Capital.
Article 72
ART. 72. Capital. — The capitalization of cooperatives and the accounting therefor shall be governed by the provisions of this Code and the regulations issued thereunder.
RA 6938 (Cooperative Code of the Philippines) CHAPTER VIII
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Capital Sources.
Article 73
ART. 73. Capital Sources. — Cooperatives registered under this Code may derive their capital from any or all of the following sources: Members' share capital; Loans and borrowings including deposits; Revolving capital which consists of the deferred payment of patronage refunds, or interest on share capital; and Subsidies, donations, legacies, grants, aids and such other assistance from any local or foreign institution whether public or private.
Limitation on Share Capital Holdings.
Article 74
ART. 74. Limitation on Share Capital Holdings. — No member of a cooperative other than a cooperative shall own or hold more than twenty per centum (20%) of the share capital of the cooperative. Where a member of a cooperative dies, his heir shall be entitled to the shares of the decedent: Provided, That the total share holding of the heir does not exceed twenty per centum (20%) of the share capital of the cooperative: Provided, further, That the heir qualify and is admitted as member of the cooperative: Provided, finally, That where the heir fails to qualify as such member or where his total share holding exceeds twenty per centum (20%) of the share capital, the share or shares in excess will revert to the cooperative upon payment to the heir of the value of such shares.
Assignment of Share Capital Contribution or Interest.
Article 75
ART. 75. Assignment of Share Capital Contribution or Interest. — Subject to the provisions of this Code, no member shall transfer his shares or interest in the cooperative or any part thereof unless : He has held such share capital contribution or interest for not less than one (1) year; The assignment is made to the cooperative or to a member of the cooperative or to a person who falls within the field of membership of the cooperative; and The board of directors has approved such assignment.
Interest on Share Capital.
Article 76
ART. 76. Interest on Share Capital. — Interest on share capital shall not exceed the normal rate of return on investments as determined by the Cooperative Development Authority and such interest shall be noncumulative.
Shares.
Article 77
ART. 77. Shares. — The term "share" refers to a unit of capital the par value of which may be fixed at any figure but not less than One peso (P1.00). The share capital of a cooperative is the money paid or required to be paid for to conduct its operations. The method of issuing the share certificates may be prescribed in the bylaws of the cooperative.
Fines.
Article 78
ART. 78. Fines. — The bylaws of a cooperative may prescribe a fine on unpaid subscribed share Capital subject to the guidelines which the Cooperative Development Authority may issue.
Investment of Capital.
Article 79
ART. 79. Investment of Capital. — (1) A cooperative may invest its capital in any of the following: In shares or debentures or securities of any other cooperative; In any reputable bank in the locality, or any cooperative; In securities issued or guaranteed by the Government; In real estate primarily for the use of the cooperative or its members; or In any other manner authorized in the bylaws.
Revolving Capital.
Article 80
ART. 80. Revolving Capital. — The general assembly of any cooperative may authorize the board of directors to raise a revolving capital to strengthen its capital structure by deferring the payment of patronage refunds and interest on share capital or by the authorized deduction of a percentage from the proceeds of products sold or per unit of product handled. The board of directors shall issue revolving capital certificates with serial number, name, amount, and rate of interest to be paid and shall distinctly set forth that the time of retirement by such certificates and the amounts to be returned are at the discretion of the board of directors. CHAPTER IXAUDIT, INQUIRY AND MEMBERS' RIGHT TO EXAMINE
Annual Audit.
Article 81
ART. 81. Annual Audit. — Cooperatives under this Code shall be subject to an annual audit by an auditor who satisfies all of the following qualifications: He is independent of the cooperative being audited and of any subsidiary of the cooperative; and He is a member of any recognized professional accounting or cooperative auditors' association with similar qualifications.
Audit Report.
Article 82
ART. 82. Audit Report. — The auditor shall submit to the audit committee a report of the audit which shall contain a statement of the assets and liabilities of the cooperative, including earnings and expenses, amount of net surplus as well as losses and bad debts, if any. The audit committee shall forthwith furnish the board of directors a copy of the audit report. Thereafter, the board of directors shall present the complete audit report to the general assembly in its next meeting.
