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AUXI
LIARYMENU

GOVPHMENU

Phi
l
ippi
neSt
andar
dTi
me

Tuesday
,August20,
2019,
4:36:
12PM

YOUAREHERE:HOMERESOURCES I
SSUANCES PHI
LIPPI
NECOOPERATI
VECODE
OF2008 REPUBLI
CACT9520

Tr
anspar
encySeal

i
conf
oi2 Fr
eedom ofI
nfor
mat
ion

i
concoopst
at Cooper
ati
veSt
ati
sti
cs

i
conf
eat
uredcoopsCo-
opSt
ori
es

i
conmast
erl
i
st1 Mast
erl
i
st

i
conpcmt
dpPCDP

i
conr
eser
vename1Reser
veCooper
ati
veName

i
concapr
1 Submi
tCAPRI
S
i
conmc Memor
andum Ci
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ars

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tAccompl
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i
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terCi
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zen'
sChar
ter

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oads1 Downl
oads

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edi
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ions1 Accr
edi
tat
ions

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conj
obv
acanci
es JobVacanci
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ds Bi
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ensi
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QRCDACOQRCDACO

LATESTPOSTS

COOPERATI
VEDEVELOPMENTAUTHORI
TYAYNAKI
KII
SASAPAGDI
RIWANGNG
BUWANNGWI KANGPAMBANSA2019

ADVI
SORY|
KAPANDESALMULTI
PURPOSECOOPERATI
VE

2019MINDANAOPEACEANDNORMALI
ZATI
ONTHROUGHCOOPERATI
VE
DEVELOPMENT(MPNCD2019)

ADVI
SORY|
RICEI
MPORTATI
ON

ADVI
SORY|
CORANDPERMI
TSFORGAMBLI
NG

CHI
EFCOOPERATI
VEDEVELOPMENTSPECI
ALI
ST(
SG-
24)

ORDERAGAI
NSTBOARDOFDI
RECTORSANDOTHEROFFI
CERSOFAMVAMC

CDACELEBRATESI
NTERNATI
ONALCOOPERATI
VEDAY,
LAUNCHESCO-
OPFI
LM
FESTI
VAL

CDACENTRALOFFI
CEJOI
NSTHENATI
ONWI
DESI
MULTANEOUSEARTHQUAKEDRI
LL

MC2019-06|
PROCEDURESI
NTHESUBMISSI
ONOFANNUALTAXINCENTI
VEREPORT
PURSUANTTOTHEJOINTADMI
NISTRATI
VEORDERNO.1,
SERI
ESOF2019

REPUBLI
CACT9520
Republ
i
coft
hePhi
l
ippi
nes

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essoft
hePhi
l
ippi
nes

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roMani
l
a

Four
teent
hCongr
ess

SecondRegul
arSessi
on

BegunandheldinMet
roMani
l
a,onMonday
,thet
went
y-ei
ght
hdayofJul
y,t
wo
thousandei
ght
.

Republ
i
cActNo.9520

Febr
uar
y17,
2009

ANACTAMENDINGTHECOOPERATI
VECODEOFTHEPHI
LIPPI
NESTOBEKNOWNAS
THE"
PHI
LIPPI
NECOOPERATI
VECODEOF2008"

Beitenact
edbytheSenat
eandHouseofRepr
esent
ati
vesoft
hePhi
l
ippi
nesi
n
Congressassembl
ed:

Secti
on1.Arti
cl
es1,2,3,4and5ofChapter1onGener
alConcept
sandPri
nci
plesof
Republi
cActNo.6938,other
wiseknownasthe"
Cooper
ati
veCodeofthePhi
li
ppines,
"
areherebyamendedtoreadasfol
lows:

CHAPTERI

GENERALCONCEPTSANDPRI
NCI
PLES
"ARTI
CLE1.Ti
tl
e.-Thi
sActshal
lbeknownast
he"
Phi
l
ippi
neCooper
ati
veCodeof
2008"
.

"ART.2.Decl arat
ionofPol i
cy.
-Itisthedeclaredpol i
cyoft
heStatetofostert
hecreati
on
andgr owthofcooper ativesasapr act
icalvehicl
ef orpr
omoti
ngself-
rel
ianceand
harnessingpeopl epowert owardstheattainmentofeconomicdev el
opmentandsoci al
j
ustice.TheSt ateshallencouragetheprivatesectortounder
taketheactualf
ormation
andor ganizati
onofcooper ati
vesandshal lcreateanatmospherethati
sconduciveto
thegrowt handdev elopmentoft hesecooper ati
ves.

"Towardt hisend,
theGov er
nmentandal li
tsbranches, subdiv
isions,i
nst r
umentalit
ies
andagenci esshallensur
etheprovi
sionoftechnicalguidance,financi
al assi
stanceand
otherservicestoenablesai
dcooperati
vestodev elopintoviableandr esponsive
economi centerpr
isesandther
ebybringaboutast rongcooper ativemov ementt hatis
freefr
om anycondi ti
onsthatmighti
nfri
ngeupont heaut onomyoror ganizat
ional
i
nt egr
it
yofcooper ati
ves.

"Furt
her,t
heStater ecogni
zestheprinci
pleofsubsidiari
tyunderwhichthecooper
ati
ve
sectorwil
lini
ti
ateandr egulat
ewithi
ni t
sownr ankst hepromotionandorgani
zati
on,
trai
ningandreserach,auditandsupportserv
icesrelati
vetocooperati
veswith
governmentassistancewher enecessary.

"ART.3.Gener alConcepts.-Acooper ati

veisanaut onomousanddul yregist
ered
associat
ionofper sons,withacommonbondofi nterest,whohav evoluntari
l
yjoined
toget
hert oachievetheirsoci
al,economic,andculturalneedsandaspi rat
ionsbymaki ng
equit
ablecont ri
buti
onst othecapitalr
equir
ed,patronizi
ngtheirproductsandser vi
ces
andaccept ingafairshareofther i
sksandbenefitsoft heundertaki
ngi naccordance
withuniv
er sall
yacceptedcooper at
ivepri
ncipl
es.

"ART.4.Cooperat
ivePri
ncipl
es.-Everycooperat
iveshal
lconducti
tsaf
fai
rsin
accordancewit
hFili
pinocult
ure,goodvaluesandexperi
enceandtheuniv
ersal
ly
accept
edpr
inci
plesofcooper
ati
onwhi
chi
ncl
ude,
butar
enotl
i
mit
edt
o,t
hef
oll
owi
ng:

"
(1)VoluntaryandOpenMember shi
p-Cooperativesar
ev ol
untaryorganizati
ons,open
t
oallpersonsabletouset hei
rservi
cesandwill
ingtoacceptther esponsibi
li
ti
esof
member ship,wi
thoutgender,
social
,raci
al,
cul
tural,
pol
it
icalorrel
igiousdiscri
minati
on.

"(
2)Democr at
iveMemberCont r
ol-Cooper ati
vesar edemocr at
icorgani
zationsthatar
e
contr
oll
edbyt heirmemberswhoact i
velypar ti
cipat
einset t
ingtheirpol
ici
esandmaki ng
deci
sions.Menandwomenser vi
ngasel ectedrepresentati
ves,di
rector
sorof f
icersar
e
accountabletothemember shi
p.Inpri
mar ycooper ati
ves,member shaveequal v
oti
ng
ri
ghtsofone- member,one-
vote.Cooperativesatotherlevel
sareor gani
zedi nthesame
democraticmanner .

"(3)MemberEconomi cPar ti
cipation-Member scontri
buteequitablyt o,and
democr ati
callycontrol
, t
hecapi t
aloftheircooperati
ves.Atleastpartoft hatcapit
ali
s
thecommonpr opertyoft hecooper ati
v e.Theyshallr
eceiveli
mi t
edcompensat ionor
l
imi t
edi nterest,i
fany ,oncapi talsubscribedandpaidasacondi ti
onofmember shi
p.
Member sall
ocatesur plusesf oranyoral loft
hefoll
owingpur poses: dev el
opingthe
cooper ativebyset t
ingupr eserves,partofwhi chshouldatleastbei ndi v
isibl
e;
benef i
tti
ngmember sinpr opor ti
ontothei rpart
onageofthecooper at i
v e'
sbubsiness;
and, suppor ti
ngotheract ivit
iesappr ovedbyt hemember ship.

"(
4)AutonomyandI ndependence-Cooperat
ivesareautonomous,sel
f-
hel p
organi
zati
onscontr
olledbythei
rmember s.I
ftheyenterint
oaggreementswi thot
her
organi
zati
ons,i
ncl
udinggovernment,orr
aisecapit
alfrom ext
ernal
sources, t
heyshal
l
dosoont ermsthatensuredemocrat
iccontroloft
heirmember sandmai ntai
nthei
r
cooperat
iveaut
onomy .

"(5)Educati
on,Traini
ngandI nformati
on-Cooper
ativ
esshal lprovi
deeducationand
trai
ningforthei
rmember s,
electedandappoi
ntedrepresentati
ves,managers,and
empl oyees,
sot hattheycancont r
ibut
eeff
ecti
vel
yandef fi
cientl
ytothedevelopmentof
theircooperat
ives.
"(
6)Cooperat
ionAmongCooper at
ives-Cooperat
ivesser
vet
heirmembersmost
eff
ecti
vel
yandstrengt
henthecooperativ
emov ementbywor
kingtoget
hert
hroughl
ocal
,
nati
onal
,regi
onal
andinter
nati
onalstructur
es.

(
7)Concer
nforCommunity-Cooperat
ivesworkf
ort
hesust
ainabl
edev
elopmentof
t
hei
rcommuniti
est
hroughpoli
ciesapprovedbyt
hei
rmembers.

"
ART.5.Def
ini
ti
onofTer
ms.Thef
oll
owi
ngt
ermsshal
lmean:

"(
1)Memberi ncl
udesaper
soneit
hernatur
alorj
uri
dicalwhoadher
ingt
othepr
inci
ples
setfor
thinthi
sCodeandintheAr
ticl
esofCooper
ati
v e,
hasbeenadmit
tedbyt
he
cooperat
iveasmember;

"(
2)Gener alAssembl yshall meant hef ul
lmember shipofthecooper ati
veduly
assembledf orthepur poseofexer cisingallt
her i
ghtsandper for
mi ngallt
heobligat
ions
pert
aini
ngt ocooper ativ
es, asprovidedbyt hisCode, i
tsart
iclesofcooper ati
onand
byl
aws: Provided,Thatf orcooperativeswithnumer ousanddi spersedmember ship,the
generalassembl ymaybecomposedofdel egateselectedbyeachsect or,
chapteror
di
stri
ctoft hecooper ati
v ei
naccor dancewi ththerulesandr egulationsofthe
Cooperati
v eDev el
opmentAut hori
ty;

"(
3)Boar
dofDi r
ectorsshal
lmeanthatbodyentr
ustedwiththemanagementoft
he
aff
air
softhecooperati
veunderi
tsart
icl
esofcooperat
ionandbyl
aws;

"(4)Commi t
teeshal
lrefert
oanybodyentr
ustedwit
hspeci
ficf
uncti
onsand
responsibi
l
iti
esunderthebylawsorr
esol
uti
onofthegener
alassemblyort
heboar
dof
direct
ors;
"
(5)Ar
ticl
esofCooperat
ionmeansthear
ticl
esofcooper
ati
onr
egi
ster
edundert
his
Codeandincl
udesaregist
eredamendmentther
eof;

"(
6)Byl
awsmeanst
heby
lawsr
egi
ster
edundert
hisCodeandi
ncl
udesanyr
egi
ster
ed
amendmentt
her
eof
;

"(
7)Regist
rat
ionmeanstheoper
ati
veactgr
ant
ingjur
idi
calper
sonal
i
tyt
oapr
oposed
cooper
ativ
eandisevi
dencedbyacert
if
icat
eofregi
str
ati
on;

"
( 8)Cooper ati
veDev
elopmentAuthor
it
yr ef
erst
othegover
nmentagencyinchar
geof
ther egi
str
at i
onandregul
ati
onofcooperati
vesassuchher
einaf
terr
efer
redt
osthe
Aut hori
ty;

"
(9)Uni
ver
sal
l
yAcceptedPr i
nci
plesmeanst
hatbodyofcooper
ati
vepr
inci
plesadher
ed
t
owor l
dwi
debycooperat
ives;

"(10)Representat
iveAssembl ymeanst heful
lmember shi
pofabodyofrepresentat
ives
electedbyeachoft hesectors,chapterordi
str
ictothecooper
ativ
edulyassembledfor
thepur poseofexerci
singsuchpower sl
awful
lydelegat
eduntothem byt
hegeneral
assembl yinaccordancewithitsbylaws;

"(
11)Off
icer
soft heCooper at
iveshalli
ncl
udet hemembersoftheboardofdir
ectors,
membersoft hedif
fer
entcommi tt
eecreatedbythegener
alassembly
,generalmanager
orchi
efexecuti
veoffi
cer,secretar
y,t
reasurerandmembersholdi
ngotherposi
tionsas
maybepr ovi
dedforintheirbylaws;

"(12)SocialAudi
tisaprocedurewherei
nt hecooperati
veassessesitssoci
alimpactand
ethical
per f
ormancev i
s-a-
visit
sstat
edmi ssi
on,vi
sion,goalsandcodeofsocial
responsibil
it
yforcooperati
vestobeestabli
shedbytheAut hori
tyi
nconsult
ationwit
h
thecooper ati
vesect
or.Itenabl
esthecooperati
vetodev el
opapr ocesswherebyi
tcan
accountfori
tssoci
alperf
ormanceandevaluateit
simpacti
nthecommuni
tyandbe
accountabl
efori
tsdecisi
onsandacti
onstoitsregul
armembers;

"(
13)Per f
ormanceAuditshal
lref
ertoanauditontheeffi
ciencyandef
fect
ivenessoft
he
cooperati
veasawhole;it
smanagementandof f
icer
s;anditsvari
ousr
esponsibi
li
ty
center
sasbasisforimprovi
ngindiv
idual
team oroveral
lperfor
manceandfor
object
ivel
yinf
ormingthegeneral
member shi
ponsuchper formance;

"(
14)ASingl
e-Li
neorSingle-
PurposeCooperat
iveshall
incl
udecooper
ati
veunder
taki
ng
acti
vi
ti
eswhicharer
elatedtoit
smai nl
ineofbusinessorpurpose;

"(
15)Serv i
ceCooperati
vesarethosewhi chprovi
deanytypeofserv
icetoit
smember s,
i
ncludingbutnotl
imitedto,t
ransport,i
nformati
onandcommuni cat
ion,
insurance,
housing,el
ect
ri
c,healthser
vices,educati
on,banki
ng,andsavi
ngsandcredit
;

"(
16)Subsi
diaryCooperati
veref
erstoanyor gani
zati
onallormajori
tyofwhose
membershiporshareholder
scomef rom acooperati
ve,or
ganizedforanyotherpur
pose
di
ffer
entfr
om thatof,andrecei
vestechnical
,manageri
alandfinanci
alassi
stancef
rom,
acooperat
ive,
inaccordancewiththerulesandregul
ati
onsoft heAuthori
ty;
"and

"(
17)Federati
onofCooper ati
vesref
erstothreeormor eprimarycooperati
ves,doi
ngthe
samel i
neofbusiness,or
ganizedatthemuni cipal
,pr
ovi
ncial,
cit
y,speci
al metr
opoli
tan
poli
ti
calsubdi
visi
on,oreconomiczonescr eatedbylaw,regi
ster
edwi t
ht heAuthor
it
yto
undert
akebusinessactiv
iti
esinsupportofitsmember -
cooperati
ves.
"

Sec.2.Ar
ti
cles6,
7,9,
10,11,12,
13,14,
16,
17,18,
20,
21, 23,
24and25ofChapt
erIIon
Organi
zat
ionandRegi
str
ati
onofthesameCodear
eherebyamendedt
oreadasfol
l
ows:

CHAPTERI
I
ORGANI
ZATI
ONANDREGI
STRATI
ON

"ART.6.PurposesofCooper
ativ
es.Acooper
ati
vemaybeor
gani
zedandr
egi
ster
edf
or
anyorallofthefol
l
owingpurposes:

"
(1)Toencour
aget
hri
ftandsav
ingsmobi
l
izat
ionamongt
hemember
s;

"(
2)Togenerat
efundsandext
endcr
edi
ttot
hemember
sforpr
oduct
iveandpr
ovi
dent
purposes;

"
(3)Toencour
ageamongmember
ssy
stemat
icpr
oduct
ionandmar
ket
ing;

"
(4)Topr
ovi
degoodsandser
vicesandot
herr
equi
rement
stot
hemember
s;

"
(5)Todev
elopexper
ti
seandski
l
lsamongi
tsmember
s;

"
(6)Toacqui
rel
andsandpr
ovi
dehousi
ngbenef
it
sfort
hemember
s;

"
(7)Toi
nsur
eagai
nstl
ossesoft
hemember
s;

"
(8)Topromot
eandadv
ancet
heeconomi
c,soci
alandeducat
ional
stat
usoft
he
members;

"(9)Toest
abl
ish,own,leaseoroper
atecooper
ati
vebanks,cooper
ati
vewholesaleand
retai
lcompl
exes,insur
anceandagri
cult
ural
/i
ndust
ri
alprocessi
ngenter
pri
ses,and
publicmar
kets;
"
(10)Tocoor
dinat
eandf
aci
l
itat
etheact
ivi
ti
esofcooper
ati
ves;

"
(11)Toadv
ocat
efort
hecauseoft
hecooper
ati
vemov
ement
s;

"
(12)Toensur
ethev
iabi
l
ityofcooper
ati
vest
hrought
heut
il
izat
ionofnewt
echnol
ogi
es;

"(
13)Toencour
ageandpromoteself
-hel
porsel
f-
empl
oymentasanengi
nef
or
economi
cgrowthandpov
ertyal
lev
iati
on;and

"
(14)Toundert
akeanyandal
l ot
heract
ivi
ti
esf
ort
heef
fect
iveandef
fi
cient
i
mplementat
ionoft
heprovi
sionsofthi
sCode.

"ART.7.Object
ivesandGoal
sofaCooperat
ive.Thepr
imar
yobj
ecti
veofever
y
cooperat
iveist
ohel pi
mprov
ethequal
it
yoflifeofi
tsmember
s.Towardst
hisend,
the
cooperat
iveshallai
mto:

"(a)Pr
ovidegoodsandservi
cestoitsmember stoenablethem t
oattai
nincr
eased
i
ncome, savi
ngs,i
nvest
ments,product
ivi
ty,andpur chasi
ngpower,andpromoteamong
themselvesequi
tabl
edist
ri
buti
onofnetsur plusthroughmaximum util
i
zati
onof
economiesofscale,
cost-
shari
ngandr i
sk-sharing;

"
(b)Pr
ovi
deopt
imum soci
alandeconomi
cbenef
it
stoi
tsmember
s;

"
(c)Teacht
hem ef
fi
ci
entway
sofdoi
ngt
hingsi
nacooper
ati
vemanner
;

"
(d)Pr
opagat
ecooper
ati
vepr
act
icesandnewi
deasi
nbusi
nessandmanagement
;
"
(e)Al
lowt
heloweri
ncomeandl
esspr
ivi
l
egedgr
oupst
oincr
easet
hei
rowner
shi
pint
he
weal
thoft
henati
on;
and

"(
f)Cooperat
ewit
hthegover
nment,ot
hercooper
ati
vesandpeopl
e-or
iented
organi
zat
ionstof
urt
hert
heattai
nmentofanyofthefor
egoi
ngobj
ecti
v es.

"ART.8.Cooper at
ivesNotinRestrai
ntofTr
ade.Nocooperat
iveormethodoract
thereofwhichcompl i
eswi t
hthi
sCodeshallbedeemedaconspiracyorcombinat
ioni
n
restrai
ntoftradeorani l
l
egalmonopoly,
oranatt
empttolessencompetit
ionorfi
x
pricesarbi
trari
lyi
nv i
olat
ionofanylawsoft
hePhil
ippi
nes.

"ART.9.Cooperat
ivePowersandCapaci
ti
es.Acooper
ati
ver
egi
ster
edundert
hisCode
shal
lhavethefoll
owingpowers,
right
sandcapaci
ti
es:

"
(1)Tot
heexcl
usi
veuseofi
tsr
egi
ster
edname,
tosueandbesued;

"
(2)Ofsuccessi
on;

"
(3)Toamendi
tsar
ti
cl
esofcooper
ati
oni
naccor
dancewi
tht
hepr
ovi
sionsoft
hisCode;

"
(4)Toadoptby
lawsnotcontr
aryt
olaw,moral
sorpubl
i
cpol
i
cy,
andt
oamendand
r
epealt
hesamei naccor
dancewit
hthi
sCode;

"(
5)Topur chase,
recei
ve,takeorgrant,hol
d,convey,sel
l
,lease,pl
edge,mortgage,and
otherwisedealwi
thsuchrealandper sonalproper
tyasthetransacti
onofthelawful
affai
rsofthecooperat
ivemayr easonablyandnecessari
lyrequi
re,subj
ecttothe
l
imi t
ati
onsprescr
ibedbylawandt heConst i
tuti
on;
"
(6)Toent
eri
ntodi
vi
si
on,
mer
gerorconsol
i
dat
ion,
aspr
ovi
dedi
nthi
sCode;

"
(7)Tofor
m subsi
diar
ycooper
ati
vesandj
oinf
eder
ati
onsoruni
ons,
aspr
ovi
dedi
nthi
s
Code;

"(8)Toavailofloans, beenti
tl
edtocreditandtoacceptandr eceivegrants,donati
ons
andassistancef rom forei
gnanddomest icsources,subjecttothecondi t
ionsofsaid
l
oans, cr
edits,grants,donati
onsorassistancethatwillnotunderminet heautonomyof
thecooperativ
e.TheAut hori
ty,
uponwr it
tenrequest,shallprovi
denecessar yassist
ance
i
nt hedocument ar yrequir
ementsfortheloans,credi
t,grants,donati
onsandot her
fi
nancialsupport;

"(9)Toav ai
lofpreferent
ialri
ghtsgrantedt ocooperat
ivesunderRepublicActNo.7160,
otherwiseknownast heLocal GovernmentCode, andot herl
aws,part
icularl
ythosein
thegr antoff
ranchisestoest abl
ish,construct
,oper
ateandmai ntai
nferries,wharv
es,
mar ketsorslaughter
housesandt oleasepublicuti
l
iti
es, i
ncl
udi
ngaccesst oext
ension
andon- sit
eresearchservicesandf acil
i
tiesrel
atedtoagr i
cul
tur
eandf i
sher yact
ivi
ti
es;

"
(10)Toorgani
zeandoper
ateschool
sinaccor
dancewithRepubli
cActNo.9155,
Gover
nanceofBasi
cEducati
onActof2001andotherpert
inentl
aws;
and

"(
11)Toexerci
sesuchotherpower
sgr
antedbythi
sCodeornecessar
ytocar
ryouti
ts
purposeorpur
posesasstatedi
nit
sAr
ti
clesofcooper
ati
on.

"ART.10.Organizi
ngaPr imaryCooperati
ve.Fi
ft
een( 15)ormor enaturalper
sonswho
areFil
ipi
nocit
izens,oflegalage,havi
ngacommonbondofi nterestandareactual
l
y
resi
dingorworkingintheintendedareaofoperation,mayorgani zeapr i
mary
cooperat
iveunderthisCode: Provi
ded,Thataprospect i
vememberofapr i
mary
cooperat
ivemusthav ecompl etedaPre-Member shipEducationSemi nar(PMES).
"Anynewlyor ganizedprimar
ycooperativemayber egister
edasmul t
ipurpose
cooperati
veonl yaftercompl
iancewiththemi nimum r equi
rementsformul t
ipur
pose
cooperati
vest obesetbyt heAuthori
ty.Asingle-
pur posecooperat
ivemayt ransf
orm
i
ntoamul tipurposeormaycr eatesubsidiar
iesonlyaf t
eratleastt
wo( 2)yearsof
operat
ions.

"ART.11.Economi cSur vey.-Everygroupofi ndivi

dualsorcooperativesint
endingto
form acooperativeundert hi
sCodeshal l
submi ttotheAut hori
tyagener al
statement
descri
bing,amongot her
st hestructur
eandpur posesofthepr oposedcooper ati
ve:
Provi
ded, Thatthest r
uctureandact ualstaf
fi
ngpat ternofthecooper ati
veshalli
nclude
abookkeeper ;Provided,
f urt
her,Thattheyshallnotbeal l
owedt ooper at
ewi t
houtthe
necessarypersonnel andshal l
alsosubmi taneconomi csurvey,i
ndicati
ngthereint
he
areaofoper at
ion,thesizeofmember ship,andot herpert
inentdatainaf or
matpr ovided
bytheAut hori
ty.

"
ART.12.Li
abi
l
ity
.Acooper
ati
vedul
yregi
ster
edundert
hisCodeshal
lhav
eli
mit
ed
l
i
abi
li
ty.

"ART.13.Term.Acooper ati
veshal l
existforaperi
odnotexceedi ngfif
ty(
50)y earsfr
om
thedateofregist
rat
ionunl esssoonerdi ssolv
eorunl esssaidperi
odisextended.The
cooperati
veterm,asor i
ginall
yst at
edi ntheart
icl
esofcooper at
ion,maybeext endedfor
periodsnotexceedi
ngf i
fty(50)y earsinanysingl
ei nstancebyanamendmentoft he
art
iclesofcooperat
ion,inaccor dancewit ht
hisCode: Provi
ded,Thatnoextensioncan
bemadeear l
i
erthanfive( 5)yearspriortotheori
ginalorsubsequentexpi
rydat e/
dates
unlessther
ear ej
ustif
iablereasonsf oranearli
erextensionasmaybedet erminedbyt he
Authorit
y.

"ART.14.Ar ti
clesofCooper at
ion.(1)Al
l cooperati
vesappl y
ingforr
egi
str
ati
onshall
fil
e
withtheAut horit
ythearti
clesofcooperat i
onwhi chshallbesignedbyeachofthe
organizersandacknowl edgedbyt hem ifnaturalpersons,andbythechai
rper
sonsor
secretari
es,ifj
uridi
cal
per sons,beforeanot ar
ypublic.
"
(2)Thear
ti
clesofcooper
ati
onshal
lsetf
ort
h:

"
(a)Thenameoft
hecooper
ati
vewhi
chshal
li
ncl
udet
hewor
dcooper
ati
ve;

"
(b)Thepurposeorpur
posesandscopeofbusi
nessf
orwhi
cht
hecooper
ati
vei
stobe
r
egist
ered;

"
(c)Thet
erm ofexi
stenceoft
hecooper
ati
ve;

"
(d)Thear
eaofoper
ati
onandt
hepost
aladdr
essesofi
tspr
inci
pal
off
ice;

"
(e)Thenames,
nat
ional
i
ty,
andt
hepost
aladdr
essesoft
her
egi
str
ant
s;

"
(f)Thecommonbondofmember
shi
p;

"
(g)Thel
i
stofnamesoft
hedi
rect
orswhoshal
lmanaget
hecooper
ati
ve;
and

"(
h)Theamountofi t
ssharecapi
tal
,thenamesandresi
dencesofi
tscontr
ibut
orsanda
statementofwhet
herthecooper
ati
veispri
mary,
secondar
yortert
iar
yinaccor
dance
withArti
cle23her
eof.

