Cooperative Code
A. Purpose/s of the Creation of a Cooperative
B. Acquisition of juridical personality of a
cooperative
1. To encourage thrift and savings mobilization
among the members;
Cooperative acquire juridical personality from
the date the Authority issues a certificate of
registration under its official seal.
2. To generate funds and extend credit to the
members for productive and provident
purposes;
C. Composition and Organization of a
Cooperative
3. To encourage among members systematic
production and marketing
4. To provide goods and services and other
requirements to the members
5. To develop expertise and skills among its
members;
6. To acquire lands and provide housing
benefits for the members;
7. To insure against losses of the members;
8. To promote and advance the economic,
social and educational status of the members;
9. To establish own lease or operate
cooperative banks, cooperative wholesale and
retail
complexes,
insurance
and
agricultural/industrial processing enterprises,
and public markets;
10. To coordinate and facilitate the activities of
cooperatives;
11. To advocate for the cause of the
cooperative movements;
12. To ensure the viability of cooperatives
through the utilization of new technologies;
13. To encourage and promote self-help or selfemployment as an engine for economic growth
and poverty alleviation; and
14. To undertake any and all other activities for
the effective and efficient implementation of
the provisions of the Cooperative Code.
D. Form/Kind of Liability of a Cooperative
Liability: Shareholders of a cooperative enjoy
limited liability for the debts and obligations of
the business, including liability for the unlawful
acts of other shareholders and employees. For
instance, if a fellow shareholder writes a
defamatory article or posts copyright infringing
material on your jointly-run website or blog,
then your liability ordinarily is limited to
amounts invested in the cooperative. The same
goes for a defamatory article or infringing post
published by an employee on the cooperative's
website. However, limited liability does not
relieve you from personal liability for your own
unlawful actions.
Cooperatives, like other forms of legal entity,
are subject to the legal doctrine known as
"piercing the corporate veil," which can result
in shareholders losing limited liability protection
in extremely rare circumstances.
If you apply for a small business loan, the lender
probably will require you to give a personal
guarantee. In that case, you are personally
responsible for the paying back the debt, even if
the business is a cooperative and even if there
is no basis for piercing the corporate veil.
E. General Assembly
The General Assembly refers to the full
membership of the cooperative duly assembled
for the purpose of exercising the rights and
performing all the obligations pertaining to
cooperatives and is considered the highest
policy-making body of the cooperative.
Composition: all members who are entitled to
vote under the articles of cooperation and bylaws.
Delegation of powers of the GA: only for
purposes of prompt and intelligent decisionmaking, the general assembly may by a threefourths (3/4) vote of all its members with voting
rights, present and constituting a quorum,
delegate some of its powers to a smaller body
of the cooperative; these powers shall be
enumerated under the by-laws of the
cooperative.
Exclusive powers which cannot be delegated:
1. To determine and approve amendments to
the articles of cooperation and bylaws;
2. To elect or appoint the members of the
board of directors, and to remove them for
cause. However, in the case of the
registered electric cooperatives, election of
the members of the board shall be held in
accordance with its bylaws or election
guidelines of such electric cooperative; and
3. To approve developmental plans of the
cooperative.