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Online PMES - Cooperative FAQ's


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Online PMES - Cooperative FAQ's

  1. 1. PreMembershipEducationSeminarBLP MULTI-PURPOSE COOPERATIVESeries of 2012 1
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  4. 4. A cooperative is an autonomous and duly registeredassociation of persons, with a common bond ofinterest, who have voluntarily joined together to achievetheir social, economic and cultural needs andaspirations by making equitable contributions to thecapital required, patronizing their products and servicesand accepting a fair share of risks and benefits of theundertaking in accordance with the universallyaccepted cooperative principles. 4
  5. 5. The primary objective of every cooperative is to helpimprove the quality of life of its members. Towards thisend, the cooperative shall aim to:(a) Provide goods and services to its members to enablethem to attain increasedincome, savings, investments, productivity, andpurchasing power, and promote among themselvesequitable distribution of net surplus through maximumutilization of economies of scale, cost-sharing and risk-sharing; 5
  6. 6. b) Provide optimum social and economic benefits to itsmembers;(c) Teach them efficient ways of doing things in acooperative manner;(d) Propagate cooperative practices and new ideas inbusiness and management; 6
  7. 7. e) Allow the lower income and less privileged groups toincrease their ownership in the wealth of the nation;and(f) Cooperate with the government, other cooperativesand people-oriented organizations to further theattainment of any of the foregoing objectives. 7
  8. 8. Cooperatives may fall under any of the following types:(a) Credit Cooperative : is one that promotes andundertakes savings and lending services among itsmembers. It generates a common pool of funds in orderto provide financial assistance and other relatedfinancial services to its members for productive andprovident purposes;(b) Consumer Cooperative : is one the primary purposeof which is to procure and distribute commodities tomembers and non-members; 8
  9. 9. (c) Producers Cooperative : is one that undertakes jointproduction whether agricultural or industrial. It is formedand operated by its members to undertake theproduction and processing of raw materials or goodsproduced by its members into finished or processedproducts for sale by the cooperative to its members andnon-members. Any end product or its derivative arisingfrom the raw materials produced by its members, sold inthe name of and for the account of thecooperative, shall be deemed a product of thecooperative and its members; 9
  10. 10. (e) Service Cooperative : is one which engages inmedical and dentalcare, hospitalization, transportation, insurance, housing, labor, electric light andpower, communication, professional and other services;(f) Multi-Purpose Cooperative : combines two (2) ormore of the business activities of these different types ofcooperatives; 10
  11. 11. (g) Advocacy Cooperative : is a primary cooperativewhich promotes and advocates cooperativism amongits members and the public through socially-orientedprojects, education and training, research andcommunication, and other similar activities to reach outto its intended beneficiaries;(h) Agrarian Reform Cooperative : is one organized bymarginal farmers majority of which are agrarian reformbeneficiaries for the purpose of developing anappropriate system of land tenure, landdevelopment, land consolidation or land managementin areas covered by agrarian reform; 11
  12. 12. (i) Cooperative Bank : is one organized for the primarypurpose of providing a wide range of financial servicesto cooperatives and their members;(J) Dairy Cooperative : is one whose members areengaged in the production of fresh milk which may beprocessed and/or marketed as dairy products;(k) Education Cooperative : is one organized for theprimary purpose of owning and operating licensededucational institutions, notwithstanding the provisions ofRepublic Act No.9155, otherwise known as theGovernance of Basic Education Act of 2001; 12
  13. 13. (l) Electric Cooperative : is one organized for the primarypurpose of undertaking power generation, utilizingrenewable sources, including hybrid systems, acquisitionand operation of sub transmission or distribution to itshousehold members;(m) Financial Service Cooperative : is one organized forthe primary purpose of engaging in savings and creditservices and other financial services;(n) Fishermen Cooperative : is one organized bymarginalized fishermen in localities whose products aremarketed either as fresh or processed products; 13
  14. 14. (o) Health Services Cooperative : is one organized forthe primary purpose of providing medical, dental, andother health services;(p) Housing Cooperative : is one organized to assist orprovide access to housing for the benefit of its regularmembers who actively participate in the savingsprogram for housing. It is co-owned and controlled by itsmembers;(q) Insurance Cooperative : is one engaged in thebusiness of insuring life and property of cooperativesand their members; 14
