NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
Third Regular Session 
)
SENATE
24 SEP -4 A11 :26
\
RKI:I ' ’JUV.
S.B. No. 2811
(In Substitution of SB Nos. 418, 2378, and 2480, taking into 
consideration House Bill No. 9673)
Prepared by the Committees on Cooperatives; Constitutional 
Amendments and Revision of Codes; Ways and Means; and Finance, with 
Senators Marcos, Estrada (3), Ejercito (JV) and Legarda as authors thereof.
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AN ACT
PROVIDING FOR THE REVISED COOPERATIVE CODE OF THE
PHILIPPINES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress Assembled:
CHAPTER I. GENERAL PROVISIONS 
SECTION 1. Title. - This Act shall be known as the "Revised Cooperative Code 
of the Philippines."
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SEC. 2. Declaration of Policy. - It is the policy of the State to foster the
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creation and growth of cooperatives as a practical vehicle for promoting self-reliance
3 
and harnessing people power towards the attainment of economic development and
4 
social justice. The State shall encourage the private sector to undertake the actual
5 
formation and organization of cooperatives and shall create an atmosphere that is
6 
conducive to the growth and development of these cooperatives.
7 
Towards this end, the State shall, through the different branches, subdivisions,
8 
instrumentalities, and agencies of the government, regulate the conduct of
9 
cooperatives and support their growth and development in partnership with the private
10 
sector. The State shall also ensure the provision of technical and financial assistance,
11 
and other services to enable the cooperatives to develop into viable and responsive
12 
economic enterprises towards a strong cooperative movement, free from conditions
13 
that infringe upon the objectives and character of cooperatives.
14 
Further, the State recognizes the principle of subsidiarity under which the
15 
cooperative sector initiates and fosters, within their own ranks, cooperative promotion,
16 
organization, training, information gathering, audit, and support services, with
17 
government assistance if necessary.
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SEC. 3. Genera! Concepts. -
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(a) A cooperative is an autonomous and duly registered association of
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persons with a common bond of interest who have voluntarily joined together to
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achieve their social, economic, and cultural needs and aspirations by making equitable
23 
contributions to the capital required, patronizing their products and services, and
24 
accepting a fair share of the risks and benefits of the undertaking in accordance with
25 
universally accepted cooperative principles;
26 
(b) 
Cooperative principles - Every cooperative shall conduct its affairs in
27 
accordance with Filipino culture, good values and experience, and the following
28 
universally accepted principles of cooperation:
29 
(1) 
Voluntary and Open Membership - Cooperatives are voluntary
30 
organizations, open to all persons able to use their services and willing to accept the
31 
responsibilities of membership, without gender, social, racial, cultural, political or
32 
religious discrimination.


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(2) 
Democratic Member Control - Cooperatives are democratic
2 
organizations controlled by its members who actively participate in setting their
3 
policies and making decisions. Elected representatives, directors or officers are
4 
accountable to the membership. In primary cooperatives, members have equal voting
5 
rights of one member-one vote. Cooperatives at other levels are organized in the same
6 
democratic manner.
7 
(3) 
Member Economic Participation - Members contribute equitably to, and
8 
democratically control, the capital of their cooperative. At least part of that capital is
9 
the common property of the cooperative. Members shall receive limited compensation
10 
or limited interest, if any, on capital subscribed and paid as a condition of membership.
11 
Members allocate surpluses for any or all of the following purposes: developing the
12 
cooperative by setting up reserves, part of which should at least be indivisible;
13 
benefitting members in proportion to their patronage of the cooperative's business;
14 
and supporting other activities approved by the membership.
15 
(4) 
Autonomy and Independence - Cooperatives are autonomous, self-help
16 
organizations controlled by their members. If cooperatives enter into agreements with
17 
other organizations, including government, or raise capital from external sources, they
18 
shall do so on terms that ensure democratic control of their members and maintain
19 
cooperative autonomy.
20 
(5) 
Education, Training, and Information - Cooperatives shall provide
21 
education and training for their members, elected and appointed representatives,
22 
managers, and employees, so that they can contribute effectively and efficiently to the
23 
development of their cooperatives.
24 
(6) 
Cooperation Among Cooperatives - Cooperatives serve their members
25 
most effectively and strengthen the cooperative movement by working together
26 
through local, national, regional, and international structures.
27 
(7) 
Concern for Community - Cooperatives work for the sustainable
28 
development of their communities through policies approved by their members.
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(c) 
Cooperative Values- Cooperatives are based on the values of self-help,
30 
self-responsibility, democracy, equality, equity, and solidarity. Cooperative members
31 
believe in the ethical values of honesty, openness, social responsibility, and caring for
32 
others.


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SEC. 4. Definition of Terms. - As used in this Act:
2 
(a) 
Area of Operation refers to the place where the cooperative operates
3 
and conducts its business, as provided for in its articles of cooperation and bylaws;
4 
(b) 
Articles of Cooperation refers to the document registered with the
5 
Cooperative Development Authority, including its amendments, that defines and
6 
regulates the relations between the cooperative and the State;
7 
(c) 
Authority refers to the Cooperative Development Authority;
8 
(d) Board of Directors refers to the collegial body responsible for the
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strategic planning, direction-setting, and policy-formulation activities of the
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cooperative;
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(e) 
Branch-Hte unit refers to a cooperative bank that performs limited
12 
banking activities and records its transactions in the books of the head office or the
13 
branch to which it is annexed;
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(f) 
Bylaws refers to the document registered with the Authority, including
15 
its amendments, that defines and regulates the operations of the cooperative and
16 
governs the relations between the cooperative and its members and among
17 
themselves;
18 
(g) 
Clustering and Consolidation refers to the grouping together of the crops,
19 
livestock and/or fish producers within a community or adjacent communities on the
20 
basis of proximity of their production areas, similarity of inputs, shared production
21 
activities/processes and/or common final products, where there is potential for unified
22 
management of production activities, sourcing of inputs, access to financing,
23 
processing, logistics, storage, marketing, and enhanced quality of produce. It shall not
24 
be limited to the notion of simply merging contiguous land properties and assets.
25 
(h) 
Committees refer to the mandatory committees under this Code
26 
entrusted with specific functions and responsibilities and such other committees that
27 
the Board of Directors deem necessary for the governance of the business affairs of
28 
the cooperative;
29 
(i) 
Compensation refers to a broad term that includes all forms of
30 
remuneration given for services rendered, like salary which is paid regularly. It does
31 
not imply an immediate payment or direct return, nor the payment of cash fare or its
32 
equivalent. It also includes any remuneration, by whatever name it may be designated.


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However, as used in Section 3.b.c. in this Code, compensation shall refer to the interest
2 
on share capital and patronage refund;
3 
(j) 
Cooperative Union refers to a cooperative whose members are registered
4 
cooperatives, federations, or both, organized purposely to represent the interest and
5 
welfare of all types of cooperatives at the city, provincial, regional, national, and
6 
sectoral levels;
7 
(k) 
Federation of Cooperatives refers to a cooperative, the members of
8 
which are primary and/or secondary cooperatives, registered with the Authority to
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conduct related business in support of its member cooperatives to address common
10 
needs, engage in capacity-building activities and delegated supervision in support of
11 
its member cooperatives and its exercise of self-regulation among its members,
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organized at the municipal, city, provincial, regional, national, special metropolitan
13 
political subdivision, or economic zones created by law;
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(I) 
General Assembly refers to the full membership of the cooperative duly
15 
assembled physically, via video conferencing, or both, for the purpose of exercising all
16 
the rights and performing all the obligations pertaining to cooperatives, as provided
17 
by this Code, its articles of cooperation, and bylaws;
18 
(m) 
Honorarium refers to the token of appreciation granted for the expert
19 
service rendered in the specific field that does not receive compensation;
20 
(n) Interest on Share Capital refers to the amount earned by the members
21 
on their contribution in the cooperative. The interest on share capital and the
22 
patronage refund shall be determined at the end of the calendar year after the net
23 
surplus shall have been distributed in accordance with the articles of cooperation and
24 
bylaws or by the Board of Directors;
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(0) 
Investment refers to equity participation in any enterprise formed,
26 
organized or existing under the laws of the Philippines;
27 
(p) 
Laboratory Cooperative refers to a cooperative affiliated with and
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registered by a primary cooperative, and whose membership consists of minors;
29 
(q) 
Member refers to a person either natural or juridical, who has been
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approved and admitted by the Board of Directors of the cooperative, federation, or
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union, after undergoing the Pre-Membership Education Seminar and has vowed to


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adhere to the articles of cooperation and its bylaws. Members shall be classified as
2 
regular or associate, as qualified by the cooperative;
3 
(r) 
Member Entitled to Vote refers to a regular member who has complied
4 
with all the membership requirements of the cooperative, has fulfilled all of their duties
5 
and obligations, and possesses none of the disqualifications as provided by the articles
6 
of cooperation and bylaws of the cooperative, as declared by the Board of Directors;
7 
(s) 
Patronage Refund refers to the payment to the members of a percentage
8 
or portion of the amount availed of, the interest on loans paid, or other services availed
9 
from the cooperative. The amount will be determined at the end of the fiscal year after
10 
the distribution of the net surplus. The percentage of the allocation will be in
11 
accordance with the provisions in its articles of cooperation, the bylaws, or by the
12 
Board of Directors. The formula and basis for the computation of the rate of patronage
13 
refund will be determined by the Authority;
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(t) 
Per Diem refers to the allowance given as reimbursement for extra
15 
expenses incurred in the performance of their duties;
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(u) 
Performance Audit refers to an audit conducted by the Authority on the
17 
efficiency, efficacy, and effectiveness of the cooperative's overall performance as a
18 
whole, its management and officers, and its various responsibility centers as basis for
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improving individual, team, or overall performance, and for objectively informing the
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general membership of the cooperative on such performance;
21 
(v) 
Primary Cooperative refers to a cooperative, the members of which are
22 
natural persons. In the case of water service cooperatives, institutional users may be
23 
accepted as associate members;
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(w) 
Registration refers to the operative act granting juridical personality to a
25 
proposed cooperative and is evidenced by a Certificate of Registration;
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(x) Representative Assembly refers to the full membership of a body of
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representatives elected by each of the sectors, chapters, or districts of the cooperative
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duly assembled for the purpose of exercising such powers in accordance with its
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bylaws;
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(y) 
Samahang Nayon and Municipal Katipunan ng mga Samahang Nayon
31 
refers to pre-cooperative organizations established under Presidential Decree (PD) No.
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175 entitled "Strengthening the Cooperative Movement";


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(z) 
Secondary Cooperative refers to a cooperative, the members of which
2 
are primary cooperatives;
3 
(aa) Single-Purpose Cooperative refers to a cooperative that undertakes only
4 
one economic activity, except one that is allowed to undertake allied economic
5 
activities;
6 
(bb) Share Capital refers to the equitable contribution of a member to the
7 
cooperative fund, the working capital fund of the cooperative, which shall have a par
8 
value of at least One hundred pesos (PhplOO.OO) and issued as common or preferred
9 
shares depending on the type of membership with the cooperative;
10 
(cc) 
Social Audit reters to an audit conducted to assess the social impact of
11 
the cooperative and its ethical performance vis-a-vis its stated mission, vision, goals,
12 
and code of social responsibility. It is a mechanism whereby it can account for the
13 
social performance of a cooperative and evaluate its impact on the community, making
14 
the cooperative accountable for its decisions and actions to its members;
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(dd) 
Subscription Agreement refers to the document executed by a member
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to signify the amount that the member intends to contribute to the cooperative fund;
17 
(ee) 
Subsidiary Cooperative refers to a cooperative, all or majority of whose
18 
members or shareholders come from a parent cooperative, organized for any other
19 
purpose different from that of, and receives technical, managerial, and financial
20 
assistance from the latter, in accordance with the rules and regulations of the
21 
Authority; and
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(ff) 
Video conferencing refers to a conference between two (2) or more
23 
participants at different sites by using computer networks to transmit audio and video
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data; and
25 
(gg) 
Worker Beneficiary refers to a natural person who renders service for
26 
value as an employee or laborer in an agricultural enterprise or farm within an agrarian
27 
reform cooperative.
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CHAPTER II. PURPOSES AND ORGANIZATION
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SEC. 5. Goals and Objectives of a Cooperative. - The primary objective of
4 
every cooperative is to help improve the quality of life of its members. Towards this
5 
end, the cooperative shall, among others, aim to:
6 
(a) 
Increase income, savings, investments, productivity, and purchasing
7 
power of its members; and promote among themselves equitable distribution of net
8 
surplus through maximum utilization of economies of scale, cost sharing and risk-
9 
sharing;
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(b) 
Provide optimum social and economic benefits to its members;
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(c) 
Providing trainings for its members on the efficient ways of processing
12 
tasks in a cooperative manner;
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(d) 
Propagate best practices, innovative ideas in business undertakings and
14 
management through the utilization of new technologies;
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(e) 
Empower the marginalized sector to gain opportunities through
16 
education and skills training;
17 
(f) 
Actively collaborate with the government, other cooperatives, and
18 
people-oriented organizations to promote cooperatives as a practical means towards
19 
sustainable socio-economic development;
20 
(g) 
Adopt membership expansion mechanism to ensure the growth of the
21 
cooperative movement;
22 
(h) 
Implement policy guidelines that will ensure transparency,
23 
accountability, and equitable access to its resources and services; and promote the
24 
interests of the members;
25 
(i) 
Advance the sustainability, competitiveness, and innovativeness of
26 
cooperatives in various industries;
27 
(j) 
Coordinate with other cooperatives through learning and information
28 
exchange to foster sustainable development;
29 
(k) 
Advocate legal framework and enabling policies appropriate for the
30 
development of cooperatives;
31 
(I) 
Be the voice and the institution of the marginalized for purposes of
32 
promoting ecological and people-centered development;
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(m) 
Encourage thrift and savings mobiiization among the members;
2 
(n) 
Generate funds and extend credit to the members for productive and
3 
provident purposes;
4 
(o) 
Encourage among members systematic production and market-oriented
5 
production;
6 
(p) 
Provide goods and services and other requirements to the members;
7 
(q) 
Deveiop expertise and skilis among its members;
8 
(r) 
Acquire iands and provide housing benefits for the members;
9 
(s) 
Provide insurance programs to cover the risk of financiai iosses in the
10 
operations of a cooperative, and provide assistance to mitigate effects of economic
11 
shocks or natural calamities or disasters;
12 
(t) 
Promote and advance the economic, social, and educational status of the
13 
members;
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(u) 
Establish, own, lease, or operate cooperative banks, cooperative
15 
wholesale and retail complexes, insurance, agricultural and industrial processing
16 
enterprises, and public markets;
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(v) 
Coordinate and facilitate the activities of cooperatives;
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(w) 
Advocate for the cause of the cooperative movement;
19 
(x) 
Ensure the viability of cooperatives through the utilization of new
20 
technologies;
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(y) 
Encourage and promote self-help or self-employment as an engine for
22 
economic growth and poverty alleviation;
23 
(z) 
Adopt such other plans which may help foster the welfare of the
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members, their families, and the community; and
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(aa) 
Undertake any activity stated in the articles of cooperation and bylaws
26 
of the cooperative.
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SEC. 6. Cooperatives Notin Restraint of Trade. - No cooperative or method
29 
or act thereof which complies with this Code shall be deemed a conspiracy or
30 
combination in restraint of trade or an iilegal monopoiy, or an attempt to lessen
31 
competition or fix prices arbitrarily in violation of any laws of the Philippines.


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This notwithstanding, fair competition between cooperatives is paramount in
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their coliective growth. Cooperatives shail support and foster a ievei piaying fieid in
3 
their industries. Accordingly, Sections 6, 7, 21 and 111 of this Code shall be in
4 
consonance with Republic Act (RA) No. 10667, otherwise known as the "Philippine
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Competition Act."
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SEC. 7. Cooperative Powers and Capacities. - A cooperative registered
8 
under this Code shali have the following powers, rights and capacities:
9 
(a) 
To the exclusive use of its registered name;
10 
(b) 
To sue and be sued;
11 
(c) 
Of succession;
12 
(d) 
To amend its articies of cooperation in accordance with the provisions of
13 
this Code;
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(e) 
To adopt bylaws not contrary to law, morals, or public policy, and amend
15 
or repeal the same in accordance with this Code;
16 
(f) 
To purchase, receive, take or grant, hold, convey, sell, lease, pledge,
17 
mortgage, or otherwise deal with such real and personal property as the transaction
18 
of the lawful affairs of the cooperative may reasonably and necessarily require, subject
19 
to the limitations prescribed by law and the Constitution;
20 
(g) 
To enter into joint venture agreement and partnership, or any other
21 
commercial activity with other cooperatives;
22 
(h) 
To enter into division, merger or consolidation, as provided in this Code;
23 
(i) 
To form subsidiary cooperatives and join federations, unions, or Credit
24 
Surety Fund Cooperatives, as provided in this Code;
25 
(j) 
To avail of loans, be entitled to credit, and accept and receive grants,
26 
donations, and assistance from foreign and domestic sources, subject to the conditions
27 
of the loans, credits, grants, donations or assistance that must not undermine the
28 
autonomy of the cooperative;
29 
(k) 
To avail of preferential rights granted to cooperatives under Republic Act
30 
No. 7160, otherwise known as the "Locai Government Code of 1991," and other laws,
31 
particularly the grant of franchises to establish, construct, operate, and maintain
32 
ferries, wharves, markets or slaughterhouses and lease public utilities, including access
10


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to extension and on-site research services and facilities related to agriculture and
2 
fishery activities;
3 
(I) To establish, own, and operate schools in all levels of the education
4 
system, subject to the rules and regulations of the Department of Education,
5 
Commission on Higher Education, and Technical Education and Skills Development
6 
Authority;
7 
(m) To operate branch, satellite, and liaison offices within its area of
8 
operation, subject to the rules and regulation by the Authority. The Authority and the
9 
sector shall issue rules regarding the creation and operation of branch, satellite, and
10 
liaison offices of cooperatives;
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(n) 
To provide training for their officers and members for continued
12 
development and personal improvement. If a cooperative is unable to provide training
13 
for its members, it may engage the services of a federation or union. Government
14 
agencies and experts from the private sector are authorized to assist in the
15 
organization, training, and development of a cooperative and its members if the
16 
cooperative wishes to do so. In this regard, cooperatives and other institutions shall
17 
be accredited as Training Service Providers by the Authority: Provided, That a
18 
federation shall only provide training in accordance with its business or specialization
19 
for their members, while a union shall provide basic and other training that benefits
20 
the sector, unless there is no existing or functioning union or federation in the area:
21 
Provided, further. That government agencies and experts from the private sector are
22 
authorized to assist in the organization, training, and development of a cooperative
23 
and its members, in coordination with federations and unions; and
24 
(o) 
To exercise such other powers granted in this Code as shall be necessary
25 
to carry out its purposes stated in its articles of cooperation.
26
27 
SEC. 8. Organizing a Primary Cooperative. - At least fifteen (15) natural
28 
persons who are Filipino citizens, of legal age, having a common bond of interest, and
29 
are residing or working in the intended area of operation, may organize a primary
30 
cooperative under this Code, provided that no cooperative with the same line of
31 
business is operating in the same area of operation. The cooperators shall attend and
32 
complete a Pre-Registration Seminar (PRS) as a prerequisite for registration. The
11


1 
details and requisites of the PRS must be included in the implementing rules and
2 
regulations of this Code: Provided, That a prospective member of a primary
3 
cooperative must have compieted a Pre-Membership Education Seminar (PMES).
4 
Foreign nationals may join in organizing a primary cooperative as associate
5 
members: Provided, That the foreign national is a natural-born Filipino citizen who is
6 
a naturalized citizen of a foreign country or is a son or daughter of a Filipino citizen
7 
who is a naturalized citizen of a foreign country: Provided, further, That their intention
8 
in joining the cooperative is for the growth and deveiopment of a Phiiippine
9 
cooperative community.
10 
Overseas Filipino Workers (OFW) may organize and register primary
11 
cooperatives, subject to the rules and regulations to be promulgated by the Authority.
12 
Indigenous cuitural communities may organize and register primary cooperatives
13 
consistent with their traditions, culture, practices, beliefs, and vaiue systems.
14 
Islamic communities may organize and register primary cooperatives consistent
15 
with the Sharia laws and principles as enunciated by the noble qur'an and the hadiths
16 
of the Prophet Mohammad.
17 
No primary cooperative shall be organized as a multi-purpose cooperative
18 
unless it has been in operation for at least two (2) years and shall have complied
19 
with the minimum requirements for multi-purpose cooperatives as prescribed by the
20 
Authority; Provided, That agricuiturai cooperatives shall be exempt from the
21 
requirements in organizing a multi-purpose cooperative.
22 
In order to encourage cooperativism among the youth, a primary cooperative
23 
may organize a laboratory cooperative as defined under this Code. A laboratory
24 
cooperative shall have all the rights, privileges, and duties of a regular cooperative,
25 
and shall be governed by special guidelines to be promulgated by the Authority, in
26 
consultation with the cooperative sector.
27
28 
SEC. 9. Mandatory Personnel of the Cooperative. - All cooperatives shall
29 
have a General Manager and a Bookkeeper to be authorized to operate.
30
31 
SEC. 10. Liability of the Cooperative. - A cooperative duly registered under
32 
this Code shail have limited liabiiity.
