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COOPERATIVES

ANTOLIN CORONEL ESPINA GARCIA JANIOLA LASTIMOSA MANAHAN


Cooperative Code of the
Philippines
Republic Act No. 6938
Amended as Philippine Cooperative
Code of 2008 (R.A. 9520)
Created to nurture creation and
growth of cooperatives
What is a Cooperative?
Organization owned and operated by the people who
work there or people who use their services.

A registered association of persons, with a common


bond of interest, who have joined together to
achieve a lawful common social or economic
goal, making fair contributions to the capital
required and accepting a fair share of the
risks and benefits in accordance with
universally accepted cooperative principles.
(Art. 3, Cooperative Code of the Philippines)
Cooperative Principles
1. Open and Voluntary Membership

2. Democratic Member Control

3. Member Economic Participation

4. Autonomy and Independence

5. Education, Training, and Information

6. Cooperation Among Cooperatives

7. Concern for Community


CORPORATION COOPERATIVES
Produces products and services for a Produces products and services to
certain market comply with the needs of its members.

Can be a small, medium, or large entity


Usually a small-scale entity since its
and can cater national and international
target group are only its members.
market.

Can be non-profit or profit; stock or non-


Usually a non-profit entity
stock entity.

Shares are transferable Shares are not transferable

Tax exempt unless otherwise stated by


Taxable unless otherwise stated by law.
law.
Organization of
Cooperatives
Cooperatives may be organized by at least 15 people for any of
reasons stated:

1.Encourage thrift and savings mobilization among members;

2.Generate funds and extend credit to members for productive and provident
purposes;

3.Encourage among members systematic production and marketing;

4.Provide goods and services and other requirements to members;

5.Develop expertise and skills among its members;

6.Acquire lands and provide housing benefits for the members;

7.Insure against losses of the members;


8. Promote and advance the economic, social, and educational
status of members;

9. Establish, own, lease or operate cooperative banks,


cooperative wholesale and retail complexes, insurance and
agricultural/industrial processing enterprises, and public
markets;

10. Coordinate and facilitate the activities of cooperatives;

11. Advocate for the cause of the cooperative members

12. Ensure viability of cooperatives through utilisation of new


technology

13. Encourage and promote self-help or self-employment as an


engine for economic growth and poverty alleviation; and

14. To undertake any and all other activities for the effective and
efficient implementation of the provisions of this Code.
Cooperatives Not In
Restraint of Trade
No cooperatives shall be deemed
in restraint of trade or an
illegal monopoly
Cooperative Powers and
Capacities
1. Sue and be sued in its cooperative name;

2. Of succession;

3. Amend its article of cooperation in accordance with the


provisions of Cooperative Code of the Philippines;

4. Adopt by-laws not contrary to law, morals or public policy,


and to amend and repeal the same in accordance with CCP;

5. Purchase, receive, take or grant, hold, convey, sell, lease,


pledge, mortgage, and otherwise deal with such real and
personal property as the transaction of the lawful affairs of
the cooperative may reasonably and necessarily require,
subject to the limitations prescribed by law and the
Constitution;
. Enter into division, merger or consolidation, as
provided in CCP;

. Join federation or unions, as provided in CCP;

. Accept and receive grants, donations, and


assistance from foreign and domestic
sources; and

. Exercise such other powers granted in CCP


or necessary to carry out its purpose or
purposes as stated in its articles of
cooperation.
Organizing Primary
Cooperative
15 or more natural persons,
citizens of the Philippines
have a common bond of interest
resides or works in the intended
area of operation
Economic Survey
• Those who wish to form cooperatives under
the CCP shall submit to the Cooperative
Development Authority a general statement
describing:
• structure;
• purpose; and
• economic feasibility of the proposed
cooperative
• Area of operation, size of membership and
other pertinent data should also be indicated.
Term of a Cooperative

Cooperatives shall exist for a period


not exceeding 50 years in any single
instance from date of registration
Unless dissolved or period is extended
Articles of Cooperation
• The articles of cooperation shall be filed with the CDA

• Signed and acknowledged by each of the organizers if natural


persons

• by presidents or secretaries if juridical persons before a notary


public

• Must be accompanied by bonds of accountable officers.