Nonliability for Defamation.
Article 83
ART. 83. Nonliability for Defamation. — An 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 authorized or required to do pursuant to this Code.
Right to Examine.
Article 84
ART. 84. Right to Examine. — A member shall have the right to examine the records required to be kept by the cooperative under Article 51 of this Code during reasonable hours on business days and he may demand, in writing, for a copy of excerpts from said records without charge except the cost of reproduction. Any officer of the cooperative who shall refuse to allow any member of the cooperative to examine and copy excerpts from its records shall be liable to such member for damages and shall be guilty of an offense which shall be punishable under Article 106 of this Code: Provided, That if such refusal is pursuant to a resolution or order of the board of directors, the liability under this article shall be imposed upon the directors who voted for such refusal: Provided, further, That it shall be a defense to any action under this article that the member demanding to examine and copy excerpts from the cooperative records has improperly used any information secured through any prior examination of the records of such cooperative or was not acting in good faith or for a legitimate purpose in making his demand.
Safety of Records.
Article 85
ART. 85. Safety of Records. — Every cooperative shall, at its principal office, keep and carefully preserve the records required by this Code to be prepared and maintained. It shall take all necessary precaution to prevent its loss, destruction or falsification. CHAPTER XALLOCATION AND DISTRIBUTION OF NET SURPLUS
Net Surplus.
Article 86
ART. 86. Net Surplus. — Notwithstanding the provisions of existing laws, the net surplus of cooperatives shall be determined in accordance with its bylaws. Every cooperative shall determine its net surplus at the close of every fiscal year and at such other time as may be prescribed by the bylaws. The net surplus shall not be construed as profit but as excess of payments made by the members for the loans borrowed, or the goods and services bought by them from the cooperative and which shall be deemed to have been returned to them if the same is distributed as prescribed herein.
Order of Distribution.
Article 87
ART. 87. Order of Distribution. — The net surplus of every cooperative shall be distributed as follows: An amount for the reserve fund, which shall be at least ten per centum (10%) of net surplus: The reserve fund shall be used for the stability of the cooperative and to meet net losses in its operations. The general assembly may decrease the amount allocated to the reserve fund when reserve fund already exceeds the share capital. Any sum recovered on items previously charged to the reserve fund shall be credited to such fund. The reserve fund shall not be utilized for investment, other than those allowed in this Code. 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. Upon the dissolution of the cooperative, the reserve fund shall not be distributed among the members. The general assembly may resolve: (i)To establish a usufructuary trust fund for the benefit of any federation or union to which the cooperative is affiliated; and (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 cooperative is affiliated. An amount for the education and training fund, which shall be not more than ten per centum (10%) of net surplus. The bylaws may provide that certain fees or fines or a portion thereof be credited to such fund. Half of the amounts transferred to the education and training fund annually under this subsection may be spent by the cooperative for education and training and other purposes; while the other half shall be credited to the cooperative education and training fund of the respective apex organization of which the cooperative is a member. An apex organization may be a federation or union. Upon the dissolution of the cooperative, the unexpended balance of the education and training fund appertaining to the cooperative shall be credited to the cooperative education and training fund of the abovementioned apex organization. An optional fund, a land and building, community development, and any other necessary fund the total of which may not exceed ten per centum (10%). The remaining net surplus shall be made available to the members in the form of interest not to exceed the normal rate of return on investments and patronage refunds. The sum allocated for patronage refunds shall be made available at the same rate to all patrons of the cooperative in proportion to their individual patronage: Provided, That: In the case of a member patron with paid up share capital contribution, his proportionate amount of patronage refund shall be paid to him unless he agrees to credit the amount to his account as additional share capital contribution; In the case of a member patron with unpaid share capital contribution, his proportionate amount of patronage refund shall be credited to his account until his share capital contribution has been fully paid; In the case of a nonmember patron, his proportionate amount of patronage refund shall be set aside in a general fund for such patrons and shall be allocated to individual nonmember patrons only upon request and presentation of evidence of the amount of his patronage. The amount so allocated shall be credited to such patron toward payment of the minimum capital contribution for membership. When a sum equal to this amount has accumulated at any time within a period specified in the bylaws, such patron shall be deemed and become a member of the cooperative if he so agrees or requests and complies with the provisions of the bylaws for admission to membership; 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 provisions of the bylaws for admission to membership, the amount so accumulated or credited to their account together with any part of the general fund for nonmember patrons shall be credited to the reserve fund or to the education and training fund of the cooperative, at the option of the cooperative. CHAPTER XISPECIAL PROVISIONS RELATING TO AGRARIAN REFORM COOPERATIVES
Coverage.
