THIRTEENTH CONGRESS OF THE 
) 
REPUBLlC OF THE PHILIPPINES 
1 
First Regular Session 
1 
S.B. No. 
9 
Introduced by Senator dinggoy Ejercito Estrada 
Cooperatives have demonstrated their value and significant role in the 
economic development of our people, particularly in the countryside. Since the 
approval of the Cooperative Code of the Philippines. R.A. No. 6938 and of the 
Cooperative Development Authority Act, R.A. No. 6938 on 10 March 1990, the 
movement for cooperativism has become rooted and flourished in the culture and 
daily life of our people. As of 1991, no less than 7,877 cooperative have been 
registered. Of this number 6,394 or about 82 percent are multi-purpose 
cooperatives in the agricultural sector and 1,052 cooperatives or 13 percent are 
multi-purpose non-agricultural cooperatives. There is no question that within the 
plan period, the growth and strengthening of cooperatives as instruments of 
people empowerment and of sustained balanced development of rural areas and 
the urban centers will be a hetping and supporting factor in achieving national 
goals of poverty incidence reduction, improvement of the quality of fife, and of 
attaining social and distributive justice with greater equality and equity in 
enjoyment of development benefits. 
These amendments have grown out of the rich experience and 
accumulated knowledge and information about and related to cooperatives and 
cooperativism. Many have come out from suggestions of a Legislative Agenda 
Task Force on Cooperatives with suggestions from cooperative leaders from 
CAR, Iloilo, Naga, Kidapawan, Dagupan and other key places where 
cooperatives flourish and help the economy. Since the approval of the law on the 
Cooperative Code and the Cooperative Development Authority, Congress has 
approved measures which add to the preferential rights and enhance 
cooperativism as a way of economic and social uplift of our people, particularly 
those in Local Government Code. 


For the first time, as suggested by youth leaders who see in cooperativism 
an avenue for youth in values inculcation within the economic area of life, 
cooperatives will utilize their education and training fund and other resources to 
provide work experience for youth and involvement in the business and 
entrepreneurial life of the area of operation of the cooperative. Youth will 
ultimately provide the continuity for cooperativism and will take on the leadership 
of the cooperative when they have gained understanding, work experience and 
have participated in cooperative activities. 
The amendments touch on policy, the requirements for registration, the 
leadership of the cooperative, and making the cooperative membership 20 for a 
primary one with a paid-up share capital of not less than P20, 000 or only about 
PI, 000 per natural person who organizes a primary Cooperative, Chances for 
good management are improved with restrictions as to membership of relatives 
up to the 3rd civil degree of consanguinity or affinity in the board, officer group 
and management staff. Accountability of bounded officers has been buttressed 
with requisites therefore prior to registration and monitored through the annual 
report. A key amendment is the right of cooperatives to as for assistance to meet 
the conditions and payments of loans, credit, donations, grants and other 
assistance. Preferential rights are underscored, Overlapping avoided through 
defined areas of operation assures that a viable existing cooperative will not have 
undue competition from a new cooperative of the same type, category and 
primary purpose within the same area of operation. 
Approval of this measure for the sake of thousands who are members of 
the registered cooperatives and thousands more of expected new cooperatives 
are urgent, necessary and crucial for sustained development and people 
empowerment. 
DA 


THIRTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
1 
SENATE 
S.B. No. 
9 
Introduced by Senator Jincggoy Ejercito Estrada 
AN ACT 
TO STRENGTHEN THE STRUCTURE, CAPABILITY FOR EFFICIENT AND 
EFFECTIVE 
PROGRAM 
1 ~ P ~ ~ ~ ~ ~ T A T l O ~  
AND 
ORGANIZATIONAL 
MANAGEMENT, AND ALIGN THE DIRECTION OF EXI$TIMG AND FUTURE 
COOPERATIVES TOWARDS PEOPLE EMPOWERMENT AND BALANCED 
SUSTAINED ECONOMIC OEVELOPMENT OF ALL COOPERATIVES, 
AMENDING 
FOR 
THAT 
PURPOSE 
REPUBLIC 
ACT 
6938. 
THE 
COOPERATIVE CODE OF THE PHILIPPINES, AND FQR OTHER PURPOSE. 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Tile. - This Act shall be known as the “Act to Strengthen the 
Structure and Capability of Cooperatives Towards People Empowerment and 
Balanced Sustained Economic Development” 
TITLE I. 