12


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SEC. 11. Term of Existence of Cooperative. - A cooperative shall have 
perpetual existence from the date of registration unless voluntarily dissolved or the 
Certificate of Registration is cancelled for reasons provided under this Code and its 
implementing rules and regulations.
SEC. 12. Articles of Cooperation. - All primary cooperatives applying for 
registration shall present to the Authority the Certificate of Pre-Registration Seminar 
and the articles of cooperation, signed by all cooperators and acknowledged by them 
before a notary public.
In case of cooperative banks, insurance cooperatives, federations, or unions, the 
articles of cooperation shall be acknowledged by its Chairpersons and Cooperative 
Secretaries before a notary public. The articles of cooperation shall contain the 
following provisions:
(a) 
Name of the cooperative, which shall include the word "Cooperative", 
"Coop", "Koopf, or"Kooperatibcf' and specify the type of cooperative;
(b) 
Purpose or purposes and the economic activities for which the 
cooperative is to be registered;
(c) 
Powers and capacities;
(d) 
Area of operation, the postal address of its principal office, and the 
official electronic mail address of the cooperative;
(e) 
Names, nationality, and the postal addresses of the cooperators;
(f) 
Common bond of membership;
(g) 
List of names of the directors;
(h) 
Amount of authorized, subscribed, and paid-up share capital, the number 
of shares, and the par-value of each share, and the names of the cooperators, except 
for cooperative unions;
(i) 
A statement as to whether the cooperative is primary or secondary;
(j) 
Other provisions consistent with this Code or any related law; and
(k) 
Certificate of Authority from the appropriate government agency.
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SEC. 13. Bylaws. - Every cooperative to be registered under this Code shall 
adopt bylaws consistent with the provisions of this Code, which shall be filed together 
with the articles of cooperation. The bylaws of each cooperative shall provide:
(a) 
The qualifications for admission to membership;
(b) 
The equitable contribution or interest to be acquired as a condition 
precedent for the exercise of the right of membership;
(c) 
The rights, privileges, duties, responsibilities, and liabilities of 
membership;
(d) 
The circumstances under which membership is acquired, maintained, 
and terminated, and the procedure to be followed;
(e) 
The conditions under which the transfer of a share or interest of the 
members shall be permitted;
(f) 
The general conduct of the affairs of the cooperative relative to agenda, 
time, place and manner of calling, convening, and conducting meetings, quorum 
requirements, voting systems of the General Assembly, the Board of Directors, 
committees and the officers, including their qualifications, disqualifications, powers, 
duties, and responsibilities;
(g) 
The manner in which the capital may be raised and the purposes for 
which it can be utilized;
(h) 
The accounting and auditing systems;
The manner of contracting loans and borrowings including the limitations
(i)
thereof;
(j)
(k)
(l)
The allocation and distribution of net surplus;
The manner of adopting and amending bylaws;
The institution of a conciliation or mediation mechanism for the amicable 
settlement of disputes among members, directors, officers and committee members 
of the cooperative; and
(m) Other matters incident to the purposes and activities of the cooperative.
14


1 
CHAPTER III. REGISTRATION
2
3 
SEC. 14. Requirements for Registration. - The proposed articles of
4 
cooperation, bylaws, and such other required documents shall be submitted in
5 
accordance with the rules and regulations to be prescribed by the Authority.
6 
Except for cooperative unions as described under Section 31 hereof, no
7 
cooperative shall be registered unless the articles of cooperation is accompanied with
8 
the bonds of the accountable officers and a sworn statement of the Treasurer showing
9 
that at least twenty-five percent (25%) of the authorized share capital has been
10 
subscribed and at least twenty-five percent (25%) of the total subscription has been
11 
paid.
12 
The Authority shall initially fix the minimum paid-up share capital in the
13 
implementing rules and regulations of this Code, periodically assess the required paid-
14 
up share capital, and may increase or decrease it through subsequent regulation
15 
whenever necessary upon consultation with the cooperative sector.
16 
The Authority may prescribe such other registration requirements as it may deem
17 
necessary, in consultation with the cooperative sector.
18
19 
SEC. 15. Registration. - A cooperative formed and organized under this Code
20 
acquires juridical personality from the date the Authority issues a Certificate of
21 
Registration under its official seal. All applications for registration shall be finally
22 
disposed of by the Authority within a period of twenty (20) working days from the
23 
filing of the complete documentary requirements, both in form and in substance,
24 
otherwise the application is deemed approved, unless the cause of the delay is justified
25 
as the case may be: Provided, That in case of a denial of the application for
26 
registration, the applicant may file a Motion for Reconsideration within five (5) days
27 
from the receipt of such denial. The Motion for Reconsideration to the Authority
28 
denying the application must be resolved within fifteen (15) days from the filing
29 
thereof. An appeal to the Board of Directors of the Authority may be filed within twenty
30 
(20) working days from receipt of notice of denial of the Motion for Reconsideration.
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The decision of the Board of Directors shall be final and executory but may be appealed
32 
to a regular court through a petition for review.
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The grounds for denial of the registration shall be prescribed in the implementing 
rules and regulations of this Code.
SEC. 16. Certificate of Registration. - A Certificate of Registration issued by 
the Authority under its official seal shall be conclusive evidence that the cooperative 
therein mentioned is duly registered unless it is proved that the registration thereof 
has been cancelled. Moreover, once the cooperative is issued a Certificate of 
Compliance, it shall be valid for five (5) years, unless revoked by the Authority after 
due process due to willful refusal to comply with the reportorial requirements set forth 
by law.
SEC. 17. Amendment of Articies of Cooperation and Byiaws. - Unless 
otherwise prescribed by this Code and for legitimate purposes, any provision or matter 
stated in the articles of cooperation and bylaws may be amended by two-thirds (%) 
vote of all the members entitled to vote, without prejudice to the right of the dissenting 
members to exercise their right to withdraw their membership under Section 37 of this 
Code.
A cooperative may opt to amend its articles of cooperation and bylaws through a 
referendum by a vote of two-thirds (%) of all the members entitled to vote, present and 
constituting a quorum.
Both the original and amended articles of cooperation bylaws shall contain all the 
provisions required by law. Amendments shall be indicated by underscoring or 
otherwise appropriately indicating the change or changes made. A copy of the 
amended articles of cooperation or bylaws shall be duly certified under oath by the 
Cooperative Secretary and majority of the directors, stating the fact that the 
amendment or amendments to the articles of cooperation and bylaws have been duly 
approved by the required vote of the members. All amendments to the articles of 
cooperation and bylaws shall be submitted to the Authority.
An application for amendments shall be deemed approved by the Authority within 
a period of twenty (20) days from the filing thereof: Provided, That the documentary 
requirements are complete in form and substance.
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SEC. 18. Contracts Executed Prior to Registration and Effects Thereof.
- Subject to the execution of a formal written contract made in the cooperative's name 
or on its behalf prior to its registration, all contracts executed prior to its registration 
between private persons and the cooperative shall remain valid and binding between 
the parties insofar as it redounds to the benefit of the cooperative.
SEC. 19. Effects of Failure to Operate or Comply with Conditions on 
Registration. - The Certificate of Registration shall be deemed cancelled and the 
cooperative shall be delisted from the registry of cooperatives if the cooperative failed 
to commence its authorized business activity within five (5) years from the issuance 
of its Certificate of Registration.
SEC. 20. Division of Cooperatives. - A registered cooperative, through a 
resolution approved by a vote of two-thirds {V2) of all the members entitled to vote, 
present and constituting a quorum, may divide itself into two (2) or more cooperatives. 
Such division of the cooperative shall be valid.' Provided, That the purpose of the 
division is not to defraud the creditors: Provided, further, That the division shall ensure 
the continuity of the existing government programs and projects.
The dissenting members shall have the right to exercise their right to withdraw 
their membership pursuant to Section 38 of this Code.
The Authority shall prescribe the rules and regulations for the division of the 
cooperative: Provided, That all the requirements set forth in this Code have been 
complied with by the newly-formed cooperatives.
CHAPTER IV. MERGER AND CONSOLIDATION OF COOPERATIVES
SEC. 21. Merger or Consolidation of Cooperatives. -
(a) 
Two (2) or more cooperatives may merge or consolidate into a single 
cooperative.
(b) 
No merger or consolidation shall be valid unless approved by a two-thirds 
(%) vote of all the members entitled to vote, present and constituting a quorum of each 
of the constituent cooperatives at separate General Assembly meetings. The
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dissenting members shall have the right to exercise their right to withdraw their 
membership pursuant to Section 38 of this Code.
(c) The Authority shall issue the guidelines governing the procedure of 
merger or consolidation of cooperatives. The merger or consolidation shall be effective 
upon the issuance by the Authority of the Certificate of Merger, or in the case of a 
consolidation of cooperatives, a new Certificate of Registration.
SEC. 22. Effects of Merger and ConsoUdation. - The merger and 
consolidation of cooperatives shall have the following effects:
(a) 
In case of merger of cooperatives, the constituent cooperatives shall 
become a single cooperative or, in the case of consolidation of cooperatives, the 
consolidated cooperative shall be the new cooperative;
(b) 
The single cooperative or the consolidated cooperative shall possess all 
the assets, rights, privileges, immunities, and franchises and assume all the liabilities 
and obligations of each of the constituent cooperatives;
(c) 
Any claim, action, or proceeding instituted by or against the constituent 
cooperatives may be continued by the single or consolidated cooperative;-and
(d) 
The merger or consolidation shall not impair the rights of creditors nor 
any lien upon the property of the constituent cooperatives.
CHAPTER V. TYPES AND CATEGORIES OF COOPERATIVES
SEC. 23. Types and Categories of Cooperatives. -
(a) Clusters of Cooperatives - Cooperatives may fall under any of the 
following clusters based on their business activity:
(1) Credit, Finance, Banking, and Insurance duster refers to cooperatives 
organized for the promotion of financial freedom and literacy among its members, and 
undertakes savings, lending, and other financial services to its members, such as:
(i) Cooperative Banks. - Cooperative banks are organized for the primary 
purpose of providing a wide range of financial services to cooperatives and their 
members;
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(ii) 
Credit Cooperatives. - Credit cooperatives are engaged solely in lending
2 
services;
3 
(iii) 
Credit and Savings Cooperatives. - Credit and savings cooperatives
4 
promote and undertake savings and lending services among its members. They
5 
generate a common pool of funds in order to provide financial assistance to their
6 
members for productive and provident purposes;
7 
(iv) 
Credit Surety Fund Cooperatives. - Credit surety fund cooperatives, in
8 
partnership with Local Government Units (LGUs), are comprised of well-capitalized and
9 
well managed member-cooperatives or non-government organizations that meet the
10 
criteria and qualifications prescribed by the Authority, LGUs, Government Financial
11 
Institutions, and other government agencies;
12 
(v) Insurance Cooperatives. - Insurance cooperatives are engaged in the
13 
business of insuring the life, general, property, and pre-need (life plan, education, and
14 
pension) of cooperatives and their members;
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(vi) 
Savings and Deposits Cooperatives. - Savings and deposits cooperatives
16 
are engaged solely in promoting and encouraging savings among its members; and
17 
(vii) 
Other cooperatives as may be determined by the Authority under this
18 
cluster in consultation with the cooperative sector.
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(2) 
Consumers, Marketing, Producers, and Logistics duster refers to
20 
cooperatives organized for the supply, procurement, transport, storage, distribution,
21 
and marketing of products of its members, industrial production, and nonagricultural
22 
business activity for the production and processing of raw materials or goods or its
23 
derivative, such as:
24 
(i) 
Consumers Cooperatives. - Consumer cooperatives are engaged
25 
primarily in procuring and distributing commodities to members and non-members;
26 
(ii) 
Marketing Cooperatives. - Marketing cooperatives are engaged in the
27 
supply of production inputs to members and markets their products, including trading
28 
and processing;
29 
(iii) 
Logistics Cooperatives. - Logistics cooperatives are engaged in
30 
operations involving facilities and supplies whose business is related to the supply
31 
chain;
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(iv) 
Producers Cooperatives. - Producers cooperatives are engaged in joint
2 
production whether agricultural or industrial. They are formed and operated by the
3 
members to undertake the production and processing of raw materials or goods
4 
produced by the members into finished or processed products for sale by the
5 
cooperative. Any end product or its derivative arising from the raw materials produced
6 
by the members, sold in the name and for the account of the cooperative, shall be
7 
deemed a product of the cooperative and its members; and
8 
(v) 
Other cooperatives as may be determined by the Authority under this
9 
cluster in consultation with the cooperative sector.
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(3) 
Human Services, Health, Housing, Workers, and Labor Service Ouster
11 
refers to cooperatives organized for providing employment and business opportunities
12 
to its members, housing, and services related to medical, dental, health and wellness,
13 
and death care, technology, including digital payment services, such as:
14 
(i) 
Health Services Cooperatives. - Health services cooperatives are
15 
organized for the primary purpose of providing medical, dental, paramedic, diagnostic,
16 
and other health services, including cooperative health organizations, hospitals, clinics,
17 
pharmacies, and transporting of patients;
18 
(ii) 
Housing Services Cooperatives. - Housing services cooperatives are
19 
organized to assist or provide access to socialized housing for the benefit of the
20 
members who actively participate in the savings program for housing;
21 
(iii) 
Labor Services Cooperatives. - Labor services cooperatives are engaged
22 
in providing specific services to a principal under a legitimate contracting or
23 
subcontracting arrangement, as defined under existing laws, and in accordance with
24 
the cooperative principles set forth under this Code;
25 
(iv) 
Technology Service Cooperatives. - Technology service cooperatives are
26 
organized to provide the members with services that are designed to facilitate the use
27 
of Information Technology by end users, electronic money issuers licensed by Bangko
28 
Sentrai ng Pilipinas (BSP), or provide specialized technology-oriented solutions by
29 
combining the processes and functions of software, hardware, networks,
30 
telecommunications, and electronics, among others;
31 
(v) 
Workers Cooperatives. - Workers cooperatives are organized by
32 
workers, including the self-employed, who are at the same time the members and
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owners of the enterprise. The principal purpose of these cooperatives is to provide
2 
employment and business opportunities to the members and manage them in
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accordance with cooperative principles; and
4 
(vi) 
Other cooperatives as may be determined by the Authority under this
5 
cluster in consultation with the cooperative sector.
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(4) 
Education, Advocacy, and Union duster refers to cooperatives organized
7 
for the promotion and advocacy of cooperativism among its members and the public
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through socially-oriented projects, education and training, research and
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communication, such as:
10 
(i) 
Advocacy Cooperatives. - Advocacy cooperatives promote cooperativism
11 
and advocate policies for the general interest and welfare of the members, the sector,
12 
the movement, and the public through socially-oriented projects, education and
13 
training, research and communication, campaigns, lobbying, and other similar
14 
activities to reach out to intended beneficiaries;
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(ii) 
Education Cooperatives. - Education cooperatives are organized for the
16 
primary purpose of owning and operating licensed educational institutions, subject to
17 
existing laws, rules and regulations; and
18 
(iii) 
Other cooperatives as may be determined by the Authority under this
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cluster in consultation with the cooperative sector.
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(5) 
Agricuiture, Agrarian, Aquacuiture, Farmers, Dairy, andFisherfoik Ouster
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refers to cooperatives engaged in the raising or culture of plants and animals, and the
22 
production and processing of agricultural produce and its derivatives, including
23 
cooperatives organized by agrarian reform beneficiaries and marginal farmers, for the
24 
purpose of developing a sustainable system of land tenure, land development, land
25 
consolidation, or land management, such as:
26 
(i) 
Agrarian Reform Cooperatives. - Agrarian reform cooperatives are
27 
organized by marginal farmers, majority of whom are agrarian reform beneficiaries,
28 
for the purpose of developing an appropriate system of land tenure, land development,
29 
land consolidation, or land management areas covered by agrarian reform;
30 
(ii) 
Agriculture Cooperatives - Agriculture cooperatives are organized as
31 
agricultural-based economic enterprises voluntarily established through joint
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investment, joint ownership, and joint management for the purpose of improving
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agricultural production capacity, agro-industry, agri-business, or services related to
2 
agricultural production, which shall include agrarian reform, dairy, fishermen,
3 
community forestry, and aquaculture cooperatives, as well as consumers, marketing,
4 
producers, and multi-purpose cooperatives whose primary business activity is at least
5 
fifty percent (50%) related to agricultural production, agro-industry, agri-business, or
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services related to agricultural production
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(iii) 
Dairy Cooperatives. - Dairy cooperatives are engaged in the production
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and marketing of fresh milk which may be processed or marketed as dairy products;
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(iv) 
Farmers Cooperatives. - Farmers cooperatives are organized by
10 
marginalized farmers, majority of whom are not agrarian reform beneficiaries, for the
11 
purpose of supporting their products, either fresh or processed;
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(v) Fisherfolk Cooperatives. - Fisherfolk cooperatives are organized by
13 
marginalized fisherfolk whose products are marketed either as fresh or processed, for
14 
the mobilization of capital in the procurement of fishing boats, nets, gears, and
15 
accessories, production of aquatic products, and access to storage and agricultural
16 
facilities;
17 
(vi) 
Irrigators Cooperatives. - Irrigators cooperatives are engaged in
18 
providing sustainable irrigation services for farmers; and
19 
(vii) 
Other cooperatives as may be determined by the Authority under this
20 
cluster in consultation with the cooperative sector.
21 
(6) 
Public Utilities Cluster refers to cooperatives organized for the purpose
22 
of undertaking electricity generation, utilizing renewable energy sources, including
23 
hybrid systems, acquisition and operation of sub-transmission or distribution;
24 
operation and management of water systems; land, air, and sea transportation
25 
services; and communications services, including telephone and digital
26 
communications, which require a franchise or certificate of public convenience and
27 
necessity such as:
28 
(i) 
Communications Cooperatives. - Communications cooperatives are
29 
organized to own, operate, and manage communication structures and arrangements,
30 
such as radio, cable TV, newspaper, and related industries, for the widespread
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dissemination of information for the members and the public;
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(ii) 
Transport Service Cooperatives. - Transport service cooperatives are 
organized to render public land, water, or air transportation services for the safe 
conveyance of passengers or cargoes, or are engaged in providing related or auxiliary 
services to the transport industry;
(iii) 
Water Service Cooperatives. - Water service cooperatives are organized 
to own, operate, and manage water systems for the provision and distribution of 
potable water for the members and their households; and
(iv) 
Other cooperatives as may be determined by the Authority under this 
cluster in consultation with the cooperative sector.
(7) Multi-Purpose Cooperative refers to one which combines two (2) or more 
of the business activities of the different types of cooperatives;
(b) 
Categories of Cooperatives. Cooperatives are categorized 
as follows:
(1) In terms of membership, cooperatives may be categorized into:
(1) 
Primary Cooperatives; and
(ii) 
Secondary Cooperatives;
(2) 
In terms of territory, cooperatives are categorized according 
to areas of
operations; and
(3) 
In terms of assets, cooperatives shall adhere to the categorization of 
enterprises as provided under Section 3 of Republic Act No. 6977, as amended.
SEC. 24. Apex of Cooperatives. - The Apex of Cooperatives refers to the 
singular cooperative vested with a juridical personality and the mandate to represent 
the cooperative sector at the national and international levels, fully and voluntarily 
organized by the members of the cooperative sector. It shall have the mandate to 
engage in discussions and advise the appropriate authorities on all matters relating to 
cooperatives, as well as to promote the cooperative identity and culture.
CHAPTER VI. FEDERATION OF COOPERATIVES
SEC. 25. Area of Coverage, - A federation of cooperatives may be organized 
at the municipal or city level, district or provincial level, regional, inter-regional or 
national levels.
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SEC. 26. Members of a Federation of Cooperatives. - Members of a 
federation of cooperatives shall consist of cooperatives with common needs or 
purposes: Provided, That a member cooperative may freely withdraw membership 
from the federation.
The minimum number of members shall be at least ten (10) primary or 
secondary cooperatives for a federation of cooperatives.
SEC. 27. Authorized, Subscribed, and Paid-Up Capital of a Federation. -
The authorized share capital of a cooperative shall be provided for in its articles of 
cooperation where at least twenty-five percent (25%) of the authorized share capital 
has been subscribed to by the members and at least twenty-five percent (25%) of the 
total subscription has been paid prior to its registration.
The minimum paid-up share capital for a federation of cooperatives shall be One 
million pesos (Phpl,000,000.00).
SEC. 28. Registration of Federation of Cooperatives.
cooperatives shall be registered with the Authority.
A federation of
SEC. 29. Functions of a Federation of Cooperatives. - A federation of 
cooperatives shall undertake the following functions:
(a) 
To carry on any cooperative enterprise authorized under Section 5 that 
complements, augments, or supplements but does not conflict, compete with, nor 
supplant the business or economic activities of its members;
(b) 
To carry on, encourage, and assist educational and advisory work 
relating to the business activities of its members;
(c) 
To render services designed to encourage simplicity, efficiency, and 
economy in the conduct of the business of its member cooperatives and to facilitate 
the implementation of their bookkeeping, accounting, and other systems and 
procedures;
(d) 
To print, publish, and circulate any newspaper or other publication in the 
interest of its member-cooperatives and enterprises;
(e) 
To coordinate and facilitate the activities of its member-cooperatives;
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(f) 
To enter into joint ventures with local or international cooperatives in the
2 
manufacture and sale of products in the Philippines and abroad;
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(g) 
To mandatorily act as conciliator-mediator in inter-intra cooperative
4 
disputes among and between the members and officers of primary cooperatives;
5 
(h) 
To assist members in the submission of the required reports and other
6 
compliances to the Authority and other government or regulatory bodies;
7 
(i) 
To render assistance, if requested, in the liquidation of the remaining
8 
assets of dissolved or cancelled primary cooperative members;
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(j) 
To develop programs on education, training, monitoring, coaching,
10 
research, and advocacy that complement, augment, or supplement the businesses of
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their members; and
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(k) 
To assist the Authority in ensuring the compliance of its member-
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cooperatives with the laws, regulations, policies, and inspection or examination
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findings of government regulatory agencies.