Article 88
ART. 88. Coverage. — The provisions of this Chapter shall primarily govern agrarian reform cooperatives: Provided, That the provisions of other chapters of this Code shall apply suppletorily except insofar as this Chapter otherwise provides.
Definition and Purpose.
Article 89
ART. 89. Definition and Purpose. — An agrarian reform cooperative within the meaning of this Code is one where the majority of the members are agrarian reform beneficiaries and marginal farmers and organized for any or all of the following purposes: To develop an appropriate system of land tenure, land development, land consolidation or land management in areas covered by agrarian reform; To coordinate and facilitate the dissemination of scientific methods of production, and provide assistance in the storage, transport, and marketing of farm products for agrarian reform beneficiaries and their immediate family, hereinafter referred to as "beneficiaries"; To provide financial facilities to beneficiaries for provident or productive purposes at reasonable costs; To arrange and facilitate the expeditious transfer of appropriate and suitable technology to beneficiaries and marginal farmers at the lowest possible cost; To provide social security benefits, health, medical and social insurance benefits and other social and economic benefits that promote the general welfare of the agrarian reform beneficiaries and marginal farmers; To provide non-formal education, vocational/ technical training, and livelihood programs to beneficiaries and marginal farmers; To act as channels for external assistance and services to the beneficiaries and marginal farmers; To undertake a comprehensive and integrated development program in agrarian reform and resettlement areas with special concern for the development of agro-based, marine-based, and cottage-based industries; To represent the beneficiaries on any or all matters that affect their interest; and To undertake such other economic or social activities as may be necessary or incidental in the pursuit of the foregoing purposes.
Cooperative Estates.
Article 90
ART. 90. Cooperative Estates. — Landholdings like plantations, estates or haciendas acquired by the State for the benefit of the workers in accordance with the Comprehensive Agrarian Reform Program shall be owned collectively by the workers-beneficiaries who shall form a cooperative at their option.
Infrastructure.
Article 91
ART. 91. Infrastructure. — In agrarian reform and resettlement areas, the Government shall grant to agrarian reform cooperatives preferential treatment, if necessary, the authority to construct, maintain, and manage with government funding roads, bridges, canals, wharves, ports, reservoirs, irrigation systems, waterworks systems, and other infrastructures. For this purpose, government technical assistance, facilities and equipment shall be made available to such agrarian reform cooperatives for their use.
Lease of Public Lands.
Article 92
ART. 92. Lease of Public Lands. — The Government may lease public lands to any agrarian reform cooperative for a period not exceeding twenty-five (25) years, subject to renewal for another twenty-five (25) years only: Provided, That the application for renewal shall be made one (1) year before the expiration of the lease: Provided, further, That such lease shall be for the exclusive use and benefit of the beneficiaries and marginal farmers subject to the provisions of the Comprehensive Agrarian Reform Program.
Preferential Right.
Article 93
ART. 93. Preferential Right. — In agrarian reform areas, an agrarian reform cooperative shall have the preferential right in the grant of franchise and certificate of public convenience and necessity for the operation 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. Electric service agencies shall, upon request of agrarian reform cooperatives, immediately provide electric services to agrarian reform areas. If the electric service agencies concerned fails for any reason to provide the services requested within a period of one (1) year from receipt thereof, the agrarian reform cooperative concerned may provide the electric services in the agrarian reform area directly through its own resources and shall continue to do so until such time that the electric service agency concerned purchases all the investments made by the agrarian reform cooperative in the electrification of the agrarian reform areas.