"
(3)Thear
ti
clesofcooperat
ionmayal
socont
ainanyot
herpr
ovi
sionsnoti
nconsi
stent
wit
hthi
sCodeoranyr el
atedlaw.

"
(4)Four(
4)copi
eseachoft
hepr
oposedar
ti
clesofcooper
ati
on,
byl
aws,
andt
he
generalst
atementr
equi
redunderAr
ti
cle11oft
hisCodeshal
lbesubmi
tt
edt
othe
Authori
ty.

"(5)Nocooper ative,
otherthanacooper at
iveunionasdescr i
bedunderArti
cle25hereof
,
shallberegisteredunlessthearti
clesofcooper ati
onisaccompani edwiththebondsof
theaccount ableoffi
cersandaswor nstatementsoft hetr
easurerelect
edbyt he
subscribersshowi ngthatatleastt
went y-f
ivepercentum (25%)oftheauthori
zedshare
capitalhasbeensubscr ibedandatl easttwenty-f
ivepercentum (
25%)oft hetotal
subscripti
onhasbeenpai d:Provi
ded, Thatinnocaseshal lt
hepaid-upsharecapit
albe
l
esst hanFi f
teenthousandpesos( P15, 000.00)
.

"TheAuthori
tyshal
lper
iodi
call
yassesst
her equi
redpai
d-upshar
ecapi
talandmay
i
ncreaseitever
yfiv
e(5)yearswhennecessaryuponconsul
tat
ionwi
ththecooper
ati
ve
sectorandtheNati
onalEconomicandDevelopmentAuthor
it
y(NEDA).

"ART.15.By
laws.(1)Eachcooper
ativ
et ober
egist
eredundert
hisCodeshal
ladopt
byl
awsnotinconsist
entwit
htheprovisi
onsoft
hisCode.Thebylawsshal
lbefi
ledatt
he
samet i
meast heart
icl
esofcooperat
ion.

"
(2)Theby
lawsofeachcooper
ati
veshal
lpr
ovi
de:

"
(a)Thequal
i
ficat
ionsf
oradmissi
ontomembershipandthepaymenttobemadeor
i
nter
estt
obeacqui r
edasacondit
ionsf
ort
heexerciseoft
herightofmember
shi
p;

"
(b)Ther
ight
sandl
i
abi
l
iti
esofmember
shi
p;

"
(c)Theci
rcumst
ancesunderwhi
chmember
shi
pisacqui
red,
mai
ntai
nedandl
ost
;

"
(d)Thepr
ocedur
etobef
oll
owedi
ncasesoft
ermi
nat
ionofmember
shi
p;
"(
e)Thecondit
ionsunderwhi
cht
het
ransf
erofashar
eori
nter
estoft
hemember
sshal
l
bepermi
tted;

"(
f)Ther ulesandpr ocedur
esont heagenda,ti
me,placeandmannerofcall
i
ng,
convening, conduct
ingmeetings,
quor um r
equi
rements,vot
ingsyst
ems,andother
mattersr el
ativetot
hebusinessaf f
air
softhegeneralassembly
,boardofdi
rect
ors,
and
commi ttees;

"(g)Thegeneralconductoftheaffai
rsoft
hecooperat
ive,
incl
udi
ngthepower
sand
dutiesofthegeneralassembly,
theboardofdi
rect
ors,committ
eesandtheof
fi
cer
s,and
theirqual
i
ficat
ionsanddisquali
fi
cati
ons;

"(
h)Themanneri
nwhi
cht
hecapi
tal
,mayber
aisedandt
hepur
posesf
orwhi
chi
tcanbe
uti
li
zed;

"
(i
)Themodeofcust
odyandofi
nvest
mentofnetsur
plus;

"
(j
)Theaccount
ingandaudi
ti
ngsy
stems;

"
(k)Themannerofl
oani
ngandbor
rowi
ngi
ncl
udi
ngt
hel
i
mit
ati
onst
her
eof
;

"
(l
)Themet
hodofdi
str
ibut
ionofnetsur
plus;

"
(m)Themannerofadopt
ing,
amendi
ng,
repeal
i
ng,
andabr
ogat
ingby
laws;

"
(n)Aconci
l
iat
ionormedi
ati
onmechani
sm f
ort
heami
cabl
eset
tl
ementofdi
sput
es
amongmember
s,di
rect
ors,
off
icer
sandcommi
tt
eemember
soft
hecooper
ati
ve;
and

"
(o)Ot
hermat
ter
sinci
dentt
othepur
posesandact
ivi
ti
esoft
hecooper
ati
ve.

"ART.16.Regi st r
ation.Acooper ati
v eformedandor gani zedundert hisCodeacqui res
j
uridi
cal personalityfrom thedat et heAut hori
tyissuesacer t
if
icateofregistrat
ionunder
i
tsofficialseal.Allappl i
cationsf orr egist
rati
onshal lbef inall
ydisposedofbyt he
Authorit
ywi thinaper i
odofsi xt y(60)day sf r
om t hefil
ingt hereof,otherwisethe
appli
cationi sdeemedappr ov ed, unlessthecauseoft hedel ayisattri
butabletothe
appli
cant :Provided, Thatincaseofadeni aloftheappl icationforregistrati
on,anappeal
shall
li
ewi ththeOf ficeoft hePr esidentwi t
hinninety(90)day sfrom receiptofnoti
ceof
suchdeni al:Provided, fur
ther, Thatf ail
ureoft heOf f
iceoft hePr esidenttoactont he
appeal wit
hi nninety( 90)day sf r
om t hefi
li
ngt hereofshal lmeanappr ovalofsaid
appli
cation.

"ART.17.Certi
fi
cateofRegist
rat
ion.Acert
if
icat
eofregi
str
ati
onissuedbytheAuthor
ity
underit
soffici
alsealshal
lbeconclusi
veevi
dencethatt
hecooperati
vet
herein
mentionedisdulyregi
ster
edunlessiti
sprovedthatt
heregi
str
ati
onthereofhasbeen
cancell
ed.

"ART.18.AmendmentofAr t
iclesofCooperat
ionandBy l
aws.Unlessotherwise
prescr
ibedbythi
sCodeandf orlegit
imat
epur poses,
anyprovi
sionormat terstatedi
n
theart
icl
esofcooperati
onandbyl awsmaybeamendedbyt wo- t
hir
ds(2/3)v oteofal
l
themember swit
hv ot
ingri
ghts,wit
houtprej
udicetotheri
ghtofthedissenti
ng
member stoexer
cisethei
rri
ghttowi t
hdr
awt heirmembershi
punderAr ti
cle30.

Botht heori
ginal
andamendedar ti
clesand/ orby l
awsshallcont
ainallprovisi
ons
requi
redbyl awtobesetouti nt
hear t
iclesofcooper ati
onandbyl aws.Amendment s
shallbeindi
catedbyunderscori
ngorot herwiseappropriat
elyi
ndicati
ngthechangeor
changesmadeandacopyoft heamendedar ti
clesoramendedby l
awsdul ycert
if
ied
underoat hbythecooper
ativesecr
etaryandamaj or
ityoft
hedirector
sst at
ingthefact
thatsaidamendmentoramendment st othearti
clesofcooperationand/orby l
awshave
beendulyappr ov
edbyt herequi
redvot
eofthemember s.All
amendment stothearti
cle
ofcooperati
onand/ orbyl
awsshallbesubmitt
edt ot
heAuthori
ty.Theamendment s
shall
takeeffectuponitsapproval
bytheauthori
tyorwi
thi
nthir
ty(30)daysfr
om the
dateoffi
li
ngt hereofi
fnotacteduponbytheAuthori
tyf
oracausenotat t
ri
butabl
eto
thecooperat
ive.

"ART.19.Contract
sExecutedPriort
oRegi str
ati
onandEf f
ectsThereof.Cont
racts
execut
edbet weenpri
vatepersonsandcooper ati
vespri
ortotheregist
rati
onofthe
cooperat
iveshallr
emainvali
dandbi ndingbetweentheparti
esanduponr egist
rat
ionof
thecooperat
ive.Afor
mal wri
ttencontractshal
lbeadoptedandmadei nthe
cooperat
ive'
snameoroni tsbehalfpri
ortoitsregi
str
ati
on.

"ART.20.Divisi
onofCooper ati
ves.Anyregist
eredcooper ati
vemay ,byar esolut
ion
approvedbyav ot
eoft hree-
fourths(3/4)ofallthemember swi thvoti
ngrights,present
andconst i
tuti
ngaquor um,resolvet
odi vi
deitselfintothetwo( 2)ormor ecooper ati
ves.
Thepr ocedureforsuchdi vi
sionshallbeprescri
bedi nt heregul
at i
onsoftheAut horit
y:
Provi
ded, Thatallt
her equi
rement ssetfort
hint hisCodehav ebeencompl i
edwi t
hby
thenewcooper at
ives:Provi
ded,furt
her,Thatnodi v i
sionofacooper ati
veinf r
audof
credi
torsshallbevalid.

"ART.21.MergerandConsoli
dati
onofCooper
ativ
es.(1)Two(2)ormor
ecooperat
ives
maymer geintoasingl
ecooperat
ivewhi
chshall
eitherbeoneoft
heconst
it
uent
cooperat
ivesortheconsol
i
datedcooper
ati
ve.

"(2)Nomer gerorconsol
idati
onshallbev ali
dunl essappr
ovedbyat hr
ee-
fourths(3/4)
voteofall
themember swithvot
ingrights,presentandconsti
tut
ingaquorum ofeachof
theconsti
tuentcooperat
ivesatseparategener alassemblymeeti
ngs.Thedissenti
ng
member sshallhavetheri
ghttoexercisetheirrighttowit
hdr
awt hei
rmember ship
pursuantt
oAr ti
cle30.

"(
3)TheAuthor
it
yshal
li
ssuethegui
del
inesgov
erni
ngtheprocedureofmergeror
consol
i
dat
ionofcooper
ati
ves.I
nanycase,t
hemergerorconsol
idat
ionofcooper
ati
ves.
Inanycase,
themergerorconsoli
dati
onshal
lbeef
fecti
veupont
hei
ssuanceoft
he
cert
if
icat
eofmergerorconsol
idat
ionbytheAut
hori
ty.

"ART.22.Effect
sofMergerandConsol
i
dati
on.Themer
gerorconsol
i
dat
ionof
cooperat
ivesshall
hav
et hefol
l
owingef
fect
s:

"(
1)Theconsti
tuentcooperat
ivesshal
lbecomeasinglecooper
ativ
ewhich,i
ncaseof
merger
,shal
lbet hesur
vivi
ngcooperati
ve,and,
incaseofconsol
idati
on,
shal
lbethe
consol
i
datedcooperati
ve;

"
(2)Thesepar
ateexi
stenceoftheconst
it
uentcooper
ati
vesshal
lcease,
exceptt
hatof
t
hesurvi
vi
ngortheconsoli
datedcooper
ati
ve;

"(
3)Thesurvi
vi
ngortheconsol
idatedcooper
ati
veshallpossessaltheassets,
right
s,
pri
vi
leges,
immuni
ti
esandf r
anchisesofeachoftheconsti
tuentcooper
ativ
es;

"(
4)Thesurvi
vi
ngortheconsol
idatedcooper
ati
veshallpossessallt
heassets,r
ight
s,
pri
vi
leges,
immuni
ti
esandf r
anchisesofeachoftheconsti
tuentcooper
ati
ves;and

"(
5)Thesur vi
vi
ngortheconsol i
datedcooper ati
v eshallberesponsibl
eforall
the
l
iabi
li
ti
esandobl i
gati
onofeachoft heconstituentcooper at
ivesinthesamemanneras
i
fsuchsur vi
vi
ngorconsol i
datedcooperati
vehadi tsel
fincurr
edsuchl i
abi
li
ti
esor
obli
gat
ions.Anyclai
m, acti
onorpr oceedi
ngpendi ngbyoragai nstanysuchconstit
uent
cooperat
ivesmaybepr osecutedbyoragai nstt hesurvi
v i
ngorconsol i
dat
edcooper at
ive,
asthecasemaybe.Nei t
hertherightsofcreditorsnoranyl i
enupont hepropertyofany
suchconstit
uentcooperati
vesshallbeimpair edbysuchmer gerorconsoli
dation.

"
ART.23.TypeandCategor
iesofCooper
ati
ves.(
1)Ty
pesofCooper
ati
vesCooper
ati
ves
mayfal
lunderanyoft
hefoll
owingty
pes:
"(
a)CreditCooper
ati
vei
sonethatpr
omot esandundert
akessavingsandlending
serv
icesamongi t
smembers.I
tgenerat
esacommonpool offundsinordertoprov
ide
fi
nancial
assist
ancetoi
tsmembersforproduct
iveandprov
identpurposes;

"(
b)Consumer
sCooper
ati
vei
soneofthepr
imar
ypur
poseofwhi
chi
stopr
ocur
eand
di
str
ibut
ecommodi
ti
estomembersandnon-
members;

"(c)Pr
oducer sCooper ati
veisonet hatundert
akesj
ointpr oducti
onwhetheragri
cultural
orindustri
al.I
tisf ormedandoper atedbyitsmember stounder t
aketheproducti
onand
processingofr awmat eri
alsorgoodspr oducedbyitsmember sint
ofini
shedor
processedpr oduct sforsalebythecooper ati
vetoi
tsmember sandnon-member s.Any
endpr oductori t
sder ivat
iveari
singf r
om therawmat eri
alsproducedbyitsmember s,
soldinthenameandf ortheaccountoft hecooper
ative,shall
bedeemedapr oductof
thecooper ati
veandi tsmember s;

"
(d)Mar
ket
ingCooperat
iveisonewhichengagesi
nthesuppl
yofpr
oduct
ioni
nput
sto
member
sandmar ket
stheirproduct
s;

"(
e)Serv
iceCooper at
ivei
sonewhichengagesinmedicalanddent
alcare,
hospi
tal
izati
on,t
ransport
ati
on,i
nsur
ance,housi
ng,l
abor,
elect
ri
cli
ghtandpower
,
communi cat
ion,
professi
onalandot
herservi
ces;

"(
f)Mult
ipur
poseCooperat
iveisonewhichcombinest
wo(
2)ormor
eoft
hebusi
ness
acti
vi
ti
esofthesedi
ff
erentt
y pesofcooper
ati
ves;

"(g)AdvocacyCooper at
iveisaprimarycooper
ati
vewhichpr
omotesandadv ocates
cooperati
vism amongi t
smember sandthepubli
cthr
oughsoci
all
y-
orient
edprojects,
educati
onandt r
aini
ng,resear
chandcommuni cati
on,andot
hersi
milaracti
vi
ti
est o
reachouttoitsintendedbenefi
ciari
es;
"(
h)AgrarianReform Cooperati
veisoneorgani
zedbymar gi
nalf
armer
smajori
tyof
whichareagr ar
ianrefor
m benefi
ciar
iesf
orthepurposeofdevel
opi
nganappropr
iat
e
system oflandtenure,l
anddevelopment
,landconsol
idat
ionorl
andmanagementin
areascoveredbyagr ari
anrefor
m;

"(
i)Cooperati
veBankisoneor
ganizedf
orthepr
imar
ypurposeofpr
ovi
dingawi
der
ange
offi
nancialser
vicest
ocooper
ati
vesandthei
rmembers;

"
(j
)Dai
ryCooper
ati
veisonewhosemembersar
eengagedinthepr
oduct
ionoff
resh
mil
kwhichmaybeprocessedand/
ormar
ket
edasdai
ryproduct
s;

"(
k)Educat
ionCooperati
veisoneorganizedfort
heprimarypurposeofowningand
oper
ati
nglicensededucat
ional
inst
itut
ionsnotwi
thst
andingtheprovi
sionsofRepubl
i
c
ActNo.9155,other
wiseknownast heGov er
nanceofBasicEducati
onActof2001;

"(
l)El
ect
ricCooper
ati
veisoneor gani
zedfortheprimarypurposedofundert
aki
ngpower
gener
ati
ons,uti
l
izi
ngrenewableenergysources,i
ncludi
nghy br
idsy
stems,acqui
sit
ion
andoperati
onofsubt
ransmissionordist
ri
butiontoitshousehol
dmember s;

"
(m)Fi
nanci
alServi
ceCooperat
ivei
soneor ganiz
edfort hepr
imar
ypur
poseofengagi
ng
i
nsavi
ngsandcredi
tser
vicesandotherf
inancialser
vices;

"
(n)Fi
shermenCooper
ativ
ei soneorgani
zedbymargi
nal
izedfi
sher
meni
nlocal
i
ties
whoseproduct
sar
emar ketedeit
herasfr
eshorpr
ocessedproduct
s;

"
(o)Healt
hServi
cesCooper
ati
veisoneorgani
zedf
ort
hepr
imar
ypur
poseofpr
ovi
ding
medical
,dent
alandot
herheal
thser
vices;
"(
p)HousingCooperat
ivei
soneorgani
zedtoassistorprovi
deaccesst
ohousi
ngfort
he
benef
itofit
sregul
armemberswhoactivel
ypar
ticipat
einthesavi
ngsprogr
am f
or
housi
ng.Iti
sco-ownedandcont
roll
edbyit
smember s;

"(
q)Insur
anceCooper
ati
vei
soneengagedi
nthebusi
nessofi
nsur
ingl
i
feandpov
ert
yof
cooperat
ivesandt
hei
rmember
s;

"(
r)Transpor
tCooperati
veisonewhichi
ncludesl
andandseat
ranspor
tat
ion,l
imi
tedto
smallvessel
s,asdefi
nedorclassi
fi
edunderthePhi
l
ippi
nemar
iti
melaws,organi
zed
undertheprovi
sionsoft
hisCode;

"(
s)WaterServi
ceCooper
ati
vei
soneorgani
zedtoown,
operat
eandmanagewat
ers
syst
emsf ort
heprovi
si
onanddi
str
ibut
ionofpot
abl
ewaterf
orit
smembersandt
hei
r
househol
ds;

"(
t)Wor ker
sCooperati
veisoneor gani
zedbyworkers,i
ncl
udingthesel
f-empl
oyed,who
areatsamet imethemember sandowner softheenter
pri
se.It
sprinci
palpur
poseisto
provi
deempl oymentandbusinessoppor t
uni
ti
estoitsmembersandmanagei tin
accordancewithcooperat
ivepri
ncipl
es;and

"
(u)Ot
hert
ypesofcooper
ati
veasmaybedet
ermi
nedbyt
heAut
hor
it
y.

"
(2)Cat
egori
esofCooperat
iveCooper
ativ
esshal
lbecat
egor
izedaccor
dingt
o
membershi
pandter
ri
tori
alconsi
derat
ionsasf
oll
ows:

"
(a)I
nter
msofmember
shi
p,cooper
ati
veshal
lbecat
egor
izedi
nto:

"
(i
)Pr
imar
yThemember
sofwhi
char
enat
ural
per
sons;
"
(i
i)Secondar
yThemember
sofwhi
char
epr
imar
ies;
and

"
(i
ii
)Ter
ti
aryThemember
sofwhi
char
esecondar
ycooper
ati
ves;
and

"(
b)I
ntermsoft
err
it
ory
,cooper
ati
vesshall
becategor
izedaccordi
ngtoareasof
oper
ati
onswhi
chmayormaynotcoincidewit
hthepoli
tical
subdiv
isi
onsofthecount
ry.

"ART.24.Funct
ionsofaFeder
ati
onofCooper
ati
ves.Af
eder
ati
onofcooper
ati
vesshal
l
undert
akethefoll
owingf
uncti
ons:

"(
a)Tocarryonanycooperat
iveent
erpr
iseauthor
izedunderArt
icl
e6t hatcomplement
s
augments,
orsuppl
ementsbutdoesnotconf l
i
ct,complet
ewith,norsupplantt
he
busi
nessoreconomicacti
vit
iesofi
tsmember s;

"
(b)Tocar
ryon,encourage,
andassi
steducat
ional
andadv
isor
ywor
krel
ati
ngt
oit
s
membercooper
atives;

"(
c)Torenderservi
cesdesignedtoencouragesimpli
cit
y,eff
ici
ency,andeconomyinthe
conductofthebusi
nessofitsmembercooper ati
vesandt ofacil
i
tat
ethe
i
mplement at
ionofthei
rbookkeepi
ng,accounti
ng,andothersy st
emsandpr ocedur
es;

"
(d)Topr
int
,publ
ish,
andcircul
ateanynewspaperorot
herpubl
i
cat
ioni
nthei
nter
estof
i
tsmembercooperat
ivesandenter
pri
ses;

"
(e)Tocoor
dinat
eandf
aci
l
itat
etheact
ivi
ti
esofi
tsmembercooper
ati
ves;
"(
f)Toent eri
ntoj
ointv
entur
eswit
hnati
onalorint
ernat
ionalcooper
ati
vesofother
countri
esinthemanufact
ureandsal
eofproductsand/orservi
cesi
nthePhil
ippi
nesand
abroad;and

"
(g)Toper
for
m suchot
herf
unct
ionsasmaybenecessar
ytoat
tai
nit
sobj
ect
ives.

"
Afederati
onofcooper
ati
vesmayber
egi
ster
edbycar
ryi
ngoutt
hef
ormal
i
tiesf
or
r
egi
str
ationofacooper
ati
ve.

"Regi
ster
edcooper
ati
vesmayorgani
zeafeder
ati
onaccor
dingt
othet
ypeofbusi
ness
acti
vi
tyengagedi
nbythecooper
ati
ves.

"ART.25.Cooperat
iveUni
ons.Registeredcooper ati
vesandfederationsatthe
appropr
iat
elevelsmayorgani
zeorj oincooperativeunionstorepresenttheint
erestand
welf
areofallt
ypesofcooperat
ivesatt heprovincial
,ci
ty,r
egional
, andnati
onallevel
s.
Cooperati
veunionsmayhavethefol l
owingpurposes:

"
(a)Tor
epr
esenti
tsmemberor
gani
zat
ions;

"
(b)Toacqui
re,
anal
yze,
anddisseminat
e,economic,st
ati
sti
cal
,andotheri
nformati
on
r
elat
ingt
oitsmembersandt
oal lt
ypesofcooperat
iveswit
hini
tsareaofoperati
on;

"(
c)Tosponsorst
udiesintheeconomic,l
egal
,fi
nanci
al,
soci
alandot
herphasesof
cooper
ati
on,andpubli
shtheresul
tst
hereof;

"
(d)Topr
omot
etheknowl
edgeofcooper
ati
vepr
inci
plesandpr
act
ices;
"
(e)Todev
elopt
hecooper
ati
vemov
ementi
nthei
rrespect
ivej
uri
sdi
cti
ons;

"
(f)Toadv
iset
heappr
opr
iat
eaut
hor
it
iesonal
lquest
ionsr
elat
ingt
ocooper
ati
ves;

"(
g)Tor ai
sefundsthroughmembershipf
ees,
duesandcontri
buti
ons,
donat
ions,
and
subsi
diesfrom l
ocalandfor
eignsour
ceswhetherpr
ivat
eorgover
nment;
and

"
(h)Todoandperf
orm suchot
hernon-
busi
nessact
ivi
ti
esasmaybenecessar
ytoat
tai
n
t
heforegoi
ngobj
ect
ives.

"Cooper
ati
veuni
onsmayassi
stthenationalandlocalgov
ernment
sint
hel
att
er'
s
devel
opmentact
ivi
ti
esi
nthei
rrespect
ivejur
isdi
ctions.
"

Sec.3.Ar
ti
cles26,27,28,
29,30,31and32ofChapterI
IIonMember
shi
poft
hesame
Codeareherebyrenumberedandamendedtoread,
asfollows:

CHAPTERI
II

MEMBERSHI
P

"
ART.26.KindsofMember
shi
p.Acooperat
ivemayhavet
wo(
2)ki
ndsofmember
s,t
o
wi
t:(
1)regularmember
sand(
2)associ
atemembers.

"Aregularmemberi sonewhohascompl iedwi t

hal lthemember shi
pr equirementsand
enti
tledtoalltherightsandpri
vil
egesofmember ship.Anassociat
ememberi sonewho
hasnor ighttov otenorbevoteduponandshal lbeent it
ledonl
ytosuchr ightsand
pri
vil
egesast heby l
awsmaypr ovi
de:Prov i
ded,Thatanassoci atewhomeet sthe
minimum r equir
ement sofregul
armember ship,
cont inuestopatr
onizethecooper at
ive
fortwo( 2)years,andsigni
fi
eshis/heri
ntentiontor emai namembershal l be
consi
der
edar
egul
armember
.

"Acooper
ati
veorganizedbymi norsshal
lbeconsideredalaborator
ycooperat
iveand
mustbeaffi
l
iat
edwi thar egi
ster
edcooperat
ive.Alaborat
orycooperat
iveshal
lbe
gover
nedbyspecialguideli
nestobepromulgatedbyt heAuthori
ty.

"ART.27.Gov ernmentOf f
icersandEmpl oyees.(
1)Anyof f
iceroremploy
eeofthe
Authori
tyshallbedisquali
fiedtobeel ectedorappointedtoanyposit
ionina
cooperati
ve:Provided,Thatthedisqualif
icati
ondoesnotext endtoacooper
ati
ve
organi
zedbyt heof fi
cersoremploy eesoft heAuthori
ty.

"(
2)Allel
ecti
veoff
ici
alsoftheGov er
nmentshallbeineli
gibl
etobecomeof fi
cer
sand
dir
ector
sofcooperat
ives:Prov
ided,Thatt
hedisquali
ficat
iondoesnotextendtoapar
ty
l
istrepr
esent
ati
vebeinganof f
icerofacooper
ativeheorsher epr
esents;
and

"(
3)Anygov ernmentempl oyeeoroffi
cial
may ,
inthedischargeofi sduti
esasamember
i
nt hecooperati
v e,
beall
owedbyt heendofof f
iceconcernedt ouseof f
ici
alt
imefor
att
endanceatt hegeneralassembly,
boardandcommi t
teemeet i
ngsofcooperat
ivesas
wellascooperativeseminars,
confer
ences,workshops,technicalmeeti
ngs,andtr
aini
ng
courseslocal
lyorabroad:Provi
ded,Thattheoperat
ionsoft heoffi
ceconcernedarenot
adversel
yaffected.