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(I) 
To conduct studies in the economic, legal, financial, social and other
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phases of cooperation, and publish the results thereof;
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(m) 
To conduct trainings to member-cooperatives as an accredited training
18 
provider; and
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(n) 
To promote the knowledge of cooperative principles and practices.
20
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SEC. 30. Special Types of Federations. - A special type of federation may be
22 
organized and registered by primary cooperatives who may not necessarily be in the
23 
same line of business but who wish to offer and are able to cater to their members
24 
the following exclusive services:
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(1) 
Water supply system services;
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(2) 
Healthcare services;
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(3) 
Deathcare services;
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(4) 
Technology services;
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(5) 
Digital payment services;
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(6) 
Deposit insurance services; and
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(7) 
Such other services as may be determined by the Authority.
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Primary cooperatives who federate under this Section are prohibited from 
engaging in any economic or business activity not related to their original line of 
business or not authorized under their articles of cooperation and bylaws or under this 
Code.
6 
CHAPTER VII. COOPERATIVE UNIONS
7
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SEC. 31. Organization and Duties. - All registered cooperatives may organize
9 
or join cooperative unions to protect the interest and promote the welfare of all types
10 
of cooperatives: Provided, That a member cooperative may freely withdraw
11 
membership from the union. The cooperative unions shall represent the constituent
12 
cooperatives at the appropriate level and exercise the following duties and functions:
13 
(a) 
To represent its member organizations;
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(b) 
To acquire, analyze, and disseminate economic, statistical, and other
15 
information relating to its members and to all types of cooperatives within its area of
16 
operation;
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(c) 
To sponsor studies in the economic, legal, financial, social and other
18 
phases of cooperation, and publish the results thereof;
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(d) 
To conduct trainings to member-cooperatives as an accredited training
20 
provider;
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(e) 
To promote the knowledge of cooperative principles and practices in
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their respective jurisdictions;
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(f) 
To develop the cooperative movement;
24 
(g) 
To assist the national agencies and local government units in cooperative
25 
development activities within their respective jurisdiction;
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(h) 
To assist in the dissemination and monitoring of the Philippine
27 
Cooperative Development Plan;
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(i) To assist the members in the submission of the required reports and
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other compliances to the Authority and other government or regulatory bodies;
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(j) 
To assist the Authority, upon written request, in the performance of its 
power of inspection or examination by way of providing relevant information, such as 
research, reports, and financial records;
(k) 
To advise the appropriate authorities on all questions relating to 
cooperatives at the municipal, city, district, provincial or regional levels;
(l) 
To act as liquidators or rendering assistance in the liquidation of the 
remaining assets of dissolved primary cooperative members upon request of the 
dissolved primary cooperative;
(m) 
To do and perform such other non-business activities as may be 
necessary to attain the foregoing objectives; and
(n) 
To do and perform such other allied services incidental to the furtherance 
of the foregoing objectives, such as but not limited to, the maintenance of training 
centers, catering, lease of venue, lodging, publication, and reproduction and sale of 
training and research materials.
SEC. 32. Sources of Funds for Cooperative Unions. - The funds of a 
cooperative union shall be sourced from the membership fees, dues, and contributions, 
remitted cooperative education and training fund (CETF) from member-cooperatives, 
training fees, fundraising activities, donations, grants, or subsidies from local and 
foreign sources, whether private or public.
CHAPTER VIII. MEMBERSHIP
SEC. 33. Membership. - A cooperative shall have regular members or associate 
members.
A regular member is one who has complied with all the membership 
requirements, including the Pre-Membership Seminar, and entitled to all the rights and 
privileges of membership. An associate member is one who has no right to vote nor 
be voted upon nor be appointed to any position in the cooperative and shall be entitled 
only to such rights and privileges as the bylaws may provide; Provided, That an 
associate member who meets all the requirements of regular membership, including 
the Pre-Membership Education Seminar, continues to patronize the cooperative for
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two (2) years, and signifies the intention to remain a member shall be considered a 
regular member.
SEC. 34. Qualifications of Membership. — Members of registered primary 
cooperatives must be natural persons, Filipino citizens or former natural-born Filipino 
citizens, of legal age, with capacity to enter into a contract, within the common bond 
of membership and area of operation, and must possess the qualifications and none 
of the disqualifications as provided for in the bylaws of the cooperative: Provided,Jh^t 
in case of former natural-born Filipino citizens, they must comply with Philippine 
taxation laws: Provided, further, That the age requirement shall not apply to laboratory 
cooperatives as defined in Section 4. A member must have completed the Pre- 
Membership Education Seminar.
SEC. 35. Government Officers and Employees.-
(a) 
All elective officials of the Government shall be ineligible to become 
officers of cooperatives: Provided, That the disqualification does not extend to a party 
list representative who represents the cooperative sector: Provided, further. That 
nothing precludes cooperatives from engaging in activities in support of party lists 
representing the sector, such as, but not limited to participating in campaigning or 
donating funds;
(b) 
Employees of the Authority are allowed to become a member of any 
cooperative. However, they shall be disqualified to be elected or appointed as an 
officer, except for cooperatives organized among themselves; and
(c) 
Any government employee or official may, in the discharge of the duties 
as a member in the cooperative, be allowed by the head of office concerned to use 
official time for attendance at the General Assembly, Board and committee meetings 
including cooperative seminars, conferences, workshops, technical meetings, and 
training courses locally or abroad.
SEC. 36. Processing of Applications for Membership. - An application for 
membership shall be acted upon by the Board of Directors within the period fixed in 
the bylaws but not later than thirty (30) days. Otherwise, the application for
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membership shall be deemed approved, subject to the condition that the applicant has
2 
submitted the duly accomplished application and has paid the membership fees to the
3 
cooperative.
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In case the application for membership is denied by the Board of Directors, an
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appeal may be made to the Election Committee, sitting as the appeals and grievance
6 
body, within fifteen (15) days after receipt of the notice of denial and the decision of
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the Election Committee shall be final.
8 
If the Election Committee fails to decide within the prescribed period, the appeal
9 
is deemed approved in favor of the applicant.
10
11 
SEC. 37. Liability of Members. - A member shall be liable for the debts of the
12 
cooperative to the extent of the member's subscription to the share capital of the
13 
cooperative.
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SEC. 38. Termination of Membership. -
16 
(a) Subject to the Terms and Conditions as stated in the bylaws of the
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cooperative, a member of a cooperative may withdraw membership from the
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cooperative by giving written notice to the Board of Directors which shall be acted
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upon within thirty (30) days from receipt of said notice.
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(b) 
The death or insanity of a member in a primary cooperative, and the
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insolvency or dissolution, de-listing, or cancellation of the certificate of registration of
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a member in a secondary cooperative shall be considered valid grounds for termination
23 
of membership: Provided, That in the case of death or insanity of an agrarian reform
24 
beneficiary-member of a cooperative, the qualified next-of-kin may assume the duties
25 
and responsibilities of the original member;
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(c) 
Termination of membership in the cooperative shall be initiated through
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the filing of a complaint before the ethics committee of the cooperative. The committee
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shall recommend to the Board of Directors the termination of membership for any of
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the following causes:
30 
(1) 
Failure to patronize any services of the cooperative for an unreasonable
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period of time as provided in the bylaws;
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(2) 
Failure to comply with the obligations of membership as provided in the 
bylaws or policies of the cooperative;
(3) 
Violation of the bylaws of the cooperative;
(4) 
Commission of any act or omission injurious or prejudicial to the interest 
or the welfare of the cooperative; and
(5) 
Others, as may be provided in the bylaws of the cooperative.
Such member shall be informed, in writing, and be given an opportunity to be 
heard by the grievance committee. The result of the investigation shall be referred to 
the Board of Directors for its consideration. Based on the recommendation of the 
grievance committee, the Board may terminate membership in the cooperative by a 
majority vote of all its members. The decision of the Board shall be in writing, and 
communicated either personally, or by registered or electronic mail. The decision may 
be appealed to the General Assembly within thirty (30) days from receipt thereof.
The General Assembly shall decide on such appeal within thirty (30) days after 
receipt thereof. Failure of the General Assembly to decide within the prescribed period 
shall be deemed in favor of the member. The decision of the General Assembly decision 
shall be final and executory. Pending the final decision, the membership shall remain 
in force. This notwithstanding, the member may file a petition for review of the 
decision of the General Assembly with the Authority within fifteen (15) days from 
receipt thereof.
SEC. 39. Refund of Interests. - All sums computed in accordance with the 
bylaws due from the cooperative to a former member shall be paid in accordance with 
this Code and as prescribed in the implementing rules and regulations: Provided, That 
in case of payment where the value of the assets of the cooperative would be less 
than the aggregate amount of its debts and liabilities exclusive of the members' share 
capital contribution such refund shall not be made.
In the computation of the interest due to a former member, the current balance 
of such member in the ledger of accounts of the cooperative shall be taken into 
account.
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CHAPTER IX. ADMINISTRATION
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SEC. 40. Composition of the General Assembly and Representative
4 
Assembly. - The General Assembly shall be the full membership of the cooperative,
5 
exercising all the rights and performing all the obligations as provided in this Code,
6 
and in its articles of cooperation and bylaws.
7 
For cooperatives with numerous and dispersed membership, the General
8 
Assembly shall delegate the exercise of its powers to a Representative Assembiy, the
9 
members of which are elected by each sector, chapter, or district of the cooperative
10 
in accordance with its articles of cooperation and bylaws: Provided, That in cases
11 
provided under this Code for the call of a regular or special General Assembly, or the
12 
approval or confirmation thereof, the Representative Assembly shall also suffice,
13 
where applicable. Such delegation shall be in accordance with the ruies and regulations
14 
of the Authority.
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SEC. 41. Powers of the General Assembly. - The General Assembly shall be
17 
the highest policy-making body of the cooperative and shall exercise such powers as
18 
are stated in this Code, and in the 
articles of cooperation and bylaws of the
19 
cooperative. The Generai Assembly, through its members entitled to vote, shall have
20 
the following exclusive powers which cannot be delegated:
21 
(a) 
Determine and approve amendments to the articles of cooperation and
22 
byiaws;
23 
(b) 
Elect, appoint, or remove, the members of the Board of Directors;
24 
(c) 
Approve the annual strategic and developmental plans, and the budget
25 
of the cooperative;
26 
(d) 
Approve or disapprove proposals from the Board of Directors pertaining
27 
to external borrowings, investments, grants, donations, and other financial assistance;
28 
and
29 
(e) 
Decide membership issues within the cooperative.
30 
Subject to such other provisions of this Code and only for purposes of prompt
31 
and intelligent decision-making, the General Assembly may by a three-fourths (3/4)
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vote of all its voting members present and constituting a quorum, deiegate some of
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its powers to the Board of Directors. These powers shali be enumerated under the 
bylaws of the cooperative.
SEC. 42. Meetings. —
(a) 
The Generai Assembly shail conduct a regular annual meeting on a date 
fixed in the bylaws, which shail be within ninety (90) days or one hundred eighty (180) 
days after the ciose of each caiendar year, for primary or secondary cooperatives, 
respectiveiy: Provided, That notice of regular meetings shail be sent in writing, by 
posting or pubiication, or through other electronic means to all members of record.
(b) 
Whenever necessary, a special meeting of the General Assembly may be 
called at any time by a majority vote of the Board of Directors, or upon petition of at
12. ieast ten percent (10%) of the totai members who are entitled to vote, or as provided 
13 for in the bylaws: Provided, That a notice in writing shali be sent one (1) week prior 
to the meeting to ali members who are entitled to vote.
If the Board fails to call a regular or special meeting within the given period, the 
Authority, upon petition of ten percent (10%) of members entitled to vote, or the 
quorum as stated in their byiaws, and for good cause shown, shall issue an order to 
the petitioners directing them to cali a meeting of the Generai Assembly by giving 
proper notice as required in this Code or in the byiaws;
(c) 
In the case of a newly registered cooperative, a speciai General Assembly 
meeting shali be called within sixty (60) days from such approvai of its registration, 
for the foliowing purposes:
(1) Presentation of approved articies of cooperation and byiaws;
Approval of the annual strategic and deveiopment pians, and budget;
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(2)
and
(3) Other matters, as may be determined by the cooperative.
(d) 
The Authority shaii compei the cooperative to cali a Generai or 
Representative Assembly for the purpose of reporting to the members the result of 
any examination or other investigation of the cooperative affairs; and
(e) 
Notice of any meeting may be waived, expressiy or impiiediy, by any 
member.
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SEC. 43. Mode of Conducting Regular or Special Assembly Meetings. -
2 
Regular and special assembly meetings may be conducted in any of the following
3 
manner:
4 
(a) 
Duly assembled in one venue, wherein the meetings are held on the
5 
same day; or
6 
(b) 
Simultaneously, wherein the meetings are held on the same day but in
7 
different venues.
8 
As a general rule, assembly meetings shall be conducted in a manner provided
9 
in the bylaws of the cooperative. However, due to technological advancement, public
10 
health and safety measures, increased level of participation of members and other
11 
equally important considerations in favor of the viability and growth of cooperatives,
12 
cooperatives are allowed to conduct their assembly meetings through video
13 
conferencing or a combination of physical attendance and video conferencing:
14 
Provided, That cooperatives who opt to conduct General Assembly meetings through
15 
video conferencing or a combination of physical attendance and video conferencing as
16 
an alternative mode shall amend their bylaws adopting the same: Provided, further,
17 
That cooperatives shall adopt policies and procedures sufficiently addressing
18 
administrative, technical, and logistical concerns for an effective and efficient video
19 
conference meeting.
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SEC. 44. Quorum. - Unless a higher requirement is provided in the bylaws of
22 
the cooperative, a quorum shall consist of at least twenty-five percent (25%) of all the
23 
members entitled to vote: Provided, That the quorum for Representative Assembly
24 
shall in no case be lower than twenty-five percent (25%) of the total membership
25 
entitled to vote.
26 
In the case of federations and unions, the quorum requirement shall be fifty
27 
percent (50%) of the total number of members entitled to vote.
28
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SEC. 45. Voting System. - Each member of a primary cooperative shall have
30 
only one (1) vote regardless of the share capital of such member. In the case of
31 
federations, they may opt to adopt in their bylaws incentive voting or share voting.
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In the case of incentive voting, the member-cooperatives shall have one (1) basic 
vote and up to five (5) incentive votes, as provided in the bylaws. In case of share 
voting, the voting rights of the member-cooperatives shali be proportionate to the 
number of their paid-up shares, subject to the iimitation imposed under Section 84 of 
this Code: Provided, That at least one-third (1/3) of the seats in the Board shali be 
reserved for smail sharehoiders. The votes cast by the delegates shall be deemed as 
votes cast by the members thereof.
The foregoing notwithstanding, the bylaws of a cooperative, other than a primary 
cooperative, may provide for voting by proxy. Voting by proxy means ailowing a 
delegate of a cooperative to represent or vote on behaif of another delegate of the 
same cooperative.
SEC. 46. Composition and Term of the Board of Directors. - Uniess 
otherwise provided in the byiaws, the direction and management of the affairs of a 
cooperative shail be vested in a board of directors which shali be composed of not iess 
than five (5) nor more than fifteen (15) members elected by the general assembly for 
a term of two (2) years and shall hold office untii their successors are duly elected and 
qualified, or untii duiy removed for cause. However, registered cooperatives or those 
applying for specific iicenses with other reguiatory agencies must comply with the 
governance requirements of said agency to operate or function as such.
For federations, a member-cooperative shali have only one representative eligible 
to run and be voted upon as a member of the Board, irrespective of the member- 
cooperative's share capital holdings.
SEC. 47. Powers of the Board of Directors. - The Board of Directors shali be 
responsibie for the annuai strategic pianning, direction-setting, and policy-formuiation 
activities of the cooperatives.
SEC. 48. Directors. -
(a) Any member of a cooperative who has the right to vote and be voted 
upon, and who possesses ail the qualifications and none of the disqualifications
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provided in this Code or in its bylaws shall be eligible for election as director, subject
2 
to the limitation imposed by the second paragraph of Section 45 of this Code.
3 
(b) 
The cooperative may, by resolution of its Board of Directors, admit as an
4 
ex officio director or committee member one appointed by any financing institution
5 
from which the cooperative received financial assistance, solely to provide technical
6 
knowledge not available within its membership. Such director or committee member
7 
need not be a member of the cooperative and shall have no powers, rights, nor
8 
responsibilities except to provide technical assistance as required by the cooperative.
9 
(c) 
The members of the Board of Directors shall not hold any other position
10 
directly involved in the day to day operation and management of the cooperative.
11 
(d) 
Any member engaged in a business similar to that of the cooperative or
12 
who, in any way, has a conflict of interest with it, is disqualified from being elected as
13 
a director.
14
15 
SEC. 49. Meeting of the Board and Quorum Requirement —
16 
(a) 
In the case of primary cooperatives, regular meetings of the Board of
17 
Directors shall be held at least once a month. Special meetings may be held at any
18 
time: i) at the call of the Chairperson, upon prior written notice given at least three
19 
(3) days prior to the date of said meeting; ii) or at the call of a majority of the members
20 
of the Board, upon prior written notice given at least one (1) day before said meeting:
21 
Provided, That only two (2) special meetings may be held in one (1) month. Notices
22 
may be sent through electronic means, to the official contact number or email account
23 
of the officers.
24 
(b) 
A majority of the members of the Board shall constitute a quorum for
25 
the conduct of business.
26 
(c) 
Each member of the Board shall only have one (1) vote, whether it be a
27 
primary or secondary cooperative, irrespective of the share capital holdings of the
28 
member-cooperative.
29 
(d) 
Directors cannot attend or vote by proxy at Board meetings.
30 
(e) 
Cooperatives may opt to allow meetings of the Board of Directors and
31 
members of the different committees of the cooperative to be conducted either
32 
through physical attendance or video conferencing, or both, subject to the rules on
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sending of notices, quorum, and voting requirements as provided for in the bylaws. In
2 
the conduct of meetings through video conferencing, cooperatives shall adopt their
3 
own policies and procedures which shall be included in their bylaws.
4
5 
SEC. 50. Vacancy in the Board of Directors. - In case of a vacancy, other
6 
than by expiration of term or an increase in the number of Board of Directors, the
7 
Board, if still constituting a quorum, may, in a special meeting called for the purpose,
8 
appoint, by majority vote, any member of the cooperative to fill such vacancy:
9 
Provided, That the director so appointed shall possess all of the qualifications and none
10 
of the disqualifications as prescribed under this Code and the bylaws of the
11 
cooperative. If the remaining members of the Board do not constitute a quorum, the
12 
vacancy shall be filled in an election conducted through a special General Assembly
13 
called for the purpose, held within thirty (30) days from the time the vacancy occurs,
14 
or during the regular General Assembly, whichever comes first. The director so
15 
appointed or elected shall serve only for the unexpired term of the predecessor in
16 
office.
17 
If the General Assembly fails to fill the vacancy, as directed in the preceding
18 
paragraph, or in case of the vacancy of the entire Board of Directors, the Authority
19 
shall compel the cooperative, through the Election Committee, to call for a special
20 
General Assembly for the purpose of electing a new Board of Directors. In the absence
21 
of the Election Committee, the General Assembly may appoint an /l£//yoc Committee
22 
that shall be responsible to call for such special General Assembly.
23
24 
SEC. 51. Officers of the Cooperative. - The officers of the cooperative shall
25 
include the members of the Board of Directors, members of the different committees,
26 
General Manager or Chief Executive Officer, Secretary, Treasurer, and other officers
27 
as may be provided for in the bylaws. As such, they shall exercise their duties and
28 
responsibilities within the scope of their defined functions.
29 
The Board of Directors shall elect from among themselves the Chairperson and
30 
Vice-Chairperson, and elect or appoint other officers of the cooperative from outside
31 
of the Board, in accordance with their bylaws.
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The Board of Directors is prohibited from appointing any person within the third 
civil degree of consanguinity or affinity of the members of the Board of Directors. 
Neither shall the appointive officers be related to each other up to the second civil 
degree of consanguinity or affinity. No officer shall engage in a business similar to that 
of the cooperative nor in any other manner have interests in conflict with the 
cooperative.
SEC. 52. Committees of Cooperatives.—
(a) 
The bylaws may create an executive committee, the members of which 
shall be appointed by the Board of Directors with such powers and duties as may be 
delegated to it in the bylaws or by a majority vote of all the members of the Board of 
Directors.
(b) 
The bylaws shall provide for the creation of other committees, such as 
conciliation-mediation, ethics, gender and development, education, and other 
committees as may be necessary for the conduct of the affairs of the cooperative. The 
members of the audit and election committee shall be elected by the General 
Assembly, while the members of the other remaining committees shall be appointed 
by the Board.