PQLICY, ~
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MEMBERSHIP, AREAS OF 
OPERATIQN 
SEC. 2. Policy. - Article 2 of R.A 6938 is hereby amended by adding a 
“Art. 2. Declarafion of P~liCy. - “FINALLY, IT IS HEREBY 
DECLARED TO POLlCY OF THE 
STATE TO STRENGTHEN THE 
new paragraph thereto, as follows: 


, 
STRUCTURE, CAPABILITY FOR EFFICIENT AND EFFECTIVE PROGRAM 
IMPLEMENTATIOhJ AND ORGANIZATION MANAGEMENT, AND TO ALIGN 
THE DiRECTlON OF EXISTING AND FUTURE COOPERATIVES TOWARDS 
PEOPLE EMPOWERMENT AND BALANCED SUSTAINED ECONOMIC 
DEVELOPMENT OF ALL COOPERATIVES.” 
SEC. 3. Organization, ~
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Areas of Operafion. - articles 6, 
I O ,  24 and 26 of R.A. No. 6938 are hereby amended, as follows: 
3-A Organization and Areas of Operation. 
“ART. 6. ~
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of Cooperatives AND AREAS OF 
OPERATION. - A cooperative may be organized and registered by at 
least TWENTY (20) [fifteen (Is)] persons for any or all of the following 
purposes; 
“(I 
1) To undertake any and all other activities for the effective and 
efficient implementation of the provision of this Code. 
“AREAS OF OPERATION FOR A COOPERATIVE SHALL BE 
DETERMINED BY THE COOPERATIVE DEVELOPMENT AUTHORITY 
IN RULES AND REGULATIONS PROMULGATED PURSUANT TO 
ARTICLE 123 Of THIS ACT. 
“ONLY ONE COOPERATIVE OF THE SAME TYPE AND 
CATEGORY IN ACCORDANCE WITH ARTICLE 23 OF THIS ACT AND 
PRIMARY 
PURPOSE SET 
FORTH 
IN THE 
ARTICLES 
OF 
COOPERATION SHALL BE REGISTERE4 AND ALLOWED TO 
OPERATED IN AN AREA OF OPERATfON. WHERE THERE IS A 
REGISTERED AND FULLY OPERATIONAL COOPERATIVE IN AN 
AREA OF OPERATION, REGISTRATION OF A NEW COOPERATIVE 
WITH THE SAME OR SI lLAR PRIMARY PURPOSE AND OF THE 
SAME TYPE AND CATEGORY WITHIN THE SAME AREA OF 
OPERATlOh AS THE EXlSTlNG REGISTERED COOPERATIVE SHALL 
BE DISALLOWED. 


“THE COOPERATIVE DEVELOPMENT AUTHORITY SHALL 
PROMULGATE IN APPROPRIATE RULES AND REGULATIONS THE 
CRITERIA FOR A FULLY OPERATIONAL COOPERATIVE EXISTING AT 
THE TIM OF THE APPLICATION FOR A NEW COOPERATIVE AS TO 
WARRANT DISALLOWANCE OF THE NEW APPLICATION FOR 
REGISTRATION. A NOTICE OF THE APPLICATION SHALL BE SENT 
TO THE EXISTING COOPERATIVE WITH THE SAME TYPE AND 
CATEGORY OPERATING WITHIN THE SAME AREA OF OPERATION 
WITHIN 
THlRTY 
(30) DAYS OF THE 
APPLICATION 
FOR 
REGISTRATION OF THE NEW COOPERATIVE AND PRIOR TO ANY 
ACTION THEREON SO AS TO PROVJDE TIME FOR THE EXISTING 
COOPERATIVE TO RESPOND TO THE AUTHORITY AS TO ITS 
REACTIONS TO THE N~~ APPLICATION.” 
3-5 Organizing a Primary Cooperative 
“ART. IO. Organizing a ~r~~~~ Cooperative, - TWENTY (20) 
[Fifteen (15)] or more natural persons OF AT LEAST EIGHTEEN (18) 
YEARS OF AGE, who are citizens of the Philippines, having a common 
bond of interest and ALL of WHOM are residing or working in the intended 
area of 
operation or WHO HAVE A BUSINESS OR OTHER 
PRODUCTIVE ENTERPRISE OR WHO ARE STUDYING WITHIN SAID 
INTENDED AREA OF OIPEMTION, MAY ORGANIZE A primary 
cooperative under this Code.” 