"ART.28.Applicati
on.Anappl icantformember shi
pshallbedeemedamemberaf t
er
approvalofhismember shi
pbyt heboar dofdir
ectorsandshal lexerci
set heri
ghtsof
memberaf t
erhavingmadesuchpay mentstothecooper ati
vei nrespectt omember ship
oracquiredinter
estint hecooper ati
veasmaybepr escri
bedi ntheby laws.I ncase
member shipisrefusedordeni edbyt heboar dofdirect
ors,anappeal maybemadet o
thegeneralassembl yandt helatter'
sdecisi
onshallbef i
nal.Fort hi
spur pose,the
generalassemblymayoptt ocreateanappeal andgr i
evancecommi t
tee, themembers
ofwhichshal l
serv eforaper i
odofone( 1)yearandshalldecideappeal son
member shipapplicati
onwi thi
nt hir
ty(30)daysuponr eceiptthereof.I
fthecommi tt
ee
fai
lstodecidewi t
hint heprescri
bedper iod,
theappeal i
sdeemedappr ov edinfavorof
t
heappl
i
cant
.

"
ART.29.Liabi
l
ityofMembers.Amembershal
lbeli
abl
efort
hedebt
softhecooper
ati
ve
t
otheextentofhiscont
ri
but
iontot
heshar
ecapit
aloft
hecooper
ati
ve.

"ART.30.Terminati
onofMember ship.(
1)Amemberofacooper ati
vemay ,foranyvali
d
reason,
withdrawhismember shi
pf r
om thecooperat
ivebygivingasixty(60)daynotice
totheboardofdirect
ors.Subj
ecttotheby l
awsofthecooperative,t
hewi t
hdrawing
membershal lbeenti
tl
edt oaref
undofhi sshar
ecapital
contributi
onandal lother
i
nterest
sinthecooperativ
e:Provi
ded,Thatsuchfundshall
notbemadei fuponsuch
paymentthev al
ueoftheassetsofthecooperati
vewouldbel essthant heaggregate
amountofitsdebtsandl i
abi
li
ti
esexclusi
veofhissharecapit
al contr
ibuti
on.

"(2)Thedeathori nsani
tyofamemberi napr i
mar ycooperat
ive,
andt hei
nsolvencyor
dissol
utionofamemberi nasecondaryort er
tiar
ycooperati
vemaybeconsi deredval
i
d
groundsf ort
ermi nat
ionofmember shi
p:Provided,Thati
ncaseofdeat hori
nsanityof
anagr ari
anreform benefi
ciar
y-memberofacooper ati
ve,t
henext-of
-kinmayassume
thedut i
esandr esponsibi
l
iti
esoftheori
ginalmember

"
(3)Member
shi
pinthecooper
ativemaybet er
minatedbyavot
eoft hemaj
ori
tyofal
l
t
hemembersoftheboar
dofdirector
sforanyofthefol
lowi
ngcauses:

"(
a)Whenamemberhasnotpatroni
zedanyoftheservi
cesofthecooper
ati
veforan
unreasonabl
eper
iodoft
imeasmaybeprevi
ouslydet
erminedbytheboardofdi
rect
ors;

"
(b)Whenamemberhascont
inuousl
yfai
l
edt
ocompl
ywi
thhi
sobl
i
gat
ions;

"(
c)Whenamemberhasact
edi
nvi
olat
ionoft
heby
lawsandt
her
ulesoft
he
cooper
ati
ve;
and
"(
d)Foranyactoromi
ssi
oni
njur
iousorpr
ejudi
cial
tot
hei
nter
estort
hewel
far
eoft
he
cooper
ati
ve.

"Amemberwhosemember shiptheboar dofdi rectorsmaywi shtot erminateshall

be
i
nf ormedofsuchi ntendedact i
oninwr it
ingandshal lbegivenanoppor t
unitytobe
hear dbeforethesai dboardmakesi tsdecision.Thedeci sionoft heboar dshallbein
wr i
ti
ngandshal lbecommuni catedinper sonorbyr egisteredmai lt
osai dmemberand
shallbeappeal ablewi t
hinthi
rty(30)day sfrom r eceiptthereoft othegener alassembly
whosedeci si
onshal lbefinal
.Thegener al assembl ymaycr eateanappeal and
grievancecommi tt
eewhosemember sshal lserveforaper iodofone( 1)yearandshall
decideappeal sonmember shipterminati
on.Thecommi tteeisgi venthirt
y(30)days
from receiptther
eoft odecideont heappeal .Fai l
uret odeci dewi t
hint heprescri
bed
per i
od,theappeal isdeemedappr ovedinf avoroft hemember .Pendingadeci si
onby
thegener alassembl y,t
hemember shi
premai nsinf orce.

"ART.31.RefundofInt
erest
s.All
sumscomputedinaccor
dancewiththeby l
awstobe
duefrom acooperat
ivetoaformermembershall
bepaidt
ohim ei
therbyt he
cooperat
iveorbytheapprovedtr
ansf
eree,
asthecasemaybe,i
naccor dancewit
hthi
s
Code."

Sec.4.Arti
cles33,
34,
35,36,37,38,39,
40,
42,42,
43,44,45,
46,47,48,49,
50and51
ofChapterIVonAdminist
rat
ionofthesameCodeareher
ebyrenumberedandamended
toread,asfoll
ows:

CHAPTERI
V

ADMI
NISTRATI
ON

"ART.32.Composi
tionoftheGener
alAssembl
y.Thegener
al assemblyshal
lbe
composedofsuchmember swhoareenti
tl
edt
ov ot
eunderthear t
icl
esofcooper
ati
on
andbylawsofthecooperat
ive.
"ART.32.Powersoft
heGeneral
Assembl
y.Thegeneralassembl
yshallbecomposedof
suchmember swhoareent
it
ledtovot
eundert
hearti
clesofcooper
ati
onandbylawsof
thecooperat
ive.

"ART.33.Power softheGener al
Assembly.Thegeneralassemblyshal
lbethehi ghest
poli
cy-makingbodyoft hecooperati
veandshallexer
cisesuchpowersasar estatedin
thi
sCode, intheart
icl
esofcooper at
ionandinthebylawsofthecooperat
ive.The
generalassemblyshallhavethefoll
owingexcl
usivepowerswhichcannotbedel egate:

"
(1)Todet
ermi
neandappr
oveamendment
stot
hear
ti
clesofcooper
ati
onandby
laws;

"(
2)Toelectorappointthemembersoftheboar dofdir
ectors,andtoremovethem f
or
cause.However,
inthecaseoftheelectr
iccooperat
ivesregist
eredundert
hisCode,
el
ecti
onofthemember softheboardshall
beheldinaccor dancewit
hitsbyl
awsor
el
ecti
onguidel
ineofsuchelectr
iccooperat
ive;
and

"
(3)Toappr
ovedev
elopment
alpl
ansoft
hecooper
ati
ve.

"Subjecttosuchotherprovi
sionsofthi
sCodeandonl yforpur
posesofpr omptand
i
ntell
igentdecisi
on-making,
thegeneralassemblymaybeat hree-
fourt
hs(3/4)voteof
alli
tsmember swi t
hv ot
ingri
ghts,pr
esentandconstit
uti
ngaquorum, del
egatesomeof
i
tspower st
oasmal lerbodyofthecooperati
ve.Thesepowersshallbeenumerated
undert hebyl
awsoft hecooperati
ve.

"ART.34.Meetings.(
1)Aregularmeet i
ngshal lbeheldannuall
ybythegeneral
assemblyonadat efixedi
nthebylaws, orifnotsof i
xed,onanydatedwit
hinninet
y(90)
daysaftert
hecloseofeachfiscalyear:Provided,Thatnoti
ceofregul
armeetingsshal
l
besentinwrit
ing,byposti
ngorpubl i
cati
on, orthr
oughot herel
ectr
oni
cmeanst oall
member sofrecord.
"(
2)Whenev ernecessary,aspecial meet
ingoft hegener alassembl ymaybecal l
edat
anytimebyamaj orit
yv oteoftheboar dofdirectorsoraspr ovidedf ori
ntheby l
aws:
Provided,Thatanot i
ceinwr i
ti
ngshal lbesentone( 1)weekpr i
ort othemeet i
ngtoall
member swhoar eent i
tl
edtovot e.Howev er
,aspeci almeet i
ngshal lbecall
edbyt he
boardofdi r
ectorsaftercompliancewi t
hther equir
ednot icewithinfrom atl
easttenper
centum (10%)oft hetotalmember swhor eentit
ledt ovotetotransactspecifi
cbusiness
coveredbyt hecall.

"I
ftheboardf ai
lstocal l
ar egul
aroraspecial
meet i
ngwi thi
nthegi
venperiod,t
he
Author
ity
,uponpet it
ionoft enpercentum (
10%)ofal lt
hemember softhecooperati
ve
whoar eenti
tl
edt ovot e,andforgoodcauseshown, shall
issueanordert
ot he
peti
ti
onersdirecti
ngthem t ocallameeti
ngoft hegeneralassembl
ybygivi
ngpr oper
noti
ceasr equir
edint hisCodeori nt
hebylaws;

"(
3)Inthecaseofanewlyappr
ovedcooperat
ive,
aspeci
algeneral
assembl
yshal
lbe
cal
led,
asfaraspract
icabl
e,wi
thi
nni
nety(90)daysf
rom suchapprov
al;

"(4)TheAuthorit
ymaycall
aspecialmeetingoft
hecooper
ativ
eforthepurposeof
report
ingtothemember st
heresultofanyexami
nat
ionorotheri
nvest
igat
ionofthe
cooperati
veaffair
s;and

"
(5)Not
iceofanymeet
ingmaybewai
ved,
expr
essl
yori
mpl
i
edl
y,byanymember
.

"ART.35.Quorum.Aquor um shal
lconsistofatleastt
wenty-
fi
v epercentum (25%)ofall
themember sentit
ledtovote.I
nthecaseofcooper ati
vebanks,thequorum shallbeas
provi
dedinArti
cl
e99oft hi
sCode.Inthecaseofel ect
ri
ccooper at
ivesr
egisteredunder
thi
sCode, aquorum, unl
essother
wiseprovidedinthebyl
aws, shal
lconsistoffiv
eper
centum (
5%)ofal l
themember sentit
ledtov ot
e.
"
ART.36.Vot i
ngSyst
em.Eachmemberofapr imarycooperati
veshallhav
eonlyone(1)
vot
e.Inthecaseofmember sofsecondaryort
erti
arycooperati
ves,
theyshal
lhaveone
(
1)basicvoteandasmanyi ncent
ivevotesasprov
idedforinthebylawsbutnotexceed
f
ive(5)vot
es.Thevotescastbythedelegat
esshallbedeemedasv otescastbythe
memberst her
eof
.

"However
,theby
lawsofacooperat
iveot
herthanapr i
mar
ymayprovi
deforvot
ingby
proxy
.Voti
ngbyproxymeansal
lowingadelegat
eofacooper
ati
vetorepr
esentorvot
e
i
nbehalfofanot
herdel
egat
eofthesamecooper at
ive.

"ART.37.Composi ti
onandTerm oft heBoardofDirect
ors.Unl
essot her
wisepr ovi
dedin
theby l
aws,t
hedirecti
onandmanagementoft heaff
air
sofacooper ati
veshallbe
vestedinaboardofdi r
ector
swhi chshallbecomposedofnotl essthatfi
ve(5)nor
mor ethanfi
ft
een( 15)membersel ectedbythegeneralassemblyforaterm oftwo(2)
yearsandshallhol
dof fi
ceunti
ltheirsuccessorsar
edulyelect
edanqual i
fi
ed, orunti
l
dulyremovedforcaused.

"ART.38.Powersoft
heBoar
dofDirect
ors.Theboar
dofdir
ector
sshall
beresponsi
ble
fort
hestrategi
cpl
anni
ng,
dir
ect
ion-
sett
ingandpoli
cy-
for
mulat
ionact
ivi
ti
esofthe
cooperat
ives.

"ART.39.Dir
ectors.(
1)Anymemberofacooper at
ivewhounderthebylawsofthe
cooperati
ve,hastheri
ghttovoteandwhopossessesal
lthequali
fi
cat
ionsandnoneof
thedisqual
if
icat
ionsprovi
dedinthelawsorby
lawsshal
lbeeli
gibl
eforelect
ionas
dir
ector.

"(
2)Thecooper ati
v emay,byresoluti
onofi tsboar dofdi
rectors,admi tasdirect
ors,
or
commi tt
eememberoneappoi ntedbyanyf inancinginst
it
utionfrom whi chthe
cooperati
ver eceivedfi
nancialassist
ancesol elytoprovi
det echnicalknowledgenot
avail
ablewithinitsmember ship.Suchdirectororcommi t
teemembernotbeamember
ofthecooper ati
veandshal lhavenopower s,rights,
norresponsibili
ti
esexceptto
provi
dedt echnicalassi
stanceasr equir
edbyt hecooperati
ve.
"
(3)Themembersoft
heboardofdi
rect
orsshal
lnothol
danyotherposit
iondi
rect
ly
i
nvol
vedi
nthedaytodayoper
ati
onandmanagementofthecooperati
ve.

"(
4)Anypersonengagedinabusinesssi
mil
artothatoft
hecooper
ati
veorwhoinany
wayhasaconfli
ctofint
erestwi
thit,
isdi
squal
i
fiedfr
om el
ect
ionasadir
ect
orofsai
d
cooper
ati
ve.

"ART.40.Meetingoft
heBoardandQuorum Requi
rement.(
1)Int
hecaseofprimary
cooperat
ives,
regul
armeet
ingsoftheboar
dofdirect
orsshal
lbehel
datleastoncea
month.

"(2)Specialmeet
ingsoftheboar dofdi
rect
orsmaybehel datanytimeupont hecal
lof
thechairper
sonoramaj orit
yoft hemembersoftheboard:Prov
ided,Thatwri
tten
noticesofthemeetingspecifyi
ngtheagendaofthespeci
almeetingshallbegivent
oall
member soft heboardatleastone(1)weekbeforet
hesaidmeet i
ng.

"(
3)Amajori
tyoft
hemembersoft
heBoardshal
lconst
it
uteaquor
um ort
heconductof
busi
ness,
unl
esstheby
lawspr
ovedot
herwi
se.

"
(4)Di
rect
orscannotat
tendorv
otebypr
oxyatboar
dmeet
ings.

"ART.41.Vacancyi ntheBoar dofDirect

ors.Anyvacancyintheboardofdi r
ector
s,ot
her
thanbyex pi
rationoft erm,maybef il
ledbythev ot
eofatleastamaj ori
tyofthe
remainingdir
ect ors,i
fstil
lconsti
tut
ingaquor um;otherwi
se,thevacancymustbef i
ll
ed
bythegeneral assembl yinar egul
arorspecialmeetingcal
ledforthepurpose.A
dir
ectorsoelect edtof i
l
l avacancyshallser
veonlytheunexpiredter
m ofhis
predecessorinof f
ice.
"ART.42.Of f
icersoftheCooperative.Theboar dofdirectorsshallel ectf rom among
themselvesthechai r
personandv i
ce-chair
person, andelectorappoi ntot herofficer
sof
thecooperativefrom outsi
deoftheboar dinaccor dancewi t
htheirby laws.Al loffi
cers
shallser
vedur inggoodbehav i
orandshal lnotber emov edexceptf orcauseaf terdue
heari
ng.Lossofconf i
denceshallnotbeav al
idgroundf orremov al unl essevidencedby
actsoromi ssioncausinglossofconf i
denceint hehonest yandint egrityofsuchof fi
cer.
Not wo(2)ormor epersonswithrel
at i
onshipsupt othet hi
rdcivi
l degr eeof
consanguinit
yoraf fi
nit
ynorshallanypersonengagedi nabusi nesssi mi lart
ot hatof
thecooperativenorwhoi nanyothermannerhasi nterestsinconf l
ictwi ththe
cooperati
veshal lser
veasanappoi ntiveoffi
cer.

"ART.43.Commi tt
eesofCooperat
ives.(
1)Theby l
awsmaycreateanexecut
ive
commi t
teetobeappointedbytheboardofdir
ectorswi
thsuchpowersandduti
esas
maybedel egatedtoi
tintheby
lawsorbyamaj or
it
yvot
eofallt
hemember softhe
boardofdirect
ors.

"(2)Theby l
awsshal lpr
ovideforthecreati
onofanaudi t
,electi
on,medi ationand
concili
ati
on,ethi
cs,andsuchot hercommi tt
eesasmaybenecessar yf ort heconductof
theaffair
soft hecooperati
ve.Themember sofboththeaudi tandel
ect ioncommi tt
ee
shallbeelectedbyt hegeneralassemblyandtherestshallbeappointedbyt heboard.
Theaudi tcommi tt
eeshallbedi r
ectl
yaccountabl
eandr esponsiblet
ot hegener al
assembl y.I
tshallhavethepoweranddut ytoconti
nuouslymoni t
ortheadequacyand
effect
ivenessofthecooper ati
ve'
smanagementcont r
olsystem andaudi tthe
performanceoft hecooperativ
eandi tsvari
ousresponsi
bili
tycenter
s.

"Unl
essotherwi
seprovi
dedintheby l
aws,theboard,i
ncaseofavacancyinthe
committees,
maycallanelect
iontofil
lthevacancyorappoi
ntapersontofi
llt
hesame
subj
ecttotheprov
isi
onthatthepersonelectedorappoi
ntedshal
lserv
eonlyfort
he
unexpi
redporti
onoftheter
m.

"ART.44.Functi
ons,Responsi
bil
i
tiesandTr ai
ningRequi
rementsofDir
ect
ors,Offi
cer
s
andCommi tteeMember s.t
hefuncti
onsandr esponsibi
l
iti
esofdir
ect
ors,
offi
cersand
commi t
teemember s,aswellasthei
rtrai
ningrequi
rements,shal
lbei
naccordancewith
t
her
ulesandr
egul
ati
onsi
ssuedbyt
heAut
hor
it
y.

"ART.45.Liabil
it
yofDi r
ectors,Off
icersandCommi tt
eeMember s.Dir
ectors,offi
cer s
andcommi tteemember s,whoar ewill
full
yandknowi nglyvot efororassenttopat entl
y
unlawful
act sorwhoar eguiltyofgrossnegl i
genceorbadf ai t
hindirecti
ngtheaf f
airsof
thecooperativ
eoracqui reanyper sonalorpecuniar
yinterestinconf l
ictwit
ht heirduty
assuchdirectors,of
ficersorcommi t
teemember sshallbel iablejoi
ntlyandsev erall
yfor
alldamagesorpr ofi
tsresult
ingtherefrom tothecooperative,member s,
andot her
persons.

"Whenadi rector,off
icerorcommi tt
eememberat temptstoacquir
eoracquires,
in
vi
olati
onofhi sdut y
,anyi nt
erestorequi
tyadver
set othecooper
ati
veinrespecttoany
mat t
erwhichhasbeenr eposedinhiminconfi
dence,heshall
,asatrust
eeforthe
cooperat
ive,bel i
ablefordamagesandshal lbeaccountabl
efordoubletheprofi
tswhi
ch
otherwi
sewoul dhaveaccr uedtothecooperat
ive.

"ART.46.Compensat ion.(1)Int heabsenceofanypr ovisi

onsi nthebylawsfixingthei
r
compensat ion,
thedi rectorsshal l
notr ecei
veanycompensat ionexceptforreasonable
perdiems: Provi
dedhowev er
, Thatthedi r
ector
sandof f
icersshallnotbeentitl
edtoany
perdiem when, i
nt hepr ecedingcal endaryear,t
hecooper ati
ver eport
edanetl ossor
hadadi vi
dendr atelesst hant heofficiali
nfl
ati
onrateforthesamey ear.Any
compensat ionothert hanperdi emsmaybegr antedtodi r
ectorsbyamaj or
it
yv oteof
themember swithv otingri
ght satar egularorspecialgeneralassembl ymeeting
speci
fical
lycall
edf ort hepurpose: Pr ovi
ded,Thatnoaddi ti
onalcompensat i
onot her
thanperdiemsshal lbepai ddur i
ngt hefir
styearofexistenceofanycooper ative.

"(
2)Thecompensationofoff
icer
soft
hecooper
ati
veaswel
last
hemember soft
he
committ
eeaswellast hemembersoft
hecommitt
eescr
eat
edpursuantt
othi
sCodeor
i
tsbyl
awsmaybef ixedinthebyl
aws.

"(
3)Unlessal
readyf
ixedi
nthebylaws,t
hecompensat
ionofal
lot
herempl
oyeeshal
lbe
deter
minedbytheboardofdi
rect
ors.
"ART.47.Deali
ngsofDi r
ector
s,Off
icer
s,orCommit
teeMember s.Acontractent
ered
i
ntobyt hecooperati
vewithone(1)ormoreofit
sdir
ector
s,of
fi
cers,andcommi tt
ee
member sisvoi
dable,attheopti
onofthecooper
ati
ve,unl
essal
l t
hefoll
owing
condi
tionsarepresent.

"(
1)Thatt
hepr
esenceofsuchdir
ectorintheboardmeeti
ngwherei
ncont
ractwas
appr
ovedwasnotnecessar
ytoconsti
tuteaquorum f
orsuchmeeti
ng;

"
(2)Thatt
hev
oteofsuchdi
rect
orwasnotnecessar
yfort
heappr
oval
oft
hecont
ract
;

"
(3)Thatt
hecont
racti
sfai
randr
easonabl
eundert
heci
rcumst
ances;
and

"(
4)Thati
nt hecaseofanof
fi
cerorcommit
teemember
,thecontr
actwitht
heoff
iceror
committ
eememberhasbeenpr evi
ousl
yaut
hori
zedbyt
hegeneralassembl
yorbythe
boar
dofdirector
s.

"
Whereanyoft hef i
rsttwocondit
ionssetf ort
hint heprecedingparagraphi sabsent ,i
n
t
hecaseofacont r
actwi t
hadirector,suchcontractmayber at
if
iedbyat hree-
fourths
(
3/4)voteofallthemember swithv oti
ngrights,pr
esentandconst i
tut
ingaquor um ina
meeti
ngcall
edf orthepurpose:Provided,Thatfulldi
sclosureoftheadv erseinterestof
t
hedirect
orsinvolvedismadeatsuchmeet i
ng,andt hatthecontracti
sf airand
r
easonableunderthecircumstances.

"ART.48.Disl
oyaltyofaDi rector
.Adi r
ectorwho, byv irt
ueofhi sof f
ice,acquiresfor
himsel
fanoppor tunitywhichshouldbel ongtot hecooper at
iveshallbel i
ablefor
damagesandmustaccountf ordoublethepr ofi
tsthatot herwisewoul dhav eaccruedto
thecooperati
vebyr efundi
ngt hesame, unlesshi sacthasbeenr atifi
edbyat hree-
four
ths(3/4)voteofal lt
hemember swi thvotingrights,presentandconst i
tuti
nga
quorum.Thisprovisionshallbeapplicable,notwithstandingthef actthatthedi r
ector
usedhi
sownf
undsi
nthev
ent
ure.

"ART.49.Il
l
egalUseofConfi
dent i
alInformati
on.(
1)Adi r
ectororoffi
cer,
oran
associat
eofadirect
ororoff
icer,who, forhi
sbenefi
toradvantageorthatofan
associat
e,makesuseofconfidenti
al i
nformati
onthat,
ifgeneral
lyknown,might
reasonabl
ybeexpectedtoadverselyaffectt
heoperati
onandv i
abi
li
tyofthecooper
ati
ve,
shallbehel
d:

"(
a)Liabl
etocompensatet
hecooperat
ivef
orthedi
rectlossessuf
fer
edbyt
he
cooperat
iveasar
esultoft
hei
ll
egaluseofinf
ormat
ion;and

"(
b)Account
abl
etothecooper
ati
veforanydir
ectbenef
itoradvant
ager
ecei
vedory
ett
o
berecei
vedbyhi
m orhi
sassoci
ate,
asar esul
tofthetr
ansacti
on.

"(
2)Thecooper
ati
veshal
ltaket
henecessar
yst
epst
oenf
orcet
hel
i
abi
l
iti
esdescr
ibedi
n
subsect
ion(
a)

"ART.50.Remov al.All
compl aintsfortheremov alofanyelect
edof fi
cershal
lbefil
ed
withtheboardofdi r
ector
s.Suchof f i
cershal
l begiventheopportunit
ytobeheard.
Majorit
yoftheboar dofdirectorsmaypl acetheof fi
cerconcer
nedunderpr event
ive
suspensionpendingtheresolutionoft hei
nvestigati
on.Uponfindingofapr i
mafacie
evi
denceofguilt,t
heboar dshal lpr
esentitsrecommendat ionforremov al
tothegeneral
assembly.

"Anel
ectiv
eof f
icermayber emovedbythreef
ourt
hs( 3/4)vot
esoftheregul
ar
member spresentandconstit
uti
ngaquorum,i
nar egularorspeci
algener
alassembl
y
meeti
ngcal l
edforthepurpose.Theof
fi
cerconcer
nedshal lbegiv
enanopportuni
tyt
o
beheardatsaidassembly.

Sec.5.Ar
ti
cles52,
53,
54,
55,
56,
57,
58,
59,
60,
61,
62and63ofChapt
erVon
Responsi
bil
i
ties,
Right
sandPr
ivi
l
egesofCooper
ati
vesoft
hesameCodear
eher
eby
renumber
edandamendedt or
ead,asf
oll
ows:

CHAPTERV

RESPONSI
BILI
TIES,
RIGHTSANDPRI
VILEGESOFCOOPERATI
VE

"ART.51.Address.Ev
er ycooperat
iveshal
lhav
eanoffi
cial
post
aladdresst
owhi chal
l
noti
cesandcommuni cationsshal
lbesent
.Suchaddr
essandeverychangether
eof
shal
lberegist
eredwitht heAuthor
ity
.

"ART.52.BookstobeKeptOpen.(1)Ever
ycooperat
iveshallhavethefol
l
owi
ng
documentsreadyandaccessi
blet
oi t
smember sandrepresentati
vesoft
heAut
hor
it
y
fori
nspecti
onduri
ngreasonabl
eoffi
cehoursatit
soffi
cialaddress:

"
(a)Acopyoft
hisCodeandal
lot
herl
awsper
tai
ningt
ocooper
ati
ves;

"
(b)Acopyoft
her
egul
ati
onsoft
heAut
hor
it
y;

"
(c)Acopyoft
hear
ti
cl
esofcooper
ati
onandby
lawsoft
hecooper
ati
ve;

"
(d)Ar
egi
sterofmember
s;

"(
e)Thebooksoft
hemi nut
esoft
hemeet
ingsoft
hegener
alassembl
y,boar
dof
di
rect
orsandcommit
tee;

"
(f)Shar
ebooks,
wher
eappl
i
cabl
e;
"
(g)Fi
nanci
alst
atement
;and

"
(h)Suchot
herdocument
sasmaybepr
escr
ibedbyl
awsort
heby
laws.