Unless otherwise provided in the bylaws, the Board, in case of a vacancy in the 
committees, may appoint or call an election to fill the vacancy, as the case may be: 
Provided, That the person so appointed or elected shall serve only for the unexpired 
portion of the term.
SEC. 53. Functions, Responsibilities, and Training Requirements of 
Directors, Officers and Committee Members. - The functions and responsibilities 
of directors, officers, and committee members, as well as their training requirements, 
shall be prescribed in the bylaws of the cooperative, in accordance with the rules and 
regulations issued by the Authority.
SEC. 54. Liability of Directors, Officers, and Committee Members. -
Directors, officers, and committee members shall be jointly and severally liable for all
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damages or losses to the cooperative, its members, or other persons in case of the
2 
following:
3 
(a) 
Willfully and knowingly voting for or assenting to patently unlawful acts;
4 
(b) 
Gross negligence or bad faith in directing the affairs of the cooperative;
5 
or
6 
(c) 
Acquiring any personal or pecuniary interest in conflict with their duty.
7 
When directors, officers, or committee members attempt to or have acquired, in
8 
violation of their duties, any interest or equity adverse to the cooperative in respect to
9 
any matter which has been reposed in them in confidence, they shall, as a trustee for
10 
the cooperative, be liable for damages and shall be accountable for double the profits
11 
which otherwise would have accrued to the cooperative.
12
13 
SEC. 55. Honorarium and Other Emoluments. -
14 
(a) In the absence of any provision in the bylaws fixing their honorarium/per
15 
diem, the directors shall not receive any compensation except for reasonable
16 
honorarium/pe/' diems-. Provided, That no additional compensation other than per
17 
diems shd\\ be paid during the first year of existence of any cooperative; Provided,
18 
further, That only the General Assembly shall approve any additional honorarium/per
19 
diem or the increase thereof.
20 
(b) Directors and officers shall not be entitled to any per diem if the cooperative
21 
reported a net loss in the preceding calendar year or had a dividend rate less than the
22 
official rate for the same year.
23 
(c) Unless already fixed in the bylaws, the compensation of all other employees
24 
shall be determined by the Board of Directors in accordance with the Regional
25 
Tripartite and Wage Productivity Board.
26
27 
SEC. 56. Dealings of Directors, Officers, or Committee Members. - A
28 
contract entered into by the cooperative with one (1) or more of its directors, or their
29 
spouses and relatives within the first civil degree of consanguinity or affinity, is
30 
voidable, at the option of the cooperative, unless the following conditions are present:
31 
(a) The presence of such director in the Board meeting wherein contract
32 
was approved was not necessary to constitute a quorum for such meeting;
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(b) 
The vote of such director was not necessary for the approval of the
2 
contract; and
3 
(c) 
The contract is fair, reasonable, and beneficial to the cooperative under
4 
the circumstances.
5 
In the case of contracts executed between the cooperative and its other officers
6 
or committee members, or their spouses or relatives within the first civil degree of
7 
consanguinity or affinity, such contracts are voidable, at the option of the cooperative,
8 
unless previously authorized by the General Assembly or by the Board of Directors,
9 
and the contract is fair, reasonable, and beneficial to the cooperative under the
10 
circumstances.
11 
The Board of Directors shall report any such contract to the General Assembly
12 
during its regular meeting for ratification.
13 
Where any of the first two conditions set forth in the preceding paragraph is
14 
absent, in the case of a contract with a director, such contract may be ratified by a
15 
three-fourths (3/4) vote of all the members entitled to vote, present and constituting
16 
a quorum in a meeting called for the purpose: Provided, That full disclosure of the
17 
adverse interest of the directors involved is made at such meeting, and that the
18 
contract is fair and reasonable under the circumstances.
19
20 
SEC. 57. Disloyalty of a Director and Other Officers of the Cooperative.
21 
- A director or other officer of the cooperative who, by virtue of such office, directly
22 
or indirectly acquires for themselves an opportunity which should belong to the
23 
cooperative, shall be liable for damages and must account for double the profits that
24 
otherwise would have accrued to the cooperative by refunding the same. This
25 
provision shall be applicable, notwithstanding the fact that the director or other officers
26 
of the cooperative used their own funds to acquire such opportunity.
27
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SEC. 58. Illegal Use of Confidential Information. -
29 
(a) A director, officer, or any person who, in conspiration or connivance
30 
therewith, makes use of confidential information to the benefit or advantage of such
31 
person, which, if generally known, may adversely affect the operation and viability of
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the cooperative, shall be held liable for the direct losses and for the unrealized benefit 
suffered by the cooperative, as a result of the transaction.
(b) The cooperative shall take the necessary steps to enforce the liabilities 
described in paragraph (a) herein.
SEC. 59. Removal From Office. - No officer may be removed except for 
cause, as provided in the internal policies of the cooperative, after due notice and 
hearing. Loss of trust and confidence in the performance of duties shall be a valid 
ground for removal.
All complaints for the removal of any elected officer shall be filed with the Board 
of Directors, except as otherwise provided herein. Upon finding prima facie evidence 
of guilt, the Board shall inform the officer concerned and present its recommendation 
for removal in a regular or special General Assembly called for the purpose, wherein 
such officer shall be given a final opportunity to present his case. The regular or special 
General Assembly, by a three-fourths (%) votes of the members entitled to vote, 
present and constituting a quorum, shall approve or disapprove the removal of the 
officer.
In cases involving directors, the complaint shall be filed with the Ethics and 
Grievance Committee, which shall follow the procedure set in the preceding paragraph.
In cases involving the removal of any appointive officer, a complaint shall be filed 
with the Ethics and Grievance Committee of the cooperative, which shall submit its 
recommendation to the Board of Directors for proper action. The decision of the Board 
of Directors may be appealed to the General Assembly.
During the investigation, the Board of Directors or the Ethics and Grievance 
Committee may, as the case may be, upon majority vote, place such officer under 
preventive suspension, as prescribed in the bylaws.
The decision of the General Assembly may be appealed to the Authority.
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CHAPTER X. RESPONSIBILITIES, RIGHTS AND PRIVILEGES OF
2 
COOPERATIVES
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SEC. 60. Address. - Every cooperative shall have an official postal address
5 
where the principal office is located and an electronic mail address to which all
6 
communications, reports, notices, and summons may be served, and where all other
7 
documents required shall be submitted. The articles of cooperation and the bylaws
8 
shall be amended accordingly should there be a change in the official postal and
9 
electronic mail addresses of the cooperative.
10 
For this purpose, an electronic mail registry shall be created in accordance with
11 
the guidelines to be promulgated by the Authority.
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SEC. 61. Books to be Kept Open. -
14 
(a) 
Every cooperative shall have the following documents ready and
15 
accessible to its members and representatives of the Authority for inspection,
16 
examination, and investigation during reasonable office hours at its registered principal
17 
office:
18 
(1) 
A copy of this Code and all other laws pertaining to cooperatives;
19 
(2) 
A copy of the implementing rules and regulations of this Code;
20 
(3) 
A copy of the articles of cooperation and bylaws of the cooperative;
21 
(4) 
A registry of members;
22 
(5) 
The books of the minutes of the meetings of the General Assembly,
23 
Board of Directors and committees;
24 
(6) 
A share and transfer book, except for unions;
25 
(7) 
Financial statements and other financial records; and
26 
(8) 
Such other documents as may be prescribed by the Authority, laws, and
27 
the bylaws.
28 
(b) 
The accountant or the bookkeeper of the 
cooperative shall be
29 
responsible for the maintenance and safekeeping of the books and records of accounts
30 
of the cooperative in accordance with generally accepted accounting practices. The
31 
accountant or bookkeeper shall also be responsible for the production of the same at
32 
the time of audit, inspection, examination, or investigation.
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The Audit Committee shall be responsible for the continuous and periodic review
2 
of the books and records of accounts to ensure that such records are in accordance
3 
with generally accepted accounting practices. It shall also be responsible for the
4 
production of the same at the time of audit or inspection.
5 
(c) 
Each cooperative shall maintain records of accounts such that the true
6 
and correct condition and the results of the operation of the cooperative may be
7 
ascertained therefrom at any time. The financial statements, audited according to
8 
generally accepted auditing standards, principles and practices, shall be published
9 
annually and shall be kept posted in conspicuous places in the principal office of the
10 
cooperative, its branches, and satellite offices.
11 
(d) 
Subject to the pertinent provisions of the National Internal Revenue
12 
Code, as amended, and other laws, a cooperative may dispose, by burning or any
13 
method of complete destruction, any document, record or book pertaining to its
14 
financial and non-financial operations which are already more than five (5) years old
15 
except those relating to transactions which are the subject of civil, criminal, and
16 
administrative proceedings. An inventory of the audited documents, records and books
17 
to be disposed of shall be drawn up and certified to by the Cooperative Secretary and
18 
the Chairman of the Audit Committee and presented to the Board of Directors, which
19 
may thereupon approve the disposition of said records.
20 
The information and data being examined which may contain confidential matters
21 
or privileged communication should not be disclosed or used without the consent of
22 
the cooperative in accordance with Republic Act No. 10173, otherwise known as the
23 
"Data Privacy Act of 2012."
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SEC. 62. Annua!Reports. - Every cooperative shall prepare an annual progress
26 
report with the necessary attachments as may be prescribed by the Authority at the
27 
end of every calendar year. The reports shall be made accessible to its members, and
28 
copies thereof shall be available upon request of members on record and properly
29 
authorized government agencies with developmental functions and extension services
30 
for cooperatives during reasonable office hours. These reports shall be filed with the
31 
Authority within one hundred twenty (120) days from the end of the calendar year.
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The form and contents of the reports shall be as prescribed by the rules of the
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Authority. Failure to file the required reports on time shall subject the accountable 
officer to fines and penalties as may be prescribed by the Authority. Failure to file the 
required reports despite notice shall be a ground for the suspension or cancellation of 
the Certificate of Registration of the cooperative, subject to the guidelines to be issued 
by the Authority.
If a cooperative fails to make and file the reports required herein, or fails to 
include therein any matter required by the Code, the Authority shall, within thirty (30) 
days from the expiration of the prescribed period, send such cooperative a notice 
stating its non-compliance and the commensurate fines and penalties that will be 
imposed until such time that the cooperative has complied with the requirements.
SEC. 63. Registry of Members as Prima Facie Evidence. - A registry of 
members kept by the cooperative shall be prima facie evidence of the following 
particulars:
(a) 
The date on which the name of any person was entered in such registry 
or list of members; and
(b) 
The date on which any such person ceased to be a member.
However, other information may be required in accordance with the guidelines
that shall be prescribed by the Authority in consultation with the cooperative sector.
SEC. 64. Probative Value of Certified Copies of Entries. - A copy of any 
entry in any book, registry, or list regularly kept in the course of business of the 
cooperative shall, if duly certified in accordance with the rules of evidence, be 
admissible as evidence of the existence of entry and prima facie evidence of the 
matters and transactions therein recorded.
No cooperative or person in possession of the books of such cooperative shall, in 
any legal proceedings to which the cooperative is not a party, be compelled to produce 
any of the books of the cooperative, unless by order of the Authority in the exercise 
of its adjudicatory powers or a competent court.
SEC. 65. Bond of Accountable Officers.- k\\ officers and employees handling 
funds, securities, or property on behalf of the cooperative shall be covered by a surety
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bond or a fidelity bond to be issued by a duly registered insurance or bonding
2 
company, the adequacy of which shall be determined by the Board of Directors, for
3 
the faithful performance of their respective duties and obligations. The cooperative
4 
may likewise secure other insurance policies for its protection against losses of monies,
5 
securities, and other properties.
6 
Within thirty (30) days upon approval of the registration of a cooperative, the
7 
bonds of the accountable officers shall be submitted to the Authority. The bond for
8 
the cooperative's Treasurer shall be ten percent(10%) of the sum of the initial paid-
9 
up capital and membership fees. The bonds for all accountable officers shall be
10 
renewed annually and adjusted accordingly.
11
12 
SEC. 66. Preference of Claims.-
13 
(a) 
Notwithstanding the provisions of existing laws, rules, and regulations to
14 
the contrary, any debt due to the cooperative from the member shall constitute a first
15 
lien upon any raw materials, production, inputs, and products produced; or any land,
16 
building, facilities, equipment, goods or services acquired and held, by such member
17 
through the proceeds of the loan or credit granted by the cooperative to such member
18 
for as long as the same is not fully paid.
19 
(b) 
No property or interest on property which is subject to a lien under
20 
paragraph (a) herein shall be sold nor conveyed to third parties without the prior
21 
permission of the cooperative. The lien upon the property or interest shall continue to
22 
exist even after the sale or conveyance thereof until such lien has been duly
23 
extinguished.
24 
(c) 
Notwithstanding the provisions of any law to the contrary, any sale or
25 
conveyance made in contravention of the preceding paragraph shall be void.
26
27 
SEC. 67. Instrument for Salary or Wage Deduction. -
28 
(a) A member of a cooperative shall, notwithstanding the provisions of
29 
existing laws to the contrary, execute an instrument in favor of the cooperative
30 
authorizing the employer to deduct from the salary or wages, commutation of leave
31 
credits, and any other monetary benefits payable by the employer, and remit such
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1 
amount as may be specified in satisfaction of a debt, share capital contribution, or
2 
other demand due from the member to the cooperative.
3 
(b) 
Upon the execution of such instrument and as may be required by the
4 
cooperative contained in a written request, the employer shall make the deduction in
5 
accordance with the agreement and remit forthwith to the cooperative the amount so
6 
deducted within ten (10) days after the end of the payroll month. The employer shall
7 
make the deduction for as long as such debt or other demand remains unpaid by the
8 
employee.
9 
(c) 
The term "employer" as used in this Section shall include all private firms,
10 
national government agencies, including government-owned and controlled
11 
corporations, government instrumentalities with corporate powers, government
12 
corporate entities, or government financial institutions, and local government units
13 
that employ a member of a cooperative and have agreed to carry out the terms of the
14 
instrument mentioned in this Section.
15 
(d) 
The provisions of this Section shall apply to all similar agreements
16 
referred to in paragraph (a) herein and were enforced prior to the approval of this
17 
Code.
18 
(e) 
Notwithstanding the provisions of existing laws to the contrary, the
19 
responsibilities of the employer as stated in paragraphs (a) and (b) herein shall be
20 
mandatory and without the need for any prior conditions, accreditation or other similar
21 
processes to facilitate or implement the deductions: Provided, That in the case of a
22 
private employer, the actual and reasonable cost for deducting and remitting may be
23 
collected.
24 
(f) 
The member may withdraw such consent at any time and for any reason,
25 
which shall also be put in writing. Any person who acts contrary to this provision shall
26 
be held liable under this Code and other laws, as the case may be.
27
28 
SEC. 68. Primary Lien. - Notwithstanding the provision of any law to the
29 
contrary, a cooperative shall have primary lien upon the capital, deposits, or interests
30 
of a member for any debt due to the cooperative from such member.
31
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1 
SEC. 69. Tax Treatment of Cooperatives. - Duly registered cooperatives
2 
under this Code which do not transact any business with nonmembers or the general
3 
public shall not be subject to any taxes, fees, and charges imposed under the internal
4 
revenue laws and other tax laws. Cooperatives not falling under this Section shall be
5 
governed by the succeeding provisions.
6
7 
SEC. 70. Tax and Other Exemptions. - Duly registered cooperatives shall not
8 
be subject to tax on their transactions with members. Further, the transactions of
9 
members with the cooperative, including member's share capital and deposits shall
10 
not be subject to any taxes, fees, and charges, including but not limited to final taxes
11 
on members' share capital and deposits and corresponding documentary stamp taxes.
12 
Notwithstanding the provisions of any law or regulation to the contrary,
13 
cooperatives dealing with non-members shall be subject to the following:
14 
(a) Duly registered agricultural cooperatives and non-agricultural
15 
cooperatives whose Reserve Funds have an existing balance of One hundred million
16 
pesos (Phpl00,000,000.00) and below shall be exempt from all national internal
17 
revenue taxes, fees, and charges of whatever name and nature imposed under the
18 
internal revenue laws and other tax laws;
19 
Such cooperatives shall be exempt from customs duties, advance sales or
20 
compensating taxes on their importation of machineries, equipment, batteries,
21 
accessories, and spare parts used in the operations of the cooperatives and which are
22 
not available locally as certified by the Department of Trade and Industry (DTI). All
23 
tax- and duty-free imports shall not be sold nor the beneficial ownership thereof be
24 
transferred to any person until after five (5) years, otherwise, the cooperative and the
25 
transferee or assignee shall be solidarily liable to pay twice the amount of the imposed
26 
tax or duties;
27 
(b) 
Non-agricultural cooperatives transacting with non-members whose
28 
Reserve Funds have an existing balance of more than One hundred million pesos
29 
(Phpl00,000,000.00) shall pay the following taxes at the full rate:
30 
(1) 
Special Income Tax of ten percent (10%) of net surplus: Provided, That
31 
the same tax is not consequently imposed on interest individually received by
32 
members. The tax base for all cooperatives liable to pay income tax shall be the income
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1 
directly related from the business transactions with non-members after deducting the
2 
amounts for the statutory funds; and
3 
(2) Value-Added Tax (VAT) on transactions with non-members: Provided,
4 
however. That duly registered cooperatives shall be exempt from the imposition of
5 
VAT, on the following:
6 
(i) 
Sales by Agricultural cooperatives duly registered with the Authority to
7 
their members as well as sale of their produce, whether in its original state or
8 
processed form, to non-members; their importation of direct farm inputs, machineries
9 
and equipment, including spare parts thereof, to be used directly and exclusively in
10 
the production and/or processing of their produce, and their resale to other Agricultural
11 
cooperatives;
12 
(ii) 
Gross receipts from lending activities by credit or multi-purpose
13 
cooperatives duly registered with the Authority; and
14 
(iii) 
Sales by non-agricultural, non-electric and non-credit cooperatives duly
15 
registered with the Authority: Provided, That the share capital contribution of all
16 
members does not exceed One hundred thousand pesos (Phpl00,000.00) each and
17 
regardless of the aggregate capital and net surplus ratably distributed among the
18 
members:
19 
Provided, That the exempt transactions in the foregoing shall include sales made
20 
by cooperatives duly registered with the Authority organized and operated by their
21 
members to undertake the production and processing of raw materials or of goods
22 
produced by their members into finished or process products for sale by the
23 
cooperatives to their members and non-members: Provided, however. That any
24 
processed product or its derivative arising from the raw materials produced by their
25 
members, sold in the name and for the account of the cooperative shall be deemed a
26 
product of the cooperative and its members: Provided, further. That at least twenty-
27 
five percent (25%) of the net income of the cooperatives is returned to the members
28 
in the form of interest and/or patronage refunds: Provided, finaiiy. That VAT shall not
29 
be imposed for the purchase of modernized vehicles under the Public Utiiity Vehicle
30 
Modernization Program;
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1 
(3) All sales of goods and/or services rendered for non-members shall be
2 
subject to the applicable percentage taxes except sales made by commodities or
3 
service cooperatives; and
4 
(4) 
Ail other taxes unless otherwise provided herein.
5 
Donations to duiy accredited charitable, research and educational institutions and
6 
reinvestment to socioeconomic projects within the area of operation of the cooperative
7 
may be tax deductibie.
8 
(c) 
Ail duly registered cooperatives shail be exempt from payment 
of iocai
9 
taxes, fees and charges whether barangay, municipal, city, or provincial taxes and
10 
taxes on transactions with banks and insurance companies. The Authority shall furnish
11 
the Municipai, City, or Provinciai Assessor's Office a certified list of duiy registered
12 
cooperatives as basis of their removal from the Assessment Rolls;
13 
(d) 
In areas where there are no available notaries public, 
the judge,
14 
exercising his/her ex-officio capacity as notary public, shail render service, free of
15 
charge, to any person or group of persons requiring the administration of oath or the
16 
acknowledgment of articles of cooperation and instruments of ioan from cooperatives
17 
not exceeding Five hundred thousand pesos (Php500,000.00);
18 
(e) 
Any register of deeds shali accept for registration, free of charge, any
19 
instrument reiative to a ioan made under this Code which does not exceed Two
20 
hundred and fifty thousand pesos (Php250,000.00) or the deeds of title of any property
21 
acquired by the cooperative or any paper or document drawn in connection with any
22 
action brought by the cooperative or with any court judgment rendered in its favor or
23 
any instrument reiative to a bond of any accountable officer of a cooperative for the
24 
faithfui performance of their duties and obiigations;
25 
(f) Cooperatives shaii be exempt from the payment of ail court and sheriff's
26 
fees payable to the Philippine Government for and in connection with ali actions
27 
brought under this Code, or where such action is brought by the Authority before the
28 
court, to enforce the payment of obligations contracted in favor of the cooperative;
29 
(g) 
Ali cooperatives shali be exempt from putting up a bond for bringing an
30 
appeal against the decision of an inferior court or for seeking to set aside any third
31 
party claim: Provided, That a certification of the Authority showing that the net assets
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1 
of the cooperative are in excess of the amount of the bond required by the court in
2 
similar cases shall be accepted by the court as a sufficient bond; and
3 
(h) Any security issued by cooperatives shall be exempt from the provisions
4 
of Republic Act No. 8799, otherwise known as "The Securities Regulation Code",
5 
provided, such security shall not be speculative.
6 
Any public official or employee who violates or in any manner circumvents this
7 
provision shall be dealt with in accordance with the penal provisions of this Code.