Privileges.
Article 94
ART. 94. Privileges. — Subject to such reasonable terms and conditions as the Department of Agrarian Reform and the Authority may impose, agrarian reform cooperatives may be given the exclusive right to do any or all of the following economic activities in agrarian reform and resettlement areas: Supply and distribution of consumer, agricultural, aquacultural, and industrial goods, production inputs, and raw materials and supplies, machinery, equipment, facilities and other services and requirements of the beneficiaries and marginal farmers in the agrarian reform areas at reasonable prices; Marketing of the products and services of the beneficiaries on the local and foreign markets; Processing of the members' products into finished consumer or industrial goods for domestic consumption or for export; Provision of essential public services at cost such as power, irrigation, potable water, passenger and/or cargo transportation by land, sea, or air, communication services, and public health and medical care services; 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 controls; Provision of financial, technological, and other services and facilities required by the beneficiaries in their daily lives and livelihood. The Government shall provide the necessary financial and technical assistance to agrarian reform cooperatives to enable them to discharge effectively their purposes under this article. The Department of Agrarian Reform, the Cooperative Development Authority and the Central Bank of the Philippines shall draw up a joint program for the organization and financing of the agrarian reform cooperatives subject to this Chapter. The joint program shall be geared towards the beneficiaries' gradual assumption of full ownership and management control of the agrarian reform cooperatives within ten (10) years from the date of registration of said cooperatives.
Organization and Registration.
Article 95
ART. 95. Organization and Registration. — Agrarian reform cooperatives may be organized and registered under this Code only upon prior written verification by the Department of Agrarian Reform to the effect that the same is needed and desired by the beneficiaries; results of a study that has been conducted fairly indicate the economic feasibility of organizing the same and that it will be economically viable in its operations; and that the same may now be organized and registered in accordance with the requirements of this Code. CHAPTER XIISPECIAL PROVISIONS ON PUBLIC SERVICE COOPERATIVES
Definition and Coverage.
Article 96
ART. 96. Definition and Coverage. — A public service cooperative, within the meaning of this Code, is one organized to render public services as authorized under a franchise or certificate of public convenience and necessity duly issued by the appropriate government agency. Such services may include the following: Power generation, transmission, and/or distribution; Ice plants and cold storage services. Electric cooperatives created under Presidential Decree No. 269 shall be governed by this Chapter if they qualify as cooperatives under the provisions of this Code; Communications services including telephone, telegraph, and telecommunications; Land, sea, and air transportation cooperatives for passenger and/or cargo. Transport cooperatives organized under the provisions of Executive Order No. 898, Series of 1983, shall be governed by this Chapter; Public markets, slaughterhouses and other similar services; and Such other types of public service as may be engaged in by any cooperative. Such cooperative shall be primarily governed by this Chapter and the general provisions of this Code insofar as they may be applicable unless they are inconsistent herewith.
Registration Requirements.
Article 97
ART. 97. Registration Requirements. — No public service cooperative shall be registered unless it satisfies the following requirements: It has the favorable endorsement of the proper government agency authorized to issue the franchise or certificates of public convenience and necessity; Its articles of cooperation and bylaws provide for the membership of the users and/or producers of the service of such cooperatives; and It satisfies 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 public service cooperative.
Regulation of Public Service Cooperatives.
Article 98
ART. 98. Regulation of Public Service Cooperatives. — (1) The internal affairs of public service cooperatives such as the rights and privileges of members, the rules and procedures for meetings of the general assembly, board of directors and committees; for the election and qualifications of officers, directors, and committee members; allocation and distribution of surpluses; and all other matters relating to their internal affairs shall be governed by this Code. (2) All matters relating to the franchise or certificate of public convenience and necessity of public service cooperatives such as capitalization and investment requirements, equipment and facilities, frequencies, rate-fixing, and such other matters affecting their public service operations shall be governed by the proper government agency concerned. (3) The Cooperative Development Authority and the proper government agency concerned shall jointly issue the necessary rules and regulations to implement this Chapter. CHAPTER XIIISPECIAL PROVISIONS RELATING TO COOPERATIVE BANKS
Governing Law.
