial statements, audited according to regulations, shall be annually published in the prescribed manner.
Annual Report.
SEC. 53. Annual Report.— Every co-operative shall annually make a report of its financial affairs as of December 31st of each year, which shall be filed with the Administrator or his duly authorized representative on or before the first day of February of each year or within the extension which may be granted by the Administrator in exceptional cases. The report shall be in such form and manner and shall contain such matters as may be prescribed by the regulations and shall be certified by one of the officers of the co-operatives as true and correct in all respects, to the best of his knowledge and belief. If any co-operative fails to make and file the report required herein, or fails to include therein any matter required by the regulations, the Administrator shall within fifteen days from the expiration of the prescribed period send such co-operative a registered notice directed to its official postal address stating the delinquency and its consequences. If the co-operative fails to file the report within thirty days from the receipt of such notice, any member of the co-operative may, or the provincial or city fiscal of the province or city where the principal office of the co-operative is located shall, upon request made in writing by the Administrator, petition the court for mandamus to compel the co-operative and its officers to file such report and require the co-operative or the officers at fault to pay all the expenses of the proceeding, including counsel fees when the filing is made by a member.
Duty to furnish information and required reports.
SEC. 54. Duty to furnish information and required reports.— Every officer, director, committee member, member and employee of a co-operative shall furnish such information in regard to the transactions or working of the co-operative as may be required of him by the Administrator or any person authorized by him. Every co-operative shall submit the reports prescribed in this Act and the regulations and any other reports as may be required by the Administrator.
Bonding of accountable officers.
SEC. 55. Bonding of accountable officers.—Every director, officer and employee handling funds, securities or property on behalf of any co-operative shall, subject to regulations, execute and deliver adequate bonds for the faithful performance of his duties and obligations.
Restrictions on borrowing.
SEC. 56. Restrictions on borrowing.—A co-operative shall receive deposits and loans from members only to such extent and under such conditions as may be prescribed by the regulations and the by-laws.
Restrictions on loans.
SEC. 57. Restrictions on loans.—Subject to the restrictions that may be imposed by the Administrator, a cooperative shall make loans only to its members and not in excess of either the maximum or of the normal credit determined by the co-operative for that member in accordance with the regulations whichever may be prescribed. Nonmembers may obtain loans on the deposits they hold in the co-operative.
Restrictions on other transactions with non-members.
SEC. 58. Restrictions on other transactions with non-members.—Subject to the provision of Sections fifty-six and fifty-seven, a co-operative shall not transact business with nonmembers to exceed that done with members.
Co-operatives to be bodies corporate.
SEC. 59. Co-operatives to be bodies corporate.—A co-operative after registration under this Act shall be a body corporate by the name under which it is registered till the registration is cancelled, with perpetual succession and a common seal and with power to hold property, to enter into contracts, to institute and defend suits and other legal proceedings and to do all things necessary for the purposes of its constitution.
Co-operative's power to call for statement of claims.
SEC. 60. Co-operative's power to call for statement of claims.— When a member of a co-operative, which includes among its purposes granting of loans to its members, applies for a loan or when a person applies for membership in such a co-operative, the co-operative may in the prescribed manner serve a notice on any creditor named in the application or ascertained after subsequent inquiry, and may also publish a general notice on all creditors, requiring him or them to furnish a written statement of his or their claim, in the prescribed form and within the time specified in the notices, which shall not be less than ten days. When a member of a co-operative, which includes among its purposes the granting of loans to its members, has already borrowed from the co-operative and intends to apply for a loan from any person other than the cooperative, such member shall send to the co-operative a notice in writing stating: His intention to apply for such loan; The amount of the loan for which he intends to apply ; The object of taking the loan; and The name and address of the lender.
Debts due to co-operatives shall be a first charge.