8
9 
SEC. 71. Issuance of Certificate of Tax Exemption for Cooperatives. -
10 
The Authority shall furnish the Bureau of Internal Revenue (BIR) a certified
11 
endorsement of a list of cooperatives in good standing and compliant with the
12 
reportorial requirements of the Authority that serves as basis for the issuance of a
13 
Certificate of Tax Exemption. The BIR shall formulate the necessary guidelines in
14 
streamlining the issuance of Certificate of Tax Exemption for cooperatives; Provided,
15 
That, individual tax identification number (TIN) of members of the cooperative should
16 
not be a requirement in the processing of application and renewal of Certificate of Tax
17 
Exemption.
18
19 
SEC. 72. Privileges of Cooperatives. - Cooperatives registered under this
20 
Code, notwithstanding the provisions of any law to the contrary, shall also be accorded
21 
the following privileges:
22 
(a) 
Cooperatives shall enjoy the privilege of depositing their sealed cash
23 
boxes or containers, documents or any valuable papers in the safes of the municipal,
24 
city, or provincial treasurers, and other government offices free of charge, and the
25 
custodian of such articles shall issue a receipt acknowledging the articles received,
26 
duly witnessed by another person;
27 
(b) 
Cooperatives organized among government employees, notwithstanding
28 
any law or regulation to the contrary, shall enjoy the free use of any available space
29 
in their agency, whether owned or rented by the Government;
30 
(c) 
Cooperatives rendering special types of services and facilities such as
31 
cold storage, ice plant, electricity, transportation, water, communications, and similar
32 
services and facilities shall be given preference in the grant of a franchise or certificate
49


1 
therefor: Provided, That such cooperatives shall open their membership to all persons
2 
qualified in their areas of operation. In case there are two (2) or more applicants for
3 
the same public service franchise or certificate of public convenience and necessity, all
4 
things being equal, preference shall be given to a cooperative engaged in public
5 
services;
6 
(d) 
In areas where there are agricultural cooperatives, at least fifty percent
7 
(50%) of the supply to government institutions, agencies, and LGUs, of rice, corn,
8 
grains, fish and other marine products, 
meat, eggs, milk, vegetables, and other
9 
agricultural commodities such as fertilizers, seeds and other agricultural inputs and
10 
implements, and related products, shall be sourced from such cooperatives;
11 
(e) 
Preferential and equitable treatment in the allocation or control of
12 
bottomries of commercial shipping vessels in connection with the shipment of goods
13 
and products of cooperatives;
14 
(f) 
Cooperatives and their federations engaged in the production and/or the
15 
marketing of products from agriculture, fisheries and small entrepreneurial industries,
16 
shall have exclusive preferential rights in the management of public markets, and lease
17 
of public market facilities, stalls or spaces, slaughterhouses, and storage facilities:
18 
Provided, That no cooperative forming a joint venture, partnership or any other similar
19 
arrangement with a non-cooperative entity can utilize these rights;
20 
(g) 
Cooperatives engaged in credit services shall be entitled to loans, credit
21 
lines, rediscounting of their loan notes, and other eligible papers with the Development
22 
Bank of the Philippines (DBP), the Land 
Bank of the Philippines (LBP), and other
23 
financial institutions except the BSP;
24 
The Philippine Deposit Insurance Corporation (PDIC) and other government
25 
agencies, government-owned and controlled corporations, and government financial
26 
institutions shall provide technical assistance to federations engaged in savings and
27 
credit operations to establish and strengthen their own cooperative deposit insurance
28 
systems;
29 
(h) 
Public transport service cooperatives shall be entitled to financing
30 
support from Government Financial Institutions for the acquisition and maintenance
31 
of land, sea, and air transport equipment, facilities, and parts, and shall be preferred
32 
in securing a franchise for active or potential routes for public transport. They shall
50


1 
have preferential rights to the management and operation of public terminals and
2 
ports whether land, sea, or air, and wharves, where the cooperative operates, as well
3 
as in the operation of arrastre and stevedoring services therein.
4 
(i) 
Cooperatives shall be given preference in the procurement of
5 
government projects subject to the existing procurement laws, rules and regulations.
6 
(j) 
Cooperatives shall enjoy the privilege of being represented by the
7 
provincial or city fiscal, or the Office of the Solicitor General, free of charge, except
8 
when the adverse party is the Republic of the Philippines;
9 
(k) 
Cooperatives organized by faculty members and employees of
10 
educational institutions shall have the preferential right to manage the school canteen
11 
and other services related to the operation of the educational institution where they
12 
are employed: Provided, That such services are operated within the premises of the
13 
said educational institution;
14 
(I) 
The relevant regulatory agencies, and LGUs shall not discriminate
15 
against duly registered cooperatives seeking accreditation as service providers, or
16 
seeking to engage in a particular business: Provided, That they possess all other
17 
qualifications under the law. Any person who acts contrary to this provision may be
18 
held liable under this Code and all other relevant laws and issuances;
19 
(m) 
Cooperatives shall be entitled to financing support from the relevant
20 
government agencies that shall allocate funds for the establishment of projects and
21 
programs for the development and promotion of cooperatives; and
22 
(n) 
The relevant government agencies and government financial institutions
23 
shall create a special window for financing, in the form of blanket or long-term
24 
wholesale loans without need for individual processing, to qualified cooperatives
25 
engaged in housing projects. Such shall offer interest rates and terms equal to, or
26 
better than those given for socialized housing projects.
27 
The Authority, in consultation with appropriate government agencies and the
28 
cooperative sector, shall issue rules and regulations on all matters concerning housing
29 
cooperatives and socialized housing projects. Furthermore, the sector shall be
30 
consulted in matters of policy and implementation that will affect the rules and
31 
regulations on cooperatives.
32
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30
31
32
CHAPTER XI. INSOLVENCY, SUSPENSION, DISSOLUTION, 
LIQUIDATION, AND DELISTING OF COOPERATIVES
SEC. 73. Proceeding Upon Insolvency. - In case a cooperative is unable to 
fulfill its obligations to creditors due to insolvency, such cooperative may apply for 
such remedies as it may deem fit under the provisions of Republic Act No. 10142, 
otherwise known as the "Financial Rehabilitation and Insolvency Act."
SEC. 74. Effect of Declaration of Insolvency by a Competent Court. -
Should the cooperative be declared insolvent by the court, its Certificate of Registration 
shall be cancelled, and it shall be delisted from the registry of cooperatives of the 
Authority.
SEC. 75. Suspension of Certificate of Registration. - A penalty of 
suspension, after due process, shall be imposed on a cooperative on any of the 
following grounds:
(a) 
Willful failure to submit annual progress reports with the necessary 
attachments within the period mandated by this Code: Provided, That in the case of 
newly-registered cooperatives, this provision shall only apply three (3) years after they 
have registered; or
(b) 
Willful failure or refusal to comply with an interlocutory order, a final and 
executory decision, or award from the Board of Directors of the Authority, or from any 
of its Regional Offices or adjudication officers, or by a voluntary arbitrator in relation 
to an investigation, voluntary arbitration, or adjudication.
SEC. 76. Voluntary Dissolution Where no Creditors are Affected. - If the
dissolution of a cooperative does not prejudice the rights of any creditor having a claim 
against it, the dissolution may be effected by a majority vote of the Board of Directors, 
and by a resolution duly adopted by the affirmative vote of at least three-fourths (3/4) 
of all the members entitled to vote, present and constituting a quorum in a special 
General Assembly called by the directors for such purpose: Provided, That the notice 
of time, place, and object of the meeting shall be posted for three (3) consecutive
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1 
weeks in the principal office of said cooperative, in a public place in the municipality,
2 
city, or province where the cooperative operates, and in its official website and social
3 
media accounts.
4 
The notice of such meeting shall be sent to each member of record either by
5 
personal delivery, registered mail, or through electronic means at least thirty (30) days
6 
prior to said meeting. A copy of the resolution authorizing the dissolution shall be
7 
certified to by a majority of the Board of Directors and countersigned by the
8 
Cooperative Secretary.
9 
Upon compliance with all the requisites for voluntary dissolution, the Authority
10 
shall issue the Certificate of Dissolution.
11
12 
SEC. 77. Voluntary Dissolution Where Creditors Are AfTected. - In case
13 
creditors of the cooperative are affected, the petition for dissolution, signed by a
14 
majority of its Board of Directors or the Chief Executive Officer or General Manager,
15 
as the case may be, and verified by the Chairperson of the Board or the Cooperative
16 
Secretary, shall be filed with the Authority. The petition shall state that the dissolution
17 
was affirmed by a vote of at least three-fourths (3/4) of all the members entitled to
18 
vote, present and constituting a quorum in a special General Assembly called for the
19 
purpose, and shall set forth all the claims and demands against the cooperative.
20 
If the petition is sufficient in form and substance, the Authority shall issue an
21 
order reciting the purpose of the petition and shall fix a period for the filing of any
22 
oppositions thereto, which shall not be less than thirty (30) nor more than sixty (60)
23 
days after the entry of the order. Before such period, a copy of the order shall be
24 
published at least once in a newspaper of general circulation published in the
25 
municipality or city where the principal office of the cooperative is situated or in the
26 
absence of such local newspaper, in a newspaper of general circulation in the
27 
Philippines at the expense of the cooperative, and a copy shall likewise be posted for
28 
three (3) consecutive weeks in three (3) public places in the municipality or city where
29 
the cooperative's office is located: Provided, That the publication requirement shall not
30 
apply to micro and small cooperatives.
31 
Upon the expiry of such period, the Authority shall proceed to hear the petition
32 
and try any issue raised in the opposition filed. If there is no opposition or such is
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1 
insufficient, and the material allegations in the petition are proven, the Authority shall
2 
issue a Certification of Dissolution and direct the disposition of assets of the
3 
cooperative in accordance with existing rules and regulations. The Certificate of
4 
Dissolution shall set forth:
5 
(a) 
The assets and liabilities of the cooperative;
6 
(b) 
The claim of any creditor;
7 
(c) 
The number of members;
8 
(d) 
The nature and extent of the interests of the members of the
9 
cooperative; and
10 
(e) 
The appointment of the liquidators.
11 
The Authority shall issue a Certificate of Cancellation of Registration upon
12 
approval of the final report of the liquidators.
13
14 
SEC. 78. Cancellation by Order of the Authority. - The Authority may
15 
cancel, after due notice and hearing, the cooperative's Certificate of Registration on
16 
any of the following grounds:
17 
(a) 
Having obtained its registration by fraud;
18 
(b) Engaging in an illegal or unauthorized purpose;
19 
(c) 
Willful violation, despite written notice by the Authority, of the provisions
20 
of this Code or its implementing rules and regulations, other issuances of the Authority
21 
consistent with this Code, or bylaws of the cooperative;
22 
(d) 
Willful refusal to comply with an order issued or given by the Authority;
23 
(e) 
Willful failure to operate on a cooperative basis; or
24 
(f) 
Failure to meet the required minimum capital and minimum number of
25 
members in the cooperative.
26 
The decision of the Authority on the cancellation of the Certificate of Registration
27 
of a cooperative may be appealed to the Authority's Board of Directors within thirty
28 
(30) days from the receipt thereof. The decision of the Authority's Board of Directors
29 
shall be final and executory unless elevated or appealed to a regular court.
30
31 
SEC. 79. Cancellation by Failure to Operate. - If a cooperative has not
32 
commenced operations within three (3) years after the issuance of its Certificate of
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3
4
5
6
7
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10
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13
14
15
16
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18
19
20 
21 
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24
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27
28
29
30
31
Registration, or has not carried on its business for three (3) consecutive years, the 
Authority shall issue a show cause order for the cooperative to explain its failure to 
operate. Failure to provide justifiable cause shall authorize the Authority, after due 
notice, to cancel the Certificate of Registration and delist it from the registry.
SEC. 80. Liquidation of a Cooperative. - Every cooperative whose term of 
existence expires by its own limitation, or whose existence is terminated by voluntary 
dissolution or cancellation of its Certificate of Registration by the Authority shall cease 
to operate. However, it can continue to exist for three (3) years for winding up its 
affairs, prosecuting and defending suits by or against it, and the disposition, 
conveyance and distribution of its properties and assets.
The cooperative is authorized to convey all of its interests in the properties to 
trustees for the benefit of its members, creditors, and other persons in interest, after 
which, all interests which the cooperative had in the properties are terminated.
Upon the winding up of the cooperative affairs, any asset distributable to any 
creditor, shareholder, or member who is unknown or cannot be found shall be given 
to the federation or union to which the cooperative is affiliated with.
A cooperative shall only distribute its assets or properties upon lawful dissolution, 
and after payment of all its debts and liabilities, except in the case of decrease of share 
capital of the cooperative, and as otherwise allowed by this Code.
SEC. 81. Delisting of Cooperatives. - Cooperatives may be delisted from the 
Registry of Cooperatives due to any of the following causes:
(a) 
Voluntary Dissolution;
(b) 
Involuntary Dissolution;
(c) 
Cancellation by Order of the Authority;
(d) 
Cancellation by Failure to Operate; or
(e) 
Merger or Consolidation.
SEC. 82. Rules and Regulations on the Insolvency, Suspension, 
Dissolution, Liquidation, and De-iisting of Cooperatives. - The guidelines on
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2
3
4
5
6
7
8 
9
10
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12
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14
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16
17
18
19
20 
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25
26
27
28
29
30
31
32
the implementation of this Chapter shall be included in the implementing rules and 
regulations of this Code,
CHAPTER XII. CAPITAL, PROPERTY, AND FUNDS
SEC. 83. Capital and Funds. - The capitalization of cooperatives and 
federations, or funds in the case of unions, shall be governed by this Code and its 
implementing rules and regulations that will be developed in consultation with the 
cooperative sector.
SEC. 84. Capital Sources. - Cooperatives registered under this Code may 
derive their capital from any or all of the following sources:
(a) 
Member's share capital;
(b) 
Loans and borrowings;
(c) 
Deposits from members only, except for cooperative banks which accept 
deposits from both members and non-members, or the general public;
(d) 
Revolving capital which consists of the deferred payment of patronage 
refunds, or interest on share capital;
(e) 
Joint venture partners; and
(f) 
Subsidies, donations, legacies, grants, aids, and such other assistance or 
investment from any local or foreign institution whether public or private: Provided, 
That capital coming from such subsidies, donations, legacies, grants, aids, 
investments, and other assistance shall not be divided into individual share capital 
holdings at any time, but instead shall form part of the donated capital or fund of the 
cooperative. Upon dissolution or cancellation of the cooperative, such donated capital 
shall be subject to escheat.
SEC. 85. Limitation on Share Capital Subscription - No member of primary 
cooperative other than the cooperative itself shall own or hold more than twenty 
percent (20%) of the subscribed share capital of the cooperative.
Where a member of a cooperative dies, their heir shall be entitled to the shares 
of the decedent: Provided, That the total shareholding of the heir does not exceed
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1 
twenty percent (20%) of the share capital of the cooperative: Provided, further, That
2 
the heir quaiifies and is admitted as a member of the cooperative: Provided, finaiiy,
3 
That where the heir fails to qualify as a member or where their total shareholding
4 
exceeds twenty percent (20%) of the share capital, the shares in excess will revert to
5 
the cooperative upon payment to the heir of the vaiue of such shares.
6 
For federations as stated in its articles of cooperation and bylaws, the share
7 
capital holdings of any one member-cooperative shall not exceed forty percent (40%)
8 
of the subscribed share capital of the federation. A foreign federation of cooperatives
9 
if admitted as associate member of a Philippine federation of cooperatives may hold
10 
or own up to forty percent (40%) of the preferred share capital of said Philippine
11 
federation: Provided, That the redemption date of such preferred share capital shall
12 
be at least five (5) years after effectivity of membership; Provided, further. That during
13 
the five-year period, withdrawal of the preferred share capital shall not be allowed.
14
15 
SEC. 86. Assignment of Share Capital Contribution or Interest. - Subject
16 
to the provisions of this Code and the approval of the majority of the Board of
17 
Directors, no member shall transfer their shares or interest in the cooperative or any
18 
part thereof unless:
19 
(a) 
The member has held such share capital contribution or interest for more
20 
than one (1) year;
21 
(b) 
The assignment 
is made to the cooperative or to a member of the
22 
cooperative or to a person who falis within the field of the membership of the
23 
cooperative; and
24 
(c) 
The Board of Directors has approved such assignment.
25
26 
SEC. 87. Capital BuHd-Up. - The bylaws of every cooperative, except for
27 
cooperative unions, shall prescribe a reasonable and realistic member capital or
28 
deposits build-up program to allow the continuing growth of the contribution of the
29 
members to the cooperative as their economic conditions continue to improve. Upon
30 
approval of the membership, the member shall execute a subscription agreement on
31 
their equitable contribution to the cooperative. Upon fuil payment thereof, the member
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may apply for an additional share capital subscription, and execute a new subscription 
agreement.
SEC. 88. Shares. - The term "share" refers to a unit of capital in a cooperative, 
except for cooperative unions, the par value of which may be fixed at any figure not 
less than One hundred pesos (PhplOO.OO) but not more than One thousand pesos 
(Phpl,000.00). The share capital of the cooperative is the money paid or required to 
be paid by the members for the operations of the cooperative.
Unless otherwise provided for in its policies, the cooperative shall issue Share 
Certificates at the end of the calendar year based on the number of shares fully paid 
for the said period.
Cooperatives are prohibited from issuing multiple types of shares with different 
par vaiues, and from increasing or decreasing the par value of the share capital without 
amending their articles of cooperation and byiaws.
A share can either be a common share issued to a regular member, or a preferred 
share issued to associate members.
SEC. 89. Fines. — The policies of a cooperative may prescribe a fine on unpaid 
subscribed share capital: Provided, That such fine is fair and reasonable.
SEC. 90. Investment of Capital. - A cooperative, upon approval as provided 
in its byiaws, may invest its capital in any of the foliowing:
(a) 
Any reputable bank;
(b) 
Securities issued or guaranteed by the Government;
(c) 
Real estate primarily for the use of the cooperative or its members; or
(d) 
Any other manner authorized in the bylaws.
SEC. 91. Revolving Capital. - The General Assembly may authorize the Board 
of Directors to raise a revolving capital from the proceeds of products sold or services 
rendered, or per unit of product or services handled, to strengthen its capital structure.
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CHAPTER XIII. AUDIT, INQUIRY, AND MEMBERS' RIGHT TO EXAMINE
SEC. 92. Audit of Cooperatives. - Cooperatives registered under this Code 
shall be subject to an annual audit of its financial and social performance in accordance 
with the implementing rules and regulations to be promulgated by the Authority. The 
financial audit shall be conducted by an external auditor who shall be independent 
from the cooperative or any of its subsidiaries, and must be a member in good standing 
of the Philippine Institute of Certified Public Accountants (PICPA), and is accredited by 
both the Board of Accountancy and the Authority. However, if the total assets or total 
liabilities of agricultural and fisheries cooperatives is less than Three million pesos 
(Php3,000,000.00), or such other amount as may be determined appropriate by the 
Department of Agriculture (DA), the financial statements may be certified under oath 
by the bookkeeper, treasurer, and the president.
The social performance audit may be conducted by the Audit Committee, by the 
internal auditor of the cooperative, or by an independent auditor engaged by the 
cooperative. The Authority, in consultation with the cooperative sector, shall 
promulgate the rules and standards for the social audit of cooperatives.
SEC. 93. Audit Report. - The complete audit reports shall be submitted to the 
Board of Directors, which shall be presented to the General Assembly for approval. 
The Board of Directors shall be liable under Section 170 of this Code should it fail to 
present such reports to the General Assembly.
SEC. 94. Non-Liability for Defamations. - The auditor shall not be held liable 
in any action for defamation for acts done or for any statement made by them in good 
faith in connection with the conduct of audit of the cooperative.
SEC. 95. Right to Examine. - All members shall have the right to examine the 
records of the cooperative under Section 61 of this Code at any time during reasonable 
hours of the operating days of the cooperative: Provided, That the member submits a 
letter request three (3) days prior to the date of their demand to examine the records 
and stating therein the purpose of the request.
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The Board of Directors shall consider the purpose and reason for the request to 
examine the records to determine its propriety. The Board of Directors shall have the 
right to refuse the request after proper consultation with the requesting member on 
any of the following grounds:
(a) 
The member has improperly used any information secured through any 
prior examination of the records of such cooperative or of any other cooperative; or
(b) 
The member is not acting in good faith or for a legitimate purpose in 
making the demand to examine records.
If the request to examine is denied based on the aforementioned grounds, the 
member shall have the burden of proving to the Board that such request is made in 
good faith and for a legitimate purpose. If the denial is made in bad faith, the directors 
who voted for such refusal shall be penalized under Section 170 of this Code.
SEC. 96. Safety of Records. - Every cooperative shall, at its principal office, 
keep and carefully preserve the records required by this Code to be prepared and 
maintained. The bylaws shall also provide the condition and the accountable persons 
for the safekeeping of the records in accordance with applicable laws on data privacy. 
The cooperative shall take all necessary precautions to prevent its loss, destruction, or 
falsification.
CHAPTER XIV. ALLOCATION AND DISTRIBUTION OF NET SURPLUS
SEC. 97. Net Surplus. - Notwithstanding the provisions of existing laws, the 
net surplus of cooperatives shall be determined in accordance with its bylaws. Every 
cooperative shall determine its net surplus at the close of every calendar year.