"(
2)Theaccount antorthebookkeeperofthecooperat
iveshall
ber esponsi
bleforthe
maintenanceoft hecooper
ativ
einaccordancewithgeneral
lyacceptedaccounting
practi
ces.Heshal l
alsoberesponsi
bleforthepr
oducti
onoft hesameatt hetimeof
auditorinspect
ion.

"Theaudi
tcommitteeshal
lberesponsi
bleforthecontinuousandperi
odi
crevi
ewofthe
booksandrecor
dsofaccounttoensurethatthesearei naccor
dancewit
hgeneral
l
y
accept
edaccounti
ngpracti
ces.Heshal
lalsober esponsibl
eforthepr
oduct
ionofthe
sameatthetimeofauditori
nspecti
on.

"(3)Eachcooperati
veshallmaintainrecordsofaccount ssucht hatt
hetrueandcor rect
conditi
onandt heresul
tsoftheoper ati
onofthecooper ativ
emaybeascer tained
therefr
om atanytime.Thef i
nancialstat
ements,auditedaccor dingt
ogener all
y
acceptedaudit
ingstandards,pr
inciplesandpracti
ces, shallbepubli
shedannual l
yand
shallbekeptpostedinaconspicuouspl aceintheprinci palof
fi
ceofthecooper ati
ve.

"(
4)Subj ecttotheper t
inentprovi
sionsoft heNat ionalI
nter
nal Rev enueCodeandot her
l
aws, acooper ati
vemaydi sposebywayofbur ningorot hermet hodofcompl ete
destructionanydocument ,r
ecordorbookper t
ainingtoitsfi
nanci alandnonf i
nancial
operationswhichar ealreadymor ethanfive(5)y earsoldexceptt hoserelati
ngt o
tr
ansact i
onswhi charet hesubjectofcivi
l,cr
iminal andadmi ni
st r
at i
veproceedings.An
i
nv entoryoftheauditeddocument s,
recordsandbookst obedisposedofshal lbe
drawnupandcer t
if
iedtobyt heboar dsecretaryandt hechairmanoft heaudit
commi tt
eeandpr esentedt otheboardofdi r
ector swhichmayt hereuponappr ovethe
di
sposi ti
onofsai drecords.
"ART.53.Repor t
s.(1)Everycooper ativeshalldrawupr egul arrepor t
sofi t
sprogr am of
acti
viti
es,includi
ngt hoseinpur suanceoft heirsocio-ci
v icunder takings,showingt hei
r
progressandachi ev ementsatt heendofev eryfiscalyear .Ther epor t
sshal l
bemade
accessibl
et oi t
smember s, andcopi est her
eofshal lbef urnishedt oal li
tsmember sor
record.Theser eportsshall bef i
ledwi t
ht heAuthor i
tywi thinonehundr edtwent y(120)
daysf r
om t heendoft hecal endary ear.Thef orm andcont ent soft hereportsshal l
beas
prescri
bedbyt herulesoft heAut hority.Fai
luretof i
lether equi r
edr eportsshallsubject
theaccount ableoffi
cer/stof i
nesandpenal ti
esasmaybepr escribedbyt heAut horit
y,
andshal lbeagr oundf orther evocat i
onofaut hor i
tyoft hecooper ativ
et ooperateas
such.Thef iscalyearofev er ycooper at
iveshallbet hecal endary earexceptasmaybe
otherwisepr ovi
dedi ntheby l
aws.

"(
2)Ifacooperati
vefail
stomake, publ
ishandfil
et herepor
tsrequir
edher ei
n, orfail
sto
i
ncludether
einanymat terr
equiredbyt heCode,theAut hor
ityshal
l,
withinfif
teen( 15)
daysfr
om theexpirat
ionofthepr escri
bedperi
od, sendsuchcooper at
iveawr i
tten
noti
ce,st
ati
ngitsnon-complianceandt hecommensur atef
inesandpenal ti
est hatwil
l
beimposedunt i
lsuchtimethatthecooper at
ivehascompl iedwiththerequirement s.

"ART.54.Regi
sterofMembersasPri
maFacieEvidence.Anyregi
sterorl
i
stofmembers
shareskeptbyanyregi
ster
edcooper
ati
veshal
lbeprimaf aci
eevi
denceofthef
oll
owi
ng
part
icul
arsenter
edther
ein:

"
(1)Thedateonwhi
cht
henameofanyper
sonwasent
eredi
nsuchr
egi
sterorl
i
stof
member;and

"
(2)Thedat
eonwhi
chanysuchper
sonceasedt
obeamember
.

"ART.55.Probati
v eVal ueofCer ti
fiedCopiesofEnt
ri
es.(1)Acopyofanyent r
yinany
book,regi
sterorlistregularlykeptinthecourseofbusi
nessi nt
hepossessionofa
cooperati
veshall
, ifdulycertif
iedinaccordancewit
htherulesofevi
dence,be
admissibl
easev idenceoft heexistenceofentr
yandprimaf aci
eevi
denceoft he
matter
sandt ransact i
onst hereinrecorded.
"(
2)Noper sonoracooperati
veispossessionoft hebooksofsuchcooper at
iveshall
,i
n
anyl
egalpr oceedi
ngstowhichthecooperati
veisnotapar t
y,becompelledt
oproduce
anyofthebooksoft hecooperat
ive,
thecontentsofwhi chcanbepr ovedandthe
matt
ers,tr
ansact i
onsandaccountsther
einrecorded,unlessbyorderofacompet ent
cour
t.

"ART.56.BondingofAccount abl
eOf f
icers.Ever
ydir
ector
,off
icer
,andemployee
handlingfunds,secur
it
iesorpropert
yonbehal fofanycooperat
iveshal
lbecoveredbya
suret
ybondt obeissuedforadulyregist
eredinsur
anceorbondingcompanyfort he
fai
thfulperf
ormanceoft hei
rrespect
ivedut i
esandobli
gati
ons.Theboardofdir
ect or
s
shall
det er
minet headequacyofsuchbonds.

"Uponthefil
i
ngoftheappli
cat
ionforregistr
ati
onofacooper at
ive,
thebondsofthe
accountabl
eoffi
cer
sshallber
equiredbyt heAuthori
ty.Suchbondsshal
lberenewed
manuallyandtheAuthor
it
yshall
accordinglybeinfor
medofsuchr enewal
.

"ART.57.PreferenceofCl ai
ms.( 1)Notwithstandi
ngt heprovi
sionsofexist
inglaws,
rul
esandr egulati
onstot hecontrary
, butsubjecttothepri
orclaim oftheAuthori
ty,any
debtduet othecooperativefrom themembershal lconsti
tut
eaf ir
stli
enuponanyr aw
mat er
ial
s,producti
on,inputs,andproductspr oduced;oranyland,buil
ding,
facil
it
ies,
equipment,goodsorser vicesacquiredandhel d,bysuchmembert hroughtheproceeds
oftheloanorcr edi
tgrantedbyt hecooper ati
vetohimf oraslongast hesamei snot
ful
lypaid.

"(
2)Nopropert
yorinter
estonproper
tywhichissubjecttoalienunderpar
agraph(1)
shal
lbesoldnorconveyedt
othi
rdparti
eswithoutthepriorpermissi
onofthe
cooper
ati
ve.Theli
enuponthepropert
yorint
erestshallconti
nuet oexi
tev
enafterthe
sal
eorconveyancether
eofunt
ilsuchl
ienhasbeendul yexti
nguished.

"
(3)Notwi
thst
andingthepr
ovisi
onsofanyl
awt othecontr
ary
,anysal
eorconv
eyance
madeincontr
aventi
onofparagr
aph(2)her
eofshall
bev oi
d.
"ART.58.InstrumentforSalar
yorWageDeduct ion.(1)Amemberofacooper at
ivemay,
notwit
hstandingtheprovisi
onsofexisti
nglawstot hecont
rary,
executeaninstr
umentin
favoroft
hecooper ati
veauthorizi
nghisemployertodeductfrom hi
s/hersal
aryor
wages,commut at
ionofleavecredit
sandanyot hermonetarybenefi
tspayabl
etohim by
theemploy erandremitsuchamountasmay bespecifi
edinsati
sfact
ionofadebtor
otherdemandduef r
om themembert othecooperati
ve.

"(2)Upont heexecuti
onofsuchi nst
rumentandasmayber equi
redbythecooper
ativ
e
cont ainedi nawri
ttenrequest
,theemployershallmakethededuct
ioninaccor
dance
wi t
ht heagr eementanddeductioninaccordancewiththeagr
eementandr emi
t
forthwi t
ht heamountsodeduct edwithi
nten(10)daysaftert
heendoft hepay
rol
l
mont htot hecooperat
ive.Theemployershallmakethededucti
onforaslongassuch
debtorot herdemandr emainsunpaidbytheempl oy
ee.

"(3)Thet erm" empl oy

er"asusedint
hisarti
cleshal
lincl
udeall
pr i
vat
efir
msandt he
nationalandl ocal gov
ernmentsandgovernment-ownedorcontrol
ledcorpor
ationswho
hav eundert heiremployeramemberofacooper at
iveandhaveagreedtocarryoutthe
termsoft heinstrumentmentionedi
nparagraphs(1)and(2)ofthisar
ti
cle.

"(
4)Theprovi
sionsoft
hisart
icl
eshal
lapplyt
oall
simi
laragreement
sref
err
edt
oin
paragr
aph(1)andwereenfor
cedpri
ortotheappr
oval
ofthisCode.

"(
5)Notwit
hstandi
ngtheprovisi
onsofexi
sti
nglawstothecontr
ary,t
heresponsi
bil
it
ies
oftheemploy
erasstatedinparagr
aphs(1)and(2)ofthi
sart
icl
esshall
bemandat ory:
Provi
ded,
Thatinthecaseofpr i
vat
eemployer,
theactual
andreasonabl
ecostdeduct i
ng
andremit
ti
ngmay becoll
ected.

"ART.59.Pri
maryLien.-Notwit
hstandi
ngt hepr
ovisi
onofanylawwitht
hecont
rar
y,a
cooperat
iveshal
lhaveprimaryl
ienupont hecapi
tal,
deposi
tsori
nter
estofamember
foranydebtduetothecooperati
vefrom suchamember .
"ART.60.TaxTr eat
mentofCooperat
ive.-Dul
yregisteredcooperativesunderthi
sCode
whichdonott r
ansactanybusi
nesswithnon-member sorthegener alpubl
icshall
notbe
subjecttoanytaxesandfeesi
mposedundert heinternalr
ev enuelawsandot hertax
l
aws.Cooper at
ivesnotfal
li
ngundert
hisarti
cleshallbegov ernedbyt hesucceedi
ng
section.

"ART.61.TaxandOt herExemptions.Cooperati
vestransacti
ngbusi nesswi t
hbot h
member sandnon-member sshallnotbesubjectedtotaxont heirtransactionswi t
h
member s.I
nrel
ati
ont othi
s,t
het r
ansactionsofmember swiththecooper ati
veshallnot
besubjecttoanytaxesandf ees,i
ncludi
ngnotl i
mi t
edtof i
naltaxesonmember s'
depositsanddocument aryt
ax.Not wi
thstandi
ngt heprovi
sionsofanyl aworr egul
ati
on
tothecont r
ary,
suchcooperati
vesdeal i
ngwi t
hnonmember sshal l
enj oythef oll
owing
taxexempt i
ons:

"(1)Cooper at
iveswi thaccumul atedr eservesandundi vi
dednetsav ingsofnotmor e
thanTenmi ll
ionpesos( P10,000,000. 00)shallbeexemptf r
om allnational,
city
,
prov i
ncial,muni cipalorbarangayt axesofwhat ev ernameandnat ure.Such
cooper ativesshal lbeexemptf rom cust omsdut ies,advancesalesorcompensat i
ng
taxesont heirimpor tati
onofmachi neries,equipmentandspar epartsusedbyt hem and
whi charenotav ail
ablelocal
lyacer ti
fiedbyt hedepar tmentoft r
adeandi ndustry(DTI
).
Alltaxfreei mpor t
ationsshallnotbesol dnorthebenef icialownershipthereofbe
transferredt oanyper sonunt i
lafterf i
ve( 5)years, ot
herwise,t
hecooper at
iveandt he
transfereeorassi gneeshal l
besol idaril
yliabl
et opayt wicetheamountoft heimposed
taxand/ordut ies.

"
(2)Cooper
ati
veswit
haccumulat
edreser
vesanddi
vidednetsavi
ngsofmoret
hanTen
mil
li
onpesos(P10,
000,
000.
00)shal
lfeet
hefol
lowi
ngtaxesattheful
lrat
e:

"(
a)IncomeTax-Ont heamountallocat
edf orinter
estoncapit
als:Pr
ovided,
Thatthe
samet axi
snotconsequentl
yimposedoni nteresti
ndivi
dual
lyrecei
vedbymember s:
Prov
ided,f
urther
,Thatcooper
ati
vesregardl
essofcl assi
fi
cat
ion,areexemptincometax
fr
om thedateofregi
str
ati
onwiththeAuthority
;
"(
b)Val ue-AddedTaxOnt ransactionswi t
hnon-member s:Prov i
ded, howev er,That
cooper ati
vesdul yregisteredwi ththeAut hori
ty;
areexemptf rom t hepay mentofv alue-
addedt ax;subjectt oSec.109, sub-secti
onsL, M andNofRepubl i
cActNo.9337, the
National I
nternalRev enueCode, asamended: Provided,Thatt heexemptt ransacti
on
underSec.109( L)shal lincludesal esmadebycooper ativesdul yregi ster
edwi ththe
Authorityorganizedandoper atedbyi t
smembert ounder taket hepr oduct i
onand
processingofr awmat erialsorofgoodspr oducedbyi t
smember si ntof i
nishedor
processpr oductsf orsalebyt hecooper ati
vetoitsmember sandnon- member s:
Prov i
ded,furt
her ,Thatanypr ocessedpr oductoritsderivati
vear i
singf rom ther aw
mat eri
alsproducedbyi tsmember s,soldinthennameandf ort heaccountoft he
cooper ati
ve:Prov i
ded, finall
y,Thatatl easttwenty-
fivepercent um ( 25%)oft henet
i
ncomeoft hecooper ativesi sreturnedtothemember sint hef orm ofi nterestand/or
patronager efunds;

"
(c)Al
lot
hert
axesunl
essot
her
wisepr
ovi
dedher
ein;
and

"(
d)Donati
onstochari
tabl
e,resear
chandeducati
onal
inst
it
uti
onsandrei
nvest
mentto
soci
oeconomicpr
oject
swi t
hintheareaofoper
ati
onofthecooper
ati
vemaybet ax
deduct
ibl
e.

"(
3)Al lcooperatives,r
egar dlessoft heamountofaccumul atedreservesandundi vi
ded
netsav ingsshallbeexemptf rom pay mentoflocal taxesandtaxesont r
ansactionswith
banksandi nsurancecompani es:Pr
ov i
ded,Thatallsalesorservicesrenderedfornon-
member sshal
lbesubj ectt otheappl icablepercentagetaxessalesmadebypr oducers,
mar ketingorservicecooper at i
ves:Pr ovi
dedfurther,Thatnothinginthisarti
cleshall
precludet heexami nat
ionoft hebooksofaccount sorotheraccount i
ngr ecor
dsoft he
cooper ativ
ebydul yaut hori
zedi nter
nal r
evenueof f
icersfori
nternalrevenuetax
purposesonl y,afterpreviousaut horizati
onbyt heAut hori
ty.

"(
4)Inareaswheretherearenoav ail
ablenotar
iespubli
c,thej
udge,exerci
singhi
sex
offi
ciocapaci
tyasnotarypubli
c,shall
renderservi
ce,f
reeofcharge,toanypersonor
groupofpersonsrequi
ri
ngt headmi ni
str
ati
onofoat hortheacknowledgmentofarti
cles
ofcooper
ati
onandinst
rumentsofl
oanf
rom cooper
ati
vesnotexceedi
ngFi
veHundr
ed
ThousandPesos(
P500,000.
00).

"(5)Anyregist
erofdeedsshal lacceptforregi
str
ation,f
reeofcharge,
anyi nst
rument
relati
vetoaloanmadeundert hisCodewhi chdoesnotexceedTwoHundr edFif
ty
ThousandPesos( P250,
000.00)ort hedeedsoft i
tl
eofanypr oper
tyacquir
edbyt he
cooper at
iveoranypaperordocumentdr awninconnect i
onwi t
hanyactionbroughtby
thecooper at
iveorwithanycour tj
udgmentr enderedinit
sfavororanyinstrument
relati
vetoabondofanyaccount ableoffi
cerofacooper at
ivefort
hefait
hful
per f
ormanceofhisdut i
esandobl igat
ions.

"(
6)Cooperat
ivesshal
lbeexemptfrom t
hepay mentofall
courtandsher i
ff'
sfees
payabl
etothePhil
ippi
neGovernmentforandinconnecti
onwithallacti
onsbr ought
underthi
sCode,orwheresuchact
ionsisbroughtbytheAuthori
tybeforethecourt,
to
enfor
cethepaymentofobli
gati
onscontract
edinfavorofthecooperati
ve.

"(
7)Al lcooperat
ivesshall
beexemptf r
om puttingupabondf orbri
nginganappeal
againstthedecisionofani nfer
iorcour
torforseeki ngtosetasideanythir
dpartyclai
m:
Provided,Thatacer t
if
icat
ionoft heAuthor
it
yshowi ngthatthenetassetsofthe
cooper at
iveareinexcessoft heamountoft hebondr equi
redbythecourtinsimil
ar
casesshal lbeacceptedbyt hecourtasasuf f
icientbond.

"(
8)Anysecuri
tyissuedbycooperati
vesshal
lbeexemptfrom t
hepr
ovi
sionsoft
he
Secur
it
iesActprovidedsuchsecuri
tyshal
lnotbespecul
ati
ve.

"ART.62.Pri
vil
egesofCooperat
ives.Cooper
ati
vesregist
eredunderthi
sCode,
notwit
hstandi
ngtheprovi
sionsofanylawtothecontrary
,bealsoaccordedt
he
fol
lowingpri
vi
leges:

"(
1)Cooperat
ivesshal
lenj
oythepri
vi
legeofdeposi
ti
ngthei
rseal
edcashboxesor
cont
ainer
s,documentsoranyval
uablepaper
sinthesaf
esofthemunici
palorci
ty
tr
easurersandot hergovernmentoff
icesfr
eeofchar
ge,andt
hecustodi
anofsuch
art
icl
esshal l
issuear ecei
ptacknowl
edgingthear
ti
clesr
ecei
veddul
ywitnessedby
anotherperson;

"
(2)Cooperat
ivesorgani
zedamonggov er
nmentemployees,notwit
hst
andinganyl
awor
r
egulati
ontothecontrar
y,shal
lenj
oyt
hef r
eeuseofanyav ai
labl
espaceinthei
ragency
,
whetherownedorrentedbytheGover
nment ;

"(
3)Cooper ati
vesrenderingspecial
ty pesofser
vicesandfaci
li
ti
essuchascol dstorage,
i
ceplant,el
ect r
ici
ty,
transport
ati
on,andsi mil
arservi
cesandfacil
i
tiesshal
lsecurea
fr
anchisetherefor
e,andsuchcooper ati
vesshal
lopentheirmember shi
ptoallpersons
qual
if
iedint hei
rareasofoper at
ion;

"(
4)Inar easwhereappropri
atecooperati
vesexist
,thepref
erenti
alri
ghttosuppl
y
governmentinstit
uti
onsandagenciesrice,cor
nandot hergrai
ns,fi
shandothermarine
products,meat,eggs,mil
k,veget
ables,t
obaccoandot heragri
cul
turalcommodit
ies
producedbyt hei
rmember sshallbegrantedtothecooperati
vesconcerned;

"(
5)Preferenti
alt
reat
mentintheall
ocationoff
erti
li
zers,i
ncl
udi
ngseedsandother
agri
cul
turalinput
sandimplements,andinri
cedistr
ibuti
onshal
lbegrant
edto
cooperati
vesbytheappropri
ategovernmentagenci
es;

"(
6)Preferenti
alandequitabl
etreat
mentint
heall
ocat
ionorcontr
olofbot
tomr
iesof
commer cialshi
ppingvesselsi
nconnect
ionwit
htheshipmentofgoodsandpr
oduct
sof
cooperati
ves;

"(7)Cooperat
ivesandt hei
rfeder
ati
ons, suchasf arm andfisheryproducer sand
suppli
ers,marketvendorsandsuchot hercooper ati
ves,whichhav ef ortheirpr i
mar y
purposetheproductionand/orthemar ketingofproductsf r
om agriculture,fisheri
esand
smal l
entr
epreneuri
al i
ndustri
esandfeder ationst
hereof,shall
hav epr eferentialr
ightsi
n
themanagementofpubl icmarket
sand/ orleaseofpubli
cmar ketfacili
ti
es, stal
lsor
spaces:Prov
ided,Thatt
heser
ightsshall
onlybeuti
li
zedexclusiv
elybycooperati
ves:
Provi
ded,fur
ther,
Thatnocooperat
iveformingajoi
ntventur
e,partnershi
poranyother
si
mi l
ararr
angementwi t
hanon-cooper
ativeent
it
ycanut i
l
izetheser i
ghts;

"
(8)Cooperat
ivesengagedincredi
tser
vicesand/orfederati
onsshallbeenti
tl
edto
l
oanscredi
tli
nes,redi
scounti
ngofthei
rloannotes,andot herel
igi
blepaper
swi t
hthe
Devel
opmentBankoft hePhili
ppi
nes,t
heLandBankoft hePhi l
i
ppinesandother
fi
nanci
ali
nsti
tuti
onsexcepttheBangkoSentral
ngPi l
ipi
nas( BSP);

"ThePhi l
i
ppineDeposi tInsuranceCorporation(PDIC)andothergover
nmentagenci es,
government -ownedandcont r ol
l
edcorpor ati
onsandgov ernmentfi
nanci
alinstit
uti
ons
shallprovi
det echnicalassi
stancetoregisterednati
onalfeder
ati
onsanduni onsof
cooperativeswhi chhav esi
gnifi
cantengagementi nsavingsandcredi
toperationsin
orderforthesef ederat
ionsanduni onstoest abl
ishand/orstr
engt
hentheirown
autonomouscooper at
ivedepositi
nsurancesy stems;

"(
9)Apubl i
ctransportservi
cecooper at
ivemaybeent it
ledtofinanci
ngsupportforthe
acqui
siti
onand/ ormaintenanceoflandandseat ransportequipment,f
aci
li
ti
esand
part
sthroughthepr ogram ofthegov er
nmentfinanci
alinsti
tut
ions.I
tshal
lhavet he
pref
erenti
alri
ghttothemanagementandoper ati
onofpubl i
cterminal
sandpor t
s
whetherlandorseat r
ansportwher ethecooperati
veoperatesandonsecuringa
fr
anchiseforactiv
eorpot enti
alroutesfort
hepublictr
anspor t
;

"(
10)Cooper ati
vest
ransact
ingbusi nesswi t
htheGov er
nmentofthePhili
ppinesorany
ofitspoli
ticalsubdi
vi
sionsoranyofi tsagenciesorinstr
umentali
ti
es,
incl
uding
gover nment-ownedandcont rol
ledcorporati
onsshallbeexemptfrom pr
equalif
icat
ion
bi
ddi ngrequirement
snot wi
thst andi
ngthepr ovi
sionsofRepubl
icActNo.9184,
otherwiseknownas, theGov ernmentPr ocurementAct;

"(
11)Cooperat
iveshal
lenj
oythepri
vi
legeofbei
ngrepr
esentedbythepr
ovi
nci
alorci
ty
fi
scalortheOf
fi
ceoftheSoli
cit
orGeneral
,fr
eeofchar
ge,exceptwhent
headver
se
part
yistheRepubl
icofthePhi
li
ppi
nes;
"(
12)Cooperati
vesorganizedbyf acul
tymember sandempl oy
eesofeducati
onal
i
nsti
tuti
onsshallhavethepr ef
erenti
alr
ighti
nthemanagementoft hecanteenandother
serv
icesrel
atedtotheoper ati
onoftheeducati
onalinst
it
uti
onwheretheyareemployed:
Provi
ded,Thatsuchservi
cesar eoperatedwit
hinthepremisesoft
hesaideducati
onal
i
nsti
tuti
on;and

"(
13)Theappr opr i
atehousi
ngagenci esandgov ernmentf i
nanciali
nsti
tut
ionsshal
l
creat easpecial wi
ndowf orf
inancinghousingpr oject
sunder takenbycooperati
ves,wi
th
i
nter estrat
esandt er
msequal to,orbettert
hant hosegi venforsociali
zedhousi
ng
projects.Thisfinanci
ngshallbeint heform ofblanketloansorl ong-t
erm whol
esal
e
l
oanst oqualif
iedcooperati
ves,withoutneedf orindiv
idualprocessing.

"TheAuthor
it
y,i
nconsult
ati
onwi t
htheappropri
ategover
nmentagenci
esand
concer
nedcooperat
ivesect
or,shal
li
ssuerulesandregul
ati
onsonallmat
ter
s
concer
ninghousi
ngcooperati
ves.
"

Sec.6.Arti
cle64ofChapt
erVIonI
nsol
vencyofCooper
ati
vesoft
hesameCodei
s
herebyrenumberedandamendedt
oread,asfol
l
ows:

CHAPTERVI

I
NSOLVENCYOFCOOPERATI
VES

"ART.63.Pr
oceedingUponI nsolvency.-I
ncaseacooperati
veisunabl
etof ul
fi
ll
its
obli
gati
onstocredi
torsduet oinsolvency,
suchcooperat
ivemayapplyforsuch
remediesasitmaydeem fitundert heprovi
sionsofActNo.1956,asamended,
other
wiseknownast heInsolvencyLaw.