3-C Members of Cooperatives 
“ART. 26. Who May Be Members of Cooperatives. - Any natural 
person WHO IS AT LEAST EIGHTEEN (18) YEARS OF AGE, AND who is 
a citizens of the Philippines, ANY RULY-REGISTERED COOPERATIVE, 
A JURIDICAL PERSON REGISTERED UNDER PHILIPPINES LAWS, or 
ANY non-profit organization OR NON-GOVERNMENTAL 
ORGANIZATION with a juridibal personality, shall be eligible for 
membership is a cooperative PROVIDED [IF] THE APPLICANT FOR 
MEMBERSHIP IN THE COOPERATIVE meets the qualifications AND 
I 


HAS NONE OF THE DISQUALIFICATIONS prescribed in the by-laws of 
THE COOPERATIVE MEMBERSHIP IN WHICH IS BEING APPLIED 
FOR: Provided, That only natural persons AT LEAST EIGHTEEN YEARS 
OF AGE AND WHO ARE CITIZENS OF THE PHILIPPINES may be 
admitted as members of a primary cooperative.” 
3-D Members of Federations of Cooperatives 
“ART. 24. federation of Cooperatives. - 
“(2) Registered cooperatives may organize a federation at the 
provincial, SPECIAL ~ € T ~ Q ~ Q L I T ~ ~  
POLITICAL SUBD lVlS ION, city, 
MUNICIPAL, regional, and national levels according to the type of 
business carried on BY COOPERATIVES. A FEDERATION MAY ALSO 
BE ORGANIZED BY REGISTERED COOPERATIVES WITHIN AN 
ECONOMIC ZONE CREATED BY AN AUTHORITY ESTABLISHED BY 
LAW OR BY THOSE OPERATING WITHIN AN ISLAND OR GROUP OF 
ISLAND. FEDERATiONS SHALL BE DULY REGISTERED BY THE 
COOPERATIVE DEVELOPMENT RULES AND REGULATIONS.” 
TITLE II. POWERS, RIGHTS, CAPACITIES, PRIVILEGES 
SEC. 4. Powers, Rights, Capacitiesf and Privikges of Cooperatives. - 
Articles 9, 62, 63, 7’6 and 87 of W.A. No. 6938 are hereby amended, as follows: 
4-A Powers, Rights, and Capacities 
“ART. 9. Cooperative Power, Rightsf and Capacities. - A 
cooperative registered under this Code shall have the following powers, RIGHTS 
and capacities: 
“(1) TO THE 
EXCLUSIVE USE OF 
ITS REGISTERED 
COOPERATIVE NAME, to [TO] sue and be sued in its cooperative name, AND 
TO PLACE THE SAME WITHIN THE AREA OF THE PRlNCfPAL OFFICE SO 
AS TO BE VlSlSLE TO THE GENERAL PUBLIC HAVING BUSINESS WITH 
SAID COOPERATIVE ; 
“(8) 
TO MAKE LOANS, BE ENTITLED TO CREDIT AND TO [To] 
accept and receive grants, donations and assistance from foreign and domestic 
, 


sources SUBJECT TO CONDITIONS OF SAID LOANS, CREDIT, GRANTS, 
DONATIONS OR ASSISTANCE AND TO BE PROVIDED HELP AND 
ASSISTANCE UPON WRITTEN REQUEST TO THE AUTHORITY IN ORDER 
TO FULFILL REQUIREMENTS TO AVAIL OF SAID LOANS, CREDIT OR BE A 
RECIPIENT OF GRANTS, DONATIONS AND ASSISTANCE: PROVIDED, THAT 
ANY COOPERATIVE, UPON WRITTEN REQUEST OF THE BOARD OF 
DIRECTORS, OFFICERS OR THE GENERAL ASSEMBLY, MAY BE 
PROVIDED 
BY 
THE 
AUTHORITY 
THE 
NECESSARY TECHNICAL, 
MANAGERIAL, ENTREPRENEURIAL ASSISTANCE OF PROVIDED STANDBY 
RESOURCES IN ORDER TO RESTRUCTURE LOANS OR CREDIT, COMPLY 
WITH PAYMENTS THEREFOR, OR TO COMPLY WITH CONDITIONS OF THE 
GRANT, DONATIONS OR ASSISTANCE FROM DOMESTIC OR FOREIGN 
SOURCES; [and] 
“(9) TO AVAIL OF PREFERENTIAL RIGHTS GRANTED TO 
COOPERATIVES UNDER R.A. No 7’160, THE LOCAL GOVERNMENT CODE 
PARTICULARLY THOSE IN THE GRANT OF FRANCHISE TO ESTABLISH, 
CONSTRUCT, OPERATE AND ~ A ~ N T A ~ N  
FERRIES, WHARVES, MARKETS 
OR SLAUGHTERHOUSES AND TO LEASE PUBLIC UTILITIES; 
“(IO) TO AVAIL OF BASIC SERVICES AND FACILITIES UNDER 
R.A. 
