ORGANIZATION AND MANAGEMENT OF COOPERATIVES

Organizational Procedure
FIRST: Get Organized
Must have at least 15 members
Determine the common problems and basic needs
A dedicated core group
Working communities
Who may become members of a primary cooperative?
If you are a Filipino of legal age, you can be a coop member if you meet the
qualifications prescribed by the coops By-laws.
What are the kinds of membership in the cooperative?
Regular members is entitled to all the rights and privileges of membership as stated in
the Cooperative Code and the coops By-laws.
Associate members has no right to vote and to be voted upon and is entitled to such
rights and privileges provided by the cooperatives By-laws and is considered a regular
member when it continues to patronize the cooperative for two years and met the
minimum requirements of regular membership.
SECOND: Reserve Your Proposed Cooperative Name
Secure and fill up Cooperative Name Reservation Request Form (CNRRF). This must be
submitted to the Cooperative Development Authority (CDA) Central Office or any of its
Extension Office.
THIRD: Prepare A General Statement Called Economic Survey
Economic Survey
Is a general statement describing, among others, the structure and purposes of the
proposed cooperative. Economic Survey is in fact a project feasibility study economic
feasibility. Here, the prospective coop members estimate the income and expenses of the
cooperative. It makes a projection of the possible growth pattern of the cooperatives certain
period, probably three (3) years, and how this growth generates income and incurs expenses. It
tries to anticipate obstacles and constraints and make allowance for them. This statement will
help you measure your cooperatives chances of success.
FOURTH: Prepare the Cooperatives By-laws
By-Laws
The qualifications for membership;
How they are acquired, maintained and lost;
The rights and obligations of members;
The condition for transfer of a share of interest;
The rules and procedures covering agenda, time, place, and manner of calling, covering ,
conduct meeting, quorum requirements, voting system, and other, matters related to the
business affairs of the general assembly, board of directors, and committees;
The general conduct of the affairs of the cooperative , including the powers and duties of
the general assembly, board of directors, committees and the officers, and their
qualifications and disqualifications;
The manner in which capital may be raise and purpose for which it can be utilized;
The mode of custody and investment of net surplus;
The accounting and auditing systems.
The manner and limitations of loaning and borrowing, including limitations;
The methods of distribution of net surplus;
The manner of adopting, amending, repealing, and abrogating By-laws;

A conciliation or mediation mechanism for the amicable settlement of disputes among

members, directors, officers and committees; and
Other matter pertaining to the purpose and activities of the cooperative.

FIFTH: Prepare the Articles Of Cooperation

Mandatory contents of the articles of cooperation
The name of the cooperative, which must include the word cooperative, e.g. Sta. Maria
Multi-Purpose Cooperative;
The purpose or purposes and scope of business for which the cooperative is to be
registered;
The term of existence of cooperative (not more than 50 years);
The area of operation and the postal address of its principal office;
The names, nationality and the postal addresses of the registrants;
The common bond of membership;
The list of names of the directors who shall manage the cooperative; and
The amount of its share capital, the names and residences of its contributors, and a
statement of whether the cooperative is primary, secondary or tertiary, in accordance with
Article 23 of R.A 6938. The articles of cooperation shall be signed by each of the
organizers and acknowledged by them if natural persons, and by the chairpersons or
secretaries, if juridical persons, before a notary public.
SIXTH: Secure Bond of Accountable Officers
A surety bond should be secured from a duly registered insurance or bonding company.
Every director, officer and employee handling funds, securities or property on behalf of the
cooperative shall be covered by this. The board of directors shall determine the adequacy of such
bonds. The amount of the bond is to be decided upon by the Board of Directors, based on the
initial network of the cooperatives which includes the paid-up capital, membership fees and other
assets of the cooperatives at time of registration.
SEVENTH: Execute Treasurers Affidavit
A sworn statement of the treasurer elected by the subscribers showing that at least
twenty-five per centum (25%) of the authorized share capital has been subscribed, and at least
twenty-five per centum (25%) of the total subscription has been paid should be executed and to
be attached to the articles of cooperation. The paid-up share capital shall not be less than Fifteen
thousand pesos (P15, 000.00).
EIGHTH: Complete the Pre-membership Education Seminar (Pmes)
A prospective member of a primary cooperative must have completed a Pre-Membership
Education Seminar (PMES). A Certificate of PMES must be secured from the training provider.
NINTH: Register Your Cooperative with the Cooperative Development Authority
Four (4) copies each of the Economic Survey, Articles of Cooperation and By- Laws duly
notarized;
Surety bond of accountable officers;
Treasurer's Affidavit;
Approved Cooperative Name Reservation Slip;
Certificate of PMES;
Organizational Structure of Cooperatives
General Assembly
The general assembly of members shall consist of all members of good standing and
when convened and acting as a body and subject to the provisions of Cooperative Code, it has
ultimate authority in the administration and management of the affairs of the cooperative.