"
Nothi
nginthi
sArt
icl
e,howev
er,
precl
udescr
edi
tor
sfr
om seeki
ngpr
otect
ionf
rom sai
d
i
nsol
vencyl
aw."
Sec.7.Ar
ticl
es65,66.67,
68,
69,
70and71ofChapt
erVIIonDi
ssol
uti
onof
Cooperat
ivesoft
hesameCodeareher
ebyr
enumberedandamendedtor
ead,
as
fol
lows:

CHAPTERVI
I

DI
SSOLUTI
ONOFCOOPERATI
VES

"ART.64.Vol untaryDi ssol uti

onWher enoCr editorsar eAf fect ed.Ifthedissol uti
onofa
cooper ativedoesnotpr ejudicet herightsofanycr edi torhav ingacl aim agai nstit,t
he
dissolutionmaybeaf fect edbyamaj orityv ot eoft heboar dofdi rect
ors,andbya
resolutiondul yadopt edbyt heaf fir
mat ivev oteofatl eastt hree-f
ourths(3/ 4)ofal lthe
member swithv otingr i
ght s,presentandconst itutingaquor um atameet i
ngt obehel d
uponcal lofthedi rectors: Provided,Thatt henot iceoft ime, placeandobj ectoft he
meet ingshal lbepubl ishedf orthree( 3)consecut i
veweeksi nanewspaperpubl i
shedin
thepl acewher ethepr incipal offi
ceofsai dcooper at i
vei slocat ed,orifnonewspaperi s
publ i
shedi nsuchpl ace, i
nanewspaperofgener alcirculationi nthePhi l
ippines:
Prov i
ded, fur
ther ,Thatt henot iceofsuchmeet ingi ssentt oeachmemberofr ecord
eitherbyr egisteredmai lorbyper sonal del i
v eryatl eastt hirty(30)day spr iortosai d
meet ing.Acopyoft her esol uti
onaut hor i
zi ngt hedi ssolutionshal lbecer ti
fiedt obya
maj orit
yoft heboar dofdi rector sandcount ersignedbyt heboar dsecr et
ar y.The
Aut hori
tyshal lthereuponi ssuet hecer ti
ficat eofdi ssol uti
on.

"ART.65.Vol untaryDi ssoluti

onWher eCredi
torsAr eAf fected.Wher ethedissoluti
onof
acooper ati
vemaypr ej udicether i
ght sofanycr editor,thepetit
ionfordissolut
ionshall
befil
edwi ththeAut hor ity.Thepet it
ionshallbesi gnedbyamaj ori
tyofitsboardor
dir
ect or
sorot herofficer smanagi ngi tsaff
air
s, veri
fiedbyi tschair
personorboar d
secretaryoroneofi tsdi rectorsandshal l
setfor t
hal lclai
msanddemandsagai nstit
andt hatit
sdissolutionwasr esolveduponbyt heaf fi
rmat i
vev oteofatleastthree-
fourt
hs( 3/4)ofallthemember swi t
hv oti
ngrights,pr esentandconst i
tuti
ngaquor um
atameet i
ngcal l
edf ort hatpur pose.
"I
fthepet i
ti
onissuffi
cienti nform andsubst ance,theAut horit
yshal li
ssueanor der
reci
tingthepurposeoft hepet it
ionandshal lfi
xadat ewhichshal lnotbelesst hanthirt
y
(30)normor ethansixty( 60)day saftertheentryoftheor der.Beforesuchdat e,acopy
oftheor dershal
lbepubl ishedatl eastonceaweekf orthr
ee( 3)consecutiveweeksi na
newspaperofgener alcirculat
ionpubl ishedinthemuni ci
pali
tyorcitywher ethepr i
ncipal
offi
ceoft hecooperati
vei ssituatedori ntheabsenceofsuchl ocal newspaper, i
na
newspaperofgener alcirculat
ioni nthePhi l
i
ppines,andacopyshal ll
ikewi
sebepost ed
forthree(3)consecuti
veweeksi nthree(3)publicplacesinthemuni cipal
i
tyorci t
y
wher ethecooperati
ve'
sof f
iceislocat ed.

"Uponexpi r
yofthefiv
e( 5)daynoticetofi
l
eobj ections,t
heAuthori
tyshal lproceedto
hearthepet i
ti
onandtr yanyissuerai
sedintheobj ecti
onfil
ed;andiftheobj ecti
onis
suffi
cientandthemat eri
alal
legati
onsofthepet i
ti
onar eproven,i
tshallissueanor der
todissolvethecooperati
veanddi r
ectthedisposit
ionofitsassetsinaccor dancewith
exist
ingrulesandregulati
ons.Theorderofdissolutionshal
lsetfort
ht herein:

"
(1)Theasset
sandl
i
abi
l
iti
esoft
hecooper
ati
ve;

"
(2)Thecl
aim ofanycr
edi
tor
;

"
(3)Thenumberofmember
s;and

"
(4)Thenat
ureandext
endoft
hei
nter
est
soft
hemember
soft
hecooper
ati
ve.

"ART.66.I
nvolunt
aryDissol
uti
on.Acooper
ati
vemaybedi
ssol
vedbyor
derofa
competentcourtaf
terdueheari
ngonthegroundsof
:

"
(1)Vi
olat
ionofanyl
aw,
regul
ati
onorpr
ovi
sionsofi
tsby
laws;
or
"
(2)I
nsol
vency
.

"ART.67.Di
ssol
uti
onbyOrderoft
heAut hor
it
y.TheAuthor
it
ymaysuspendorr
evoke,
aft
erduenoti
ceandhear
ing,t
hecert
if
icateofregi
str
ati
onofacooper
ati
veonanyoft
he
fol
lowi
nggrounds:

"
(1)Hav
ingobt
ainedi
tsr
egi
str
ati
onbyf
raud;

"
(2)Exi
sti
ngf
orani
l
legal
pur
pose;

"(
3)Wil
l
ful
viol
ati
on,
despi
tenot
icebyt
heAut
hor
it
y,oft
hepr
ovi
sionsoft
hisCodeori
ts
byl
aws;

"
(4)Wi
l
lful
fai
l
uret
ooper
ateonacooper
ati
vebasi
s;and

"
(5)Fai
l
uret
omeett
her
equi
redmi
nimum numberofmember
sint
hecooper
ati
ve.

"ART.68.Di ssolutionbyFai lur

etoOr ganizeandOper ate.-I
facooper ati
vehasnot
commencedbusi nessandi tsoperationwithi
ntwo( 2)y ear
saftert
hei ssuanceofit
s
cert
if
icateofr egistrationorhasnotcar r
iedonitsbusinessfortwo( 2)consecuti
ve
year
s, theAut hori
tyshal lsendaf ormal noti
cetothesai dcooperat
ivetoshowcauseas
toit
sf ail
uretooper ate.Fail
ureoft hecooperati
vetopr omptlyprov
idej ust
if
iabl
ecause
fori
tsf ai
lur
et ooper ateshallwar
r anttheAuthori
tytodel et
eitsnamef rom therost
erof
regi
steredcooper ati
v esandshallbedeemeddi ssol
v ed.

"ART.69.LiquidationofaCooper at
ive.Everycooper at
ivewhosechar t
erexpi
resbyits
ownl i
mitati
onorwhoseexi stencei
st er
mi natedbyv ol
untarydi
ssoluti
onorthroughan
appropri
atejudicialproceedingshallneverthelessconti
nuetoexistforthr
ee(3)years
aft
erthet i
mei tisdissolved;nottocontinuet hebusinessforwhichitwasestabli
shed
butforthepurposeofprosecut
inganddefendi
ngsuit
sbyoragainsti
t;set
tl
ementand
cl
osur eofi
tsaffai
rs;
disposi
ti
on,conv
eyanceanddist
ribut
ionofi
tspr
operti
esand
assets.

"Atanyti
meduringthesaidt
hree(3)years,
thecooper ati
veisauthor
izedand
empower edt
oconveyallofi
tspropert
iestotrust
eesf orthebenefi
tofitsmembers,
credi
tor
sandotherpersonsi
ni nt
erest
.From andafteranysuchconv eyance,
all
i
nterest
swhichthecooperat
ivehadinthepropert
iesar eter
minated.

"Uponthewi ndi
ngupofthecooper
ati
veaffai
rs,
anyassetdi
str
ibutabl
etoanycr
edi
tor
,
shareholderormemberwhoisunknownorcannotbefoundshallbegivent
othe
federat
ionoruniont
owhichthecooperat
ivei
saffi
l
iat
edwith.

"Acooperati
veshal
lonl
ydistr
ibut
eitsassetsorpropert
iesuponl
awfuldi
ssol
uti
onand
aft
erpaymentofalli
tsdebtsandli
abil
it
ies,excepti
nthecaseofdecr
easeofshare
capi
talofthecooper
ati
veandasot her
wi seall
owedbythisCode.

"ART.70.Rul
esandRegul
ati
onsonLi
qui
dati
on.TheAut
hori
tyshal
li
ssuethe
appropr
iat
eimpl
ementi
ngguidel
i
nesf
orthel
iqui
dati
onofcooper
ati
ves.
"

Sec.8.Ar
ti
cles72,
73,
74,75,
76,77,78,
79and80ofChapt
erVII
IonCapi
tal
,Pr
opert
y,
andFundsofthesameCodeareher
ebyrenumber
edandamendedtor
ead,asf
oll
ows:

CHAPTERVI
II

CAPI
TAL,
PROPERTY,
ANDFUNDS

"ART.71.Capit
al.-Thecapit
ali
zati
onofcooper
ati
vesandtheaccount
ingprocedur
es
shal
lbegov er
nedbyt heprovi
sionsoft
hisCodeandtheregul
ati
onswhichshallbe
i
ssued.
"ART.72.Capi
tal
Sources.
-Cooper
ati
vesregist
eredundert
hisCodemayder
ivet
hei
r
capi
talfr
om anyoral
lofthefol
l
owingsources:

"
(1)Member
'sshar
ecapi
tal
;

"
(2)Loansandbar
rowi
ngsi
ncl
udi
ngdeposi
ts;

"
(3)Revol
vi
ngcapi
tal
whichconsi
stsoft
hedef
err
edpay
mentofpat
ronager
efunds,
or
i
nter
estonshar
ecapit
al;
and

"(4)Subsidies,donati
ons,l
egacies,gr
ants,aidsandsuchotherassist
ancefr
om any
l
ocal orforeigninsti
tuti
onwhetherpublicorpriv
ate:
Provi
ded,Thatcapit
alcomingfrom
suchsubsi des,donations,
legaci
es,grants,
aidsandotherassi
stanceshall
notbe
divi
dedint oindivi
dualshar
ecapi t
alholdi
ngsatanyt i
mebutshallinst
eadform par
tof
thedonat edcapitalorfundofthecooper at
ive.

"
Upondi
ssol
uti
on,
suchdonat
edcapi
tal
shal
lbesubj
ectt
oescheat
.

"ART.73.Li
mitat
iononShareCapital
Holdi
ngs.
-Nomemberofpr
imarycooper
ati
ve
othert
hancooperati
vei
tsel
fshallownorholdmor
ethant
enpercent
um (10%)oft
he
sharecapi
taloft
hecooperat
ive.

"Wher eamemberofcooper ati

vedies,hi
sheirshallbeentitl
edtotheshar esofthe
decedent :
Provi
ded,Thatt
hetotalshareholdi
ngoft heheirdoesnotexceedt enper
centum (10%)ofthesharecapit
alofthecooperati
v e;Pr
ovided,fur
ther,Thatthehei
r
quali
fyandi sadmit
tedasmember soft hecooperative:
Providedfinal
ly,Thatwherethe
hei
rf ail
stoquali
fyasamemberorwher ehistotalshareholdingexceedst enper
centum (10%)ofthesharecapit
al,theshareorshar esexcesswi l
lrev
erttothe
cooper
ati
veuponpay
mentt
othehei
roft
hev
alueofsuchshar
es.

"ART.74.Assi
gnmentofShareCapi
tal
Cont r
ibuti
onorI
nterest
.-Subjectt
ot he
provi
si
onsoft hi
sCode,nomembershall
transferhi
ssharesorinter
estinthe
cooperat
iveoranypar
tther
eofunl
ess.

"
(1)Hehashel
dsuchshar
ecapi
tal
cont
ri
but
ionori
nter
estf
ornotl
esst
hanone(
1)y
ear
.

"
(2)Theassi
gnmenti
smadet
othecooper
ati
veortoamemberoft
hecooper
ati
veort
o
apersonwhofal
l
swit
hint
hef
iel
dofthemembershi
poft
hecooper
ati
ve;
and

"
(3)Theboar
dofdi
rect
orshasappr
ovedsuchassi
gnment
.

"ART.75.Capit
alBuil
d-Up.-Tebyl
awsofeverycooperati
veshal
lbeprov
idedfora
reasonabl
eandr eali
sti
cmembercapitalbui
ld-
uppr ogr
am toal
lowtheconti
nui
ng
growthoft hemember s'i
nvest
mentinthei
rcooperati
veasthei
reconomiccondi
ti
ons
conti
nuet oimprove.

"ART.76.Shares.-Theterm"share"r
eferstoaunitofcapit
ali
napr i
mar ycooper
ati
vet
he
parvalueofwhi chmaybef i
xedtoanyfigurenotmorethanOnet housandpesos
(P1,
000.00).Theshar eofcapit
alofacooper at
ivei
sthemoneypai dorrequir
edtobe
paidfortheoper at
ionsofthecooperati
ve.Themethodf ort
heissuanceofshare
cert
if
icatesshallprescr
ibedini
tsbylaws.

"ART.77.Fi
nes.-Thebylawsofacooper
ati
vemayprescr
ibeafineonunpaidsubscri
bed
sharecapit
al.Pr
ovided,
thatsuchf
inei
sfai
randr
easonableundertheci
rcumstances.

"
ART.78.I
nvest
mentofCapi
tal
.-Acooper
ati
vemayi
nvesti
tscapi
tal
inanyoft
he
f
oll
owing:
"
(a)I
nshar
esordebent
uresorsecur
it
iesofanyot
hercooper
ati
ve;

"
(b)I
nanyr
eput
abl
ebanki
nthel
ocal
i
ty,
oranycooper
ati
ve;

"
(c)I
nsecur
it
iesi
ssuedorguar
ant
eedbyt
heGov
ernment
;

"
(d)I
nreal
stat
epr
imar
il
yfort
heuseoft
hecooper
ati
veori
tsmember
s;or

"
(e)I
nanyot
hermanneraut
hor
izedi
ntheby
laws.

"ART.79.Rev olv
ingCapi t
al.Thegener al assemblyofanycooperati
vemayaut horizethe
boardofdi rectorst oraisear evol
vingcapi talt
ostrengtheni
tscapit
al str
uctur
eby
deferr
ingt hepay mentofpat ronageref undsandi nter
estonsharecapi t
alorbythe
authorizeddeduct i
onofaper centagef rom theproceedsofproduct
ssol dorser v
ices
rendered,orperuni tofproductorser viceshandled.Theboardofdirectorsshallissue
revol
vingcapi talcer t
if
icateswithserial number,name, amount,
andr ateofinter
estt o
bepaidandshal l disti
nctl
ysetf or
ththet imeofreti
rementofsuchcer ti
fi
catesandt he
amount st
ober eturned."

Sec.9.Art
icl
es81,82,
83,
84and85ofChapterI
XonAudit
,Inqui
ryandMember
s'Ri
ght
toExamineofthesameCodear
eher
ebyrenumberedandamendedtoread,
asf
oll
ows:

"ART.80.AnnualAudit
.Cooperat
ivesregist
eredunderthi
sCodeshallbesubj
ecttoan
annualfi
nanci
al,
perfor
manceandsoci alaudit.Thef
inanci
alaudi
tshal
lbeconductedby
anexternal
audit
orwhosat i
sfi
esallthefoll
owingquali
fi
cati
ons:

"
(1)Hei
sindependentoft
hecooper
ati
veoranyofi
tssubsi
diar
ythathei
saudi
ti
ng;
and
"
(2)Heisamemberi ngoodstandingoft
hePhil
i
ppi
neInst
itut
eofCert
if
iedPubl
i
c
Accountants(
PICPA)andi
saccredit
edbybot
htheBoardandAccount
ancyandthe
Author
it
y .

"
Thesoci
alaudi
tshal
lbeconduct
edbyani
ndependentsoci
alaudi
toraccr
edi
tedbyt
he
Aut
hor
it
y.

"Perf
ormanceandsoci
alaudi
trepor
tswhichcont
ainthefi
ndi
ngsandr
ecommendat
ions
oftheaudi
torshal
lbesubmit
tedtotheboar
dofdirect
ors.

"TheAuthor
it
y,i
nconsul
tati
onwitht
hecooperati
vesect
or,
shal
lpr
omul
gat
ether
ules
andstandar
dsfort
hesocialaudi
tofcooper
ati
ves.

"ART.81.AuditReport
.Theaudi t
orshallsubmitt
ot heboardofdir
ector
sandt othe
audi
tcommi tteethefi
nancial
auditreportwhichshallbei
naccordancewiththe
general
lyacceptedaudi
ti
ngst andar
dsf orcooper
ativesasjoi
ntl
ypromulgatedbythe
Phil
ippi
neInstit
uteofCert
if
iedPubli
cAccount ants(PICPA)andtheAuthori
ty.

"Ther
eaf
ter
,theboardofdir
ect
orsshal
lpr
esentt
hecompl
eteaudi
trepor
ttot
hegener
al
assembl
yinitsnextmeet
ing.

"ART.82.Nonli
abi
li
tyf
orDefamati
ons.Theauditori
snotli
ablet
oanypersoni
nan
acti
onfordefamati
onbasedonanyact,done,oranyst
atementmadebyhi mingood
fai
thinconnect
ionwit
hanymatterheisauthori
zedorrequi
redt
odopursuanttothi
s
Code.

"
ART.83.Ri
ghttoExamine.Amembershallhav
etheri
ghttoexami
net
herecor
ds
r
equi
redtobekeptbythecooper
ati
veunderArt
icl
e52ofthi
sCodedur
ingr
easonabl
e
hoursonbusi
nessdaysandhemaydemand,inwr
iti
ng,f
oracopyofexcer
ptsf
rom sai
d
recor
dswit
houtchar
geexceptt
hecostofpr
oduct
ion.

"Anyoffi
ceroft hecooper ati
vewhoshal lrefuset oall
owanymemberoft hecooperati
ve
toexami neandcopyexcer ptsfrom itsrecor dsshallbel i
abl
et osuchmemberf or
damagesandshal lbegui l
tyofanof fensewhi chshal lbepunishableunderArti
cle140
ofthi
sCode: Pr ovided,Thati fsuchr efusalispur suanttoar esolut
ionororderofthe
boardofdi rectors,theliabili
tyundert hisarticl
eshal lbeimposedupont hedir
ectors
whov otedf orsuchr ef
usal :Provided, f
urt
her ,Thatitshallbeadef ensetoanyact i
on
underthisar t
iclethatthememberdemandi ngt oexami neandcopyexcer ptsfr
om t he
cooperativerecor dshasi mproper l
yusedanyi nf or
mat i
onsecur edthroughanyprior
examinationoft herecor dsofsuchcooper ativeorwasnotact i
ngingoodf ait
horf ora
l
egiti
mat epur posei nmaki nghisdemand.

"ART.84.SafetyofRecords.Everycooper
ati
veshall
,atit
spr i
ncipal
offi
ce,keepand
caref
ull
ypreservetherecordsrequir
edbythi
sCodet obepr eparedandmai nt
ained.I
t
shall
takeallnecessar
ypr ecaut
iontoprev
entit
sloss,destr
uctionorfal
sif
icati
on."

Sec.10.Ar
ti
cles86and87ofChapt
erXonAllocat
ionandDist
ri
buti
onofNetSur
plusof
thesameCodear eher
ebyr
enumberedandamendedtoread,asfol
l
ows:

CHAPTERX

ALLOCATI
ONANDDI
STRI
BUTI
ONOFNETSURPLUS

"ART.85.NetSurplus.Not
wi t
hstandingtheprovi
si
onsofexi
stingl
aws,t
henetsurplus
ofcooperati
vesshallbedet
er minedinaccordancewi
thit
sbylaws.Ev
erycooperat
ive
shal
ldetermineit
snetsurplusatt hecl
oseofev er
yfi
scal
yearandatsuchotherti
mes
asmaybepr escr
ibedbytheby l
aws.

"
Anypr
ovi
sionofl
awt
othecont
rar
ynot
wit
hst
andi
ng,
thenetsur
plusshal
lnotbe
construedaspr ofi
tbutasanexcessofpay mentsmadebyt hemember sfort
heloans
borrowed,orthegoodsandser v i
cesav ai
ledbythem f
rom t
hecooper ati
veorthe
diff
erenceoft heright
ful
amountduet othemember sfort
heirproductssoldorser
vices
renderedtothecooper at
iveincludingotherinf
lowsofassetsresult
ingfr
om it
sother
operatingact
iv i
ti
esandwhi chshal lbedeemedt ohavebeenreturnedtothem i
fthe
samei sdistr
ibutedasprescribedher ei
n.

"ART.86.Or
derofDi
str
ibut
ion.Thenetsur
plusofev
erycooper
ati
veshal
lbedi
str
ibut
ed
asfoll
ows:

"(
1)Anamountforthereserv
efundwhi chshal
lbeatleastt
enpercent um (10%)ofnet
surpl
us:
Provi
ded,That,
inthefi
rstfi
ve(5)year
sofoperati
onafterregist
rat
ion,t
his
amountshal
lnotbelessthanfi
ftypercent
um (50%)ofthenetsurplus:

"
(a)Thereservef
undshallbeusedf orthestabi
l
ityofthecooper
ati
veandtomeetnet
l
ossesinit
soperati
ons.Thegeneral assemblymaydecreasetheamountall
ocat
edto
t
hereservefundwhenthereser
vef undal r
eadyexceedsthesharecapi
tal
.

"Anysum r
ecov
eredoni
temspr
evi
ousl
ychar
gedt
other
eser
vef
undshal
lbecr
edi
tedt
o
suchfund.

"(b)Thereser
v ef
undshal lnotbeuti
li
zedfori
nvest
ment,otherthanthoseall
owedi
n
thisCode.Suchsum ofther eser
vefundinexcessofthesharecapit
almaybeusedat
any t
imeforanyproj
ectthatwoul dexpandtheoper
ati
onsoft hecooperat
iveupont
he
resolut
ionofthegener
al assembly.

"(
c)Uponthedi
ssol
uti
onofthecooperat
ive,t
hereserv
ef undshal
lnotbedi
str
ibut
ed
amongthemembers.Thegener
alassembl ymayresolv
es:

"
(i
)Toest
abl
i
shausuf
ruct
uar
ytr
ustf
undf
ort
hebenef
itofanyf
eder
ati
onoruni
ont
o
whi
cht
hecooper
ati
vei
saf
fi
li
ated;
and

"(
ii
)Todonate,
contri
bute,orotherwi
sedi
sposeoftheamountfort
hebenefi
tofthe
communitywherethecooperativ
eoperat
es.Ift
hememberscannotdeci
deupont he
di
sposaloft
hereservefund,thesameshallgotot
hefeder
ati
onoruniontowhichthe
cooper
ati
veisaff
il
iat
ed.

"(2)Anamountf ortheeducationandtrai
ningfund,shallnotbemor ethantenper
centum (10%)ofthenetsurplus.Theby l
awsmaypr ovi
det hatcert
ainfeesoraport
ion
thereofbecredit
edtosuchf und.Thefundshallprovideforthetrai
ning,devel
opment
andsi mil
arothercooper
ati
veact i
vi
ti
esgear edtowardsthegr owthoft hecooper
ati
ve
mov ement:

"(a)Halfoftheamountstransfer
redtotheeducati
onandt r
aini
ngfundannuall
yunder
thissubsecti
onshallbespentbyt hecooperat
iveforeducati
onandt r
aini
ngpurposes;
whi l
etheotherhalfmayber emitt
edtoauni onorfederat
ionchosenbyt hecooper
ativ
e
orofwhi chiti
samember .Thesaidunionorfederati
onshallsubmittotheAuthor
it
y
andt oitscontr
ibut
ingcooperati
vesthefol
lowingschedules:

"(
i)Li
stofcooperat
iveswhi
chhav
eremi
tt
edt
hei
rrespect
iveCooper
ati
veEducat
ionand
Trai
ningFunds(CETF);

"
(i
i)Busi
nessconsul
tancyassi
stancet
oincl
udet
henat
ureandcost
;and

"(
ii
i)Ot
hertr
aini
ngactiv
iti
esunder
takenspeci
fyi
ngt
her
eint
henat
ure,
par
ti
cipant
sand
costofeachact
ivi
ty.

"(
b)Upont hedissol
utionofthecooper
ati
ve,t
heunexpendedbal anceoft
heeducat
ion
andtrai
ningfundapper t
aini
ngtothecooper
ati
veshal
lbecr edi
tedtothecooper
ati
ve
educati
onandt rai
ningfundofthechosenuni
onorfederat
ion.
"(
3)Anamountf orthecommunitydevel
opmentf
und,whi
chshal
lnotbelessthanthr
ee
percentum (
3%)ofthenetsurpl
us.Thecommunit
ydevel
opmentfundshallbeusedf
or
proj
ectsoracti
vi
ti
esthatwi
llbenef
itt
hecommunitywher
ethecooperat
iveoperat
es.

"
(4)Anoptional
fund,alandandbuil
ding,
andanyot
hernecessar
yfundt
het
otal
of
whichshal
lnotexceedsevenpercentum (
7%)
.

"(
5)Ther emaini
ngnetsurplusshal
lbemadeav ai
labletothemembersinthef orm of
i
nterestonsharecapi
talnottoexceedthenormalrateofret
urnouri
nvestment sand
patr
onager ef
unds:Pr
ovided,Thatanyamountremai ni
ngaftert
heal
lowableinter
est
andthepatronageref
undhav ebeendeductedshallbecredi
tedtot
hereservefund.