• Sworn statement of treasurer that at least 25% of authorized


share capital has been subscribed and 25% of the subscription
has been paid

• Provided, paid-up share capital shall never be less than


P2,000.00
Registration
• Juridical personality is acquired from the date CDA issues a
certificate of registration (COR)

• Applications for registration shall be finally disposed of by


CDA within 30 days from filing,

• Otherwise, application is deemed approve. Unless cause of


delay is due to the applicant.

• In case of denial of registration, an appeal shall lie with the


Office of the President within 90 days from receipt of notice
of denial.

• If not acted upon within 90 days, registration shall be


deemed approved.
Amendment of Articles of
Cooperation and By-Laws
• Amendment shall commence if voted upon by at least 2/3 of
all the members with voting rights.

• Amendments shall be appropriately indicated and shall


have a copy certified under oath by the secretary.

• Majority of the directors must state the fact that


amendments have been approved by the required vote.

• All amendments shall be submitted to CDA.

• Amendments shall take effect upon approval or within 30


days from date of filing if not acted upon by CDA for an
unknown cause not attributable to the cooperative.
Contracts Executed Prior to
Registration and its Effects
Contracts executed between private
persons and cooperatives prior to
registration shall remain valid and
binding
Division of Cooperatives
• If approved by 2/3 of the members allowed to vote, a
cooperative may divide itself into two or more
cooperatives.

• Procedure shall be prescribed by CDA.

• Newly created cooperatives shall be legally


established upon registration with CDA.

• Provided, all requirements set forth in CCP has been


complied with.

• Provided, further, no division of cooperative in fraud


of creditors shall be valid.
MEMBERSHIP
Membership
• Who may be members?
– Natural persons
– Other Cooperatives
– Non-profit Organizations with juridical
personality
Kinds of Members
1. Regular Members
– Entitled to all the rights and privileges of
membership (ie. To vote and be voted, etc.)

2. Associate Members
– No right to vote or be voted
– Entitled only to rights as prescribed by the
by-laws
Application for Membership
1. Tendering of application
2. Approval of application by the BOD
3. Payment of acquired interest

• If denied, applicant may appeal to the


General Assembly
Termination of Membership
VOLUNTARY AUTOMATIC BY BOD
RESOLUTION

GROUNDS Any reason Death, …


insanity,
a)Non-patronization of the cooperative’s
insolvency, services
dissolution
for an unreasonable period of time
b)Failure to comply with obligations
REQUIREMENTS
c) BOD should
Violation of by-laws be rules
and None Majority vote of
of cooperatives
given a notice the BOD
d)Any act or omission that causes injury or
60 days before
prejudice to the cooperative
withdrawal
ADMINISTRATION
GENERAL ASSEMBLY

DEFINITION COMPOSITION POWERS

1. To determine and
approve amendments
to the articles of
- All members who cooperation and the
- It is the highest are entitled to by-laws
2. To elect and appoint
policy-making vote under the
members of the BOD
body of the articles of and consequently, to
cooperative cooperation and remove them
the by-laws 3. To approve
developmental plans
of the cooperative
4. Such other matters
Meetings of the GA
REGULAR SPECIAL

FREQUENCY Annually Whenever needed

DATE Date fixed in by-laws Any time


or 90 days after close
of the year

NOTICE 2 weeks prior unless a 1 week prior


different period is
required
Meetings of the GA
• Who can call for special meetings?
a) BOD - majority vote
b) members - when the BOD fails to hold a
meeting within the year, upon petition of the
10% of all the members to the Cooperative
Development Authority
c) CDA – for various purposes
Quorum

• 25% of all members entitled to vote,


unless otherwise provided in the by-laws
Voting System
PRIMARY SECONDARY AND
TERTIARY
NUMBER OF 1 per member 5 per member-
VOTES cooperative
WHO VOTES Members Delegates of
themselves member-
cooperatives
PROXY VOTING Not allowed unless Allowed
provided for in by-
laws
BOARD OF DIRECTORS

WHO CANNOT BE
COMPOSITION AND WHO ARE QUALIFIED
TERM TO BE DIRECTORS?
DIRECTORS OR
OFFICERS?