  15. 15. (r) Transport Cooperative : is one which includes landand sea transportation, limited to small vessels, asdefined or classified under the Philippine maritimelaws, organized under the provisions of RA 9520;(s) Water Service Cooperative : is one organized toown, operate and manage waters systems for theprovision and distribution of potable water for itsmembers and their households; 15
  16. 16. (t) Workers Cooperative : is one organized byworkers, including the self-employed, who are at thesame time the members and owners of the enterprise. Itsprincipal purpose is to provide employment andbusiness opportunities to its members and manage it inaccordance with cooperative principles; and(u) Other types of Cooperatives : as may be determinedby the Authority. 16
  17. 17. Cooperative shall be categorized according tomembership and territorial consideration. In terms ofmembership, cooperatives shall be categorized into:Primary-the members of which are natural persons.Secondary-the members of which are primaries.Tertiary-the members of which are secondarycooperatives. 17
  18. 18. Thus, those with cooperative memberships areconsidered federations or unions as the case may be. Interms of territory, cooperatives shall be categorizedaccording to areas of operation which may or may notcoincide with the political subdivisions of the country.Those organized by minors shall be considered alaboratory cooperative and must be affiliated with aregistered cooperative. It is governed by specialguidelines promulgated by the CDA. 18
  19. 19. A cooperative has two kinds of members: regularmembers and associate members.A regular member is one who has complied with all themembership requirements and entitled to all the rightsand privileges of membership as stated in theCooperative Code and the cooperative by laws.An associate member has no right to vote and be votedupon and is entitled only to such rights and privilegesprovided by the cooperatives by laws. 19
  20. 20. Cooperative registered under R.A. 9520 can enjoy thefollowing privileges:(1) Cooperatives shall enjoy the privilege of depositingtheir sealed cash boxes or containers, documents or anyvaluable papers in the safes of the municipal or citytreasurers and other government offices free ofcharge, and the custodian of such articles shall issue areceipt acknowledging the articles received dulywitnessed by another person; 20
  21. 21. (2) Cooperatives organized among governmentemployees, notwithstanding any law or regulation to thecontrary, shall enjoy the free use of any available spacein their agency, whether owned or rented by theGovernment;(3) Cooperatives rendering special types of services andfacilities such as cold storage, iceplant, electricity, transportation, and similar services andfacilities shall secure a franchise therefor, and suchcooperatives shall open their membership to all personsqualified in their areas of operation; 21
  22. 22. (4) In areas where appropriate cooperatives exist thepreferential right to supply government institutions andagencies rice, corn and other grains, fish and othermarine products meat, eggs, milk, vegetables, tobaccoand other agricultural commodities produced by theirmembers shall be granted to the cooperativesconcerned;(5) Preferential treatment in the allocation of fertilizersand in rice distribution shall be granted to cooperativesby the appropriate government agencies; 22
  23. 23. (6) Preferential and equitable treatment in theallocation or control of bottomries of commercialshipping vessels in connection with the shipment ofgoods and products of cooperatives;(7) Cooperatives and their federations, such as marketvendor cooperatives, shall have preferential rights inmanagement of public markets and/or lease of publicmarket facilities, stall or spaces; 23
  24. 24. (8) Credit cooperatives and/or federations shall beentitled to loans, credit lines, rediscounting of their loannotes, and other eligible papers with the DevelopmentBank of the Philippines, the Philippine National Bank, theLand Bank of the Philippines and other financialinstitutions except the Central Bank of the Philippines;(9) Cooperatives transacting business with theGovernment of the Philippines or any of its politicalsubdivisions or any of its agencies orinstrumentalities, including government-owned andcontrolled corporations shall be exempt from pre-qualification bidding requirements; and 24
  25. 25. (12) shall have the preferential right in the managementof the canteen and other services related to theoperation of the educational institution where they areemployed: Cooperatives organized by faculty membersand employees of educational institutions Provided, Thatsuch services are operated within the premises of thesaid educational institution; and 25
  26. 26. (13) The appropriate housing agencies and governmentfinancial institutions shall create a special window forfinancing housing projects undertaken bycooperatives, with interest rates and terms equal to, orbetter than those given for socialized housing projects.This financing shall be in the form of blanket loans toqualified cooperatives, without need for individualprocessing. 26
  27. 27. Organizing a cooperative can be complex and simple.It requires an understanding of the basic needs of theprospective cooperative members. It demandspatience from the organizer who must make thecooperatives long-term goals and objectives, and itsvisions a real part of the members lives.But it can be too easy because the Cooperative Codeof the Philippines (RA 6938) has devised very clear-cutsteps for the cooperative organizer and members. Thefollowing are the basic information that the prospectivemembers should understand before organizing acooperative. 27