"Thesum al
locat
edforpatr
onageref
undsshal
lbemadeavai
l
ableatthesamer at
etoal
l
patr
onsofthecooperat
ivei
nproport
iont
othei
rindi
vi
dual
pat
ronage:
Provided,
That:

"(
a)Inthecaseofamemberpatronwithpaid-
upsharecapit
alcontri
buti
on,
his
propor
tionat
eamountofpat
ronageref
undshal l
bepaidtohim unl
essheagreest
o
credi
ttheamountt
ohisaccountasaddit
ionalshar
ecapit
alcontri
buti
on;

"(
b)Inthecaseofamemberpatronwithunpai
dsharecapit
alcont
ri
buti
on,hi
s
propor
tionat
eamountofpat
ronageref
undshallbecr
edit
edtohisaccountunt
ilhi
s
accountunti
lhi
sshar
ecapit
alcont
ri
butionhasbeenful
l
ypaid;

"(c)Int
hecaseofanon- memberpat ron,hi
spr oport
ionateamountofpat r
onagerefund
shallbesetasideinageneral
fundf orsuchpat r
onsandshal lbeall
ocatedtoindi
vi
dual
non-memberpat ronsonl
yuponrequestandpr esent
ationofev i
denceoftheamountof
hispatronage.Theamountsoallocatedshallbecreditedtosuchpat r
ontoward
pay mentofthemi ni
mum capi
talcontri
buti
onf ormember shi
p.Whenasum equal to
thisamounthasaccumul at
edatanyt imewithinaper i
odspeci f
iedinthebyl
aws,such
patronshal
lbedeemedandbecomeamemberofthecooperat
iveifhesoagr
eesor
request
sandcomplieswi
tht
heprovi
sionsoft
heby
lawsforadmissiont
omembershi
p;
and

"(
d)Ifwithi
nanyperiodoft i
mespecifiedinthebyl
aws, anysubscriberwhohasnotf ul
ly
paidhissubscri
bedsharecapitaloranynon-memberpat ronwhohasaccumul atedthe
sum necessaryformember shi
pbutwhodoesnotr equestnoragr eetobecomea
memberorf ail
stocompl ywiththeprovisi
onsoftheby l
awsf oradmi ssionto
member shi
p,theamountsoaccumul atedorcredi
tedtot hei
raccountt ogetherwit
hany
partofthegeneralf
undfornonmemberpat ronsshallbecredit
edt other eser
vefundor
totheeducati
onandt r
ainingfundofthecooper at
ive,
attheopt i
onoft hecooper at
ive.
"

Sec.11.Art
icl
es88,89,90,91,92,93,94and95ofChapt
erXIont
heSpecial
Prov
isi
ons
Relat
ingtoAgrar
ianReform Cooperat
ivesoft
hesameCodeareher
ebyrenumber
ed
ret
itl
edandamendedt oread,asfoll
ows:

CHAPTERXI

AGRARI
ANREFORM COOPERATI
VES

"ART.87.Coverage.Theprovisi
onsofthi
sChaptershall
pri
mari
lygovernagr
arian
ref
orm cooperati
ves:Prov
ided,Thatt
heprovi
sionsoftheot
herchapter
softhisCode
shal
lapplysuppletor
il
yexceptinsof
arasthi
sChapterother
wiseprov
ides.

"ART.88.Defini
ti
onandPur pose.Anagrar
ianref
orm cooperat
ivei
soneor gani
zedby
mar gi
nalfar
mers,majori
tyofwhichareagrari
anref
orm benefi
ciar
ies,fort
hepurposeof
developi
nganappr opr
iat
esy st
em oflandtenur
e,l
anddev el
opment ,
landconsol
idati
on
orlandmanagementi nareascov er
edbyagrari
anref
orm.

"
Anagr
ari
anref
orm cooper
ati
veasdef
inedshal
lbeor
gani
zedf
oranyoral
loft
he
f
oll
owi
ngpur
poses:
"(
1)Todev
elopanappr
opr
iat
esystem oflandt
enure,
landdevel
opment
,land
consol
i
dat
ionorl
andmanagementinareascover
edbyagrari
anref
orm;

"(2)Tocoor di
nateandfacil
it
atethedisseminat
ionofsci
enti
ficmet hodsofproducti
on,
andprov i
deassistanceinthestorage,t
ranspor
t,andmarket
ingoff arm pr
oductsfor
agrari
anr ef
orm benefi
ciar
iesandt hei
rimmediatefami
ly
,hereinaf
terrefer
redtoas
"benefi
ciari
es";

"(
3)Topr ovi
defi
nancial
faci
l
iti
est
obenef
ici
ari
esf
orpr
ovi
dentorpr
oduct
ivepur
poses
atreasonabl
ecosts;

"
(4)Toarr
angeandfaci
li
tat
etheexpedit
ioustr
ansf
erofappr
opri
ateandsuit
abl
e
t
echnol
ogytobenef
ici
ari
esandmar gi
nalfar
mersatthel
owestpossi
blecost
;

"(5)Topr ovi
desocialsecur
it
ybenefi
ts,heal
th,
medi
calandsoci
alinsurancebenef
it
s
andot hersocialandeconomicbenef
itsthatpr
omot
ethegeneralwelfareoft
heagrari
an
reform benefi
ciari
esandmar gi
nal
farmers;

"(
6)Topr
ovidenon-
for
maleducat
ion,vocati
onal
/t
echni
cal
trai
ning,
andl
i
vel
i
hood
progr
amstobenefi
ci
ari
esandmarginalfar
mers;

"
(7)Toactascondui
tsf
orext
ernal
assi
stanceandser
vicest
othebenef
ici
ari
esand
margi
nalf
armers;

"
(8)Tounder t
akeacompr ehensi
veandintegrat
eddevel
opmentpr
ogr
am inagr
arian
r
eform andresett
lementareaswit
hspecialconcer
nfort
hedevel
opmentofagr
o-based,
mari
ne-based,andcott
age-basedindust
ri
es;
"
(9)Tor
epr
esentt
hebenef
ici
ari
esonanyoral
lmat
ter
sthataf
fectt
hei
rint
erest
;and

"
(10)Toundert
akesuchothereconomi
corsoci
alact
ivi
ti
esasmaybenecessar
yor
i
ncident
ali
nthepur
suitofthefor
egoi
ngpur
poses.

"ART.89.Cooper ati
veEstat
e.Landhol
dingsl
ikeplantati
ons,estatesorhaci
endas
acqui
redbyt heSt at
eforthebenefi
toftheworkersinaccordancewi ththe
Compr ehensi
v eAgrari
anReform Pr
ogram whichshallbecollecti
vel
yownedbyt he
worker-benef
iciar
iesunderacooperat
iveset
-up.

"ART.90.Infr
astructure.I
nagr ar
ianreform andr esett
lementar eas,t
heGov ernment
shall
gr antt
oagr ari
anr ef
orm cooperativespreferenti
altr
eatmenti ntheconst r
ucti
on,
maintenanceandmanagementofr oads, br
idges,canals,
whar ves,ports,reservoi
rs,
i
rri
gationsystems, waterworkssy st
ems, andot herinf
rastr
uctureswi t
hgov ernment
fundi
ng.Fort hi
spur pose,theGov er
nmentshal lprovi
detechnicalassistance, f
aci
lit
ies
andequi pmenttosuchagr ar
ianreform cooperat i
ves.

"ART.91.LeaseofPublicLands.TheGov er
nmentmayl easepubliclandst oany
agrari
anrefor
m cooperati
veforaper i
odnotexceedingtwent y-
fi
ve(25%)y ears,subject
torenewalforanot
hertwenty-f
ive(25)year
sonly:Provi
ded, Thattheappl i
cati
onf or
renewalshall
bemadeone( 1)yearbeforet
heexpirati
onoft helease:Provided,furt
her,
Thatsuchleaseshall
bef ortheexclusi
veuseandbenef itofthebenef i
ciar
iesand
mar gi
nalf
armerssubjecttotheprovisi
onsoftheCompr ehensiveAgr ari
anRef orm
Program.

"ART.92.Pr eferenti
alRi ght.I
nagr ar i
anr efor
m areas,anagr ari
anr eform cooperative
shal
lhav et hepr eferentialri
ghtint hegr antoffranchiseandcer t
if
icateofpubl i
c
convenienceandnecessi tyfortheoper at i
onofpubl i
cut i
li
ti
esandser vi
ces: Pr
ov i
ded,
Thatitmeet st herequirement sandcondi t
ionsimposedbyt heappr opri
ategov ernment
agencygr ant i
ngt hef r
anchi seorcer t
if
icateofpubl i
cconv enienceandnecessi t
y.Ifthere
i
sanel ectricser vicepr ovideri
nt hear ea, i
tshallupont herequestofanagr ari
anr efor
m
cooperati
v e, i
mmedi atelyprovideel ectri
cser v
icestot heagrarianreform areas.Ifthe
elect
ri
cservicepr ovi
derfail
stopr ovi
detheser vi
cesrequestedwithi
naper iodofone(1)
year,t
heagr ar
ianr ef
orm cooperativ
econcer nedmayunder taketoprovi
det heelect
ri
c
servi
cesinthear eathroughitsownr esources.Alli
nvestmentsmadebyt hesaid
agrar
ianreform cooper at
ivefortheelect
ri
ficati
onoftheagrarianref
ormr esett
lement
areasshall
bet hesubj ectofsaletotheelectri
cservi
cepr ov
ideronceittakesont he
servi
ce.

"ART.93.Pri
vi
leges.Subjectt
osuchr easonabl
etermsandcondi
ti
onsast he
Depart
mentofAgr ari
anRef or
m( DAR)andt heAuthor
it
ymayimpose,agrari
anr
eform
cooperat
ivesmaybegi ventheexclusi
verightt
odoanyoralloft
hefoll
owingeconomic
acti
vi
ti
esinagrari
anr ef
orm andresettl
ementareas;

"(1)Supplyanddist
ri
butionofconsumer,
agricul
tural
,aqua-cul
tural
,andindustr
ial
goods, pr
oducti
oninput
s, andrawmateri
alsandsupplies,machinery,equi
pment ,
facil
it
iesandotherser
vicesandrequi
rementsoft hebenefi
ciar
iesandmar ginalfar
mer
s
atreasonablepri
ces;

"
(2)Market
ingoft
hepr
oduct
sandser
vicesoft
hebenef
ici
ari
esi
nlocal
andf
orei
gn
market
s;

"(
3)Pr
ocessi
ngofthemembers'pr
oduct
sint
ofi
nishedconsumerori
ndust
ri
algoodsf
or
domest
icconsumpti
onorf
orexport
;

"(
4)Provi
sionofessenti
alpublicservi
cesatcostsuchaspower,i
rr
igat
ion,
potabl
e
water
,passengerand/orcargot r
ansport
ati
onbylandorsea,communicati
onserv
ices,
andpubli
chealthandmedi calcareservi
ces;

"
(5)Management,
conservati
on,andcommer ci
aldevel
opmentofmar
ine,
forest
ry,
mineral
,wat
er,
andothernatural
resourcessubjectt
ocompli
ancewit
hthelawsand
r
egulati
onsonenv
ironmentalandecological
control
s;and
"(
6)Provi
sionoffi
nanci
al,
technol
ogi
cal
,andot
herser
vicesandf
aci
l
iti
esr
equi
redbyt
he
benef
ici
ari
esinthei
rdai
lyli
vesandli
vel
i
hood.

"TheGov ernmentshallpr
ov i
dethenecessaryfi
nancialandt echni calassistanceto
agrar
ianreform cooperat
ivestoenablethem t
odi schargeeffect i
velytheirpurposes
underthisarti
cl
e.TheDAR, t
heAuthorit
yandtheBSPshal ldr awupaj ointprogram f
or
theorganizat
ionandf i
nancingoftheagrari
anreform cooper ativ
essubj ectoft hi
s
Chapter.Thejointpr
ogram shallbegearedtowardst hebenef ici
ariesgradual
assumpt i
onoff ul
lownershipandmanagementcont roloftheagr ar i
anref orm
cooperati
ves.

"ART.94.Organizati
onandRegistrati
on.Agrari
anreform cooperativesmaybe
organi
zedandr egist
eredunderthisCodeonl yuponpr i
orwr i
tt
env erifi
cati
onbytheDAR
totheeff
ectthatthesamei sneededanddesi r
edbyt hebenef i
ciar
ies;result
sofastudy
thathasbeenconduct edfai
rl
yindicat
etheeconomi cf easibi
li
tyofor gani
zingthesame
andthatitwil
lbeeconomi cal
lyvi
ableinitsoperati
ons; andthatthesamemaynowbe
organi
zedandr egist
eredi
naccor dancewi t
hrequir
ement softhi
sCode.

"TheAuthori
ty,i
nconsul
tati
onwit
ht heconcer
nedgov
ernmentagenciesand
cooperat
ivesector
,shal
li
ssueappropri
aterul
esandr
egul
ati
onspertaini
ngt
othe
provi
si
onsoft hi
sChapter.
"

Sec.12.Ar
ti
cles96,97and98ofChapt
erXI
Iont heSpeci
alProv
isi
onsonPubli
c
Servi
cesCooperat
ivesoft
hesameCodeareherebytr
ansfer
redtoanot
herchapt
er.
ChapterXI
Iasamendedshallnowr
ead,asf
oll
ows:

CHAPTERXI
I

COOPERATI
VEBANKS
"ART.95.Gov erni
ngLaw.Thepr ovi
sionsoft
hisChaptershall
primaril
ygovern
cooper at
ivebanksregi
steredunderthi
sCodeandt heotherprovi
sionsoft
hi sCode
shal
l applytothem onl
yinsofarastheyar
enotinconsi
stentwiththeprovi
sions
containedinthisChapt
er.

"ART.96.Super v
ision.Thecooper ativebanksregi
steredunderthi
sCodeshal lbeunder
thesupervisi
onoft heBSP.TheBSP, uponconsultat
ionwiththeAuthorit
yandt he
concernedcooper ati
vesect or
,shallformulat
eguideli
nesregardi
ngtheoper at
ionsand
thegov er
nanceofcooper at i
vebanks.Thesegui deli
nesshallgi
veduer ecogni
ti
ont ot
he
uniquenatureandchar acterofcooper ati
vebanks.Tot hi
send,cooperativ
ebanksshall
providefi
nancialandbanki ngservicestoitsmember s.

"ART.97.Or gani zat i

on, Member shipandEst abli
shmentofaCooper ati
v eBank.( 1)
Cooper ati
veor gani zationsdulyest abl
ishedandr egi ster
edundert hi
sCodemay
organizeacooper ativebank,whi chshallli
kewisebeconsi deredacooper at i
ve
regi
strableunderpr ovisi
onsoft hisCodesubj ectt ot herequirement sandr equisit
e
authorizati
onf rom t heBSP.Onl yonecooper ativebankmaybeest ablishedi neach
provi
nce: Provided, Thatanaddi ti
onal cooperati
vebankmaybeest ablishedi nthesame
provi
ncet ocat ert ot heneedsi nt hesamepr ov i
ncet ocatertot heneedsoft helocal
it
y
dependi ngont heeconomi ccondi ti
onsoft heprov inceasmaybedet ermi nedbyt he
BSP: Provided,furt her,Thattheaddi ti
onalcooper ativebankshal l
bel ocatedi nt heCit
y
ormuni ci
pali
tyot hert hatthecityormuni cipali
tywher ethef i
rstcooper ati
v ebanki s
l
ocated.

"(
2)Member shi
pinacooperati
vebankshallei
therber egularorassoci
ate.Regular
membershipshall
bel i
mit
edtocooperat
iveorganizat
ionswhi char
eholdersofcommon
shar
esofthebank.Associat
emember sarethosesubscr ibingandholdi
ngpr ef
erred
shar
esofthebank, whi
chmayincludebutarenotlimitedtot hefol
lowi
ng:

"
(a)I
ndi
vi
dual
member
soft
hebank'
smember
-pr
imar
ycooper
ati
ves;
and

"
(b)SamahangNay
onandMuni
cipal
Kat
ipunanngmgaSamahangNay
on(
MKSN)
whi chhel dcommonshar esofcooper ati
vebankspr i
ortot heeffectivi
tyoft hisActshall
appl yforconv er siontof ull
-pledgedcooper at i
vesinordertomai ntaintheirstatusas
regularmember sofcooper ativebanks: Prov ided,Thattheyshal lnotif
ythecooper ati
ve
bankconcer nedt heirintentiont oconv ertwi thinaper i
odofni net y(90)day sf r
om the
effect i
vityofthi sAct.SamahangNay onandMKSNar eher ebygiv enaper iodofone( 1)
yearf rom t heef fecti
vi
tyoft hisActt ocompl etethei
rconv ersi
onascooper atives.
Cooper ativebankshal lexertr easonabl eeff ortstoinformt hei
rmemberSamahang
Nay onandMKSNt ofi
nal l
yconv ertort ogiv et henoti
ceofconv ersionwi t
hi nthe
prescr i
bedper iod.Upont hef ail
ureoft heSamahangNay onandMKSNt of inall
yconvert
toaf ul
l-pledgedcooper ativewi thi
nt hemaxi mum per iodofone( 1)year,thecooper ati
ve
bankconcer nedmayconv ertthecommonshar esheldbysuchassoci ationst o
prefer r
edshar es.

"(3)Theart
icl
esofcooperat
iveandbylawsofacooper at
ivebank,
oranyamendment
theret
o,shall
beregi
ster
edwi t
htheAut hori
tyonlywhenaccompaniedbyacer
ti
fi
cat
eof
authori
tyi
ssuedbytheBSP, underi
tsoffici
alseal
.

"ART.98.Administ
rati
onofCooper ati
veBanks.Tomai nt
ainthequali
tyofbank
managementandaccor dappropri
ateprot
ecti
ontodeposi t
orsandthepubli
cingener
al,
theBSPshallprescr
ibedthefitandproperqual
ifi
cati
onsofbankdi r
ector
sandoffi
cer
s
fort
hepurposesoft hi
sarti
cle,gi
vingduerecogni
tiontotheuniquenatur
eand
charact
erofcooperati
vebanks.

"Not
withst
andi
ngtheprovi
sionsoft
hisCode,t
henumber,comput
ati
onandt
erm oft
he
boardofdir
ect
orsshal
lbedefinedi
ntheart
icl
esofcooper
ati
onandbyl
awsoft
he
cooper
ativ
ebank.

"ART.99.Quorum andVoti
ngRight s.Thequor um r
equir
ementf orgeneralassembly
meet i
ngs,
whetherspeci
alorregular,shal
lbeonehal fpl
usoneoft henumberofv oti
ng
sharesofall
themember singoodst anding.Inthemeetingsoftheboar dofdirect
ors,
whetherspeci
alorregul
ar,
thequor um requir
ementshall beone-halfpl
usoneofal lt
he
member softheboardofdir
ectors.Eachdi r
ectorshal
lonl yhav
eonev ot
e.
"Notwi
thst
andingtheprovi
sionsoft hi
sCodet othecont
rary
, t
hequor
um requi
rement
foramendment sofar
ti
clesofcooper at
ionandby l
awsshallbethr
ee-
four
ths(3/4)vot
e
ofallt
hemember swithvoti
ngr i
ghts,presentandconst
it
uti
ngaquorum.Allother
voti
ngrequi
rementsshallbeaspr escri
bedbyt heBSP.

"Thevoti
ngr
ight
soft
hemember
sshal
lbepr
opor
ti
onat
etot
henumberoft
hei
rpai
d-up
shares.

"ART.100.Power s,Functi
onsandAl l
i
edUndert
akingsofCooperativ
eBanks.A
cooperat
ivebankshal lpr
imari
lyprovi
def
inanci
al,
banki ngandcredi
tser
vicesto
cooperat
iveorganizati
onsandt hei
rmembers.Howev er,t
heBSPmaypr escri
be
appropri
ateguideli
nes,cei
li
ngsandcondit
ionsonborr owingofacooper
ative
organi
zati
onfrom acooper ati
vebank.

"
Thepowersandf
unct
ionsofacooper
ati
vebankshal
lbesubj
ectt
osuchr
ulesand
r
egul
ati
onsasmaybepromulgat
edbytheBSP.

"I
naddit
iontothepowersgrantedbythi
sCodeandotherexi
sti
nglaws,anycooper
ati
ve
bankmayper f
orm anyorall
ofthebanki
ngserv
icesoff
eredbyothert
ypesofbanks
subj
ecttothepri
orapprovaloftheBSP.

"ART.101.Capi
tal
Requir
ementsofCooper
ati
veBanks.(
1)Acooper
ati
vebankshal
l
haveami ni
mum paid-
upcapi
tali
nsuchamountasmayberequir
edbytheBSP.

"TheBSPmaypr escr
iberul
esandr egul
ationsonthet ypesofsharesacooperat
ivebank
mayissue,i
ncludingtheter
mst hereofandr i
ghtsappurtenantther
etotodet
ermine
compli
ancewi t
hl awsandregul
ationsgov erni
ngcapitalandequitystr
uct
ureofbanks:
Provi
ded,Thatcooperati
vebanksshallissueparv al
ueshar esonly.

"
(2)TheBar
ri
oSav
ingsFund(
BSF)andBar
ri
oGuar
ant
eeFund(
BGF)
coll
ected/deductedbyv ar
iousbankst hroughoutthecountr yfrom thel oanproceedsof
farmer-borr
ower swhower emember sofcooperativ
esandSamahangNay onin
compliancewi t
hPr esi
dentialDecreeNo.175andaccompany i
ngl et
tersofi nstruct
ion,
whichar esti
ll
floati
ngandout standingeit
herasactiveordor mantdeposi taccount sin
thebooksoft hosebanks, shallbedepositedtothecooper ativebankl ocatedi nthe
provi
ncewher et hedeposi
t or
ybanksofBSFandBGFar elocat ed,orifthereisno
cooperativ
ebanki ntheprov i
nce.TheBSP, i
ncoordinat
ionwi tht heAut hor
ity,shall
comeupwi ththeimplement i
nggui del
inesonhowt ocreditt heowner softhef unds.

"Thosefundswhoseowner
scoul
dnotbel
ocat
edori
dent
if
iedshal
lbesubj
ectt
o
escheat
.

"ART.102.Pr i
vil
egesandIncent
ivesofCooper at
iveBanks.Thecooper ati
vebanks
regi
steredundert hi
sCodeshallbegiventhesamepr ivi
legesandincentiv
esgrantedto
theruralbanks,priv
atedevel
opmentbank, commer ci
albanks,andallotherbanksto
redi
scountnot eswi t
htheBSP,t
heLandBankoft hePhilippi
nes,andothergovernment
bankswi thoutaff
ectingi
nanywayt heprovisi
onsofthisCode.

"(
1)Subj ecttot heappr ovaloft heBSP, acooper ativebankshal lpubli
shast atementof
i
tsfinancialstatementofi t
sf inancialcondi ti
on,includingthoseofitssubsi diariesand
affi
li
atesinsucht ermsunder standablet ot helaymanandi nsuchf requencyasmaybe
prescri
bedbyt heBSP, i
nEngl ishorFi l
ipino, atl
eastonceev eryquarterinanewspaper
oflocalcircul
ationi nthecityorpr ovi
ncewher ethepr incipaloff
iceislocatedor ,i
fno
newspaperi spubl ishedint hesamepr ovinces,theni nanewspaperpubl ishedi nt he
nearestcityorpr ovinceorinanewspaperofgener alcircul
ati
on.TheBSP, howev er,
may
al
lowt hepost i
ngoft hefinanci alstat
ement soft hecooper ati
vebanki nconspi cuous
pl
acesi tmaydet ermineinl ieuoft hepubl icati
onr equiredintheprecedingsent ence
whenwar rant
edbyt hecircumst ances.

"However
,incasesoff orecl
osureofmor tgagescoveri
ngloansgrantedbyacooper
ati
ve
bank,
andt heexecuti
onofj udgmentsthereoninvol
vingrealpr
operti
esandlevi
edupon
byasheri
ff,i
tshallbeexemptf r
om publicati
onrequir
ementwher ethetot
alamountof
thel
oan,excludi
nginterestandotherchargesdueandunpai d,doesnotexceedTwo
hundredf i
ft
yt housand( P250,000.00)orsuchamountast heBSPmaypr escribe, as
maybewar rantedbyt hepr evail
i
ngeconomi ccondi t
ionsandbyt henat ureand
characterofthecooper ativebanks.Itshal lbesuffici
entpubl i
cati
oninsuchcasesi fthe
noti
ceoff oreclosureandexecut ionofj udgmentar epost edi nconspicuousar easi nthe
cooperativ
ebank' spr emi ses,themuni cipalhall
,themuni cipalpubli
cmar ket,the
barangayhall,orthebar angaypubl i
cmar ket,i
ftherebeanywher ethepr oper t
y
mor t
gagedi ssituated, withi
naper iodofsi xty(60)day simmedi atel
ypr ecedingt he
publi
cauct i
onort heexecut ionofjudgment .Proofofpubl i
cationasrequi redher ein
shallbeaccompl i
shedbyanaf fi
dav i
toft hesherifforofficerconduct i
ngt hef oreclosur
e
sal
eorexecut ionofj udgment ,andshal lbeat t
achedt other ecordofthecase.

"
(2)Acooper at
ivebankshal
lbeall
owedtoforecl
osurelandsmor
tgagedtoitssubj
ect
tot
hepr ov
isi
onsofRepublicActNo.6657,
otherwiseknownasCompr ehensi
ve
Agrar
ianReform Lawof1988.

"ART.103.Assistancet oCooper ati

v eBanks.Inaccor dancewi thexist
ingpoli
cies,
governmentagenci es,government -
ownedorcont roll
edcor porati
onsandf i
nanci al
i
nstit
ut i
onsshallpr
ov i
deassi stance,techni
calorot herwise,tocooperati
vebankst o
permitthem togrow, devel
opandper for
mt hei
rroleincount rysi
dedev el
opment
towardsasust ai
nablenat i
onal economi cdevelopment .Whenev eracooper ati
vebank
organizedunderthisCodei sinast at eofconti
nuingi nabil
it
yorunwi ll
i
ngnesst o
maintainaperiodofl i
quidi
ty,theBSPmaydesi gnateoneofi tsoffi
cialsoraper sonof
recognizedcompet ence,preferabl
ywi t
hexperi
encei ncooper ati
vebankingandf inance,
asconser vat
orofthesai dbankpur suanttotheappr opriat
epr ovi
sionsofexisti
ng
bankinglaws.

"ART.104.Appli
cabi
li
tyofBankingLawsandRegulat
ions.Wi
threspecttot
he
provi
si
onsandgov ernanceofthecooper
ati
vebanks,t
heprovi
sionsofthebanki
ngl
aws,
rul
esandr egul
ati
onsshallpr
evail
,not
wit
hst
andingSec.71ofRepubli
cActNo.8791,
other
wiseknownast heGeneralBanki
ngActof2000.

"
TheBSPandtheAuthor
it
y,i
nconsul
tat
ionwiththeconcer
nedcooperati
vesect
or,shal
l
i
ssueappr
opr
iat
erul
esandregul
ati
onspert
aini
ngtotheprovi
sionsofthi
sChapter
."
Sec.13.Ar
ticles99,100,101,102,103,104,105,
106,107,108and109ofChapterXI
II
onSpecialProvisi
onsRelati
ngtoCooper at
iveBanksofthesameCodearehereby
tr
ansfer
redtoanot herchapt
er.ChapterXII
Iasamendedshal l
nowread,
asfol
lows

CHAPTERXI
II

I
NSURANCECOOPERATI
VE

"ART.105.Cooperat
iveInsur
anceSociet
ies.Exi
sti
ngcooperat
ivesmayor gani
ze
themselvesi
ntoacooper at
ivei
nsur
anceent i
tyf
orthepurposeofengaginginthe
businessofi
nsuri
nglif
eandpr oper
tyofcooperati
vesandthei
rmember s.