No. 716, THE LOCAL GOVERNMENT CODE, PARTICULARLY 
EXTENSION AND ON-SITE RESEARCH SERVICES AND FACILITIES 
RELATED TO AGRICULTURE AND FISHERY ACTIVITIES BOTH AS TO 
PROVIDING THE PRODUCTS FOR DISPERSAL AS WELL AS TO BE 
RECIPIENT OF DISPERSAL PROGRAMS OF LOCAL GOVERNMENT UNITS; 
“(11) PROVIDE C
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FOR THE COOPERATIVE AND 
COOPERATIVISM THROUGH TRAINING, PROVIDlNG WORK EXPERIENCE 
AND PARTlCiPATORY COOPEWATlVE INVOLVEMENT OF YOUTH WITHIN 
THE AREA OF OPERATION; AND 
“(12) [ (9) ] TO EXERCISE SUCH OTHER POWERS GRANTED 
BY THIS code or WHICH AREnecessary to carry out its purpose or purposes as 
stated in its articles of cooperation.” 


4-B Privileges and Preferential Treatment 
‘‘ART. 63. Privileges AND P
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TREATMENT of 
Cooperative 
“(7) Cooperatives and their federations, such as FARM AND 
FISHERY PRODUCERS AND SUPPLIERS, market vendors and OTHER 
cooperatives WHICH HAVE FOR THEIR PRIMARY PURPOSE PRODUCTION 
AND/OR MARKETING O f  PRODUCTS FROM AGRICULTURE, FISHERY AND 
SHALL ENTREPRENEURIAL *INDUSTRIES AND FEDERATIONS THEREOF.” 
shall have preferential rights in THE management of public markets and/or lease 
of public market facilities, stall or spaces: 
PROVIDED, THAT THE 
COOPERATIVE ITSELF UTILlZES THESE RIGHTS AND NOT THROUGH A 
MIDDLE-MAN NOR A PERSON NOT CONNECTED WITH NOR A MEMBER OF 
THE COOPERATIVE; 
4-C Services From a Judge or Register of Deeds 
“ART. 62. ?ax and Other Exemptions. - 
“(4) Any judge in his capacity as notary public, ex-officio, shall 
render service, free of charge, to any person or group of persons requiring either 
the administration of oath or the acknowledgment of articles of cooperation or a 
cooperative applicant for registration and instruments of loan BY OR from ANY 
cooperative IN THE AMOUNT not exceeding ONE HUNDRED [Fifty] thousand 
pesos (PI 00,000.00) j(P50, OOO.OO)]. 
“(5) Any register of deed shall accept for registration, free of 
charge, any instrument relative to a loan made under this Code THE AMOUNT 
OF WHICH does not exceed ONE HUNDRED [Fifty] thousand pesos (PIOO, 
000.00) [(P50, OOO.OO)l, or the deeds of title of any property acquired by the 
cooperative, or any paper or document drawn in connection with any action 
brought by the cooperative, or with any court judgment rendered in its favor, or 
any instrument relative to a bond of any accountable officer of a cooperative for 
the faithful performance of his duties and obligations.” 
“4-D. Right to interest on Share Capital 


“ART. 76. Interest on Share Capital. - Interest on share capital 
shall not exceed the normal rate of return on investments as determined to the 
Cooperative Development Authority PURSUANT TO iTS RULE-MAKING 
POWERS UNDER THIS ACT, BUT IN NO CASE SHALL THE SAID RATE TO 
RETURN EXCEED FIFTEEN PERCENT (15%) PER ANNUM.” 
4-E. Fund for Education and Training 
“ART. 87. Order of ~ i § f r i ~ u t i ~ n .  