• Any member who


• 5 – 15 members has the right to vote
1. Any officer or
• Term should not • Must possess all
the qualifications employee of the
be more than set forth by the law Cooperative
two years and by-laws Development
• Directors cannot Authority
• Exception: Those 2. Elective officials of
serve for more the Government
appointed by a
than three financial institution except barangay
consecutive who extended officials
terms financial assistance
to the cooperative.
Meetings of the BOD
REGULAR SPECIAL

FREQUENCY Monthly or as Whenever needed,


provided in the by- upon call of the
laws President or as
provided in the by-
laws
PROXY VOTING Not allowed Not allowed

QUORUM Majority of the BOD unless otherwise provided


by the by-laws
Vacancy in the BOD
• If reason is other than expiration of term
the majority vote of the remaining
directors, if still a quorum, will be sufficient
to fill up the position
• Otherwise, a GA meeting must be called
Vacancy in BOD
• Illustration: 4 out of the 10 directors of
BAC Cooperative died because of food
poisoning. How does the cooperative fill
up the vacancies provided that the by-laws
state that quorum will be 50%+1?
Officers
• Elected or appointed by the BOD
• Need not to be part of the BOD except for
the Chairman and the Vice Chairman
• Subject restrictions on consanguinity
Liabilities of Directors, Officers
and Committee Members
• Those who:
– willfully and knowingly vote for unlawful acts
– are guilty of gross negligence or bad faith
– acquire any personal or pecuniary interest in
conflict with their duties
shall be liable JOINTLY and SEVERALLY
Liabilities of Directors, Officers
and Committee Members
• Doctrine of Corporate Opportunity
• Liable for damages and double the profits
that otherwise would have accrued to the
cooperative
Dealings with Directors, Officers
or Committee Members
• Voidable at the option of the cooperative
• Unless the following conditions are
present:
1. Presence of director was not necessary to
meet the quorum.
2. Vote of such director was not necessary for
the approval of the contract.
3. Contract is fair and reasonable.
4. Person has been previously authorized by
the GA
RESPONSIBILITIES, RIGHTS
AND PRIVILEGES OF
COOPERATIVES
BASIC
RESPONSIBILITIES

Maintain and
File an
Official Postal Books to be Publish
Kept Open
Annual
Address Records of
Report
Accounts

• Audited according to
GAAP
a) Cooperative Code of the • Shall be kept posted in
Philippines Disposal of Records Failure to File
b) Regulations of the a conspicuous place in
• Where notices Cooperative the principal office of • The form and
Development Authority • Burning
cooperatives • Authority shall be
contents shall send
and
(CDA) •• Other method of –
Audit committee a written notice
prescribed by the
communications c) Articles of cooperation complete
responsible destruction
for • Within fifteen (15)
rules of Authority
shall be sent and by-laws of the
cooperative production of the days from the
d) Register of members • expiration of the
• Registered with books and records of Shall be filed with
e) Minutes of the meetings Provided, That at
accounts it shall be of
the time prescribed period
the CDA within one
the Cooperative f) Share books, where more thanorfive
audit (5) years old.
inspection hundred (120) days
Development applicable
g) Financial statements
Except, Those subject to civil,
• Accountant/bookkeepe Imposed Sanctions:
from the end of
Authority (CDA) •
h) Other documents criminal, and administrative
r – responsible in every fiscaland
Fines year
prescribed by laws or by- proceedings.
maintaining the Penalties
laws • Revocation
correctness and
accuracy of the
records
Rights of Cooperatives
• Surety bonds – to guarantee faithful performance of duties and
obligation.

Principal – Director, officer, and/or employee


Obligee – Cooperative
Surety – Insurance company

• Primary lien - to secure a debt, created by law in favor of certain


creditors.

Debtor – Member
Creditor - Cooperatives
Tax Treatment of Cooperatives
Transactions with non-members
ACCUMULATED RESERVES AND UNDIVIDED NET SAVINGS

Transactions
Not more than with its membersMore than Regardless of the amount
P10,000,000 P10,000,000

- Not subject to any taxes and fees imposed under the internal
Exempt from: Subject to: Exempt from:
• revenue
National, city, provincial,laws and• otherIncometax Tax laws • payment of local taxes
municipal or barangay • Value-Added Tax • taxes on transactions with bank
taxes of whatever name • All other taxes and insurance companies
and nature • Tax Deductible from
• Custom duties donations to charitable, Provided, That all sales or services
• Importation taxes research and educational rendered for non-members shall be
institutions and reinvestment subject to the applicable percentage
to socioeconomic projects taxes sales made by producers,
within the area of operation marketing or service cooperatives
of the cooperative
Provided further, That nothing in this
article shall preclude the examination
of the books of accounts or other
accounting records of the cooperative
NOTARY PUBLIC REGISTER OF DEEDS/ COURT AND SHERIFF’S
DEED OF TITLE FEE