"ART.106.Ty pesofI nsuranceProv i

ded.Undert hecooperati
veinsuranceprogr am
establi
shedandf ormedbyt hev i
rtueoftheprovisionsofthi
sCode, thecooper ativ
e
i
nsur ancesociet i
esshal lprovi
dei t
sconsti
tuti
ngmember sdiffer
enttypesofi nsurance
coverageconsi stingof ,
butnotl i
mi t
edto,l
ifeinsurancewithspecialgroupcov erage,
l
oanpr ot
ecti
on, reti
rementpl ans,endowment ,mot orvehi
clecoverage,bonding, cr
op
andlivestockpr otecti
onandequi pmentinsurance.

"ART.107.Appl i
cabil
it
yofI nsuranceLaws.Thepr ov i
sionsoft heInsuranceCodeandal l
otherlawsandr egulat
ionsr el
ativetotheor ganizationandoper at
ionofani nsur
ance
companyshal lapplytocooper ati
v einsuranceent it
iesor ganizedundert hi
sCode.The
requir
ement soncapi t
ali
zation,i
nv estment sandr eservesofi nsurancef i
rmsmaybe
l
iberal
lymodi f
ieduponconsul t
ationwi t
ht heAut horit
yandt hecooperat i
vesector,buti
n
nocasemayber equir
ementt ober educedt olesst hanhal fofthosepr ovidedforunder
theInsuranceCodeandot herrelatedlaws.

"ART.108.Implement
ingRules.TheInsuranceCommi ssi
onandtheAut
hor
it
y,i
n
consul
tationwit
htheconcernedcooperati
vesector,
shall
issuet
heappr
opr
iat
erul
es
andregulati
onsimpl
ementingtheprovisi
onsofthisChapter
."
Sec.14.Ar
ti
cles110,111,112,113and114ofChapt
erXIVonSpeci
alPr
ovi
sions
rel
ati
ngtoCreditCooper
ativ
eoft hi
sCodear
eherebytr
ansf
err
edtoanot
herchapt
er.
ChapterXI
Vasamendedshal l
nowr ead,
asf
oll
ows:

CHAPTERXI
V

PUBLI
CSERVI
CECOOPERATI
VES

"ART.109.Defi
nit
ionandCov er
age.Apublicser
vicecooperat
ive,
wit
hinthemeaningof
thi
sCode, i
soneor gani
zedtorenderpubli
cserv
icesasauthori
zedunderafranchi
seor
cert
if
icat
eofpublicconveni
enceandnecessitydulyi
ssuedbytheappropri
ate
governmentagency.Suchservi
cesmayi ncl
udethefol
lowing:

"
(1)Powergener
ati
on,
transmi
ssi
on,
and/
ordi
str
ibut
ion;

"
(2)I
cepl
ant
sandcol
dst
orageser
vices;

"
(3)Communi
cat
ionser
vicesi
ncl
udi
ngt
elephone,
tel
egr
aph,
andcommuni
cat
ions:

"(
4)Landandseat r
anspor
tat
ioncooperati
vesforpassengerand/
orcargo.Tr
ansport
cooper
ati
vesorgani
zedundertheprov
isionsofExecuti
veOrderNo.898,Seri
esof1983,
shal
lbegover
nedbyt hi
sChapter.

"
(5)Publ
i
cmar
ket
s,sl
aught
erhousesandot
hersi
mil
arser
vices;
and

"(
6)Suchothert
ypesofpubl
icser
vicesasmaybeengagedi
nbyanycooperat
ive.Such
cooper
ati
veshal
lbepri
maril
ygovernedbyt
hisChapt
erandt
hegener
alprov
isi
onsof
t
hisCodei
nsof
arast
heymaybeappl
i
cabl
eunl
esst
heyar
einconsi
stenther
ewi
th.

"ART.110.Regist
rat
ionRequi
rements.Unl
essot
her
wiseprov
idedinthi
sCode, nopubl
ic
serv
icecooperati
veshal
lberegi
ster
edunlessi
tsat
isf
iest
hefoll
owingrequi
rements.

"(
1)I
tsar
ti
clesofcooper
ati
onandby l
awsprovi
deforthemember
shi
poft
heuser
s
and/
orpr
oducersoftheser
viceofsuchcooper
ati
ves;
and

"(
2)Suchot herrequi
rementsasmaybei mposedbytheotherpert
inentgovernment
agenciesconcerned.Incasetherearetwo(2)ormoreappli
cantsforthesamepubli
c
serv
icefranchiseorcerti
fi
cateofpubli
cconveni
enceandnecessit
y ,
allt
hingsbei
ng
equal,
preferenceshallbegiv
entoapubl i
cservi
cecooperat
ive.

"ART.111.RegulationofPubl i
cServiceCooperativ
es.(1)Theinternalaffair
sofpubli
c
servi
cecooper at
ivessuchast herightsandprivi
legesofmember s,therulesand
proceduresformeet i
ngsofthegener al
assembly,boardofdirectorsandcommi tt
ees;
fortheelect
ionandqual i
fi
cati
onsofof f
icer
s,dir
ectors,andcommi tteemember s;
all
ocati
onanddi stributi
onofsurpl
uses; andall
othermat ter
srelati
ngt otheiri
nter
nal
affai
rsshall
begov ernedbythisCode.

"(2)Al
l matt
ersr el
atingt
ot hefr
anchiseorcerti
fi
cateofpublicconv
enienceand
necessityofpubl i
cservi
cecooperativ
essuchascapi tali
zati
onandinv
estment
requir
ement s,equipmentandfacili
ti
es,f
requencies,
rate-f
ixi
ngandsuchothermatter
s
affect
ingtheirpublicser
viceoperati
onsshallbegovernedbyt hepr
opergovernment
agencyconcer ned.

"(
3)TheAuthori
tyandthepropergover
nmentagencyconcer
nedshal
lj
oint
lyi
ssuet
he
necessar
yrul
esandregulat
ionstoimplementt
hisChapt
er.

"
(4)TheAut
hor
it
yshal
lest
abl
i
shacommi
tt
eef
ort
hemoni
tor
ingoft
ranspor
tat
ion
servicecooper at
ivescomposedofr epr
esent at
ivesf r
om theAuthor i
ty,theLand
Transportati
onFr anchisi
ngandRegulatoryBoard( LTFRB) ,t
heLandTr ansportat
ion
Office(LTO),Of f
iceofTranspor
tCooper ati
ves(OTC) ,otherconcernedgov ernment
agencies,asmaybenecessar y,andtheNat i
onal Federati
onofTr anspor t
ati
on
Cooper at
ives.Al ocalmonit
ori
ngcommi tt
eeshal ll
ikewisebeestablishedatt he
extensionof f
icesoftheAuthori
tytofacil
it
atethemoni t
oringoftranspor t
ati
on
cooper at
ives.

"ART.112.EngagementinAll
i
edBusinessbyTr ansport
ati
onServi
ceCooperati
ves.
Subjectt
operti
nentnati
onall
awsandlocalordinances,pr
imar
ytransport
ati
onserv
ice
cooperat
ivesi
ncludi
ngsecondaryandter
ti
aryfederati
onofcooperati
vesmayengagein
abusinessrel
atedtotr
ansport
ati
onservi
ce,i
ncludingbutnotl
imitedto:

"(
1)Import
ati
on,
dist
ri
but
ionand,
mar
ket
ingofpet
rol
eum pr
oduct
sinaccor
dancewi
th
exi
sti
nglaws;

"
(2)Oper
ati
onofgasol
i
nest
ati
onsandt
ranspor
tat
ionser
vicecent
ers;

"
(3)I
mpor
tat
ion,
dist
ri
but
ionandmar
ket
ingofspar
epar
tsandsuppl
i
es;
and

"
(4)Mar
ket
ingofv
ehi
cl
e/dr
iver
sinsur
ancepol
i
cies.

"ART.113.Renewal ofFranchi
seandVehi cleRegistr
ati
on.Renewal soffranchiseand
vehi
cleregist
rati
onshallbegrantedtot r
ansportationserv
icecooper at
ives:Provided,
Thatsuchcooper ati
vepresentsacertif
icateofgoodst andingissuedbyt heAut hori
ty,
OTC,andt helocalgover
nmentuni tconcer nedaspr ooft
hatithascont i
nuously
provi
dedther equi
redpublictr
ansportati
onser vi
ces.

"TheAuthori
ty,
inconsul
tat
ionwit
ht heconcer
nedgov
ernmentagenciesand
cooper
ativesector
,shal
li
ssueappropri
aterul
esandr
egul
ati
onspertaini
ngt
othe
pr
ovi
si
onsoft
hisChapt
er.
"

Sec.15.Arti
cles115,116,117and118ofChapterXVonSpeci
alProvi
sionsr
elat
ingto
Cooperati
veInsuranceSociet
iesoft
hesameCodear eher
ebyt
ransfer
redtoanother
chapter
.Chapt erXVasamendedshal l
nowread,asf
oll
ows:

CHAPTERXV

CREDI
TCOOPERATI
VES

"ART.114.Coverage.Thi
sChapt ershall
applytocr edi
tcooperat
ivesandother
cooperat
ives,
incl
udingmultipurposecooperat
ives,thatpr
ovidesavingsandcr
editt
o
thei
rmember sonly.Therestoft hepr
ovisi
onsoft hisCodeshallapplytot
hem i
nsofar
asthesamear enotinconsistentwit
htheprovisi
onsoft hi
sChapt er
.

"ART.115.Def
init
ionandObj
ect
ives.Acredi
tcooper
ati
vei
safinanci
alor
gani
zat
ion
ownedandoper atedbyi
tsmemberswiththefol
lowi
ngobj
ect
ives:

"
(1)Toencour
agesav
ingsamongi
tsmember
s;

"(
2)Tocreat
eapoolofsuchsav
ingsf
orwhi
chl
oansf
orpr
oduct
iveorpr
ovi
dent
purposemaybegr
antedtoi
tsmembers;
and

"(
3)Toprov
ider
elat
edser
vicest
oenabl
eit
smember
stomaxi
mizet
hebenef
itf
rom
suchl
oans.

"
ART.116.Or
ganizati
onandRegist
rat
ion.
-Creditcooper
ati
vesshal
lbeor
gani
zedand
r
egi
ster
edinaccordancewi
ththegeneral
provisionsoft
hisCode.
"ART.117.Organi
zat
ionalLinkage.Credi
tcooperat
ivesmayor ganizechapter
sor
subsi
diar
ies,
orjoi
nleaguesandf eder
ati
onsforthepur poseofpr ovi
dingcommonly
neededessenti
alser
vicesincludi
ngbutnotli
mi t
edtot hef ol
l
owi ng:

"(
1)Inter
lendingofsurpl
usfund;
"(2)Mutualbenefi
ts;
"(
3)Depositguarant
ee;"(
4)
Bonding;
"(5)Educati
onandtrai
ning;"
(6)Pr
ofessional
andtechnicalassi
stance;
"(
7)
Researchanddev el
opment;
"(8)Represent
ation;
and" (
9)Otherservi
cesneededto
i
mpr ovetheirper
formance.

"Exi
sti
ngsupportor
gani
zati
onssuchasfeder
ationsofcr
edi
tcooper
ati
ves,
credi
t
cooperat
ivesatt
heprov
inci
al,
regi
onal
andnationall
evel
smayconti
nueassuchunder
thi
sCode."

Sec.16.AnewArti
cl
eisi
nser
tedi
nChapt
erXVonCr
edi
tCooper
ati
vesandshal
lnow
read,
asfol
lows:

"ART.118.ConversionofCreditCooperati
vestoFinanci
al Serv
iceCooper atives.
Exist
ingcredi
tandmul ti
purposecooperativ
eswithsav i
ngsandcr editfacil
it
iesshall
formall
yinfor
mt heAuthori
tyofitsint
entiontoconti
nueper for
mingi t
spr esent
functi
ons.Shoul
dt hesaidcooperati
vesdecidetoexerciseenhancedf unctions,itshal
l
notif
ytheAuthori
tyandsatisfytherequir
ementsforconv ersi
ontofinancialser v
ice
cooperati
ve."

Sec.17.AnewChapt eronFi
nanci
alSer
viceCooper
ati
vesshal
lbei
nser
tedi
nthi
s
Chapterandshal
lread,asf
oll
ows:

CHAPTERXVI

FI
NANCI
ALSERVI
CECOOPERATI
VES
"ART.119.Defi
nit
ionandFunctionsofFinanci
alSer
vicesCooper
ati
ves.Afi
nanci
al
servi
cecooperati
veisafi
nancialorgani
zati
onownedandoper at
edbyitsmembersand
authori
zedtoprovi
dethefol
lowingser v
ice,
excl
usiv
elytoit
smember s:

"(
a)Thefunctionsofcredi
tcooperat
ivesandothercooper
ati
ves,incl
udi
ngmultipur
pose
cooperat
ives,t
hatprov
idesavingsandcredi
ttotheirmembers,and"(
b)Otherf
inanci
al
serv
icessubjectt
oregulat
ionbytheBSP.

"Thearti
clesofcooperationandbyl
awsofanyfi
nanci
alservi
cecooperat
ive,
orany
amendmentt hereto,
shal lber
egi
ster
edwit
htheAuthori
tyonl
yifaccompaniedbya
cert
if
icat
eofaut hori
tyissuedbytheBSP,
underi
tsoffi
cial
seal.

"
Theauthorit
ygr antedthispr
ovisi
onmayber evokedbytheBSPifanyofthegr
ounds
f
orrecei
vershi
pment ionedunderSec.53and56ofRepublicActNo.8791ispr
esentor
i
fthefi
nancialservicecooperat
ivehaswil
lf
ull
yviol
atedt
hisCodeofanyoftherel
ated
r
ulesandregulations.

"
TheBSPshallissueaceaseanddesi
stor
dertocooperat
ivesexer
cisi
ngt
hef
unct
ionof
afi
nanci
alser
vicecooper
ati
vewit
houtaut
hori
tyf
rom theBSP.

"TheBSPmaychargeequi
tabl
erat
esorfees,
asmaybeprescri
bedbyt
heMonetary
Boardforl
i
censi
ng,exami
nati
onandot
herservi
ceswhi
chi
trender
sundert
hisCode.

"Uponthefavorablecert
ificati
onoft
heBSPandt hepr
iorapprovaloftheAuthorit
y,a
cooperat
ive,t
hemai npur poseofwhichistoperfor
m savi
ngsandcr editf
unctions,may
convertt
of i
nancialser
vicecooperat
ivesubjectt
otherequiredquali
fi
cati
onsand
procedur
espr ovi
dedundert hi
sCodeandint hei
mplementingrulesandregulati
ons.
"
ART.120.Membershi
pandAf
fi
li
ati
on.Af
inanci
alser
vicecooper
ati
veshal
lhav
ethe
t
wo(2)typesofmembers:

"
(1)Regul
armember
s,whoar
enat
ural
per
sons;
and

"(2)Associatemember s,whoarenat uralpersonsbutwhodonoti mmedi atelyquali

fy
undert herequirement sformember shipsetoutint hebylawsofthecooper ativ
e.All
associatemember swhoar enat
ural personsshallbegiventwo(2)y earstobecome
regularmember s.Fail
uretoconvertwi t
hinthesaidperiodshall
meanaut omat ic
wi t
hdrawal oftheirassociat
emember ship.Theymay ,however,
re-applyasr egular
member saf t
ertwo( 2)years.

"Minorswhoar edependentsofregularmember scanqual i

fyasassociatemembers.
Whent heyreachtheageofmaj ori
tyandwi thi
ntwo( 2)y earsfrom accept
ancesofthei
r
associatemember shi
p,t
heyhav etheopt i
ontoconv ertint
or egul
armember s.As
associatemember s,t
heymayopenaccount s,depositfundsandwi t
hdrawfr
om thei
r
account,subj
ecttothebylawsandr ulesofthecooper ati
ve,andther ul
esand
regul
ationsoftheAuthori
ty,not
withstandi
ngthepr ovi
sionsofexi sti
nglawstothe
contrary.

"ART.121.Regul
ati
onandSuperv
isi
on.TheAuthor
it
yshal
lexer
ciseleadregul
ator
y
powersandsupervi
sionov
ertheoperat
ionsoft
hefi
nanci
alser
vicecooperati
ves,
towi
t:

"
(1)Issuerul
esandregulat
ionsfort
hesaf
eandsoundconductofoper
ati
onsof
f
inancial
servi
cecooperati
ves;

"(
2)Est
abli
shstandar
dsofoper
ati
onf
oruni
for
m appl
i
cat
iont
oal
lfi
nanci
alser
vice
cooper
ati
ves;

"
(3)Pr
escr
iber
ati
os,
cei
l
ings,
li
mit
ati
ons,
orot
herf
ormsofr
egul
ati
onont
hedi
ff
erent
t
ypesofaccountsandpract
icesoffi
nanci
alser
vicecooper
ati
veswhi
chshal
l
,conf
orm
t
oint
ernat
ional
lyaccept
edstandards;

"(
4)I
nvest
igat
etodet
ermi
newhetherafi
nanci
alser
vicecooper
ati
vei
sconduct
ingi
ts
busi
nessi
nasafeandsoundmanner;

"(
5)Conductregularexami
nationofthebooksofaccount
s,r
ecor
dsandot
her
documentsoffinancial
ser
vicecooperat
ives;

"
(6)I
nqui
rei
ntot
hesol
vencyandl
i
qui
dit
yofaf
inanci
alser
vicecooper
ati
ves;

"(
7)Prescribeappr
opr
iat
efeesforsuperv
isi
onandexaminati
onoff
inanci
alserv
ice
cooperat
ivestoamongothers,
monitorandover
seethatexi
sti
ngl
awsandr egul
ati
ons
arecompliedwith;

"(
8)Passuponandrevi
ewthequal
i
ficat
ionsanddisquali
fi
cat
ionsofi
ndi
vi
dual
sel
ect
ed
orappoi
nteddi
rect
orsorof
fi
cer
sanddisquali
fyt
hosef oundunfi
t;

"
(9)Disquali
fy,
suspendorremov
eanydi r
ect
ororof
fi
cerwhocommi
tsoromi
tsanact
whichrenderhim unf
itf
ort
heposit
ion;

"(
10)Sel ect
,desi
gnateanddeput
izefeder
ati
ons,thr
oughanapprovedaccredi
tat
ion
cri
teri
a,thatwil
lsuper
visepr
imar
yfinanci
alser
vicecooper
ati
vesandissuebasic
guidel
inestheref
or;

"
(11)Requi
ret
hesubmi
ssi
onofr
elev
antr
epor
tsf
rom t
hedeput
izedsuper
visor
;
"(12)Prov
ideremedialmeasuresintheoper
ationsoffi
nancial
ser
vicecooper
ati
vesthat
areinastateofcontinui
nginabi
li
tyorunwil
l
ingnesstomaintai
naper i
odofli
qui
dit
yat
therequestofthedeputi
zedsupervi
sororwhent hedeputi
zedsuperv
isorf
ail
sto
perfor
mi t
sfuncti
ons;

"
(13)Accr
edi
text
ernalaudi
tor
sinaccor
dancewi
thst
andar
dsf
oraudi
tandf
inanci
al
r
eport
ingi
ncooperat
ionwit
hthePICPA;and

"(14)Appointaconservatororarecei
verasmaybenecessar ysubjectt
other ulesand
regulat
ionstobepromul gatedbytheAuthorit
yincoordinati
onwiththeBSP, takingi
nto
considerat
ionthegrounds,powersandpr ocedur
esunderSec. s29and30ofRepubl ic
ActNo.7653asmaybedeemedappr opriatetofi
nancialser
vicecooperat
ives.

"TheAuthorit
yshal lincl
udei nitsrulesandregulati
ons,appropriatesancti
onsand
penalt
ies,onthef inancialserv
icecooper at
ives,
itsmember s,offi
cersandr esponsibl
e
persons,f
oranyact ionthatfail
st oadheretosoundandpr udentmanagementpr acti
ces
orareinconsistentwi t
ht heprovisionsofthisCode,otherapplicablelawson
cooperati
ves,rules,regulati
ons,circular
sorordersissuedbyt heAut hori
ty,andrequire
thecooperati
v etounder t
akecor r
ect i
veorremedialmeasur esrelati
vethereto.

"TheBSPisauthori
zedt
oconductr
isk-
basedsuper
visi
onandexami
nat
ionoff
inanci
al
servi
cecooper
ativ
esasitmaydeem necessar
y.

"
ART.122.Pr omulgat
ionofRulesandRegulat
ions.TheBSP,i
ncoordi
nati
onwit
hthe
Author
it
y,shall
prescr
ibetheappropr
iat
eprudenti
alrul
esandregul
ati
onsappl
i
cabl
eto
thefi
nanci
alservi
cecooperat
ives.

"Subj
ecttother
egulati
onsoftheBSP, t
hebankinglaws,r
ulesandr egulat
ionsshal
l have
suppl
etoryappl
i
cati
ont ofi
nancial
servi
cescooperati
ves:Pr
ovided,howev er,
Thatthe
provi
si
onsonaccesst oborrowi
ngorf i
nancial
assist
ancetobeext endedbyt heBSPof
thePhil
i
ppineDepositI
nsuranceCorporat
ion(PIDC)shal
lnotapplytofinancial
ser
v ice
cooper
ati
ves:
Provi
ded,f
urther
,Thatt
hedeposi
tli
abi
l
iti
esoft
hef
inanci
alser
vice
cooper
ati
vesshal
lnotbeinsur
edbythePDIC.

"
ART.123.Fi nancialServ
iceCooperati
veFederat
ions.Financialservicecooperat
ives
mayor ganizethemselvesint
ofinanci
alser
vicecooperativemayor ganizethemsel
v es
i
ntofinancialser
vicecooperat
ivefeder
ati
ons,andregistertheirfederati
onwi t
hthe
Authori
ty.Thesefinanci
alservi
cecooperat
ivefederat
ionsmaybedeput i
zedbythe
Authori
tyast hesupervi
soroftheirmembers,andtheyshal lhavet hefoll
owing
funct
ions:

"
(a)Dev
elopstandardsandprovideser
vicesfort
hebenefi
tofi
tsaff
il
iat
esandt
hei
r
membersinaccordancewit
ht herul
esandr egul
ati
onsoft
heAuthori
ty;

"(
b)Defi
necommonobj ect
ivesandcoor
dinat
eact
ivi
ti
esf
ort
hef
inanci
alser
vice
cooper
ati
vefeder
ati
on;

"(
c)Establi
shandadmini
sterf
undssuchasl
i
qui
dit
yfund,
loanf
und,
inv
est
mentf
und,
stabi
l
izati
onfundandsuchotherf
unds;

"(
d)Establ
ishasavi
ngsguar
anteesyst
em f
ort
heprot
ect
ionoft
hei
raf
fi
li
ates'
member
-
deposi
torswit
hint
hree(
3)year
sf r
om t
heappr
oval
ofthi
sCode;

"
(e)Exer
ciseon-
sit
eandof
f-
sit
esuper
visor
ypowerov
eri
tsmember
s;

"
(f)Pr
ovi
deremedi
alassi
stancet
oit
smember
sconcer
ningt
hei
roper
ati
onsand
management;

"(
g)Actastheli
qui
dat
orandwhenappli
cable,
sequest
erpropert
iestosat
isf
yan
obli
gat
ionsecur
edbyamortgagewhenauthori
zedbytheAuthori
ty;
and
"(
h)Transmi
trel
evantandrequi
redinf
ormat
ionr
egar
dingt
heoper
ati
onsand
perf
ormanceofmember -
cooper
ativ
estotheAut
hori
ty.

"TheAut hori
tyandot hergover
nmentagenci es, government-ownedorcont r
oll
ed
corporati
onsandgov ernmentfi
nancialinst
it
ut i
onsshal lpr
ov i
det echni
calandsuch
otherassistancethatmaybeal l
owedbyt heirchar t
erstofi
nanci alserv
icecooperat
ive
federati
onsf ortheestabli
shmentand/ orst
rengt heningoftheirrespecti
vecooperat
ive
savingsguar ant
eesy stem.Thetechnicalassistancet obeprov i
dedshal l
incl
ude,
amongot hers,t
raini
ngsupervi
sionandexami nation.

"ART.124.Desi gnat
ionofExisti
ngUni tatt
heCooper ativ
eDev el
opmentAut hor
it
yto
Perform Regulator
yandSuper vi
sor yFunctions.Withi
nsix(6)mont hsfr
om theapprov
al
ofthisCode,theAut hor
it
yshall designatetheunittoformulateandimplementthe
necessaryregulati
ons,r
ules,polici
es,guideli
nesandst andardsappli
cabl
esolel
yto
fi
nancialservi
cecooperativesanddeput i
zedfederati
onsintheperformanceofthei
r
savings,cr
editandsuchot herrelatedenhancedf i
nancialservi
ceoperati
ons.

"TheDepartmentofFinance,theBSPandotherconcernedgovernmentagenci
esshall
provi
detechnical
andt r
ainingsuppor
tfort
heeffect
iveandeffi
cienti
mplementat
ionof
theregul
atoryandsupervisoryf
uncti
onsandresponsi
bil
it
iesoftheAuthor
it
y.

"ART.125.Pr ohi
bit
ion.Thet er
mscr editcooperat
ive,
financialservicecooper at
iveand
fi
nancialservi
cecooper at
ivefederat
ionshallbeusedexcl usivelybyt hosewhoar eduly
regi
steredunderthisCode, andnoper son,groupofper sons,oror ganizati
onsshalluse
thesaidtermsunlessdul yregist
eredwi t
htheAuthorit
y .Viol
ationsoft hisprohi
biti
on
shal
lbepuni shableinaccordancewi t
hAr ti
cle140ofthi sCode. "

Sec.18.AnewChapt
eronEl
ect
ri
cCooper
ati
vesshal
lbei
nser
tedandshal
lread,
as
fol
lows:
CHAPTERXVI
I

ELECTRI
CCOOPERATI
VE

"
ART.126.Coverage.Theprov i
sionsofthisCodeshal
lappl
ytoallel
ect
riccooper
ati
ves
r
egi
steredwit
htheAut hori
ty.Thi
sshallalsocovernewdist
ri
but
ionuti
li
ti
esthatwil
l
r
egi
sterwit
htheAut hori
ty.

"Electri
ccooperati
vesmayundert
akepowergener at
ionuti
li
zi
ngrenewabl
eener
gy
sour ces,incl
udi
nghybri
dsyst
ems, acqui
sit
ionandoperat
ionofsubtr
ansmi
ssi
onor
distri
butionasit
spr i
marypur
poses.

"ART.127.Regi
str
ati
onofEl ectr
icCooperat
ives.Theregi
str
ati
onofanel ect
ric
cooperat
ivewit
htheAuthorityunderthi
sCodeshal lbesubmit
tedforapprovaltothe
member sthr
oughareferendum, cal
ledfort
hepur poseasprovi
dedforunderAr ti
cles
183and129oft hi
sCode.