- The net surplus of every 
cooperative shall be distributed as follows: 
[[(I 
1 
“(2) An amount for the education and training funds, which shall be 
not LESS [more] than ten percenturn (10%) of net surplus. The by-laws may 
provide that certain fees or fin’es or a portion thereof be credited to such fund. 
THE FUND SHALL PROVIDE FOR THE TRAINING, PROVISION OF WORK 
EXPERIENCE AND COOPERATIVE INVOLVEMENT OF YOUTH WITHIN 
PURSUANT TO ARTICLE 9 PARAGRAPH (1 1) OF THE CODE IN ADDITION 
TO WHATEVER RESOURCES A COOPERATIVE MAY DECIDE TO SET 
ASIDE FOR THIS PROGRAM FOR CONTINUITY OF COOPERATIVISM.” 
TiTLE 111. REGlSTRATrON REQUIREMENTS, BY-LAWS, 
ANNUAL REPORTS 
SEC. 5. Registration requirements, By-Laws, Annual Reports of 
Cooperatives. - Articles 1 I, 
14. 16, q?, 18, and 54 of R.A No. 6938, are hereby 
amended, as follows: 
5-A. Economic Survey As A Basis of Registration 
“ART. 11. Economic Survey AS A BASIS OF REGISTRATION. - 
Every group of individuals or cooperatives intending to form a cooperative under 
this Code shall submit to the Cooperative Development Authority a general 
statement describing the structure, purposes and economic feasibility of the 
proposed cooperative, indicating therein the area of operation, the size of 
membership and other pertinent data WHICH PROVIDE AN ECONOMIC 


6 
SURVEY AS A BASIS OF REGISTRATION AND THE PERCEIVED ROLE OF 
THE COOPERATIVE IN SUSTAINED BALANCED DEVELOPMENT WITHIN 
THE INTENDED AREAS OF OPEFPATlON AND THE NATION AS A WHOLE.” 
5-b. Signature on Articles of Cooperation; 
“ART. 14. Article of Cooperation. - (1) All cooperatives applying 
for registration shall file with Cooperative Development Authority the articles of 
cooperation which shall be signed by each of the organizers AND ALL THE 
COOPERATORS and acknowledge by THE ORGANIZER AND MAJORITY OF 
THE COOPERATORS [the] if natural persons, and by the president or 
secretaries, if juridical persons, before a notary public. 
Paid-up Share Capital 
“(5) No cooperative shall be registered unless the articles of 
cooperation ARE [is] accompanied with the bonds of the accountable officers and 
a sworn statement of the treasurer elected by the subscribers showing that at 
least twenty-five percenturn (25%) of‘ the authorized share capital has been 
subscribed and at least twenty-five (25%) of the total subscription has been paid: 
Provided, That in the case shall be paid-up share capital [shall] be less than 
TWENTY [Two] thousand pesos (P2Q,OOQ.00) [(PZ,QQO.OQ) 1.” 
5-C. Pre-Membership Seminar Requisite for Registration 
“ART. 16. Registration. - NO COOPERATIVE SHALL BE 
REGISTERED UNLESS THE PRE EMBERSHIP SEMINAR HAS BEEN 
COMPLETED AND PROOF OF COMPLETION THEREOF WITH A LIST OF 
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5-D. Registration Documents. 
“ART. 17. Certificate of ~ @ ~ i ~ f r a ~ ~ o n  
AND REGISTRATION 
DOCUMENTS. - 
“THE 
CERTIFICATE 
SHALL 
BE 
ACCOMPANIED 
WITH 
REGISTRATION DOCUMENTS iNDICATING THE APPROVED AREA OF 
OPERATION OF THE REGISTERED COOPERATIVE, THE FIELD OF 
MEMBERSHIP AND 
THE 
NATURE OF THE 
BUSINESS 
OF 
THE 
COOPERATIVE.” 


5-E. Amendment of Article of Cooperation and By-Laws 
ART. 18. Amendment of Articles of Cooperation and By-La ws. 