Any provision of law to the contrary notwithstanding, the net surplus shall not be 
construed as profit but as an excess of payments made by the members for the loans 
borrowed, or the goods and services availed by them from the cooperative or the 
difference of the rightful amount due to the members for their products sold or services 
rendered to the cooperative including other inflows of assets resulting from its other 
operating activities and which shall be deemed to have been returned to them if the 
same is distributed as prescribed herein.
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SEC. 98. Net Surplus Allocation and Statutory Funds. - The net surplus
3 
shall be subject to the allocation of the following statutory funds, which shall be
4 
recorded in the books of account, for the cooperative's growth and development:
5 
(a) An amount for the reserve fund which shall be at least ten percent (10%)
6 
of the net surplus provided, that in the first five (5) years of operation after
7 
registration, the amount allocated for the reserve fund shall not be less than thirty
8 
percent (30%) of the net surplus.
9 
The reserve fund shall be used for the stability of the cooperative and to cover
10 
net losses in its operations, including losses incurred during a pandemic, state of
11 
emergency, and other such force majeure. provided, that if any of the aforementioned
12 
events occur, necessitating the use of the reserve fund, cooperatives may use not
13 
greater than fifteen percent (15%) of the latter to mitigate the losses incurred, as may
14 
be approved or confirmed by the general assembly, as the case may be. Any sum
15 
recovered on items previously charged to the reserve fund shall be credited to such
16 
fund.
17 
The fund shall be recorded in the books of account of the cooperative and the
18 
cash allocation for the reserve fund shall be deposited separately in an account
19 
established for that purpose.
20 
The general assembly may decrease the amount allocated to the reserve fund
21 
when the reserve fund already exceeds the share capital and may approve the
22 
utilization of the reserve fund for investment to enhance the growth and development
23 
of the cooperative: Provided, That the liquidity of the cooperative shall be taken into
24 
account when utilizing a portion of the reserve fund for investment: Provided, further,
25 
That the cooperative may only utilize no more than fifty percent (50%) of the reserve
26 
fund for investment upon approval of at least a majority vote of all members entitled
27 
to vote, present and constituting a quorum: Provided, finally, That the board of
28 
directors shall conduct due diligence and only invest in short-term low-risk investment
29 
options.
30 
Upon the dissolution of the cooperative, the reserve fund shall be distributed in
31 
accordance with the rules and regulations on liquidation to be issued by the Authority."
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(b) 
The Cooperative Education and Training Fund (CETF), which shall not 
exceed ten percent (10%) of the net surplus, shall be used for the training, 
development, and similar other cooperative activities geared towards the growth of 
the cooperative movement:
(1) 
Flalf of the CETF shall be used to provide for the education and training of 
its officers, members, and employees; while the other half shall be remitted to a 
federation and/or union that the cooperative of which it is a member, which must 
redound to the benefit and development of the member-cooperatives.
Should a cooperative have multiple affiliations, seventy percent (70%) of the 
CETF remittance shall be given to the cooperative union/s to which it is a member 
while the remaining thirty percent (30%) shall be distributed between the federations 
it is affiliated with.
(2) 
The balance of the CETF shall be utilized within the succeeding fiscal 
year following its allocation and shall be utilized in accordance with the policies and 
guidelines to be promulgated by the Authority;
(3) 
Upon the dissolution of the cooperative, the unexpended balance of the 
CETF shall be credited to the cooperative education and training fund of the union in 
which it is a member or the union where it was last affiliated with.
(c) 
The Community Development Fund (CDF), which shall not be less than 
five percent (5%) of the net surplus, shall be used for projects or activities that will 
benefit the community where the cooperative operates. However, the cooperative may 
extend assistance to marginalized communities or affected areas outside its area of 
operation in times of calamities, disaster, or national emergency, at the discretion of 
the General Assembly.
In the case of cooperatives whose common bond of membership is institutional, 
the community refers to the municipality or city where the principal or branch office is 
located.
The allocation for the CDF for the current year shall be fully utilized in the 
following year unless the projects or activities as approved by a majority of the 
members entitled to vote, present and constituting a quorum in a General Assembly 
meeting, require multi-year utilization. For multi-year projects or programs, the 
allocation shall be fully utilized within the period as stated in the plan.
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The utilization of the CDF shall be in accordance with the guidelines to be
2 
promulgated by the Authority.
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(d) 
The optional fund, which shall not exceed five percent (5%) of the net
4 
surplus, may be used for the acquisition of land and construction of building, and any
5 
other necessary fund; Provided, That it is approved by at least three-fourths (3/4) of
6 
all members entitled to vote, present and constituting a quorum, which shall be in
7 
accordance with the implementing rules and regulations to be promulgated by the
8 
Authority.
9 
This fund may also be used for the benefit of its members and employees under
10 
exceptional circumstances such as the occurrence of a pandemic, crisis, or force
11 
majeure. However, if the optional fund is insufficient, the cooperative may charge any
12 
deficiency to direct expenses.
13 
(e) 
The remaining net surplus shall be made available in full to the members
14 
in the form of interest on share capital following the formula for computation as
15 
provided by the Authority: Provided, That this is approved by a majority of the
16 
members entitled to vote, present and constituting a quorum.
17 
(f) 
The sum allocated for patronage refunds shall be made available at the
18 
same rate to all patrons of the cooperative in proportion to their individual patronage:
19 
Provided, That:
20 
(1) 
In the case of a member patron with paid-up share capital contribution,
21 
the member patron's proportionate amount of patronage refund shall be paid to the
22 
member patron unless the member patron agrees to credit the amount to the member
23 
patron's account as additional share capital contribution;
24 
(2) 
In the case of a member patron with unpaid share capital contribution,
25 
the member patron's proportionate amount of patronage refund shall be credited to
26 
the member patron's account until the share capital contribution has been fully paid;
27 
(3) 
In the case of a non-member patron, the non-member patron's
28 
proportionate amount of patronage refund shall be set aside in a fund created for this
29 
purpose and shall be allocated to individual non-member patrons only upon request
30 
and presentation of evidence of the amount of their patronage. The amount allocated
31 
shall be credited to such patrons toward payment of the minimum capital contribution
32 
for membership. When a sum equal to this amount has accumulated at any time within
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two (2) years from the start of their patronage, such patrons shall be deemed and 
become members of the cooperative if they agree or request and comply with the 
provisions of the bylaws for admission to membership; and
(4) Any non-member patron who has accumulated the sum necessary for 
membership but who does not request nor agree to become a member or fails to 
comply with the provisions of the bylaws for admission to membership, the amount so 
accumulated or credited to their account together with any part of the general fund 
for non-member patrons shall be credited to any of the statutory funds as approved 
by a majority of the members entitled to vote, present and constituting a quorum.
CHAPTERXV. AGRICULTURAL COOPERATIVES
SEC. 99. Definition and Coverage. - This Chapter shall apply to all agricultural 
cooperatives, as defined in this Code: Provided, That the provisions of the other 
chapters of this Code shall apply suppletorily except insofar as this Chapter otherwise 
provides.
SEC. 100. Cooperative Business Activities and Allied Services. - A duly 
registered agricultural cooperative may engage in all or any of the following activities:
(a) 
Raising and/or culture of plants, high-value crops, animals, fish, poultry, 
dairy and meat-type livestock, other agri-products as source of food, feed, and fiber, 
and other agrifishery or non-food commodities;
(b) 
Marine and inland fishing;
(c) 
Production and/or sale of salt;
(d) 
Community and social forestry;
(e) 
Provision of credit facilities for marginal farmers and fishermen;
(f) 
Facilitating the production, procurement, repacking, importation, 
distribution and marketing of farm inputs/implements for its members such as but not 
limited to, meat-type and dairy animals, planting materials, semen, silage, feeds, 
veterinary supplies, seeds, fertilizers and chemicals, farm equipment, food processing 
and engineering supplies/equipment, and other inputs as may be needed by the 
agricultural industry;
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(g) 
Propagation, production, harvest, postharvest, processing, packing,
2 
repacking, marketing, exportation, and sale of members' agri-products, dairy products
3 
and by-products, and/or produce;
4 
(h) 
Maintenance and management of irrigation systems, water impounding,
5 
and other agricultural facilities;
6 
(i) 
Other allied services such as but not limited to warehousing, cold storage
7 
and cold chain, other post-harvest services, hauling, transport of members'
8 
products/produce, and such other similar business services and activities that will
9 
reduce cost and/or value addition of output; and
10 
(j) 
Learning site entrepreneurship for extension, technology demonstration,
11 
agri-tourism, and farm business schools.
12
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SEC. 101. Pre-Cooperative Agricultural Organization. - Prior to
14 
registration with the Authority, a group of natural persons intending to form an
15 
agriculture cooperative may voluntarily form a Pre-Cooperative Agricultural
16 
Organization (PCAO) that shall have its own juridical personality to undertake activities
17 
that shall determine the viability of the creation of a cooperative under this Code. Prior
18 
to registration, the PCAO must be registered as such with the local Cooperative
19 
Development Officers (LCDOs).
20 
The DA and the Authority, in coordination with the CDOs, shall assist PCAOs so
21 
that they can formally organize as cooperatives under this Code: Provided, That should
22 
the PCAO decide to formally organize into a cooperative, it must comply with the
23 
provisions of Sections 8 and 14 of this Code. Section 18 shall apply to all contracts
24 
executed by pre-cooperative organizations prior to registration under this Code.
25 
The DA and the Authority shall jointly issue guidelines on the mechanisms for
26 
PCAOs.
27
28 
SEC. 102. Registration of Agricultural Cooperatives. - Agricultural
29 
cooperatives shall file their application for registration with the regional office of the
30 
Authority that has jurisdiction over its area of operation. The requirements and
31 
procedure for registration of agricultural cooperatives shall be in accordance with the
32 
rules and regulations to be promulgated by the Authority.
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No fees shall be assessed or charged to any agricultural cooperative by any 
government entity, national or local, at any stage of its organization and registration 
process.
SEC. 103. Capital Requirements of Agricultural Cooperatives. - The
authorized share capital of an agriculture cooperative shall be stated in its articles of 
cooperation and that prior to its registration, at least twenty five percent (25%) of the 
authorized share capital shall be subscribed to by the members and at least twenty- 
five percent (25%) of the subscribed share capital shall be paid-up: Provided, That the 
paid-up capitalization requirement for primary cooperatives shall not be less than 
Fifteen thousand pesos (Phpl5,000.00).
SEC. 104. Bond of Membership. - The bond of membership of agricultural 
cooperatives shall be any of the following:
(a) 
Residential - members are farmers, farm workers, fisherfolk who are 
actually and physically residing within the area of operation;
(b) 
Occupational - members are those who are engaged in raising, culture 
of plants, animals, as well as those from the technical and scientific communities of 
the agriculture sector;
(c) 
Associational - members are from registered associations, groups, clubs, 
cultural and other similar aggrupation of farmers, farm workers, and fisherfolk; or
(d) 
Institutional - members consist of employees, workers and/or officers of 
a particular institution who will undertake or are undertaking agricultural projects.
SEC. 105. Clustering and Consolidation. - In order to pool their resources 
for increased viability and market competitiveness, the DA, in collaboration with the 
Department of Agrarian Reform (DAR), the DTI, the Authority, and the cooperative 
sector shall institutionalize the farm and fisheries clustering and consolidation (F2C2) 
program that will promote, encourage agricultural cooperatives and facilitate their 
cooperation into clusters that will encompass the whole agricultural value chain, 
including but not limited to land consolidation, postharvest processing, distribution, 
logistics, marketing, and promotions.
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Within sixty (60) days from the effectivity of this Code, the DA, the DAR, the DTI 
and the Authority, in consultation with the cooperative sector, shall jointly issue the 
guidelines for the implementation of the program, and shall provide the necessary 
assistance at every step of the clustering and consolidation process, including the 
formulation of cluster development plans.
SEC. 106. Partnership and Joint Venture with Private Entities. — Duly 
registered private entities may enter into a partnership or joint venture with 
agricultural cooperatives in order to provide the latter with investments and technical 
support, such as, but not limited to technological, logistics, and facilities support, 
among others.
Such partnership or joint venture shall be registered with the necessary 
regulatory authorities, including the Authority, and enjoy the relevant exemptions and 
privileges under this Code.
The details of the joint venture or partnership with private entities shall be left 
to the discretion of the cooperatives. Further details shall be laid down in the 
implementing rules and regulations of this Code.
SEC. 107. Role of the National Coordinating Committee on 
Cooperatives Development - The Authority shall mobilize the National 
Coordinating Committee on Cooperative Development (NCC-CD) in partnership with 
the cooperative sector and other stakeholders for the promotion of the growth, 
viability, and development of Agricultural and fisheries cooperatives. Provided, That 
the NCC-CD shall coordinate with the DA and the Farmers and Fisherfolk Enterprise 
Development Council (FFEDC) on matters related to the growth, development, and 
sustainability of the agricultural and fisheries cooperatives.
SEC. 108. Roie ofLGUs. - The Local Government Units shall:
(a) Ensure the appointment of Cooperative Development Officers, in 
compliance with Republic Act No. 11535;
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(b) 
Create a Committee on Agricultural Cooperatives Development in the
2 
Local Government Legislative Council which shall focus on addressing legislative
3 
concerns on agricultural cooperatives;
4 
(c) 
Legislate necessary ordinances for the promotion and development of
5 
agricultural cooperatives;
6 
(d) 
Disseminate information to people and facilitate the establishment and
7 
development of the management and operations of agricultural cooperatives in their
8 
respective localities;
9 
(e) 
Expedite the issuance of the necessary permits for the implementation
10 
of programs and projects of the Authority and other national government agencies for
11 
the benefit of agricultural cooperatives;
12 
(f) 
Upon written request of the Authority, assist in the resolution of inter-
13 
cooperative disputes among agricultural cooperatives operating within their localities;
14 
(g) 
Facilitate and conduct seminars, trainings, and/or conferences necessary
15 
for the organization, registration, management and operations of agricultural
16 
cooperatives, in coordination with federations and unions;
17 
(h) 
Provide technical assistance and skills training for farmers, farm workers,
18 
and fisherfolk to engage in income-generating activities;
19 
(i) 
Provide access to land for agricultural and fisheries cooperatives for
20 
farming and other purposes which include leasing or allocating public lands for
21 
cooperatives use;
22 
(j) 
Offer financial support to agricultural and fisheries cooperatives through
23 
grants, subsidies, or low-interest loans; and
24 
(k) 
Facilitate linkage between agricultural and fisheries cooperatives and
25 
other institutions offering assistance/services.
26
27 
SEC. 109. Role of Cooperative Development Councils and National
28 
Government Agencies. - The Authority shall, in collaboration with the LGUs through
29 
the Regional, Provincial, City, and Municipal Cooperative Development Councils and
30 
the Cooperative Development Officers, facilitate programs and policies affecting
31 
agricultural cooperatives in accordance with a Joint Memorandum Circular to be
32 
promulgated by the Authority and the LGU.
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Agricultural cooperatives shall be entitled to financing support from the relevant
2 
government agencies that shali allocate funds for the establishment of projects and
3 
programs for the development and promotion of agriculturai cooperatives.
4
5 
SEC. 110. Benefits and Privileges of Agricultural Cooperatives. - An
6 
agriculture cooperative shall enjoy the following benefits and privileges:
7 
(a) 
Taxes, Duties, and Liens:
8 
(1) 
Ail benefits, privileges, and tax treatments of cooperatives as defined
9 
and enumerated under Chapter X of this Code shail appiy to agricultural cooperatives;
10 
(2) 
Agricultural cooperatives shall be exempt from customs duties, advance
11 
sales or compensating taxes on their importation and local purchase of machineries,
12 
equipment, accessories, batteries, and spare parts used by them: Provided, That all
13 
tax- and duty-free imports and local purchases shall not be sold nor the beneficial
14 
ownership thereof be transferred to any person until after five (5) years, otherwise,
15 
the cooperative and the transferee or assignee shall be solidarily liable to pay twice
16 
the amount of the imposed tax and/or duties; and
17 
(3) 
Ali real properties owned, and those directly used for the operations,
18 
management, and maintenance of agricultural cooperatives shall be exempt from the
19 
payment of real property taxes imposed under existing laws.
20 
(b) 
Trainings and Conferences - All trainings and conferences necessary for
21 
the organization, registration, management and operations of an agricuiture
22 
cooperative, rendered by the appropriate government agency, shall be given free of
23 
charge, including costs of venue, training materials, speakers and resource persons.
24 
The CDOs shall be primarily responsible for these trainings and conferences within
25 
their respective iocalities;
26 
(c) 
Consolidation - Agricultural cooperatives may consolidate agricultural
27 
lands owned by its members within a contiguous area for purposes of agricuitural
28 
development; and
29 
(d) 
Direct Purchase by National and Local Government Agencies - To
30 
promote and support agricultural cooperatives, national and local government
31 
agencies shall directly purchase agricultural products from accredited agricultural
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cooperatives: Provided, That said products are necessary in the performance of their 
respective mandates.
For the purposes of this Code, the procurement by national and local government 
agencies of said agricultural products shall be exempt from the application of the 
bidding process prescribed under relevant government procurement laws; Provided, 
that said agencies shall undergo a negotiated procurement under the appiicable 
guideiines of the Government Procurement Policy Board.
(e) Loans and Grants:
(1) 
All loans applied for by agricultural cooperatives in any government- 
owned or -controlled banks or government financial institutions shall enjoy preferential 
treatment as to the requirements, rates, securities, and coliaterals; and
(2) 
The DA shall coordinate with the BSP to lower the requirements for all 
loans applied for and granted to agricultural cooperatives.
SEC. 111. Merger and Consolidation of Agricultural Cooperatives. -
Notwithstanding the provisions of this Code, the merger and consolidation of 
agricultural cooperatives shall be in accordance with the implementing rules and 
regulations to be promulgated by the Authority.
SEC. 112. Inter-Cooperative Arrangements of Agricultural 
Cooperatives. - Agricultural cooperatives shall be allowed to enter into inter­
cooperative arrangements with and among other cooperatives and other entities to 
pursue value and supply chain solutions and other agribusiness development 
programs, subject to the guidelines to be promulgated by the Authority in consultation 
with the cooperative sector.
SEC. 113. Local Development Hubs. - Local Development Hub (LDH) refers 
to a farming zone or transport infrastructure, which is generally far from formal 
markets, and serves a minimum of one hundred (100) farmers, linking them to buyers, 
who may be, among others, traders, processors, and export companies. The DA, the 
DTI, and the Authority shali jointly establish or make use of the existing LDHs in order 
to strengthen the market linkages between farmers and buyers, fostering agricultural
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development and economic growth at the local level. They shall jointly issue the 
guidelines for the operations and maintenance thereof.
SEC. 114. Annual Trade Fair and Awards. - The DA, in coordination with the 
Authority, and in partnership with the cooperative sector shall establish and hold the 
Annual Agricultural Cooperatives Trade Fair and Awards and other development- 
oriented projects and activities to showcase the exemplary business achievement, 
latest innovations, and other emerging trends in the sector.
CHAPTER XVI. AGRARIAN REFORM COOPERATIVES
SEC. 115. Coverage. - The provisions of this Chapter shall primarily govern 
agrarian reform cooperatives, inciuding Agrarian Reform Beneficiaries (ARBs) 
Cooperative as defined in Department of Agrarian Reform Administrative Order No. 
05, Series of 2009: Provided, That the provisions of the other chapters of this Code 
shall apply suppletorily except insofar as this Chapter otherwise provides.
SEC. 116. Purpose. - An agrarian reform cooperative as defined shall be 
organized for any of the following purposes:
(a) 
To develop an appropriate system of land tenure, land development, 
land consolidation or land management in areas covered by agrarian reform;
(b) 
To coordinate and facilitate the dissemination of scientific methods of 
production and provide assistance in the storage, transport, and marketing of farm 
products for agrarian reform beneficiaries and their immediate family;
(c) 
To provide financial facilities to ARBs for provident or productive 
purposes at reasonable costs;
(d) 
To arrange and facilitate the expeditious transfer of appropriate and 
suitable technology to ARBs and marginal farmers at the lowest possible cost;
(e) 
To provide social security benefits, health, medical and social insurance 
benefits, and other social and economic benefits that promote the general welfare of 
the ARBs and marginal farmers;
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(f) 
To provide non-formal education, vocational and technical training, and 
livelihood programs to ARBs and marginal farmers;
(g) 
To act as conduits for external assistance and services to the ARBs and 
marginal farmers;
(h) 
To undertake a comprehensive and integrated development program in 
agrarian reform and resettlement areas with special concern for the development of 
agro-based, marine-based, and cottage-based industries;
(i) 
To represent the ARBs on any or all matters that affect their interest; 
and
(j) 
To undertake such other economic or social activities as may be 
necessary or incidental in the pursuit of the foregoing purposes.
SEC. 117. Cooperative Estate. - Landholdings acquired by the State, like 
plantations, estates, or haciendas for the benefit of the workers in accordance with 
the Comprehensive Agrarian Reform Program shall be collectively owned by the 
worker-beneficiaries under a cooperative set-up.
SEC. 118. Infrastructure. - In agrarian reform and resettlement areas, the 
Government shall grant to agrarian reform cooperatives preferential treatment in the 
construction, maintenance, and management of roads, bridges, canals, wharves, 
ports, reservoirs, irrigation systems, waterworks systems, and other infrastructures 
with government funding. For this purpose, the Government shall provide technical 
assistance, facilities, and equipment to such agrarian reform cooperatives.