Article 99
ART. 99. Governing Law. — (1) The provisions of this Chapter shall primarily govern cooperative banks registered Linder this Code and the other provisions of this Code shall apply to them only insofar as they are not inconsistent with the provisions contained in this Chapter. (2) Cooperatives duly established and registered under the provisions of this Code may organize among themselves a cooperative bank which shall likewise be considered a cooperative registerable under the provisions of this Code subject to the requirements of and requisite authorization from the Central Bank.
Definition, Classification and Functions.
Article 100
ART. 100. Definition, Classification and Functions. — A cooperative bank is one organized by, the majority shares of which is owned and controlled by, cooperatives primarily to provide financial and credit services to cooperatives. The term "cooperative bank" shall include cooperative rural banks. A cooperative bank may perform the following functions: To carry on banking and credit services for the cooperatives; To receive financial aid or loans from the Government and the Central Bank of the Philippines for and in behalf of the cooperative banks and primary cooperatives and their federations engaged in business and to supervise the lending and collection of loans; To mobilize savings of its members for the benefit of the cooperative movement; To act as a balancing medium for the surplus funds of cooperatives and their federations; To discount bills and promissory notes issued and drawn by cooperatives; To issue negotiable instruments to facilitate the activities of cooperatives; To issue debentures subject to the approval of and under conditions and guarantees to be prescribed by the Government; To borrow money from banks and other financial institutions within the limit to be prescribed by the Central Bank; and To carry out all other functions as may be prescribed by the Authority: Provided, That the performance of any banking function shall be subject to prior approval by the Central Bank of the Philippines.
Registration Requirements.
Article 101
ART. 101. Registration Requirements. — No entity shall be registered by the Cooperative Development Authority as a cooperative bank unless the articles of cooperation and bylaws thereof as well as its establishment and operation as a cooperative bank have been approved by the Central Bank of the Philippines and it satisfies all requirements for registration as a cooperative.
Membership.
Article 102
ART. 102. Membership. — Membership of a cooperative bank shall include only cooperatives and federations of cooperatives.
Board of Directors.
Article 103
ART. 103. Board of Directors. — The number, composition, and voting rights of the board of directors shall be defined in the articles of cooperation and bylaws of the cooperative bank, notwithstanding provisions of this Code to the contrary.
Loans.
Article 104
ART. 104. Loans. — Cooperatives may obtain loans from a cooperative bank. Loans granted by a cooperative bank shall be reported to the Central Bank of the Philippines.
Supervision.
Article 105
ART. 105. Supervision. — The cooperative banks registered under this Code shall be under the supervision of the Central Bank the Central Bank upon consultation with the agency and the cooperative movement shall formulate guidelines regarding the operations and banking transactions of cooperative banks. These guidelines shall give due recognition to the unique cooperative nature and character of cooperative banks. To this end, cooperative banks may be exempted from Central Bank rules and regulations, applicable to other types of banks, which would impede the cooperative rural bank from performing legitimate financial and banking services to its members.
Capitalization.
Article 106
ART. 106. Capitalization. — (1) A national cooperative bank shall have a minimum authorized share capital of Two hundred million pesos (P200,000,000.00) in relation to Article 14(5). The authorized share capital shall be divided into such number of shares with a minimum par value of One thousand pesos (P1,000.00) per share. For the purpose primarily of determining the permanency of equity, the types of share a cooperative bank may issue, including the terms thereof and the rights appurtenant thereto, shall be subject to such rules and regulations as the Central Bank may prescribe. (2) A local cooperative bank shall have a minimum authorized share capital of Twenty million pesos (P20,000,000.00) divided into such number of shares with a minimum par value of One hundred pesos (P100.00) per share.
Distribution of Net Surplus.