- Unless otherwise prescribed by this Code and for legitimate purposes, any 
provision or matter stated in the articles of cooperation and by-laws MAY BE 
AMENDED by two-bird (2/3) 
vote of all the members with voting rights, without 
prejudice to the rights of the dissenting members to exercise their right to 
withdraw their membership under Artide 31 and 32. THE LIST OF MEMBERS 
CONSTITUTING THE TWO - THIRDS AFFIRMATIVE VOTE OF ALL THE 
MEMBERS AND THE LIST OF ME BERS WHO DISSENTED FROM THE 
VOTE ON THE AMENDMENTS TOGETHER WITH THE NAMES OF THOSE 
MEMBERS WITH VOTING RIGHTS WHO WERE NOT PRESENT AT THE 
VOTING ON SAID AMENDMENTS SHALL BE RECORDED AND SUBMITTEDl 
WITH 
THE 
PROPOSED 
A ~ E ~ D ~ E N ~ $  
TO 
THE 
ARTICLES 
OF 
COOPERATIVE 
OR 
TO 
THE 
BY-LAWSl 
TO 
THE 
COOPERATIVE 
DEVELOPMENT AUTHORITY. 
“The original and amend articles AND BY-LAWS together shall 
contain all provisions required by law to be set out in the articles of cooperation 
AND IN THE BY-LAWS. Amendments shall be indicated by underscoring or 
otherwise appropriately indicating the change or changes made and a copy 
[thereof] OF THE ARTICLES OR BY-LAWS AMENDED “duly certified under oath 
by the cooperative secretary and a majority of the directors stating the fact that 
said amendment or amendments have been duly approved by the required vote 
of the members. All amendments to the articles of cooperation OR THE BY- 
LAWS shall be submitted to the Cooperative Development Authority. The 
amendments shall take effect upon its approval witbhin thirty (30) days from the 
date of filing thereof if not acted upon by the Authority for a cause and 
attributable to the cooperatives.” 
5-F Annual Reports 
“ART. 54. Annual RepoPts. - (I) 
Every cooperative shall draw up 
an annual report of its ACTIVITIES AND PROGRAMS [affairs] as of the end of 
every CALENDAR [ fiscal ,] year, and publish the same furnishing copies to all its 


members of record, A copy thereof shall be filed with the Cooperative 
Development Authority within NINETY (90) [sixty (60)] days from THE DATE OF 
THE COOPERATIVE’S REGULAR GENERAL ASSEMBLY MEETING AND IN 
NO CASE LATER THAN NINETY (90) DAYS FROM THE END OF CALENDAR 
YEAR. The form and contents of the annual report shall be prescribed by the 
rules of the Authority. Failure to file the required annual report shalt be a ground 
for CANCELLATION OF THE CERTIFICATE OF REGISTRATION OF THE 
COOPERATIVE ISSUED BY THE AUTHORITY OR FOR revocation of authority 
of the cooperative to operate as such. The fiscal year of every cooperative shall 
be the calendar year, except as may be otherwise provided in the By-Laws.” 
“(2) 
TITLE IV. ADMINISTMTIOM, VOTING, BOARD OF DIRECTORS, 
~~~~~~~~ 
SEC. 6. Administration, Voting, Board of Directors, Officer. - Articles 
28, 35, 36, 37, 38, 40, 41, 43, 45, and 51 .of R.A No. 6938 are hereby amended, 
as follows: 
6-A Meeting, Quorum and Voting. 
“ART. 35. Meetings. - A regular meeting shall be held annual by 
the General Assembly [ on a date fixed in the by-law 1, or [ if not so fixed. J on any 
date within ninety (90) days after the dose of each CALENDAR [ fiscal ] year: 
Provided, That written notice of regular meetings shall be sent to all members of 
record at their official addresses at least two (2) weeks prior to the meeting, 
unless a different period FOR THE WRITTEN NOTICE is required in the by-laws. 
I 
“(4) The Authority may calf a special meeting of the cooperative; 
“(a) For the purpose of reporting to the members the result of any 
audit, examination, or other investigation of the cooperative [affairs] ACTIVITIES 
AND PROGRAMS ordered or made by SAID AUTHORITY [ him 1; or” 


the same cooperative.” 


the office concerned to use official time for attendance at the general assembly, 
board and committee meetings of cooperatives, as well as cooperative seminars, 
conferences, workshops, technical meetings, and training courses locally or 
abroad: Provided, That the operations of the office concerned are not adversely 
affected.” 