  28. 28. There are nine (9) stepssuggested in setting up acooperative. 28
  29. 29. FIRST. Get organized. You must have at least 15members to do that. At once determine the commonproblems you would want solved and the basic needsyou would want provided for through a cooperative.You may want to include increasing yourproduction, marketing your produce, creditassistance, power generation, banking or insurance andother similar needs. 29
  30. 30. Determining your problems and needs will also help youclassify the kind of cooperative you will be organizing.Even before a cooperative is set up, a dedicated coregroup people who will do all the organizational andpaper works is a must. From this core group, workingcommunities may be formed to set things moving. Thesecommittees may includemembership, finance, executive, secretariat to name afew. 30
  31. 31. SECOND. Reserved your proposed cooperative name.Secure and fill up Cooperative Name ReservationRequest Form (CNRRF). This must be submitted to CDACentral Office or any of its Extension Office. Areservation fee shall apply. 31
  32. 32. THIRD. Prepare a general statement called aneconomic survey. Economic Survey is a generalstatement describing, among others, the structure andpurposes of the proposed cooperative. The structureand actual staffing pattern shall include a bookkeeper.This should indicate the area of operation, the size ofmembership and other pertinent data in a formatprovided by the Authority. 32
  33. 33. FOURTH. Prepare the cooperatives by-laws. The by-lawscontain the rules and regulations governing theoperation of the cooperative. 33
  34. 34. FIFTH. Prepare the articles of cooperation. Mandatorycontents of the articles of cooperation are thefollowing:(a) the name of the cooperative, which must includethe word "cooperative";(b) the purpose or purposes and scope of business forwhich the cooperative is to be registered;(c) the term of existence of cooperative; 34
  35. 35. (d) the area of operation and the postal address of itsprincipal office;(e) the names, nationality and the postal addresses ofthe registrants;(f) the common bond of membership;(g) The list of names of the directors who shall managethe cooperative; and 35
  36. 36. (h) The amount of its share capital, the names andresidences of its contributors, and a statement ofwhether the cooperative is primary, secondary ortertiary. The articles of cooperation shall be signed byeach of the organizers and acknowledged by them ifnatural persons, and by the chairpersons or secretaries, ifjuridical persons, before a notary public. . 36
  37. 37. SIXTH. Secure bond of accountable officer(s). A suretybond should be secured from a duly registeredinsurance or bonding company. Every director, officerand employee handling funds, securities or property onbehalf of the cooperative shall be covered by this. Theboard of directors shall determine the adequacy of suchbonds. 37
  38. 38. SEVENTH. Execute Treasurers Affidavit. A sworn statementof the treasurer elected by the subscribers showing thatat least twenty-five per centum (25%) of the authorizedshare capital has been subscribed, and at least twenty-five per centum (25%) of the total subscription has beenpaid should be executed and to be attached to thearticles of cooperation. The paid-up share capital shallnot be less than Fifteen thousand pesos (P15,000.00).. 38
  39. 39. EIGHTH. Complete the Pre-Membership EducationSeminar (PMES). A prospective member of a primarycooperative must have completed a Pre-MembershipEducation Seminar (PMES). A Certificate of PMES mustbe secured from the training provider. 39
  40. 40. NINTH. Register your cooperative with the CooperativeDevelopment Authority (CDA).. Submit the followingrequired documents in four (4) copies:Four (4) copies each of the Economic Survey, Articles ofCooperation and By-Laws duly notarized;1. Economic Survey;2. Articles of Cooperation and By-Laws;3. Surety bond of accountable officers;4. Treasurers Affidavit;5. Approved Cooperative Name Reservation Slip;6. Certificate of PMES; 40
  41. 41. The Cooperative Development Authority (CDA) is thesole government agency mandated to register all typesof cooperatives. Its main office is located at 827 AuroraBlvd., Immaculate Conception, Quezon City.Prospective cooperatives must submit their applicationto the CDA Extension Office where the principal office ofthe cooperative is located. 41
  42. 42. The following are the amount of fees to be paid for theregistration of cooperatives per CDA per MemorandumCircular 2004-07, Series of 2004:.The initial registration fee to be imposed shall be 1/10 of1% of the authorized share capital or the basic feebelow whichever is higher:. 42
  43. 43. TYPE OF COOPERATIVESBASIC FEESPrimary Cooperatives Php 500.00Seconday Cooperatives Php 2,000.00Tertiary Cooperatives Php 3,000.00Laboratory Cooperatives Php 50.00 43
  44. 44. But it can be too easy because theCooperative Code of the Philippines (RA6938) has devised very clear-cut steps for thecooperative organizer and members. Thefollowing are the basic information that theprospective members should understandbefore organizing a cooperative. 44
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