SEC. 61. Debts due to co-operatives shall be a first charge.— Notwithstanding the provisions of existing laws, rules and regulations, but subject to the prior claim of the Government in respect of any sum recoverable as a public demand or of Government financing institutions for whatever amount they have extended as loans in connection with production, storage, processing and marketing, or of a landlord in respect of share or rent or any sum recoverable as share or rent, any debt or outstanding demand owing to a co-operative from any member, past member or the estate of a deceased member shall be a first charge: If the debt or demand is due in connection with the supply of, or any loan to provide the means of paying for, seed, fertilizer, labor, subsistence, irrigation facilities, fodder for cattle, or any other thing incidental to the conduct of agricultural operations—upon the crops or other agricultural produce of such member or estate of such deceased member, at any time within two years from the date of such supply or loan; If the debt or demand is due in connection with the supply of, or any loan for the purchase of cattle, agricultural implements or machinery or warehouses for the storage of agricultural produce—in the manner and to the extent aforesaid upon the crops or agricultural produce of such member or estate of such deceased member and also upon the cattle, agricultural implements or machinery or warehouses thus supplied, purchased or constructed in whole or in part from any such loan; If the debt or demand is due in connection with the supply of, or any loan for the purchase of raw materials, industrial implements and machinery, workshops, warehouses or business premises—upon the raw materials or other things supplied or purchased by such member, or estate of such deceased member in whole or in part from any such loan and also upon any articles manufactured from raw materials or with implements and machinery, workshops, warehouses or business premises so supplied, purchased or constructed wholly or in part from any such loan; If the debt or demand is due in connection with any loan for the purchase or redemption of land,—upon the land purchased or redeemed by such member in whole or in part from any such loan; If the debt or demand is due in connection with any loan for the purchase or construction of any house or building or any portion thereof or in respect of the supply of materials for such construction,—upon the house or building so purchased or constructed by such member from any such loan or material; and If the debt or demand is due in connection with the supply of, or any loan for the purchase of consumer goods, facilities or other things,—upon the goods, facilities or property so supplied or purchased in whole or in part from any such loan. No property or interest in property which is subject to a charge under subsection (1) shall be transferred in any manner except by way of lease for a term not exceeding ten years without the previous permission of the co-operative. Notwithstanding the provisions of any law, any transfer made in contravention of the provisions of subsection (2) shall be void. Notwithstanding the provisions of this Act or of any other law— Any member of a co-operative who applies for a loan from the co-operative shall, if he owns any land, make a declaration in the form prescribed in the regulations. Such declaration shall state that the applicant for a loan thereby creates a charge on the land owned by him and specified therein for the payment of the loan which the co-operative may make to the member in pursuance of the application and for all future advances, if any, required by him which the cooperative may grant him as such member subject to such maximum as may be determined by the co-operative together with interest on such loan and advances; Any member of a co-operative who has obtained a loan from the co-operative before the enactment of this Act and who owns any land shall, as soon as possible, make a declaration in the form and to the effect referred to in clause (a), and no such member shall, unless and until he has made such declaration, be entitled to exercise any right as a member of the co-operative; (c) A declaration made under clauses (a) and (b) may be revised at any time by a member with the consent of the co-operative in whose favor such declaration is made; No member shall alienate the whole or any part of the land specified in the aforementioned declaration until the whole amount borrowed by or advanced to the member together with interest thereon is paid in full: Provided, That any such land and the standing crops thereon may be alienated with previous written permission of the co-operative.
Agreements with members for deductions from salary to meet claims of co-operative permitted.
SEC. 62. Agreements with members for deductions from salary to meet claims of co-operative permitted.— A member of a co-operative may, notwithstanding the provisions of existing laws, execute an agreement in favor of the co-operative authorizing his employer to deduct from the salary or wages payable to him by the employer such amount as may be specified in the agreement and to pay the amount so deducted to the co-operative in satisfaction of any debt or other demand owing from the member to the co-operative. Upon the execution of such agreement the employer shall, if so required by the co-operative by a request in writing and so long as such debt or other demand or any part of it remains unpaid, make the deduction in accordance with the agreement and remit forthwith the amount so deducted to the co-operative. The term "employer" as used in this section includes the Government of the Philippines or of any local authority and any other person who has under his employ a member of a co-operative. The provisions of this section shall also apply to all such agreements of the nature referred to in subsection (1) as were in force on the date of the approval of Commonwealth Act Numbered five hundred sixty-five.
Lien and set off on members' interest.
SEC. 63. Lien and set off on members' interest.—A co-operative shall have an absolute lien upon the capital, deposits or interest of a member or past member for any debt or demand due to a co-operative from such a member, either as a principal or as a surety, and may set off any sum credited or payable to a member or past member in or towards payment of any such debt or demand.