• Ex officio • Free of charge • Payable to the


• Free of charge • Any instrument Philippine government
• Articles of cooperation relative to a loan NOT • Exempt
and instruments of exceeding Two
loan from cooperatives Hundred Fifty Provision:
not exceeding five Thousand Pesos Sufficient bond –
hundred thousand (P250,000) accepted by the court
pesos (P500,000) Security – not be
speculative
Privileges of Cooperative
• The right to deposit their valuable in government
officers free of charge with the government
official acting as custodian of such valuable
• Free use of space, when the cooperative
members are government employees, in the
same government office.
• Special types of coops like cold storage,
electricity, transport and similar services can
open their membership to all persons qualified in
their areas of operation.
• The preferential right to supply government offices
with their produce, in the allocation of fertilizer and
rice distribution, use of butteries for shipment of their
goods, and in the management of public markets.
• Entitlement to loans, credit line, and rediscounting of
notes with government financial institution like PNB,
Land Bank and DBP.
• Exemption from prequalification requirements when
bidding for a government project.
• The right to be represented by the provincial or city
fiscal or the Office of the Solicitor general, free of
charge in legal suits.
CAPITAL, PROPERTY AND
FUNDS
CAPITAL
SOURCES
(ROLM)
Other
assistance
Revolving Loans and Member’s
from any local
Capital or foreign Borrowings Share Capital
institution
• Assignment of
• In shares or • Share Capital–
Share Capital
- Deferring the debenture or Contribution
Share is a unit orof
payment of securities of any Interest
capital, par value –
1. notHeld
moreshare
patronage other cooperative than 1000
capital
• Share Capital
refunds and • In any reputable contribution
Holdings - Ownoror
- Subsidies, bank in locality or
interest on holdinterest for not
more than ten
donation, any cooperative less than
per centum (10%) 1 year
share capital
legacies, • In securities • When
2. Made to the of
a member
cooperative
cooperative or -to
dies
grants, aids issued or
- Authorized guaranteed by the
a member
heirs of the
shall be entitled
to the share of the
cooperative or to
deduction of Government
- Whether decedent
a person who
percentage from • In real estate Provided:
falls within the
public or 1. Total share holding of
the proceeds of primarily for the use field of the
private themembership
heir does notof
products sold or of the cooperative exceed 10%
the cooperative
service or its members; or 2.
3. HeirThe
is qualify
board and
of is
rendered • In any other manner admitted ashas
director
authorized in the members
approvedof such
cooperative
assignment
bylaws
AUDIT, INQUIRY AND MEMBER’S RIGHT
TO EXAMINE
Annual Annual Safety of
Report Right to Examine
Audit Records

Auditor: Members have the right to


Submitted to Preserve examine the records and demand
• Independent the BOD and the
• Member of a copy of excerpts
to the audit records
PICPA and committee
is accredited
by BOA Offers who refuse to allow the
member their right shall be liable
Failure to to damages and guilty of offense
file – • Provided:
cancellatio • Refusal is pursuant to the
n of the order of BOD
certificate • Member demanding has
of improperly used any info
registration secured
ALLOCATION AND
DISTRIBUTION OF NET
SURPLUS
Net Surplus
Not construed as profit but as:
• excess payments for the loans borrowed
• excess payments for goods and services
bought from the cooperative (patronage)

Distribution of surplus is a form of return of


the above.
Order of Distribution (RETOR)
RESERVE
FUND
EDUCATION
AND
TRAINING
FUND

NET
SURPLUS
OPTIONAL
FUND

REMAINING
NET SURPLUS
Reserve Fund
AMOUNT General: At least 10% of net surplus but
may be decreased
PURPOSE • To maintain stability of the cooperative
• To meet net losses of operations
SPECIAL RULES a) Amount allocated may be decreased when
RF already exceeds the share capital
b) It shall not be utilized for investments. But
those in excess of share capital can be
used.

WHAT HAPPENS Shall not be distributed to the members.