Article 107
ART. 107. Distribution of Net Surplus. — The provisions of this Code on the allocation and distribution of net surplus shall apply.
Privileges.
Article 108
ART. 108. Privileges. — Cooperative banks shall have the following privileges subject to the approval of the Central Bank and compliance with applicable banking laws, rules and regulations: The cooperative banks registered under this Code shall be given the same privilege granted to the rural banks, private development banks, commercial banks, and all other banks to rediscount notes with the Central Bank, the Land Bank of the Philippines, and other government banks without affecting in any way the provisions of this Code; and To act as a depository of government funds. For this purpose, all government, departments, agencies and units of the national and local governments, including government-owned and controlled corporations are hereby authorized to deposit their funds in any cooperative bank.
Assistance to Cooperative Bank.
Article 109
ART. 109. Assistance to Cooperative Bank. — Whenever a cooperative bank organized under this Code is distressed or may need assistance in the rehabilitation of its financial condition or to avoid bankruptcy, the Monetary Board of the Central Bank of the Philippines shall designate an official of the Central Bank or a person of recognized competence, in banking or finance as receiver or conservator of the said bank pursuant to the provisions of Section 29 of Republic Act No. 265, as amended. CHAPTER XIVSPECIAL PROVISIONS RELATING TO CREDIT COOPERATIVE
Coverage.
Article 110
ART. 110. Coverage. — This Chapter shall apply only to credit cooperatives and the rest of the provisions of this Code shall apply to them insofar as the same are not inconsistent with the provisions of this Chapter.
Definition and Objectives.
Article 111
ART. 111. Definition and Objectives. — A credit cooperative is a financial organization owned and operated by its members with the following objectives: To encourage savings among its members; To create a pool of such savings for which loans for productive or provident purposes may be granted to its members; and To provide related services to enable its members to maximize the benefit from such loans.
Organization and Registration.
Article 112
ART. 112. Organization and Registration. — Credit cooperatives shall be organized and registered in accordance with the general provisions of this Code.
Organizational Linkage.
Article 113
ART. 113. Organizational Linkage. — Credit cooperatives may organize chapter or subsidiaries, or join leagues and federations for the purpose of providing commonly needed essential services including but not limited to the following: Interlending of surplus fund; Mutual benefits; Deposit guarantee; Bonding; Education and training; Professional and technical assistance; Research and development; Representation; and Other services needed to improve their performance. Existing support organizations such as federations of credit cooperatives, credit cooperatives at the provincial, regional and national levels may continue as such under this Code.
Prohibition.
Article 114
ART. 114. Prohibition. — The term "credit cooperative" shall be used exclusively by those who are duly registered under this Chapter, and no person or group of persons, or organizations shall use the said term unless duly registered herein. CHAPTER XVSPECIAL PROVISIONS RELATING TO COOPERATIVE INSURANCE SOCIETIES
Cooperative Insurance Societies.
Article 115
ART. 115. Cooperative Insurance Societies. — Existing cooperatives may organize themselves into a cooperative insurance entity for the purpose of covering the insurance requirements of the cooperative members including their properties and assets.
Types of Insurance Provided.
Article 116
ART. 116. Types of Insurance Provided. — Under the cooperative insurance program established and formed by virtue of the provisions of this Code, the cooperative insurance societies shall provide its constituting members different types of insurance coverage consisting of, but not limited to, life insurance with special group coverage, loan protection, retirement plans, endowment with health and accident coverage, fire insurance, motor vehicle coverage, bonding, crop and livestock protection and equipment insurance.
Applicability of Insurance Laws.
Article 117
ART. 117. Applicability of Insurance Laws. — 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 insurance entities organized under this Code. The requirements on capitalization, investments and reserves of insurance firms may be liberally modified upon consultation with the Cooperative Development Authority and the cooperative sector. But in no case may the requirements be reduced to less than half of those provided for under the Insurance Code and other related laws.
Implementing Rules.
Article 118
ART. 118. Implementing Rules. — The Insurance Commission, upon consultation with the Cooperative, Development Authority and the cooperative sector, shall formulate the rules and regulations implementing these provisions. CHAPTER XVIMISCELLANEOUS PROVISIONS
Compliance with Other Laws.