"ART.128.Voti
ngRequirementforRegi
str
ati
on.I
ncompl i
ancewi
tht
her
eferendum asa
voti
ngprocedure,t
herequir
ednumberofv ot
esforregi
str
ati
onwi
tht
heAuthori
tyshal
l
betwentypercent(20%)ofall
member si
ngoodst andi
ng.

"ART.129.Document
stobeSubmitt
edforRegi
str
ati
onwit
htheAuthor
it
y.Forpur
poses
ofregi
str
ati
on,el
ect
ri
ccooper
ati
vesshal
lsubmitt
hefol
l
owingdocuments:

"(a)Copyoftheboardresol
uti
oncert
if
yingt
otheresul
tofthev
oteapprovedthr
ougha
refer
endum approv
ingtheregi
str
ati
onofthecooperat
ivewi
tht
heAuthori
tyin
compl i
ancewit
hAr t
icl
e128;

"(
b)Cert
if
iedcopyoft
hear
ti
clesofi
ncor
por
ati
on/
cooper
ati
onandby
lawsasr
equi
red
bytheAuthor
it
y;
"
(c)Dul
yaudi
tedf
inanci
alst
atement
sfort
hepastt
wo(
2)y
ear
s;

"(
d)Li
stofnamesofincumbentboardofdir
ector
sandt
hei
raddr
essescer
ti
fi
edbyt
he
boar
dsecret
aryandatt
estedbythechai
rperson;

"(e)Wit
hinsi
x(6)monthsfrom t
heregistr
ation,
thetr
easurershal
lsubmitaswor
n
statementoft
heauthori
zedsharecapital
,thesubscr
ibedsharecapi
talofmembersand
theamountofpaid-
upsharecapital
receivedbythetreasur
er;and

"
(f)Bondsofaccount
abl
eof
fi
cer
s.

"ART.130.Regi str
ati
onOptionsofEl ectri
cCooperativ
es.Electri
cCooper at
ives
registeredwit
ht heNati
onalElectri
fi
cationAdmi ni
str
ation(NEA)underPr esident
ial
Decr eeNo.269, asamendedwhi choptnott oregi
sterwiththeAut hor
it
yar eall
owedt o
retaintheword" cooper
ati
ve"intheirregist
erednames: Provided,Thattheyshallnotbe
entitl
edt ot
hebenef i
tsandprivi
legesundert hi
sCode.

"ART.131.RoleoftheEner
gyRegul
ator
yCommi ssi
on.Allr
atesandtari
ff
sofel
ect r
ic
cooperat
ivesregi
ster
edundert
heAuthori
tyshal
lbesubj
ecttotherul
esonapplicat
ion
andapprov al
ofandbytheEner
gyRegulat
oryCommi ssi
onfordist
ri
buti
onut
il
it
ies.

"ART.132.Ef fectsofRegi str

ati
onwi t
htheAut hori
ty.(1)Upont heeffectivi
tyofthis
Code, electr
iccooper ativ
est hataredulyregisteredwiththeAut horit
y ,
andi ssueda
certi
ficateofregistr
at i
on, shal
lnolongerbecov eredbyPr esident i
al DecreeNo.269, as
amendedbyPr esidentialDecreeNo.1645: Provided,Thatelect ri
ccooper ativ
es
regi
st eredwiththeAut hor it
yshallnowbecov eredbyt heprov isionsoft hisCodeaswel l
asfut urerul
esandi ssuancesoft heAut hori
ty:Provided,howev er,Thatthesecur i
tyof
tenureandt hecol l
ect i
vebar gai
ningagreementbet weent hecooper ati
vemanagement
andt heempl oyeesshal lberespected,withnodi minutionoft heirexisti
ngsal ar
ies,
emol
ument
s,r
anksandot
herbenef
it
s;

"
(2)Theel
ect
riccooper
ati
vesregi
steredwit
htheAuthor
it
ywit
hexi
sti
ngloansobtai
ned
f
rom NEAaft
erJune26,2001shallconti
nuetoobser
vethet
ermsofsuchloansunt
il
f
ullpay
mentorsett
lementther
eof
;

"(3)Exceptasprovi
dedintheimmedi
atel
yprecedi
ngpar
agraph,theNEAshallnolonger
exerciseregul
ator
yorsupervi
sor
ypowersonelect
ri
ccooperat
ivesdul
yregi
steredwith
theAut hori
ty;

"(
4)Electri
ccooper at
ivesr egister
edwi ththeAuthorityareent i
tl
edt ocongressional
al
locati
ons,grants,subsidiariesandot herfi
nancialassistancef orruralel
ect
ri
ficati
on
whichcanbecour sedthrought heDepar t
mentofEner gy,theAut hori
tyand/orlocal
governmentunits.Theel ectriccooperativesr
egisteredundert hisCodecanav ailofthe
fi
nancialserv
icesandt echni calassi
stancepr ov
idedbyt hegov ernmentf i
nanci
al
i
nstit
utionsandtechnical dev el
opmentagenci esont ermsr espectingthei
r
i
ndependenceasaut onomouscooper ativ
es;

"(
5)Allcondonedl oans,subsidies,
grantsandotherassistanceshallform partofthe
donatedcapital
andf undsoft heelectri
ccooperati
vesandassuch, itshallnotbesold,
tr
adednorbedi videdintoshar ehol
dingsatanytime;thesedonat edcapital
/ f
undshall
bevaluatedforthesolepur poseofdet er
miningtheequitypar t
ici
pati
onoft hemember s:
Provi
ded, Thati
nt hecaseofdi ssolut
ionofthecooperati
v e,saiddonatedcapitalshal
l
besubjecttoescheat ;
and

"
(6)El
ectr
iccooper
ati
vesregi
ster
edandconf
irmedwi t
htheAuthori
tyunderRepubl
i
c
ActNo.6938andRepubli
cActNo.6939areherebydeemedregist
eredunderthi
sCode.

"ART.133.ShareCapi
tali
ntheElectr
icCooperat
ives.Theel
ectr
iccooper
ati
veshall
i
ssueanddi st
ri
buteshar
ecerti
fi
catesunderthenameoft hei
rmember s,
taki
nginto
consi
derati
onthei
rprevi
ousequit
ycontri
buti
ons,theamorti
zati
oncomponentthrough
t
hepay
ment
smade,
capi
tal
bui
l
d-upandot
hercapi
tal
cont
ri
but
ions.

"ART.134.Cancel
l
ati
onofRegi
str
ati
onwit
htheAut
hor
it
y.Thecancel
lati
onoft
he
regi
str
ati
onofanelect
ri
ccooper
ati
veshal
lbegr
ant
edbytheAuthori
tyaspr
ovi
ded
underArt
icl
es64to70ofthi
sCode.

"TheAuthor
it
y,inconsul
tat
ionwi
ththeconcernedcooper
ativesect
or,
shal
li
ssue
appropr
iat
erulesandregul
ati
onspert
aini
ngtotheprovi
sionsofthi
sChapt
er.
"

Sec.
19.Ar
ti
cles119,120and121ofChapterXVIonMiscel
laneousPr
ovi
sionsoft
he
sameCodear eher
ebyamendedandshall
nowr ead,
asf ol
l
ows:

CHAPTERXVI
II

MI
SCELLANEOUSPROVI
SIONS

"ART.135.Compli
anceWithOtherLaws.TheLaborCodeandal lotherlaborl
aws,t
he
Social
Securi
tyAct,
theMedicalCareAct
,andallot
hersociallegi
slations,andal
lot
her
l
awsandexecut i
veorder
sshallappl
ytocooperat
ivesdul
yr egist
eredundert hi
sCode.

"ART.136.Regi st
erofCooper ati
ves.TheAut hor i
tyshallestabli
shar egist
erwhichshal
l
cont ai
nachr onol
ogical entr
yoft henameofev er
ycooper ativeregisteredordissolv
ed
undert hi
sCodet ogetherwi ththebasi cinformat i
onr equir
edf orregistrati
onor
dissoluti
onandanyot heri nformat i
onconsi deredusef ul
.TheAut horityshallpubl
ish
annual l
yal i
stofexi
stingcooper at i
ves,cooper ati
vesunderdi ssolutionandt hosewhose
registr
ationarecancelleddur i
ngt hey eart
oget herwithsuchi nformat i
ononeachof
them asmaybepr escr i
bedi nther ul
esandr egulati
ons.

"ART.137.Set
tl
ementofDisputes,Conci
l
iat
ion,
andMediat
ionProceedings.Disputes
amongmember s,
off
icer
s,di
rector
s,andcommi t
teemembers,
andintra-cooperati
ve,
i
nter
-cooperat
ive,
intr
a-f
eder
ati
onorinter-
feder
ati
ondisput
esshal
l,asfaraspr
act
icabl
e,
besett
ledamicablyinaccor
dancewiththeconcil
i
ati
onormediati
onmechanisms
embodiedinthebylawsofcooperat
ivesandinsuchotherappl
i
cablelaws.

"Theconci
l
iati
onandmediat
ioncommi t
teeofthecooper
ati
veshal
lfaci
l
itat
ethe
amicabl
esettl
ementofi
ntr
a-cooper
ati
vedisput
esanddisput
esamongmember s,
offi
cer
s,di
rect
ors,
andcommi tt
eemember s.

"Shouldsuchconcili
ationormedi ati
onpr oceedingfail
,themattershallbesettl
ed
throughv ol
untar
yarbitrat
ion:
Prov i
ded,howev er,Thatbef or
eanypar t
ycanv ali
dlyfi
lea
compl ai
ntwiththeAut hori
tyf
orv ol
untaryarbitr
ation,i
tmustf i
rstsecureacer t
if
icati
on
from it
sconcili
ati
onandmedi ati
oncommi tt
eeandf r
om i t
sconcil
iat
ionandmedi at
ion
commi t
teeandfrom thecooper at
iveunionorf ederati
ont owhichitbel
ongst hat
despiteallef
fort
stoset tl
etheissues,t
hesamehav efailed.

"Thej
urisdi
cti
onoft hevoluntar
yar bi
tr
atorsshall
beexclusiv
eandorigi
nalandt hei
r
deci
sionsshallbeappealabletot heOff
iceofthePresi
dent.TheAuthori
tyshall
issue
andadoptthepr operrul
esofpr oceduregoverni
ngarbi
tr
ationastheprimaryand
excl
usivemodef ordisputeresoluti
oninaccordancewit
ht heAl
ter
nativ
eDi sput
e
Resol
utionActof2004.

"
Fort
hispur
pose,
theAut
hor
it
yshal
lconst
it
uteal
i
stofqual
i
fiedv
olunt
aryar
bit
rat
ors.
"

Sec.20.Anewar
ti
cl
eisinsert
edinChapt
erXVI
IIont
heMi
scel
l
aneousPr
ovi
sionsoft
he
sameCodeandshall
read,asfol
l
ows:

"ART.138.Joi
ntCongressi
onal Oversi
ghtCommi tt
eeonCooper at
ive(
JCOCC).Thereis
herebycr
eatedaJointCongressionalOv ersi
ghtCommi tt
eecomposedoft heChai
rman
oftheSenateCommi t
teeonCooper ativesandt heChair
manoft heHouseCommi tt
ee
onCooperati
vesDevelopment,withfour( 4)member seachfr
om bothHouses.Thesaid
member sshal
lbedulyappointedbyt heSenat ePresi
dentandtheSpeakeroftheHouse
ofRepresentati
vesfr
om themembersoft
herespect
ivecommi t
teebasedont
he
propor
tional
r epr
esent
ati
onofthepar
ti
esorcoal
it
ionther
ein.

"
TheJointOv
ersi
ghtCommit
teeshall
revi
ewandapprov
etheimplement
ingr
ulesand
r
egul
ati
onsofthi
sCodeandmonitori
tsproperi
mpl
ementat
ion.

"Theannual
appropr
iatef
ortheov
ersi
ghtcommitteeshal
lbechar
gedt
othebudgetof
bothHousesofCongressi
ntheGener
alAppropr
iati
onsAct(GAA)
."

Sec.21.Art
icl
e122isherebydelet
ed.Art
icl
es123,124,
125,
126,127,
128,129and130
ofChapterXVIIonFi
nalProvi
sionsoft
hisCodeareamendedtor
ead,asfol
lows:

CHAPTERXI
X

FI
NALPROVI
SIONS

"ART.139.I
mpl ementingRul esandRegul ations.TheAut horit
yshalli
ssuerul
esand
regul
ati
onstoimpl ementthosepr ovisi
onsoft hisCodewhi chexpressl
ycallf
orthe
i
ssuancethereof.Thisparagr aphshallnotappl ytothosecaseswher einaspeci
fic
provi
si
onofthisCodeexpr esslydesignatespar ti
cul
argov ernmentagencieswhi
chshal
l
i
ssuetheregulati
onscalledf orbyanypr ovisionofthisCode.

"ART.140.PenalPr
ovi
sions.Thef
oll
owi
ngact
soromi
ssi
onsaf
fect
ingcooper
ati
vesar
e
herebyprohi
bit
ed:

"(
1)Theuseoft hewor dË œ
cooper ati
ve'byanyper sonorofpersonsororganizati
ons,
unlessdulyregister
edasacooper ativeunderthisCodeexceptaspr ovi
dedforunder
Art
icle130her eof.I
ncaseofv iolat
ion, t
heindivi
dual ori
ndiv
idual
sconcerned,orinthe
caseofanor ganization,
itsoff
icersanddi rect
orsshal l
,uponconvi
cti
on,eachsuf f
erthe
penaltyofimprisonmentofnotl esst hantwo( 2)yearsnormor et
hanfive(5)yearsand
afi
nenotexceedi
ngTwent
ythousandpesos(
P20,
000.
00)orbot
hatt
hedi
scr
eti
onof
t
hecourt
;

"
TheAut
hor
it
ymaymot
upr
opr
io,
ini
ti
atecompl
aint
sforv
iol
ati
onsoft
hispr
ovi
sion.

"(
2)Anyper sonwhowi l
lf
ullyatt
empt sinanymannert oev adeordefeattaxinv i
olati
on
oftheprovi
sionsofAr ti
cles60and61oft hi
sCodeshal l
inadditi
onthereof,bepunished
byaf i
neofnotlesst hanThi r
tythousandpesos( P30,
000.00)butnotmor et
hanOne
hundredthousandpesos( P100,000.
00)andsuf f
erimpr i
sonmentofnotl essthant wo(2)
yearsbutnotmor ethanf our(4)years:Pr
ovided,Thattheconvicti
onoracqui t
tal
obtai
nedundert hi
sAr ti
cleshallnotbeabart othefil
ingofaciv i
lsui
tforthecollecti
on
oftaxes;

"(3)Directori
ndirectv i
olat
ionorcircumv enti
onofthepr ov isi
onsofAr t
icl
es60and61
ofthisCodecommi tteebyanypubl icof f
icial
orempl oyeeofanybur eau,offi
ceor
agencyoft hegov ernmentt hatdeprives,diminishesori nanymannerhi ndersor
restri
ctsanydulyr egister
edcooper ativefrom thefullenjoymentoft heexempt i
onfrom
thepay mentoft hetaxes, f
eesandchar gesenumer at
edt herei
n,shall
uponconv i
cti
on,
sufferapenaltyofnotl esst hatone( 1)yearbutnotmor et hanf i
ve(5)years
i
mpr isonmentoraf ineintheamountofnotl essthanFi vet housandpesos( P5,
000.00)
orbot hatthediscretionoft hecourtandshal lfurt
herbedi squali
fi
edtohol danyother
offi
ce;

"
(4)Directori
ndi
rectint
erf
erenceori
nter
vent
ionbyanypubl
i
coff
ici
aloremployeei
nto
t
heinternalaf
fai
rsofacooperati
veofwhichheisnotamember
,suchas,butnot
l
i
mi t
edt o,t
hefol
lowing:

"(
a)Infl
uencingt
heelecti
onorappoi
ntmentofoff
icer
s,di
rect
ors,
commit
teemembers
andempl oyeest
hroughpubli
corpri
vat
eendorsementorcampaignf
ororagai
nstany
personorgroupofpersons;
"
(b)Requi
ri
ngpr
iorcl
ear
ancesf
oranypol
i
cyordeci
sionwi
thi
nthecooper
ati
ve;

"
(c)Request
ingordemandi
ngforthecreat
ionofposi
ti
onsororgani
zati
onaluni
ts,
or
r
ecommendi nganyper
sonforappoi
ntment,t
ransf
er,
orremovalfr
om hisposi
ti
on;or

"(
d)Anyotheract
sini
mical
oradv
erset
otheaut
onomyandi
ndependenceof
cooper
ati
ves.

"(5)Adirector,off
icerorcommi tt
eememberwhov i
olat
edthepr ovisionsofAr t
icl
e45
ont heLiabil
it
yofDi rectors,Off
icersandCommi t
teeMember s,Article48ont he
Disloyal
tyofaDi r
ector,andAr t
icle49ont heI l
l
egalUseofConf ident i
alI
nformat i
onshal
l
uponconv i
cti
onsuf feraf i
neofnotl essthanFi vehundredthousandpesos
(P500,000.00)normor ethanFiv ehundredt housandpesos( P500,000.00)or
i
mpr i
sonmentofnotl esst hanfi
ve( 5)y
ear sbutnotmor ethanten( 10)year
sorbot hat
thecour t
'sdiscreti
on;

"(6)Thefoll
owi
ngareconsi
der
edoffensespuni
shablebyapenalt
yofi
mpri
sonmentof
notlessthanone(1)y
earnormorethanfiv
e(5)yearsorafi
neofnotmor
ethanFi
ft
y
thousandpesos(P50,
000.
00)orbot
hatt hedi
scr
etionofthecour
t:

"
(a)Omissi
onorref
usalt
ofur
nishanyi
nfor
mat
ion,
repor
torot
herdocumentt
hati
s
r
equir
edundert
hisCode;

"(
b)Provi
dingi
nfor
mati
on,
report
sorotherdocumentst
ot heAuthor
it
ythatar
erequi
red
underthi
sCodewhicht
hepersonknowstobef al
seormisleadi
ng;

"
(c)Omissi
onorrefusalt
okeepabookorr
egi
sterundert
hisCodeort
omaket
he
r
equir
edentryt
herein;
"(
d)Maki
nganent
ryr
equir
edundert
hisCodei
nabookorr
egi
ster
,whi
cht
heper
son
knowst
obefal
seormisl
eadi
ng;

"
(e)Hi
nderinganauthor
izedpersonf
rom maki
ngani
nspect
ion,
audi
t,exami
nat
ionor
i
nvest
igat
ionrequi
redunderthi
sCode;

"
(f)Fai
luret
ocompl
ywi
thanor
derorwr
it
teni
nst
ruct
ionsi
ssuedorgi
venbyt
he
Author
ity
;

"
(g)Vi
olat
ionoft
hepr
ovi
sionsr
egar
dingt
ransact
ionswi
thar
est
ri
ctedpar
ty;
and

"(
h)Abetti
ng,counseling,all
owing,aut
hori
zingorcommandinganotherpersonto
commi tanoffensepuni shabl
ebyt hi
sCode: Pr
ovi
ded,Thati
ncasethev i
olatori
sa
cooperati
veorjuri
dicalperson,thepenal
tyshal
lbeimposedonitsdir
ectorsand
off
icer
s.

"(7)Anyv i
olat
ionofanyprov
isi
onofthisCodeforwhichnopenalt
yisimposedshallbe
punishedbyi mpri
sonmentofnotlessthansi
x(6)monthsnormor ethanone(1)year
andaf ineofnotlessthanOnethousandpesos(P1,
000.00)
,orbothatthedi
scret
ionof
thecour t
.

"I
ncaseofv i
olati
onofanypr ovi
sionofthisCode, t
heindivi
dualorindivi
duals,andinthe
caseofor ganizat
ionsorgov ernmentagenci es, i
tsoff
icer
s, anddir
ect or
sshall
, upon
convicti
onbyaCour t
,eachsuf ferapenaltyofnotl essthant wo(2)y earsbutnotmor e
thanfive(5)yearsimpri
sonmentoraf inei ntheamountofnotl essthanTwent y
thousandpesos( P20,000.00),orbothatt hedi scr
eti
onoft hecourt.Inthecaseofa
publi
cof f
ici
alorempl oyee,theof f
endershal luponconv i
cti
on,suffertheaccessor y
penaltyoftempor ar
yabsol utedisqual
if
ication.

"
ART.141.Pr
int
ingandDi
str
ibut
ion.(
1)TheNat
ional
Pri
nti
ngOf
fi
ceshal
lpubl
i
sht
his
Codei nt
heOffici
alGazet
teinful
lwit
hinsixt
y(60)daysf r
om thedateofappr ov
al
ther
eof.Copi
esoft hi
sCodeshallbegiventoeverydepartment,agencyand
i
nstrumental
it
yoftheNational
Gov er
nment ,
incl
udingregi
onal,provi
ncialof
fi
cesand
l
ocal gov
ernmentsincl
udi
nggov er
nment -
ownedandcont rol
ledcorporati
ons.

"(2)All
dulyr egi
steredcooperat
ivesandtheirfederat
ions,uni
onsandassoci ations,and
cooperativ
ecor porati
onsshallbegivenone( 1)copyeachatcost .Thereaf
ter,every
newlyregisteredcooperati
veshallbeissuedatcostacopyoft hi
sCodeandt he
regulat
ionspr omulgatedther
eont oget
herwithitscerti
fi
cateofregist
rati
on.

"ART.142.I
nterpret
ati
onandConstruct
ion.I
ncaseofdoubtast othemeani
ngofany
provi
sionofhisCodeort her
egul
ati
onsissuedinpursuancet
hereof,
thesameshal
lbe
resol
vedli
berall
yinfavoroft
hecooperati
vesandtheirmembers.

"ART.143.Repeal i
ngClause.Exceptasexpr esslypr ov i
dedbyt hi
sCode,President ial
Decr eeNo.175andal lotherlaws, orpart
st hereof,inconsistentwi t
hanyprov i
si onof
thi
sCodeshal lbedeemedr epeal ed:Provi
ded, Thatt heprovisionsofSec.s3, 5, and7of
PresidentialDecreeNo.1645, Executiv
eOr derNo.623, seri
esof2007.Rev enue
Regul at
ionNo.20- 2001,andal llaws,decrees,ex ecutiveorders, i
mplementingr ulesand
regulati
ons,BI Rcir
cular
s, memor andum orders,l
et t
er sofi
nst ructi
on,l
ocalgov er nment
ordinances,orpar t
sthereofinconsi st
entwi t
hanyoft heprovisionsofthi
sActar e
herebyr epealed,amendedormodi fi
edaccor di
ngl y.

"ART.144.Tr ansit
oryProvisions.-(1)Allcooperativesregisteredandconf i
rmedwiththe
Author i
tyunderRepublicActNo.6938andRepubl icActNo.6939, areher ebydeemed
regi
st eredunderthiscode, andanewcer tif
icat
eofr egistr
at i
onshallbei ssuedbythe
author i
ty:Provi
ded,Thatsuchcooper ati
veshallsubmi ttot henearestof fi
ceofthe
author i
tyacopyoft hei
rcer tif
icateofr egi
strati
onorcer ti
ficateofconf i
rmat i
on,t
he
arti
clesofcooper ati
on,theirby l
aws, andt heirl
atestauditedf i
nancialstatementwithi
n
one( 1)y earfr
om theeffectivi
tyoft hiscode, ot
herwiset heshal l
bedeemedcancel led
mot upr opri
o.
"(2)Followi ngtheissuanceofthenewcer tif
icateofr egistr
ation,theregi
ster
ed
cooper ativesshallsecuredthei
rcer t
ifi
cateoft axexempt i
onf rom thenearestof
fi
ceof
theBur eauofI nternalRevenue(BIR):Provided, Thatsuchexempt i
onsshallbeval
idof
fi
v e(5)y earsfrom thedateofissue: Provi
ded, further,Thatallunpaidassessmentsof
previouslyr egi
steredcooperati
veshal lbethesubj ectofcompr omisesett
lementon
termsf av orabl
et osuchcooperative;and:Prov ided,final
ly,ThattheBI Randthe
authorityshal l
bej oi
ntlyi
ssuethenecessar yr egulationsont hisexempt i
onand
compr omi sewithi
nni net
y(90)daysf rom theef fecti
v i
tyfr
om t hisCode.

"(3)Registrati
onofel ect
ri
ccooper ati
veswit
ht heAut hori
tyshallnotbeconsi deredasa
transferredofowner shipofit
sasset sandli
abili
ti
esnorshal li
tconst i
tut
eachangei n
thenat ure,str
ucture, andstat
usoft hecooperati
v e.Saidregi
strati
onshall notresul
tin
therev ocationofthecondonedl oansunderRepubl icActNo.9136, ot
herwi seknownas
theElect ri
cPowerI ndust r
yRefor m Act:
Provi
ded, Thatelectr
iccooper at
iveswi th
existi
ngl oansshall notbesubj ecttothecont
rol andsuper vi
sionsofitscreditorsand
shallonlybel imi
tedt otheful
fi
llmentofeachci v
ilobligat
ions.

"ART.
145.Separ
abil
tyCl
ause.-Shoul
danypartofthi
scodebedecl ar
ed
unconst
it
uti
onal
,theval
i
dit
yofremaini
ngprov
isionhereofshal
lremaini
nful
landef
fect
.

"ART.146.Ef
fect
ivi
tyCl
ause.-Thi
scodeshal
ltakeef
fectf
if
teen(
15)day
sfr
om i
ts
publi
cati
oninanewspaperofgeneral
cir
cul
ati
on.

Appr
oved:

(
Sgd.
)PROSPEROC.NOGRALES

Speakeroft
heHouseofRepr
esent
ati
ves

(
Sgd.
)JUANPONCEENRI
LE
Pr
esi
dentoft
heSenat
e

ThisActwhichi
saconsoli
dat
ionofSenat
eBi
llNo.2264andHouseBill
No.4312was
fi
nall
ypassedbytheSenat
eandtheHouseofRepresent
ati
vesonDecember16,
2008.

(
Sgd.
)MARI
LYNB.BARUA-
YAP

Secr
etar
yGener
al

HouseofRepr
esenat
ives

(
Sgd.
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RIO-
REYES

Secr
etar
yofSenat
e

Appr
oved:
Febr
uar
y17,
2009

(
Sgd.
)GLORI
AMACAPAGAL-
ARROYO

Pr
esi
dentoft
hePhi
l
ippi
nes

Republ
i
cAct9520Downl
oad

ADVI
SORY

(01/
15/2019)Pendingtherevi
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ssuedthis14thofJanuary2019.|( 01/10/2019)TheCDAadv ises
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MENDEZUNI TEDCOOPERATI VEi snotadul yr egist eredcooper at ivenorhasapendi ng
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