Compiled from an official source version. Later amendments or repeals may not be reflected; the official text prevails.・Read the official text ↗
Proceedings Upon Insolvency.
ART. 64. Proceedings Upon Insolvency. — In case a cooperative is unable to fulfill its obligations to creditors due to insolvency, such cooperative may apply for such remedies as it may deem fit under the provisions of the Insolvency Law (Act No. 1956, as amended). Nothing in this article, however, precludes creditors from seeking protection from said insolvency law. CHAPTER VIIDISSOLUTION OF COOPERATIVES
Voluntary Dissolution Where No Creditors Are Affected.
ART. 65. Voluntary Dissolution Where No Creditors Are Affected. — If the dissolution of a cooperative does not prejudice the rights of any creditor having a claim against it, the dissolution may be effected by a majority vote of the board of directors, and by a resolution duly adopted by the affirmative vote of at least two-thirds (2/3) of all the members with voting rights at a meeting to be held upon call of the directors: Provided, That notice of time, place and object of the meeting shall be published for three (3) consecutive weeks in a newspaper published in the place where the principal office of said cooperative is located, or if no newspaper is published in such place, in a newspaper of general circulation in the Philippines: Provided, further, That notice of such meeting is sent to each stockholder or member either by registered mail or by personal delivery at least thirty (30) days prior to said meeting. A copy of the resolution authorizing the dissolution shall be certified by a majority of the board of directors and countersigned by the secretary of the cooperative. The Cooperative Development Authority shall thereupon issue the certificate of dissolution.
Voluntary Dissolution Where Creditors Are Affected.
ART. 66. Voluntary Dissolution Where Creditors Are Affected. — Where the dissolution of a cooperative may prejudice the rights of any creditor, the petition for dissolution shall be filed with the Cooperative Development Authority. The petition shall be signed by a majority of its board of directors or other officers managing its affairs, shall he verified by its president or secretary or one of its directors and shall set forth all claims and demands against it and that its dissolution was resolved upon by the affirmative vote of at least two-thirds (2/3) of all the members with voting rights, at a meeting called for that purpose. If the petition is sufficient in form and substance, the Cooperative Development Authority shall, by an order reciting the purpose of the petition, fix a date on or before which objections thereto may be filed by any person, which date shall not be less than thirty (30) nor more than sixty (60) days after the entry 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 principal office of the cooperative is situated, or in the absence of such newspaper, then in a newspaper of general circulation in the Philippines, and a similar copy shall be posted for three (3) consecutive weeks in three (3) public places in the municipality or city. Upon five (5) days notice, given after the date on which the right to file objections as fixed in the order has expired, the Cooperative Development Authority shall proceed to hear the petition and try any issue made by the objections filed; and if no such objection is sufficient, and the material allegations of the petition are true, it shall issue an order dissolving the cooperative and directing such disposition of its assets as justice requires. The order of dissolution shall set forth therein: The assets and liabilities of the cooperative; The claim of any creditor; The number of members; and The nature and extent of the interests of the members of the cooperative.
Involuntary Dissolution.
ART. 67. Involuntary Dissolution. — A cooperative may be dissolved by order of a competent court after due hearing on the grounds of: (1) violation of any law, regulation, or provisions of its bylaws; or (2) insolvency.
Dissolution by Order of the Authority.
ART. 68. Dissolution by Order of the Authority. — The Authority may suspend or revoke, after due notice and hearing, the certificate of registration of a cooperative on any of the following grounds: Having obtained its registration by fraud; Existing for an illegal purpose; Willful violation, despite notice by the Authority, of the provisions of this Code or its bylaws; Willful failure to operate on a cooperative basis; and Failure to meet the required minimum number of members in the cooperative.
Dissolution by Failure to Organize and Operate.
ART. 69. Dissolution by Failure to Organize and Operate. — If a cooperative has not commenced business and operation within two (2) years after the date shown on its certificate of registration or has not carried on business for two (2) consecutive years, the Authority shall send formal inquiry to the said cooperative as to the status of its operation. Failure of the cooperative to promptly provide justifiable cause for its failure to operate shall warrant the Authority to strike off its name from the register and, for all intents and purposes, the cooperative shall be deemed dissolved.
Cooperative Liquidation.
ART. 70. Cooperative Liquidation. — Every cooperative whose charter expires by its own limitation or whose cooperative existence is terminated by voluntary dissolution or is terminated by appropriate judicial proceedings shall nevertheless be continued as a body cooperative for three (3) years after the time when it would have been so dissolved, for the purpose of prosecuting and defending suits by or against it and enabling it to settle and close its affairs, to dispose of and convey its property and to distribute its assets, but not for the purpose of continuing the business for which it was established. At any time during said three (3) years, said cooperative is authorized and empowered to convey all of its property to trustees for the benefit of members, creditors and other persons in interest. From and after any such conveyance by the cooperative of its property in trust for the benefit of its members, creditors and others in interest, all interest which the cooperative had in the property terminates the legal interest vests in the trustees and the beneficial interest vests in the members, creditors or other persons in interest. Upon the winding up of the cooperative affairs, any asset distributable to any creditor or shareholder or member who is unknown or cannot be found shall be given to the federation, union or association to which the cooperative is affiliated or to the movement. Except by decrease of share capital and as otherwise allowed by this Code, no cooperative shall distribute any of its assets or property except upon lawful dissolution and after payment of all its debts and liabilities.
Rules and Regulations on Liquidation.
ART. 71. Rules and Regulations on Liquidation. — The Authority shall issue the appropriate implementing guidelines for the liquidation of cooperatives.
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).