Article 119
ART. 119. Compliance with Other Laws. — (1) The Labor Code and all other labor laws shall apply to all cooperatives. (2) The Social Security Act, the Medical Care Act, and all other social legislations shall apply to all cooperatives. (3) All other laws and executive orders applicable to cooperatives duly registered under this Code.
Register of Cooperatives.
Article 120
ART. 120. Register of Cooperatives. — The Cooperative Development 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 the basic information required for registration or dissolution and any other information considered useful. The Cooperative Development Authority shall publish every year a list of cooperatives in existence, under dissolution and whose registration is cancelled during the year together with such information on each of them as may be prescribed in the regulations.
Settlement of Disputes.
Article 121
ART. 121. Settlement of Disputes. — Disputes among members, officers, directors, and committee members, and intra-cooperative disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or mediation mechanisms embodied in the bylaws of the cooperative, and in applicable laws. Should such a conciliation/mediation proceeding fail, the matter shall be settled in a court of competent jurisdiction. CHAPTER XVIIFINAL PROVISIONS
Electric Cooperatives.
Article 122
ART. 122. Electric Cooperatives. — Electric cooperatives shall be covered by this Code. However, there shall be a transition period of three (3) years within which the Cooperative Development Authority and the National Electrification Administration shall help and assist electric cooperatives to qualify under this Code. The Cooperative Development Authority and the National Electrification Administration shall jointly promulgate rules and regulations to the end that the provisions of this law are harmonized with the provisions of Presidential Decree No. 269.
Regulations.
Article 123
ART. 123. Regulations. — (1) The Cooperative Development Authority may issue regulations to implement those provisions of this Code which expressly call for the issuance thereof. This paragraph shall not apply to those cases wherein a specific provision of this Code expressly designates particular government agencies which shall issue the regulations called for by any provision of this Code. (2) Where a provision of this Code does not expressly call for nor authorize the issuance of a regulation, no regulation shall be issued thereon. Any regulation issued in violation of this paragraph shall be null and void ab initio. (3) No regulation shall be issued nor become effective under this Code unless the following requirements are satisfied: Public announcement on the intention to issue regulations describing the subject to be dealt on with a copy of the proposed regulations attached, inviting the public to make known their views thereon and submit their positions with respect thereof. The announcement shall be published in a daily newspaper of national general circulation at least once a week for four (4) consecutive weeks prior to the intended date of commencement of the public hearing thereon, specifying the date, time and place of the public hearing; Public hearings may be conducted separately in Luzon, Visayas and Mindanao by the Authority and the proceedings thereof shall be duly recorded. Minutes of a public hearing shall be made available to the public at cost. The public hearing may be held in several sessions: Provided, That no session shall be conducted unless the minutes of all other previous sessions have been published beforehand; The proceed regulations shall be supported by a memorandum of justification for every provision thereof which shall include citation of the legal bases therefor, the reasons for such provision, and the expected results therefrom; and The regulations shall be recommended by the Authority and approved by the Office of the President, and the same shall take effect thirty (30) days after publication in the Official Gazette.
Penal Provisions.