Register of members.
SEC. 64. Register of members.—Any register or list of members or shares kept by any registered co-operative shall be prima facie evidence of the following particulars entered therein: The date on which the name of any person was entered in such register or list as a member; and The date on which any such person ceased to be a member.
Admissibility of copy of entry as evidence.
SEC. 65. Admissibility of copy of entry as evidence.— A copy of any entry in any book, register or list regularly kept in the course of business in the possession of a co-operative shall, if duly certified in such manner as may be prescribed by the regulations, be admissible in evidence of the existence of the entry and shall be admitted as prima facie evidence of the matters and transactions therein recorded in every case where, and to the same extent to which, the original entry would, if produced, have been admissible to prove such matters. In the case of such co-operative as the Administrator may direct, no person or a co-operative in possession of the books of such co-operative shall in any legal proceedings to which the co-operative is not a party be compelled to produce any of the books of the co-operative, the contents of which can be proved under subsection (1) or to appear as a witness to prove the matters, transactions and accounts therein recorded, unless by order of a competent court or judge made for special cause.
Exemptions.
SEC. 66. Exemptions.—Co-operatives registered under this Act shall, notwithstanding the provisions of existing law to the contrary, enjoy the following exemptions: Co-operatives with net assets of not more than five hundred thousand pesos shall be exempt from all taxes and government fees of whatever name and nature except those provided for under this Act: Provided, however, That co-operatives having net assets in excess of five hundred thousand pesos shall pay taxes as provided hereunder: Income Tax—they shall pay tax at the full rate as provided under existing laws on the amount allocated for interest on capital; Sales Tax—they shall pay fixed and percentage taxes at the full rate as provided under existing laws on gross sales to non-members; and They shall pay all other taxes, unless otherwise provided herein at the full rate as provided under existing laws. They shall be exempt from the payment of documentary stamp tax, residence taxes, tax on banks and insurance companies and municipal or city taxes. Any justice of the peace, in his capacity as notary public ex officio, shall render service, free of charge, to any person or group of persons requiring either the administration of oath or the acknowledgment of articles of incorporation of a proposed co-operative and instruments of loan from a co-operative not exceeding two thousand pesos. Any register of deeds shall accept for registration, free of charge, any instrument relative to a loan made under this Act which does not exceed two thousand pesos or the deeds of title to any property acquired by the co-operative or any paper or document drawn in connection with any action brought by the co-operative or with any court judgment rendered in its favor or any instrument relative to a bond of any accountable officer of a cooperative for the faithful performance of his duties and obligations. They shall be exempt from the payment of all court and sheriff's fees payable to the Philippine Government for and in connection with all actions brought under this Act, or to enforce the payment of obligations contracted in favor of the co-operative, and where such an action is brought by the Administrator before the court, he shall, likewise, not be required to pay any such fees. They shall be exempt from putting up a bond for bringing an appeal against the decision of an inferior court or for seeking to set aside any third party claim, provided, that a certification of the Administrator showing that the net assets of the co-operative are in excess of the amount of the bond required by the court in similar cases shall be accepted by the court as a sufficient bond. Any security issued by co-operatives shall be exempt from the provisions of the Securities Act provided such security shall not be speculative.
Other privileges.
SEC. 67. Other privileges.—Co-operatives registered under this Act shall, notwithstanding the provisions of any law, be accorded also the following privileges: The reports or returns prescribed under this Act shall be deemed to be sufficient returns for any purpose prescribed under any law. Co-operatives 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 acknowledging the articles received, witnessed by another person. Co-operatives shall enjoy the privilege of depositing with the postal savings banks such funds as they may desire to deposit at the same rate of interest as that granted to individuals and without limitations as to the amount. Co-operatives shall enjoy the privilege of being represented in courts by the provincial or city fiscal or the Solicitor General or his representatives, as the case may be, free of charge, in any case in which they are either plaintiffs or defendants, except when the Philippine Government is the plaintiff itself; and all suits brought by or on behalf of a co-operative shall be instituted in court by them at most within three months from the date of receipt of such suit.
Provisions on this page are reproduced verbatim from official open data. See the attribution line.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).