SEC. 119. Lease of Public Lands. - The Government may lease public lands 
to any agrarian reform cooperative for a period not exceeding twenty-five (25) years, 
subject to renewal for another twenty-five (25) years only: Provided, That the 
application for renewal shall be made one (1) year before the expiration of the lease: 
Provided, further, That such lease shall be for the exclusive use and benefit of the 
ARBs and the marginal farmers subject to the provisions of Republic Act No. 6657 
otherwise known as "The Comprehensive Agrarian Reform Law of 1988," as amended.
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SEC. 120. Preferential Right - In agrarian reform areas, an agrarian reform
2 
cooperative shall have the preferential right in the grant of franchise and Certificate of
3 
Public Convenience and Necessity for the Operation of Public Utilities and Services:
4 
Provided, That it meets the requirements and conditions imposed by the appropriate
5 
government agency granting the franchise or Certificate of Public Convenience and
6 
Necessity. In cases where there is an electric service provider in the area, it shall, upon
7 
the request of an agrarian reform cooperative, immediately provide electric services
8 
to the agrarian reform areas. If the electric service provider fails to provide the services
9 
requested within a period of one (1) year, the agrarian reform cooperative concerned
10 
may undertake to provide the electric services in the area through its own resources.
11 
All investments made by the said agrarian reform cooperative for the electrification of
12 
the agrarian reform resettlement areas shall be the subject of sale to the electric
13 
service provider once it takes on the service.
14
15 
SEC. 121. Special Privileges. - Subject to such reasonable terms and
16 
conditions as the DAR and the Authority may impose, agrarian reform cooperatives
17 
may be given the exclusive right to do any of the following economic activities in
18 
agrarian reform and resettlement areas:
19 
(a) 
Supply and distribution of consumer, agricultural, aquacultural, and
20 
Industrial goods, production inputs, raw materials and supplies, machinery, equipment,
21 
facilities, and other services and requirements of the ARBs and marginal farmers at
22 
reasonable prices;
23 
(b) 
Marketing of the products and services of the ARBs in local and foreign
24 
markets;
25 
(c) 
Processing of the products of the members into finished consumer or
26 
industrial goods for domestic consumption or for export;
27 
(d) 
Provision of essential public services at cost, such as power, irrigation,
28 
potable water, passenger or cargo transportation by land or sea, communication
29 
services, and public health and medical care services;
30 
(e) 
Management, conservation, and commercial development of marine,
31 
forestry, mineral, water, and other natural resources subject to compliance with the
32 
laws and regulations on environmental and ecological controls; and
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(f) Provision of financial, technological, and other services and facilities 
required by the ARBs in their daily lives and livelihood.
The foregoing notwithstanding, an agrarian reform cooperative cannot, on its 
own, by policy or any other means, disqualify a member as an ARB, whether directly 
or constructively.
The Government shall provide the necessary financial and technical assistance to 
agrarian reform cooperatives to enable them to effectively discharge their purposes 
under this Chapter. The DAR, the Authority and the BSP shall draw up a joint program 
for the organization and financing of agrarian reform cooperatives. The joint program 
shall be geared towards the gradual assumption of full ownership and management 
control by ARBs of the agrarian reform cooperatives.
SEC. 122. Organization and Registration. - Agrarian reform cooperatives 
may be organized and registered in accordance with the requirements of this Code 
only upon prior certification by the DAR that said proposed cooperative is needed and 
that its organization is feasible and will be economically viable in its operations.
The Authority, in consultation with the concerned government agencies and 
cooperative sector, shall issue appropriate rules and regulations pertaining to the 
provisions of this Chapter.
CHAPTER XVII. COOPERATIVE BANKS
SEC. 123. Organization, Registration, and Membership. - The
organization and membership of a Cooperative Bank shall be governed by the following 
provisions:
(a) 
Organization - At least fifteen (15) cooperatives duly established and 
registered under this Code may register a cooperative bank with the Authority.
(b) 
Registration - The application for the registration of the articles of 
cooperation and bylaws, including its amendments, by a cooperative bank with the 
Authority shall be accompanied by a Certificate of Authority issued by the BSP.
(c) 
Membership - Membership in a cooperative bank shall be open to:
(1) cooperatives of all types and categories;
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(2) natural persons who are members of the bank's member-primary
2 
cooperatives;
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(3) foreign cooperatives;
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(4) pre-cooperative organizations established under Presidential Decree No. 175;
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and
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(5) individuals.
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Membership in a cooperative bank shall either be regular or associate. Regular
8 
membership shall be limited to cooperative organizations, individual members of the
9 
bank's member-primary cooperatives or foreign cooperatives. Associate members shall
10 
be pre-cooperative organizations established under P.D. No. 175 and individuals who
11 
are subscribing and holding preferred shares only.
12 
The common shareholdings of domestic cooperative organizations shall at all
13 
times be at least sixty percent (60%) of the total outstanding voting shares of the
14 
Cooperative Bank. Common shares held by individual members of the bank's member-
15 
primary cooperatives and foreign cooperatives shall not be more than forty percent
16 
(40%) of the total outstanding voting shares: Provided, That the common shares held
17 
by individual members shall not be more than five percent (5%) of the total
18 
outstanding voting shares.
19 
Other provisions of this Code shall apply suppletorily insofar as they are not
20 
inconsistent with this Chapter.
21
22 
SEC. 124. Powers and Functions of Cooperative Banks. - Cooperative
23 
banks shall primarily provide a wide range of financial services to cooperative
24 
organizations, their members, and to the public. A cooperative bank may perform any
25 
of the following banking services:
26 
(a) 
Extend loans and advances primarily for the purpose of meeting the
27 
normal credit needs of cooperatives as well as farmers, farm workers, fisherfolks, or
28 
their families, merchants, private and public employees, and self-employed individuals:
29 
Provided, That loans and advances granted to cooperatives shall not be subject to
30 
individual ceilings on loans to directors, officers, stockholders, and related interests
31 
(DOSRI);
32 
(b) 
Accept savings and time deposits;
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(c) 
Act as a correspondent bank of other financial institutions;
2 
(d) 
Discount and rediscount paper with the LBP, DBP or any other bank,
3 
including its branches and agencies. Said banks shall specify the nature of paper
4 
deemed acceptable for rediscounting, as well as the rediscount rate to be charged by
5 
any of these banks;
6 
(e) 
Act as collection agent;
7 
(f) 
Act as a depository bank of LGUs and other government agencies or
8 
instrumentalities;
9 
(g) 
Acquire readily marketable bonds and other debt securities;
10 
(h) 
Buy and sell foreign exchange;
11 
(i) 
Acquire shares of publicly listed companies;
12 
(j) 
Act as conduit bank for the disbursement of government funds intended
13 
for lending to agriculture, small-medium enterprises (SMEs), and projects for local
14 
economic development;
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(k) 
Eligible to participate in government program allocations for agricultural
16 
lending, social housing, loans to rural micro enterprises, and other initiatives towards
17 
inclusive growth;
18 
(1) 
Offer financial technology services such as digital lending and payment,
19 
and digital wealth management, among others, subject to prior approval of the BSP;
20 
(m) 
Participate in treasury and money market operations such as:
21 
(i) 
Repurchase Agreements with the BSP;
22 
(ii) 
Reverse Repurchase Agreements with the BSP;
23 
(iii) 
Overnight Lending Facility of the BSP;
24 
(iv) 
Overnight Deposits with the BSP;
25 
(v) 
Term Deposit Facility with the BSP; and
26 
(vi) 
Sales and Marketing of Financial Products
27 
(n) 
Offer credit card services
28 
(o) 
Act as lending banks for credit surety fund cooperatives, as provided
29 
under Republic Act No. 10744, otherwise known as the "Credit Surety Fund
30 
Cooperative Act of 2015";
31 
(p) 
Act as depository bank of cooperatives with regard to their reserve funds,
32 
if such banks exist in their area of operations; and
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(q) Offer other banking services as provided in Section 53 of Republic Act
2 
No. 8791.
3 
In addition to the powers granted to cooperative banks by this Code and other
4 
existing laws, any cooperative bank may perform any or all of the banking services
5 
offered by other types of banks subject to the prior approval of the BSP.
6
7 
SEC. 125. Establishment of Branches and Other Offices. - The
8 
establishment of branches, branch-lite units, or other banking offices by cooperative
9 ' banks shall be governed by the rules and regulations of the BSP. The cooperative bank
10 
shall furnish the Authority with a copy of the Certificate of Authority issued by the BSP.
11
12 
SEC. 126. Management of Cooperative Banks. - The management of the
13 
cooperative banks shall be governed by the rules and regulations to be promulgated
14 
by the BSP, in consultation with the Authority. To maintain the quality of bank
15 
management and accord appropriate protection to depositors and the public in
16 
general, the BSP shall prescribe the fit and proper qualifications of bank directors and
17 
officers for the purposes of this Article, giving due recognition to the unique nature
18 
and character of cooperative banks. The number, composition, and term of the Board
19 
of Directors shall be defined in the articles of cooperation and bylaws of the
20 
cooperative bank, in accordance with the following guidelines:
21 
(a) Board and Committees. - The cooperative bank shall constitute, at a
22 
minimum, the Board of Directors, Election Committee, and Audit Committee.
23 
The Board of Directors shall be composed of at least five (5) but not more than
24 
fifteen (15) members, at least one (1) of whom is an independent director. It shall be
25 
entrusted with the management of the affairs of the Cooperative Bank. It shall be
26 
responsible for the strategic planning, direction-setting and policy formulation activities
27 
of the cooperative bank. The members of the Board of Directors shall be elected by
28 
the General Assembly or Representative Assembly.
29 
The Election Committee shall be responsible for the formulation and
30 
implementation of election rules and guidelines. It shall supervise the conduct of
31 
election, election-related activities, canvass and certify the results of the election, and
32 
decide cases relative to such election, except those involving the committee itself or
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its members. The members of the Election Committee shall be elected by the General 
Assembly or Representative Assembly.
The Audit Committee is a Board-level committee whose composition, functions 
and responsibilities shall be in accordance with the existing regulations of the BSP. 
Other Board-level committees may be created as may be directed by the BSP.
Other committees may be created by the Board of Directors with powers, 
functions, and responsibilities which shall be defined in the bylaws; and
(b) Key Management Officers. - The key management officers shall be 
appointed by the Board and shall include the President, Treasurer, Internal Auditor, 
and Compliance Officer, or their equivalent ranks. The BSP shall prescribe the 
qualifications and disqualifications of the key management officers.
SEC. 127. Vacancy in the Committees. - In case of vacancy in the 
committees, the Board of Directors of the Cooperative Bank, unless otherwise provided 
in the bylaws, will appoint a person to fill the same, subject to the provision that the 
person appointed shall serve only for the unexpired portion of the term.
SEC. 128. Compensation of Directors. - In the absence of any provision in 
the bylaws fixing their compensation, the directors shali not receive any compensation 
except for reasonable per diems: Provided, however, That the directors and officers 
shall not be entitled to any per diem when, in the preceding calendar year, the 
cooperative bank reported a net loss or had a dividend rate less than the official 
inflation rate for the same year. Any compensation other than per diems may be 
granted to directors by a majority vote of the members with voting rights at a regular 
or special general assembly meeting specifically called for the purpose: Provided, That 
no additional compensation other than per diems shaW be paid during the first year of 
existence of the Cooperative Bank.
In no case shali the total yearly compensation of directors exceed ten percent 
(10%) of the net income of the cooperative bank during the preceding year.
SEC. 129. Deaiings of Directors, Officers, Stockholders, and Related 
Interests (DOSRI). - Dealings with directors and officers of the Cooperative Bank
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shall comply with the provisions of Section 36 of Republic Act No. 8791, otherwise 
known as "The General Banking Law of 2000". However, the limits on loans to dealings 
of directors, officers, stockholders, and related interests shall not apply to loans, other 
credit accommodations, or guarantees extended by the cooperative bank to its 
member primary cooperatives.
SEC. 130. Illegal Use of Confidential Information. - The liability of a 
director or officer, or an associate of a director or officer, who, for their benefit or 
advantage or that of an associate, makes use of confidential information that, if 
generally known, might reasonably be expected to adversely affect the operations and 
viability of the cooperative bank shall adhere to the provisions of Section 58 of this 
Code.
SEC. 131. Bond for Faithful Performance of Duties and Obligations. -
The bond for the faithful performance of duties and obligations of accountable officers 
of the cooperative bank shall adhere to the provisions of Section 65.
SEC. 132. Quorum Requirement and Voting Rights of the Cooperative 
Bank Board of Directors. - In meetings of the Board of Directors of the Cooperative 
Bank, the same provisions under Section 49 of this Code shall apply.
SEC. 133. Composition of the General Assembly. - The General Assembly 
shall be composed of regular members who are entitled to vote under the articles of 
cooperation and bylaws of the cooperative bank.
SEC. 134. Powers of the General Assembly. - The General Assembly shall 
be the highest policy-making body of the cooperative bank and shall exercise the same 
powers as enumerated in Section 41 of this Code.
SEC. 135. Meetings. - The conduct of meetings of the General Assembly of 
cooperative banks shall adhere to the provisions specified in Section 42 of this Code.
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SEC. 136. Quorum and Voting System. - The quorum requirement for
2 
General Assembly meetings of cooperative banks, whether special or regular, shall be
3 
one-half (V2) plus one (1) of the number of voting shares of all the members entitled
4 
to vote.
5 
To amend its articles of cooperation and bylaws, at least three-fourths (3/4) vote
6 
of all the members with voting rights, present and constituting a quorum shall be
7 
required. All other voting requirements shall be prescribed by the BSP.
8 
The voting rights of the members shall be proportionate to the number of their
9 
paid-up shares.
10 
The cooperative bank may opt to amend its articles of cooperation and bylaws
11 
through a referendum, subject to the guidelines to be issued by the Authority. However,
12 
the vote requirement shall still be two-thirds (%) vote of all the members entitled to
13 
vote.
14 
SEC. 137. Investment in Allied Undertakings. - Subject to the requirements
15 
and restrictions as may be imposed by the Monetary Board under its existing rules and
16 
regulations. Cooperative Banks may invest in equities of allied undertakings which may
17 
include, but are not limited to the following:
18 
(a) 
Banks, financial institutions and non-bank financial intermediaries;
19 
(b) 
Warehousing and other post-harvest facilities;
20 
(c) 
Fertilizers, agricultural chemicals, and pesticides distribution;
21 
(d) 
Farm equipment distribution;
22 
(e) 
Trucking and transportation of agricultural products;
23 
(f) 
Marketing of agricultural products;
24 
(g) 
Leasing;
25 
(h) 
Automated teller machine (ATM) networks;
26 
(i) 
Public transportation;
27 
(j) 
Financial technology; and
28 
(k) 
Other undertakings as may be determined by the Monetary Board of
29 
the BSP.
30
31 
SEC. 138. Limitations on Lending Authority. - Except as the Monetary Board
32 
may otherwise prescribe, the direct indebtedness to Cooperative Banks of any person.
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company, corporation, or firm, including the indebtedness of members of a partnership 
and association, for money borrowed, shall in no time exceed twenty five percent 
(25%) of unimpaired capital and surplus of the cooperative bank. Direct indebtedness 
shall exclude loans secured by obligations of the BSP; loans fully guaranteed by the 
Government as to the payment of principal and interest; loans to the extent covered 
by the hold-out on, or assignment of, deposits maintained in the lending cooperative 
bank and held in the Philippines; and other loans or credits which the Monetary Board 
may, from time to time, specify as non-risk assets.
SEC. 139. Capital Requirement for Cooperative Banks. - A cooperative 
bank shall have a minimum paid-up capital in such amount as may be required by the 
BSP. The BSP may prescribe rules and regulations on the types of shares a cooperative 
bank may issue, including the terms thereof and rights appurtenant thereto to 
determine compliance with laws and regulations governing capital and equity structure 
of banks: Provided, That Cooperative Banks shall issue par value shares only.
SEC. 140. Samahang Nayon and Municipal Katipunan ng mga 
Samahang Nayon. - Samahang Nayon (SN) and Municipal Katipunan ng mga 
Samahang Nayon (MKSN) which held common shares of cooperative banks prior to 
the effectivity of Republic Act No. 9520 shall apply for conversion to cooperatives in 
order to maintain their status as regular members of cooperative banks: Provided, 
That the cooperative banks shall exert efforts to inform and assist the SN and MKSN 
to convert within three (3) years from the effectivity of this Code: Provided, further. 
That the funds held in the name of the SN and the MKSN that failed to convert to a 
cooperative within the said period shall be converted to preferred shares and shall 
remain as capital of the cooperative bank.
SEC. 141. Additional Source of Capital of the Cooperative Banks. - The
unliquidated funds or common shares in cooperative banks held in the name of 
cooperatives whose Certificates of Registration are cancelled shall be converted to 
preferred shares and shall remain as capital in said cooperative banks.
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SEC. 142. Supervision and Reguiation of Cooperative Banks. - All
2 
cooperative banks shall be under the supervision of the BSP: Provided, however, That
3 
the Authority shall monitor the cooperative banks' compliance with cooperative laws,
4 
rules, and regulations. With respect to the governance of the cooperative banks, the
5 
provisions of the banking laws, rules, and regulations shall prevail, notwithstanding
6 
Section 71 of Republic Act No. 8791.
7
8 
SEC. 143. Promuigation of Guideiines. - The BSP and the Authority may
9 
formulate guidelines to implement or clarify the provisions of this Chapter: Provided,
10 
That the BSP, as the regulator of banks, shall be the primary regulator of cooperative
11 
banks consistent with the provisions of R.A. No. 8791: Provided, further. That in order
12 
to minimize the burden of dually-regulated entities, the BSP, in consultation with the
13 
Authority and the cooperative banks, shall consider the requirements for cooperatives
14 
provided in this Code and by the Authority to the extent allowed in banking and other
15 
relevant laws in its promulgation of rules and regulations.
16
17 
SEC. 144. Priviieges and Incentives of Cooperative Banks. - Cooperative
18 
banks registered under this Code shall have the following privileges and incentives:
19 
(a) 
Those privileges and incentives accorded to cooperatives under this Code
20 
and other laws including exemption from all national, provincial, city, municipal or
21 
barangay taxes, fees, and charges of whatever nature and description: Provided, That
22 
when a cooperative bank has reached an undivided net savings of more than One
23 
hundred million pesos (Phpl00,000,000.00), transactions to non-members shall be
24 
taxable;
25 
(b) 
The foreclosure of mortgages covering loans granted by cooperative
26 
banks and executions of judgment involving real properties levied upon by sheriff shall
27 
be exempt from publication in newspapers where the total amount of loan, excluding
28 
due and unpaid interests, does not exceed One million pesos (Phpl,000,000.00) or
29 
such amount as the Monetary Board may prescribe as may be warranted by prevailing
30 
economic conditions. It shall be deemed sufficient publication in such cases if the
31 
notices of foreclosure and execution of judgment are posted in the most conspicuous
32 
areas such as the municipal building, the municipal public market, the cooperative
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bank, and the barangay hall where the land mortgaged is situated sixty (60) days
2 
immediately preceding the public auction or execution of judgment. Proof of
3 
publication as required herein shall be accomplished via an affidavit of the sheriff or
4 
officer conducting the foreclosure sale or execution of judgment and shall be attached
5 
with the records of the case;
6 
(c) 
A cooperative bank shall be allowed to foreclose lands mortgaged to it
7 
subject to the provisions of Republic Act No. 6657, otherwise known as "The
8 
Comprehensive Agrarian Reform Law of 1988," as amended. For agrarian lands
9 
foreclosed by a cooperative bank, the disposal of the same to another qualified
10 
beneficiary under Republic Act No. 6657, as amended, shall be made through the same
11 
cooperative bank. The amortization of the beneficiary in favor of DAR shall be coursed
12 
through the servicing cooperative bank: Provided, That cooperative banks shall be
13 
exempt from the landholding limits as prescribed by DAR or any other law requiring
14 
the same;
15 
(d) 
For cooperative banks granted by the BSP with accreditation as Rural
16 
Financial Institution (RFI) under Republic Act No. 10000, otherwise known as "The
17 
Agri-Agra Reform Credit Act of 2009", the following privileges shall be awarded:
18 
(1) 
Unrestricted branching rights to set-up agriculture-oriented branches in
19 
unbanked municipalities and predominantly agricultural communities, subject to
20 
existing regulations on minimum capitalization for banks and the size of branch
21 
network;
22 
(2) 
Automatic eligibility with Philippine Guarantee Corporation (with respect
23 
to agricultural credit guarantee), Philippine Crop Insurance Corporation (PCIC), and
24 
governmental agencies providing services towards risk-mitigation in the agriculture
25 
sector;
26 
(3) 
Priority status as credit delivery partner or conduit of government-
27 
directed programs for agricultural through the DA and other government agencies;
28 
(4) 
Entitlement to participate free of charge in capability-building activities
29 
in agriculture lending such as, but not limited to, exchange of best-practice
30 
experiences, study tour, technology transfer among ASEAN member-states and other
31 
fora of international cooperation; and
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(e) Notwithstanding the provisions herein, priviieges and incentives granted 
to rural banks pursuant to Republic Act No. 7353, otherwise known as the "Rural Act 
of 1992," shall also be granted to cooperative banks duly registered under this Act.