TO FUND UPON Will either go to:
DISSOLUTION a) the federation or union affiliated with
b) community where coop operates
Education and Training Fund
AMOUNT Not more than 10% of net surplus

PURPOSE To educate and train members in accordance


with the principle of Cooperative Education

SPECIAL RULES a) Half of the amount can be spent for the


training and education of the cooperative’s
members
b) The other half will be given the ETF of it
federation or union

WHAT HAPPENS Shall be given to apex organization; the


TO FUND UPON cooperative’s federation or union
DISSOLUTION
Optional Fund
AMOUNT Not more than 10% of net surplus

PURPOSE For land and building, community


development or any other purpose
deemed necessary
Remaining Net Surplus
AMOUNT Same rate to all patrons in proportion to their individual
patronage
PURPOSE To be given back to members in the form of interests
SPECIAL Case 1: Member patron with paid up share
RULES ON capital distribution
PATRONAGE a) Distribute
REFUNDS b) Additional share capital contribution

Case 2: Member patron with unpaid share


capital distribution
a) Credited to account until fully paid

Case 3: Non-member patron


a) Set aside and credited to such patron making him
a member
b) Credited to other funds
TYPES OF
COOPERATIVES
• Cooperative Development Authority (CDA)
Purpose: designated to be a lead government agency in the promotion, development,
and regulation of cooperatives, of whatever type and nature throughout the Philippines
Creation: Office of the President
Function: - conduct seminar and workshops for the training of local
government officials on cooperative promotion, organization and
development
- provide information to the local government units on the policies
and standards that have been formulated by the CDA concerning
cooperatives
- assist the local government units in the development of
cooperatives in their locality
Governing Body: 1 chairman & 6 members (2 each from Luzon, Visayas,
Mindanao)
Term: 6 yrs w/o reappointment
1st appointment: - chairman: 6 yrs
- 3 members:4 yrs
- 3 members: 2 yrs
Vacancy: appointed by the President
Approved: March 10, 1990
Type Purpose
Credit Cooperative savings and lending services

Consumers
procure and distribute commodities to members and non-members
Cooperative
Producers production and processing of raw materials or goods into finished or processed
Cooperative products for sale

Marketing
engages in the supply of production inputs to members and markets their products
Cooperative
Multipurpose combines two (2) or more of the business activities of these different types of
Cooperative cooperatives
engages in medical and dental care, hospitalization, transportation, insurance,
Service Cooperative housing, labor, electric light and power, communication, professional and other
services
Advocacy
promotes and advocates cooperativism among its members and the public
Cooperative
Education owning and operating licensed educational institutions
Cooperative Capitalization

Fishermen organized by marginalized fishermen in localities whose products are marketed


Cooperative either as fresh or processed products

Health Services providing medical, dental and other health services

provide employment and business opportunities to its members and manage it in


Workers Cooperative accordance with cooperative principles
Agrarian Reform
Type Cooperative Bank Dairy Cooperative
Cooperative

engaged in the
developing an appropriate production of fresh
providing a wide range
system of land tenure, land milk which may be
of financial services to
Purpose development, land
cooperatives and their
processed and/or
consolidation or land marketed as dairy
members
management in areas products

In consultation with In consultation with


Authority Department of Agrarian Supervision of BSP the National Dairy
Reform (DAR) Authority

Regulation/ Only one cooperative


At least 15 marginal farmers,
bank may be Fifteen (15) or more
Organizatio majority are agrarian reform
established in each natural persons
n beneficiaries
province

Same as rural banks,


private development
Marketing of products, public bank, commercial
Privileges services banks, and all other
banks to rediscount
notes with the BSP
Financial Service Housing
Type Electric Cooperative
Cooperative Cooperative

assist or provide
power generation utilizing savings and credit
access to housing for
Purpose new and renewable energy services and other
the benefit of its
sources financial services
regular members

co-owned and
Energy Regulatory
supervision of BSP controlled by its
Authority Commission and Department
members
of Energy

-Fifteen (15) or more


Regulation/ deposit liabilities of the
natural persons.
financial service
Organizatio cooperatives shall not
-co-owned and
n controlled by its
be insured by the PDIC
members

minimum paid-up
Capitalizatio Five Million Pesos
capitalization of
n (P5,000,000.00)
P 15, 000.00
Transport Water Service
Type Insurance Cooperative
Cooperative Cooperative

own, operate and


land and sea
manage waters
transportation, limited to
insuring life and poverty of systems for the
small vessels, as
Purpose cooperatives and their
defined or classified
provision and
members distribution of potable
under the Philippine
water for its members
maritime laws
and their households

In consultation with the In consultation with


In consultation of Insurance
Authority Commission
DOTC, LTO, LTFRB, the NWRB, the
MARINA, OTC LWUA,