“ART. 38. Composiiiopr of the Board of Directors. - 
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“ A DIRECTOR WHO HAS SERVED THREE (3) CONSECUTIVE 
TERMS, IS ELIGiBLE FUR REELECTION AFTER THREE (3) CONSECUTIVE 
YEARS OF NOT SERVING ON THE BOARD OF DIRECTORS OF A 
C 0 0 P E RAT IVE 
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“ART. 40 Direcfors. - 
I 
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“(2) XXXXXXXXXXXXXXXX 
“(3) THE MEMBERS OF THE BOARD OF DIRECTORS SHALL 
NOT HOLD ANY OTHER POSiTlON IN THE COOPERATIVE, OTHER THAN 
AS MEMBERS OF THE BOARD OF DIRECTORS. THEY SHALL ELECT FROM 
AMONG THEMSELVES A C
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AND A VICE-CHAIRMAN.” 
“ART. 41. Meeting of the Board, Quorum. - 
“(2) Special meeting of the board of directors may be held at any 
I t (  1 ) x x x ~ m x x x x x x x  
time upon the call of the CHAIRMAN [Presidential] or as provided in the by-laws. 
xxxxxxXXXXXXXXXx 
cc ART. 43. Officers of the Cooperafives. - The board of directors 
shall elect among themselves only the Chairman and Vice-chairman, and elect 
or appoint other officers of the cooperative from outside of the board in 
accordance with THE [their] by-laws OF THE COOPERATIVE. All officers shall 
serve during good behavior and shall not be removed except for cause after due 
hearing. Loss of confidence shall1 not be a valid ground for removal unless 
evidenced by acts or omissions causing loss of confidence in the honestly and 
integrity of such officer. No two (2) or more persons with relationships up to the 


third civil degree of consanguinity or affinity shall sew8 as elective or appointive 
officers in the same Board OR COMMITTEES. 
“NO TWO OR MORE PERSONS WITH RELATIONSHIPS UP TO 
THE THIRD CIVIL DEGREE OF COMSANGUtNlTY OR AFFINITY SHALL 
SERVE IN THE SAME MANAGEMENT STAFF OF ANY COOPERATIVE. 
‘* THE SECRETARY OF THE BOARD NEED NOT BE A PERSON 
OUTSIDE THOSE ELECTED TO THE BOARD OF DlRECTORS.” 
“NO TWO (2) OR MORE PERSONS WITH RELATIONSHIPS UP 
TO THE THIRD CIVIL DEGREE OF CONSANGUINITY OR AFFINITY SHALL 
SERVE TOGETHER WHERE ONE IS AN OFFICER OUTSIDE THE BOARD 
AND THE OTHER IS A DIRECTOR OR A STAFF MEMBER.” 
“ART. 45. Functions and ResponsibiMies of Directors, Officers 
and Committee Members. - The functions and responsibilities of the directors, 
officer and committee members of the directors, officers and committee members 
shall be as prescribed in detail in the by-laws of a cooperative. 
“WITHIN SIXTY (60) DAYS FROM REGISTRATION AND IN NO 
CASE LATER THAN SIXTY (60) DAYS FROM HAVlNG BEEN ELECTED OR 
APPOINTED, ALL 
DIRECTORS, OFFICERS, 
COMMITTEE MEMBERS, 
MANAGEMENT STAFF AND EMPLOYEES ARE REQUIRED TO UNDERGO 
RIGID TRAINING IN THEIR FUNCTIONS AND RESPONSlBlLlTlES TO BE 
CONDUCTED BY THE AUTHORITY AND ANY 
DULY ACCREDITED 
GOVERNMENT OR NON-GOVERNMENT ORGANIZATION.” 
“ART. 51. Rernsvab - A elective officer, director, or committee 
member may be removed by a vote of two-thirds (2/3) of the voting members 
present and constituting a quorum, in a regular or special general assembly 
meeting called for the purpose. The person involved shall be given an 
opportunity to be heard at said assembly. 
“APPOINTIVE 
OFFICERS 
OR 
COMMITTEE 
MEMBERS 
APPOINTED BY THE BOARD OF DIRECTORS MAY, FOR GOOD CAUSE 
SHOWN, BE REMOVED NY A MAJORITY VOTE OF ALL THE MEMBERS IF 
THE BOARD OF DIRECTORS, IN ALL CASES, THE PERSON CONCERNED 


SHALL BE GIVEN AN OPP 
DIRECTORS OR BY THE G 
NITY TO BE HEARD BY THE BOARD OF 
L ASSEMBLY.” 