CHAPTER XVIII. INSURANCE COOPERATIVES
SEC. 145 Insurance Cooperatives. - Existing cooperatives may organize 
themselves into an insurance cooperative for the purpose of engaging in the business 
of insuring life, non-iife, pre-need (life plan, education, and pension) health, and 
property of cooperatives and their members.
SEC. 146. Types of Insurance Coverage. - Under the cooperative insurance 
program established and formed by the virtue of the provisions of this Code, the 
insurance cooperative shall provide its constituting cooperatives and their members 
different types of insurance coverage consisting of life insurance with speciai group 
coverage, loan protection, retirement plans, endowment, health and accident 
coverage, pre-need plans, fire insurance, marine insurance, motor vehicle coverage, 
bonding, crop and livestock protection, and equipment insurance, among others.
SEC. 147. Applicability of Insurance Laws. - The provisions of the Insurance 
Code and all other laws, rules and regulations relative to the organization and 
operation of an insurance company shali apply to insurance cooperatives organized 
under this Code. The requirements on capitaiization, investments and reserves of 
insurance firms may be liberally modified upon consultation with the Authority and the 
cooperative sector, but in no case may the requirement be reduced to less than half 
of those provided for under the Insurance Code and other related laws.
Other provisions of this Code shall apply suppletorily insofar as they are not 
inconsistent with this Chapter.
In case of conflict of law, the Insurance Code shall prevail.
SEC. 148. Implementing Rules and Regulations for Insurance 
Cooperatives. — The Insurance Commission and the Authority, in consultation with
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the concerned cooperative sector, shall issue the appropriate rules and regulations 
implementing the provisions of this Chapter.
CHAPTER XIX. COOPERATIVES ENGAGED IN PUBLIC SERVICE
SEC. 149. Definition and Coverage. - A cooperative engaged in public service 
refers to one organized to render public service, authorized under a franchise, 
certificate of public convenience, certificate of public convenience and necessity, 
concession, or any other appropriate form of authorization or permit duly issued by 
the appropriate government agency. Such public service include, but is not limited, to 
the following;
(a) 
Health services;
(b) 
Power generation, transmission, and/or distribution;
(c) 
Ice plants and cold storage services;
(d) 
Communication services including telephone and digital communications, 
and other value-added services;
(e) 
Land, water, and air transportation services for passengers and/or 
cargoes;
(f) 
Public markets, slaughterhouses, management of land transport 
terminals and ports, and other similar services;
(g) 
Water supply and distribution system services; and
(h) 
Such other types of public service as may be engaged in by any 
cooperative.
Such cooperatives shall be primarily governed by this Chapter and the general 
applicable provisions of this Code.
SEC. 150. Registration Requirements. - In addition to the requirements 
provided under Section 14 of this Code, no cooperative engaged in public service shall 
be registered unless it satisfies the following requirements:
(a) Its articles of cooperation and bylaws provide for the membership of the 
users and/or producers of the service of the cooperative; and
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(b) Such other requirements as may be imposed by the other concerned 
government agencies.
SEC. 151. Regulation of Cooperatives Engaged in Public Service. - The
internal affairs of cooperatives engaged in public service, such as:
(a) 
the rights and privileges of members;
(b) 
the rules and procedures for meetings of the General Assembly, Board 
of Directors and committees;
(c) 
the election and qualifications of officers, directors, and committee 
members;
(d) 
allocation and distribution of surpluses; and
(e) 
all other such matters, shall be governed by this Code.
All matters relating to the franchise. Certificate of Public Convenience, Certificate 
of Public Convenience and Necessity, concession, or any other appropriate form of 
authorization or permit of cooperatives engaged in public service such as capitalization 
and investment requirements, equipment and facilities, frequencies, rate-fixing and 
such other matters affecting public service operations of cooperatives shall be 
governed by the proper government agency concerned.
The Authority, together with other concerned government agencies, shall jointly 
issue rules and regulations necessary to implement this Chapter.
CHAPTER XX. TRANSPORT SERVICE COOPERATIVES
SEC. 152. Definition and Coverage. - This Chapter shall govern transport 
service cooperatives as defined in this Code, including cooperatives organized under 
the provisions of Executive Order No. 898, series of 1983 and by vehicle operators 
defined under the Public Utility Vehicle Modernization Program (PUVMP) of the 
Department of Transportation (DOTr).
SEC. 153. Engagement in Allied Business by Transport Service 
Cooperatives. - Subject to pertinent national laws and local ordinances, primary
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transport service cooperatives including federations of cooperatives, may engage in 
businesses related to transportation service, including but not limited to:
(a) 
Importation, distribution, and marketing of petroleum products in 
accordance with existing laws;
(b) 
Operation of gasoline stations, automotive service centers, and 
management of land transport terminals and ports;
(c) 
Importation, distribution, marketing, and sale of spare parts, automotive 
supplies, and accessories;
(d) 
Marketing of vehicle and drivers insurance policies as an agent or liaison 
of a licensed insurance company;
(e) 
Establishment and operation of fleet management services; and
(f) 
Automotive maintenance credit facilities for the purpose of extending 
loans for the maintenance and repair of public utility vehicles.
SEC. 154. Registration^ Regulation, and Supervision of Transport 
Service Cooperatives. - The DOTr-Office of Transport Cooperatives shall have 
jurisdiction over the registration, regulation, and supervision of transport service 
cooperatives.
SEC. 155. Renewal of Franchise and Vehicle Registration. - Renewals of 
franchise and vehicle registration shall be granted to transportation service 
cooperatives: Provided, That such cooperative presents a certificate of good standing 
issued by the Office of Transport Cooperatives of the DOTr, and the concerned LGU 
as proof that it has continuously provided the required public transportation services.
The Office of Transport Cooperatives of the DOTr, in consultation with the 
concerned government agencies and cooperative sector, shall issue appropriate rules 
and regulations pertaining to the provisions of this Chapter.
SEC. 156. Oversight Committee. A multi-sectoral committee on transport 
service cooperatives composed of representatives from the DOTr, the Department of 
the Interior and Local Government, the Land Transportation Franchising and 
Regulatory Board, the Land Transportation Office, other concerned government
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agencies, as may be necessary, the federation of transport service cooperatives, the 
regional clustered organizations, and the national alliance of cooperatives shall be 
established and thereafter shall be charged with the monitoring, recommendation of 
policies and programs affecting the operations of transport service cooperatives, and 
such other functions.
A regional monitoring committee shall likewise be established at the regional 
offices of the Authority for the same purpose.
The functions of the monitoring committees shall be prescribed in the 
implementing rules and regulations to be promulgated by the DOTr, in coordination 
with the relevant government agencies.
CHAPTER XXI. CREDIT AND SAVINGS COOPERATIVES 
AND CREDIT COOPERATIVES
SEC. 157. Coverage. - This Chapter shall apply to credit cooperatives and credit 
and savings cooperatives, including multi-purpose cooperatives and federations. The 
provisions of the other chapters of this Code shall apply suppletorily except insofar as 
this Chapter otherwise provides.
SEC. 158. Purposes and Objectives. - Cooperatives engaged solely in credit 
or in both credit and savings services, owned and operated by its members, shall have 
the following purposes and objectives:
(a) 
To encourage savings among its members;
(b) 
To provide loans for productive or provident purposes to its members 
and related services to enable its members to maximize the benefit from such loans;
(c) 
To promote the cooperatives engaged in credit and credit and savings 
as preferred financial institutions among Filipinos; and
(d) 
To promote the safe, sound, stable, and sustainable operations of 
cooperatives engaged in credit and credit and savings by regulating and supervising 
their operations and curtailing or preventing any act or practice which is prejudicial to 
the interests of their members and the general public.
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SEC. 159. Regulation and Supervision of Cooperatives Engaged in 
Credit and Credit and Savings. - Pursuant to its powers, functions, and 
responsibilities under Republic Act No. 11364, otherwise known as the "Cooperative 
Development Authority Charter of 2019", the Authority shall exercise regulatory 
powers and supervision over the operations of the cooperatives engaged in credit and 
credit and savings.
The Authority shall, in consultation with the concerned government agencies and 
cooperative sector, issue appropriate rules and regulations pertaining to the provisions 
of this Chapter.
CHAPTER XXII. ELECTRIC COOPERATIVES
SEC. 160. Coverage. Unless otherwise provided, the provisions of this Code 
shall not apply to electric cooperatives.
The registration, regulation, and supervision over electric cooperatives shall 
solely be under the National Electrification Administration (NEA).
Upon the effectivity of this Act, all CDA-registered electric cooperatives shall be 
deemed registered with the NEA without the need of further act from the Authority. 
The benefits under Sections 69 to 72 of this Code shall be extended to all electric 
cooperatives. Provided, That the existing share capital of electric cooperatives 
registered with the Authority upon effectivity of this Act shall be held in trust by the 
respective electric cooperative.
SEC. 161. Role of the Energy Regulatory Commission. - All rates and tariffs 
of electric cooperatives registered with the Authority shall be subject to the rules on 
application and approval of and by the Energy Regulatory Commission (ERC) for 
distribution utilities.
CHAPTER XXIII. FOREIGN PARTNERSHIPS
SEC. 162. Engagement of Foreign Cooperatives with Local 
Cooperatives. - Foreign cooperatives may invest, partner with, or become members
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of local federations: Provided, That they are recognized by international coalitions of 
cooperatives or by the relevant authority in the country of origin, as well as registered 
with the Authority: Provided, further. That they comply with all relevant laws allowing 
them to do business in the Philippines: Provided, finaiiy. That their engagement with 
the local cooperatives shall be subject to an agreement which shall be submitted for 
the approval of the Authority, pursuant to its implementing rules and regulations.
Foreign cooperatives that shall transact with local federations must comply with 
Philippine taxation laws, the Anti-Money Laundering Act, and other pertinent laws, 
classified under the Philippines' foreign investment negative list for foreign equity 
restrictions under the Philippine Constitution and specific laws, and shall be under the 
regulation of the pertinent agencies for the duration of their engagement with the 
federations. Foreign cooperatives shall not interfere, directly or indirectly, in the 
management and internal affairs of the federations in accordance with the generally 
accepted cooperative principles of independence and autonomy, notwithstanding that 
local cooperatives shall be one hundred percent (100%) wholly owned and controlled 
by Filipinos.
SEC. 163. Limitations. — The equity or share capital of the foreign cooperative 
shall not exceed forty percent (40%) of the total equity or subscribed share capital of 
the partnership or federation, as the case may be.
CHAPTER XXIV. MISCELLANEOUS PROVISIONS
SEC. 164. Compiiance With Other Laws. - All cooperatives duly registered 
under this Code shall, at all times, be subject to all relevant laws, rules and regulations, 
as well as issuances and directives issued by a duly authorized government regulatory 
body in exercise of its jurisdiction.
This notwithstanding, cooperatives that are registered or applying for specific 
licenses with other regulatory agencies must comply with the governance 
requirements of said agency to operate or function as such.
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SEC. 165. Registry of Cooperatives. - The Authority shall keep a registry
2 
which shall contain a chronological entry of the name of every cooperative registered,
3 
suspended, dissolved, or cancelled under this Code together with other relevant
4 
information. The Authority shall publish and post on its website a list of existing
5 
cooperatives, cooperatives under dissolution or suspension, and cooperatives whose
6 
registration have been cancelled, together with other relevant information, as may be
7 
prescribed in the implementing rules and regulations of this Code.
8
9 
SEC. 166. Settlement of Disputes^ Conciliation, Mediation, and
10 
Arbitration Proceedings. - Disputes among members, officers, directors, and
11 
committee members, and intra-cooperative, inter-cooperative, intra-federation or
12 
inter-federation disputes shall, as far as practicable, be settled amicably in accordance
13 
with the conciliation or mediation mechanisms embodied in the bylaws of cooperatives
14 
and in other applicable laws.
15 
The Conciliation-Mediation Committee of the cooperative shall facilitate the
16 
amicable settlement of intra-cooperative disputes or disputes among members,
17 
officers, directors, and committee members.
18 
Should such conciliation or mediation proceeding fail, the party may settle the
19 
dispute through arbitration or adjudication: Provided, however, That before any party
20 
can validly file a complaint with the Authority for voluntary arbitration or adjudication,
21 
it must first secure a certification from its Conciliation-Mediation Committee and from
22 
the cooperative union or federation to which it is affiliated that despite all efforts to
23 
settle the issues, the conciliation-mediation proceeding failed.
24 
Once the arbitrators or the appropriate adjudication division acquires jurisdiction
25 
over the case, it shall have exclusive jurisdiction. The decision of the arbitrator shall
26 
be final and executory. For this purpose, the Authority shall create a database of
27 
qualified arbitrators which shall also be posted in its official website
28 
Decisions rendered by the Authority in the exercise of its adjudicatory powers
29 
shall be appealable to a regular court in accordance with the applicable rules.
30 
In case of election-related issues, the aggrieved party may elevate the case for
31 
adjudication to the proper regional office of the Authority in accordance with the
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Authority's Omnibus Rules of Procedure without undergoing aiternative dispute 
resolution.
SEC. 167. Joint Congressional Oversight Committee on Cooperatives 
(JCOCQ. - There is hereby created a Joint Congressional Oversight Committee which 
shall be composed of the Chairperson of the Senate Committee on Cooperatives and 
the Chairperson of the House Committee on Cooperatives Development and four (4) 
members each from both Houses duly appointed by the Senate President and the 
Speaker of the House of Representatives from the members of the respective 
committees.
SEC. 168 Issuance of Injunctive Relief on the Authority. — Only the Court 
of Appeals or Supreme Court shall issue a restraining order or injunction enjoining the 
Authority from examining and investigating cooperatives subject to its supervision or 
examination.
CHAPTER XXV. FINAL PROVISIONS
SEC. 169. Pena! Provisions. - The following acts or omissions affecting 
cooperatives are hereby prohibited:
(a) 
The use of the word "cooperative" shall not be allowed unless authorized 
under this Code. However, organizations registered with other government agencies 
are allowed to retain the word "cooperative" in their registered names: Provided, That 
these organizations shall not be entitled to the benefits and privileges under this Code.
In case of violation, the penaity of imprisonment of not less than two (2) years 
but not more than five (5) years or a fine not exceeding Two hundred thousand pesos 
(Php200,000.00), or both, at the discretion of the court, shall be imposed, upon 
conviction, on the individual or, in the case of an organization, its officers and directors.
The Authority may, motu proprio, fiie complaints for vioiation of this provision.
(b) 
Any person who willfuliy attempts in any manner to evade or defeat tax 
in violation of Sections 69 and 70 of this Code shall, in addition to the payment of 
double the amount of the tax due, be punished by a fine of at ieast Five hundred
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thousand pesos (Php500,000.00) but not exceeding Ten million pesos
2 
(Phpl0,000,000.00) and suffer imprisonment of not less than six (6) years but not
3 
more than ten (10) years: Provided, That the conviction or acquittal obtained under
4 
this Section shail not be a bar to the filing of a civil suit for the collection of taxes;
5 
(c) 
Direct or indirect violation or circumvention of the provisions of Sections
6 
Sections 69 and 70 of this Code committed by any public officiai or employee of any
7 
bureau, office or agency of the government that deprives, diminishes or in any manner
8 
hinders or restricts any duiy registered cooperative from the fuil enjoyment of the
9 
exemption from the payment of the taxes, fees and charges enumerated therein, shali
10 
upon conviction, suffer a penalty of imprisonment of not less than seven (7) years but
11 
not more than twelve (12) years or a fine of at ieast Five hundred thousand pesos
12 
(Php500,000.00) but not exceeding One miliion pesos (Phpl,000,000.00), or both, at
13 
the discretion of the court and shall further be disqualified to hold any other office;
14 
(d) 
Direct or indirect interference or intervention by any pubiic official or
15 
employee in the internal affairs of a cooperative of which he is not a member,
16 
including, but not limited to, the following:
17 
(1) 
Influencing the eiection or appointment of officers, directors, committee
18 
members and empioyees through pubiic or private endorsement or campaign for or
19 
against any person or group of persons;
20 
(2) 
Requiring prior clearance for any policy or decision within the
21 
cooperative;
22 
(3) 
Requesting or demanding for the creation of positions or organizational
23 
units, or recommending any person for appointment, transfer, or removal from
24 
position; or
25 
(4) 
Any other acts inimical or adverse to the autonomy and independence
26 
of cooperatives.
27 
(e) 
A director, officer or committee member who violates the provisions of
28 
Section 54 on the Liability of Directors, Officers and Committee Members, Section 57
29 
on the Disioyaity of a Director, and Section 58 on the lilegal Use of Confidentiai
30 
Information shail upon conviction suffer a fine of at least Five hundred thousand pesos
31 
(Php500,000.00) but not exceeding One million pesos (Phpl,000,000.00) or
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imprisonment of not iess than five (5) years but not more than ten (10) years or both
2 
at the court's discretion;
3 
(f) The foilowing are considered offenses punishabie by a penalty of
4 
imprisonment of not less than one (1) year but not more than five (5) years or a fine
5 
of not more than One hundred thousand pesos (Phpl00/000.00), or both, at the
6 
discretion of the court:
7 
(1) 
Omission or refusal to furnish any information, report or other document
8 
that is required under this Code;
9 
(2) 
Providing information, reports or other documents to the Authority that
10 
are required under this Code which the person knows to be false or misleading;
11 
(3) 
Omission or refusal to keep a book or registry under this Code or to make
12 
the required entry therein;
13 
(4) 
Making an entry required under this Code in a book or registry, which
14 
the person knows to be false or misleading;
15 
(5) 
Hindering an authorized person from making an inspection, audit,
16 
examination or investigation required under this Code;
17 
(6) 
Failure to comply with an order or written instructions issued or given by
18 
the Authority;
19 
(7) 
Violation of the provisions regarding transactions with a restricted party;
20 
and
21 
(8) 
Abetting, counseling, allowing, authorizing or commanding another
22 
person to commit an offense punishable by this Code: Provided, That in case the
23 
violator is a cooperative or juridical person, the penalty shall be imposed on its
24 
directors and officers.
25 
The cooperative or any of its members can file a case against any officer or
26 
employee of the BIR or of any other government agency with the Ombudsman, the
27 
Civil Service Commission, other appropriate government agency or the courts.
28 
In case of violation of any provision of this Code, the individual or individuals,
29 
and in the case of organizations or government agencies, its officers, and directors
30 
shall, upon conviction by a court, each suffer a penalty of not less than two (2) years
31 
but not more than five (5) years imprisonment or a fine of at least Fifty thousand
32 
pesos (Php50,000.00), or both, at the discretion of the court. In the case of a public
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ofRcial or employee, the offender shall upon conviction, suffer the accessory penalty 
of temporary absolute disqualification.
SEC. 170. Administrative Sanctions. - The Authority shall conduct 
investigations, file necessary charges, discipline, suspend or remove erring officers and 
members of the cooperative for vioiation of cooperative iaws, rules, regulations, 
issuances of the Authority, its articies of cooperation, and bylaws, after due process, 
and direct the General Assembly to replace the suspended or removed officers.
Any violation of the ruies on adjudication shall likewise be penalized under this 
Section. Such administrative sanctions shall be imposed by the Authority in accordance 
with its rules and regulations.
SEC. 171. Interpretation. - Any doubt in the interpretation of any provision of 
this Act shall be liberally interpreted in favor of the cooperatives and its members.
SEC. 172. Ipso-Facto Clause. - Unless otherwise provided by law, 
cooperatives are entitled to the privileges, benefits, and exemptions granted by R.A. 
NO. 7160, and other existing laws.
SEC. 173. Transitory Provisions.—
(a) 
All cooperatives registered with the Authority under Republic Act no. 
6938, otherwise known as the "Cooperative Code of the Philippines", as amended, are 
hereby deemed registered under this Code; and
(b) 
The authority granted to non-cooperatives as Training Service Providers 
shall continue to be effective until its expiration or six (6) months from the effectivity 
of the implementing rules and regulations of this Code, whichever comes later.
SEC. 174. Printing and Distribution. - The National Printing Office shall 
publish this Code in the Official Gazette in full within sixty (60) days from the date of 
approvai thereof. Copies of this Code shall be given to every department, agency, and 
instrumentality of the National Government, including regionai, provincial offices, and
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local governments including government-owned and controlled corporations by the 
Authority.
SEC. 175. Implementing Rules and Regulations. - Within ninety (90) days 
from the effectivity of this Act, the Authority shall promulgate rules and regulations to 
implement the provisions of this Act. Within the same period, the particular 
government agencies expressly designated under specific provisions in this Code, after 
prior consultation with the cooperative sector, shall issue the regulations called for by 
such respective provisions.
SEC. 176. Appropriations.-IhQ amount necessary to carry out the provisions 
of this Code shall be included in the annual General Appropriations Act.
SEC. 177. Separability Clause. - If any provision of this Act is declared 
unconstitutional, the remainder thereof not otherwise affected shall remain in full force 
and effect.
SEC. 178. Repealing Clause. - R.A. No. 6938, as amended, is hereby 
repealed. All other laws, presidential decrees, executive orders, letters of instruction, 
proclamations or administrative regulations that are inconsistent with the provisions 
of this Act are hereby repealed, amended, or modified accordingly.
SEC. 179. Effectivity Clause. - This Act shall take effect after fifteen (15) days 
following its publication in the Official Gazette newspaper of general circulation.
Approved,
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