According to Article 3, Chapter 1 of Republic Act (R.A.) 9520, also known as the Philippine Cooperative Code of 2008 (hereafter referred to as the Code), a cooperative is “an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles.” The Cooperative Development Authority (CDA) is the regulating body of the cooperatives.
General Concepts and Principles
A cooperative should not be confused with an association. An association is a group of persons banded together for a specific purpose (en.wikipedia.org). On the other hand, a cooperative is a form of an association which is business-oriented. Associations need not be business-oriented (for they may be formed for purposes other than business, such as civic purposes). Article 4 of the Code provides that every cooperative shall conduct its affairs in accordance with Filipino culture, good values and experience and the universally accepted principles of cooperation which include, but are not limited to, the following: 1. Voluntary and Open Membership - Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, cultural, political or religious discrimination. 2. Democrative Member Control - Cooperatives are democratic organizations that are controlled by their members who actively participate in setting their policies and making decisions. Men and women serving as elected representatives, directors or officers are accountable to the membership. In primary cooperatives, members have equal voting rights of one-member, one-vote. Cooperatives at other levels are organized in the same democratic manner. B. Principles
3. Member Economic Participation - Members contribute equitably to, and democratically control, the capital of their cooperatives. At least part of that capital is the common property of the cooperative. They shall receive limited compensation or limited interest, if any, on capital subscribed and paid as a condition of membership. Page 1 of 19
AC 525, 6:30-7:30, MWF
4. Members allocate surpluses for any or all of the following purposes: developing the cooperative by setting up reserves, part of which should at least be indivisible; benefitting members in proportion to their patronage of the cooperative's business; and, supporting other activities approved by the membership. 5. Autonomy and Independence - Cooperatives are autonomous, self-help organizations controlled by their members. 7. Education, Training and Information - Cooperatives shall provide education and training for their members, elected and appointed representatives, managers, and employees, so that they can contribute effectively and efficiently to the development of their cooperatives. 8. Cooperation Among Cooperatives - Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures. 9. Concern for Community - Cooperatives work for the sustainable development of their communities through policies approved by their members. C. Purposes 6. If they enter into agreements with other organizations, including government, or raise capital from external sources, they shall do so on terms that ensure democratic control of their members and maintain their cooperative autonomy.
(Article 6) A cooperative may be organized and registered for any or all of the following purposes: 1. To encourage thrift and savings...