Article 124
ART. 124. Penal Provisions. — The following acts or omissions affecting cooperatives are hereby prohibited: The use of the word "cooperative" by any person or of persons or organizations, domestic or foreign, unless duly registered as a cooperative under this Code. In case of violation hereof, the individual or individuals concerned, or in the case of an organization, its officers and directors shall, upon conviction, each suffer the penalty of imprisonment for one (1) year and a fine not exceeding One thousand pesos (P1, 000.00) or both at the discretion of the court; Direct or indirect interference or intervention by any public official or employee into the internal affairs of a cooperative of which he is not a member, such as, but not limited to, the following: 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 group of persons; Requiring prior clearance for any policy or decision within the cooperative; Requesting or demanding for the creation of positions or organizational units, or recommending ally person for appointment, transfer, or removal from his position; or Any other acts inimical or adverse to the autonomy and independence of cooperatives. In case of violation of any provision of this subsection, the individual or individuals, and in the case of organizations, its officers and directors shall, upon conviction by a court, each suffer a penalty of not less than one (1) year but not more than five (5) years imprisonment or a fine in the amount of not less than Five thousand pesos (P5,000.00), or both at the discretion of the court; A director, Officer or committee member who violated the provisions of Article 47 (liability of directors, officers and committee members), Article 50 (disloyalty of a director) and Article 51 (illegal use of confidential information) shall upon conviction suffer a fine of not less than Five thousand pesos (P5,000.00) nor more than Five hundred thousand pesos (P500, 000.00) or imprisonment of not less than five (5) years but not more than ten (10) years or both at the court's discretion; Any violation of any provision of this Code for which no penalty is imposed shall be punished by imprisonment of not less than six (6) months nor more than one (1) year and a fine of not less than One thousand pesos (P1,000.00), or both at the discretion of the court.
Printing and Distribution.
Article 125
ART. 125. Printing and Distribution. — (1) The National Printing Office shall publish this Code in the Official Gazette in full within sixty (60) days from the date of approval thereof. Copies of this Code shall be given to every department, agency and instrumentality of the National Government, including regional, provincial offices and local governments including government-owned and controlled corporations. (2) All duly registered cooperatives and their federations, unions and associations, and cooperative corporations shall be given one (1) copy each at cost. Thereafter, every newly registered cooperative or cooperative corporations shall be issued at cost a copy of this Code and the regulations promulgated thereon together with its certificate of registration.
Interpretation and Construction.
Article 126
ART. 126. Interpretation and Construction. — In case of doubt as to the meaning of any provision of this Code or the regulations issued in pursuance thereof, the same shall be resolved liberally in favor of the cooperatives and their members.
Repeals.
Article 127
ART. 127. Repeals. — Except as expressly provided by this Code, Presidential Decree No. 175 and all other laws, or parts thereof, inconsistent with any provision of this Code shall be deemed repealed: Provided, however, That nothing in this Code shall be interpreted to mean the amendment or repeal of any provision of Presidential Decree No. 269: Provided, further, That the electric cooperatives which qualify as such under this Code shall fall under the coverage thereof.
Transitory Provisions.
Article 128
ART. 128. Transitory Provisions. — All cooperatives registered under Presidential Decree Nos. 175 and 775 and Executive Order No. 898, and all other laws shall be deemed registered with the Cooperative Development Authority: Provided, however, That they shall submit to the nearest Cooperative Development Authority office their certificate of registration, copies of the articles of cooperation and bylaws and their latest duly audited financial statements within one (1) year from the effectivity of this Act, otherwise their registration shall be cancelled: Provided, further, That cooperatives created under Presidential Decree No. 269, as amended by Presidential Decree No. 1645, shall be given three (3) years within which to qualify and register with the Authority: Provided, finally, That after these cooperatives shall have qualified and registered, the provisions of Sections 3 and 5 of Presidential Decree No. 1645 shall no longer be applicable to said cooperatives.
Separability.
Article 129
ART. 129. Separability. — Should any part of this Code be declared unconstitutional, the rest-of the provisions shall not be affected thereby.
Effectivity.
Article 130
ART. 130. Effectivity. — This Code shall take effect fifteen (15) days from its publication in a newspaper of general circulation. Approved, (Sgd.) JOVITO R. SALONGA (Sgd.) RAMON V. MITRA President of the Senate Speaker of the House of Representatives This Act which is a consolidation of House Bill No. 13029 and Senate Bill No. 513 was finally passed by the House of Representatives and the Senate on March 5, 1990 and March 2, 1990, respectively. (Sgd.) EDWIN P. ACOBA (Sgd.) QUIRINO D. ABAD SANTOS, JR. Secretary of the Senate Secretary of the House of Representatives Approved: March 10, 1990 (Sgd.) CORAZON C. AQUINO President of the Philippines
Back to RA 6938 (Cooperative Code of the Philippines) — full text
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