TITLE V. SETTLEM 
~~~~~~~, 
CONCILiATION, BONDING OF 
LE OFFICERS, PENALTIES 
Me Officers. - Article 57 of R.A No. 6938 
le Officers. - Every director, 
urities or property on behalf of 
adequate bonds for the faithful 
SI duties and obligations. The 
uacy of such bond. 
NTABLE OFFICERS SHALL 
COOPERATION 
AS 
A 
THE COOPERATIVE. THE 
EVERY YEAR AND THE 
UP-TO-DATE SHALL BE 
UANT TO ARTICLE 54 OF 
HED ALL MEMBERS OF 
RECORD 
AND 
I 
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TO 
THE 
COOPERATIVE 
DEVELOPMENT AU 
. THE AUTHORITY MAY BY RULES AND 
REGULATIONS SE 
lTERlA AND GUiDELINES AS TO THE 
ADEQUACY OF T 
OF ACCOUNTABLE OFFICERS OF A 
C 0 0 P E RATIVE . ” 
SEC. 8. Sefflemen 
and Conciliafr’on. - Article 121 of R.A 
No. 6938 is hereby 
“ART. I 
21. Seitlemenf of Disputes, CONCILIA TION AND 
MEDIATION PROC€EDlNGS. - Disputes among members, officers, 
directors, and committee members and intra-federation or inter-federation 
disputes AS WELL AS INTER-COOPERATIVE, INTRA-FEDERATION OR 
INTER-FEDERATION DISPUTES shall, as far as practicable, be settled 


amicably in accordance with the conciliation or mediation mechanism 
embodied in the by-laws of cooperative FOR INTRA-COOPERATIVE 
DISPUTES, IN THE BY-LAWS OF DISPUTANT COOPERATIVES FOR 
INTER COOPERATIVE DISPUTES, IN THE BY-LAWS OF THE 
FEDERATION FOR INTRA-FEDERATION DISPUTES AND IN THE BY- 
LAWS OF DISPUTANT FEDERATIONS FOR INTER-FEDERATION 
DISPUTES, and in applicable laws. 
“Should such a conciliation or mediation proceeding fail, the matter 
shall be settled in a court of competent jurisdiction.” 
SEC. 9. Penalties. -Article 124 of R.A No. 6938 is hereby amended, as 
follows: 
“ART. 124. Penal Prtrvision. - The following acts or omission 
affecting cooperatives are hereby prohibited: 
“(I) 
The use of the word “cooperative” by any person or of persons 
or organizations, domestic or foreign, unless duly registered as a 
cooperative under this Code. In case of violation hereof, the individual or 
individuals concerned, or in the case of an organization, its officers and 
directors shall upon conviction, such suffer the penalty of imprisonment 
OF NOT LESS THAN [for] one (I 
1 year NOR MORE THAN FIVE (5) years 
and a fine not exceeding FIVE [One] thousand pesos (P5, 000.00) [(PI, 
OOO.OO)] or both at the discretion of the court; 
“(2) xxxxxxxxxxxxxxxxxx. 
“In case of violation of any provision of the is subsection, the 
individual or individuals and in the case of organizations, its officers and 
directors, shall upon conviction by a court, each suffer a penalty of not 
less than TWO (2) YEARS [one (1) year] but not more than SIX (6) [five 
(5)J years imprisonment or a fine of an amount of not less than five 
thousand pesos (PS,OOO.OO), 
or both at the discretion of the court. IN THE 
CASE OF A PUBLIC OFFICIAL OR EMPLOYEE, HE SHALL, UPON 
CONVICTION, SUFFER THE ECESSARY PENALTY OF TEMPORARY 
ABSOLUTE DlSQUALlFICATlON.” 


xxxxxxxxxxxxxxxxxxxx’’ 
TITLE VI. FINAL PROVISIONS 
SEC. I O .  Separability Clause. - Should any part of this Act be declared 
unconstitutional or invalid for any reason, the rest of the provisions shall not be 
affected thereby. 
SEC 11. Repeaiing Clause. - All laws, decrees, executive orders, 
proclamations, rules and regulations, and other issuance and parts thereof which 
are inconsistent with the provisions of this Act, are hereby repealed or modified 
accord i ng I y . 
SEC. 12. Effecfivity Ckuse. - This Act shall take effect upon its 
publication in at least two (2) national newspapers of general circulation. 
Approved,