Regulation/
Fifteen (15) or more duly Fifteen (15) or more
Organizatio registered cooperatives natural persons
n

minimum capitalization of at
minimum paid-up minimum paid-up
Capitalizatio least 50% of those provided
capitalization of capitalization of
n under the Insurance Code of
P 15, 000.00 P 15, 000.00
the Philippines
MERGER AND
CONSOLIDATION OF
COOPERATIVES
Merger Consolidation

Two or more cooperatives belonging to


same category unite
Surviving cooperative Forms a new
remains in being cooperative

One of the cooperatives None of the old


survive and the other cooperatives surviving
cooperatives do not
survive
• Two or more cooperatives may merge into
a single cooperative
• Approved by three-fourths (3/4) vote of all
members with voting rights
• Effective upon the issuance of the
Certificate of Merger or Consolidation by
the Authority
Effects of Merger and
Consolidation
• Constituent cooperatives shall become
single cooperative
• The separate existence of
cooperatives shall cease, except that
of the surviving cooperative
• Surviving cooperative shall possess all
the rights, privileges, immunities and
powers
• Shall possess all the assets, rights,
privileges, immunities and franchises
of each of the constituent
cooperatives
• Surviving cooperative shall be
responsible for all the liabilities and
obligations of each of the constituent
cooperatives
Parties to the Merger or
Consolidation

• Only cooperatives belonging to the same


category can be parties to merger or
consolidation
Procedure for merger or consolidation
Duly approved board resolution

Execution of a Memorandum of Understanding

Formulation of Plan

Presentation and Approval of the Proposal and Plan

Posting/ Publication of the Notice

Written Notification to Creditors

Filing with the Authority the required documents for


registration

Issuance of Certificate of Registration by the Authority


DISSOLUTION OF
COOPERATIVES
Modes Of Dissolution
1. Voluntary Dissolution where no creditors
are affected
2. Voluntary Dissolution where creditors are
affected
3. Involuntary Dissolution
4. Dissolution by order of the Cooperative
Development Authority
5. Dissolution by failure to organize and
operate
6. Cooperative Liquidation
Voluntary Dissolution
NO CREDITORS ARE CREDITORS ARE
AFFECTED AFFECTED
Petition for  Majority vote of the board of  Filed with the Cooperative
dissolution directors Development Authority
 Majority vote of the board of
 Affirmative vote of at least two- directors or other officers
thirds (2/3) of all the members managing its affairs
with voting rights  Affirmative vote of at least
two-thirds (2/3) of all the
members with voting rights

Meeting  Upon call of the directors  Called for that purpose

Notice of sent to each stockholder or  Objections thereto may be


member either by registered filled by any person, which date
Meeting mail or by personal delivery at shall not be less than thirty (30)
least thirty (30) days prior nor more than sixty (60) days
after the entry of the order
NO CREDITORS ARE CREDITORS ARE AFFECTED
AFFECTED
Newspaper  Notice of time, place and object  Published at least once a week
published in of the meeting shall be for three (3) consecutive weeks
the published for three (3)
municipality consecutive weeks
of principal
office
If No  Newspaper of general  Newspaper of general
Newspaper circulation in the Philippines circulation in the Philippines,
available in and a similar copy shall be
the posted for three (3) consecutive
municipality weeks in three (3) public places
in the municipality or city.
Dissolution  The Cooperative Development  The order of dissolution:
Authority shall issue the 1. The assets and liabilities of the
certificate of dissolution. cooperative;
2. The claim of any creditor;
3. The number of members; and
4. The nature and extent of the
interests of the members of the
cooperative.
Involuntary Dissolution

Violation of any law, regulation or


provisions of its by-laws

 Insolvency
Dissolution By Order Of The
Authority
(REViCoM)
(1) Registration by fraud
(2) Existing for an illegal purpose
(3) Willful Violation of the provisions of this
Code or its by- laws
(4) Failure to operate on a Cooperative
basis
(5) Failure to meet the required Minimum
number of members in the cooperative
Dissolution By Failure To
Organize And Operate
 If a cooperative has not commenced
business and operation within two
years after the date shown on its
certificate of registration

 If a cooperative has not carried on


business for two consecutive years
Cooperative Liquidation
• Every cooperative is given 3 years to convey
all of its property
• Any asset distributable to any creditor who is
unknown shall be given to the federation,
union or association to which the cooperative
is affiliated or to the movement.
• No cooperative shall distribute any of its
assets or property except upon lawful
dissolution and after payment of all its debts
and liabilities.