POWERS OF THE GENERAL ASSEMBLY

The General Assembly shall be the highest policy-making body of the cooperative. The
general assembly shall have the following powers:

Elect and remove directors, officers, and committee members for cause;
Hear and pass the upon the reports of the Board of Directors, officers, and committees;
Arbitrate in disputes or disagreement by and between members of the board, committees,
officers, and members;
Determine amendments to the Articles of Incorporation and By-laws
Decide, subject to legal restrictions, on major financial policy changes;
Exercise final authority on all matters vitally affecting the cooperative; and
Exercise all the rights and privileges appurtenant to membership

MEETINGS
A regular meeting shall be held by the general assembly on a date fixed in the By-laws, or
if not so fixed, on any date within ninety (90) days after the close of each fiscal year. Provided,
that notice of regular meetings shall be sent in writing, by posting or publication, or through
other electronic means to all members of record.
Whenever necessary, a special meeting of the general assembly may be called at any time by a
majority of the board of directors or as provided for in the By-laws.
QUORUM
A quorum shall consist of at least twenty-five percent (25%) of all the members entitled
to vote.
VOTING SYSTEM
Each member of a primary cooperative shall have only one (1) vote. (one man-one vote
policy).
Special General Assembly
This may be called at any time by the Board of Directors in between Annual general
assemblies to take up urgent matters.
Special general assembly shall be convened by the President within 30 days upon receipt of
the call from:
At least 10% of the membership
The audit and inventory committee
The CDA or its authorized representative; and
The Federation or Union of which the cooperative is a member.
BOARD OF DIRECTORS
Manner of Selection
The members of the board shall be elected by secret ballot by the general membership at
the annual assembly for a term of 2 years. However, during the first election after registration,
one-half plus one of the directors garnering the highest number of votes shall serve for 2 years,
the rest for one year. Thereafter, all directors shall serve for a term of two years
All members in good standing who have the time and willingness to serve, are qualified to be
voted upon as directors.
Disqualifications
1. Holding any elective position in the government except that of the barrio councilman.
2. Having conflicting interest with the business of the Coop.

3. Having been absent for three (3) consecutive board meetings without being excused.
4. Being a full-time employee of the Kilusang Bayan.
5. Having been convicted of any crime involving moral turpitude, gross negligence, gross
misconduct in the performance of his duties, or found culpable in any administrative case
involving such offenses.
6. Facing as a defendant or respondent, in an administrative proceeding or civil suit involving
financial/or property accountability.
7. Having been associated with any past anomalies in cooperatives, and
8. Having been disqualified pursuant to disqualifications prescribed by the CDA.

Power of the Board

The members of the Board of Directors, as a body and not acting in their individual
capacity, shall have the following duties:

Exercise general supervision and control over the affairs of the cooperative
Prescribe policies consistent with the law, the By-laws, resolutions of the membership
assembly for the management of its business, and the guidance of its members, officers,
and employees.

Liability of the Board Member

Members of the board shall be jointly and severally liable for transactions, acts,
omissions made in violation of law, regulations of the By-laws, or the decisions of the general
assembly, except those who entered a protest at the time when such transaction, act, omission
was acted upon.
Joint and Severally Liability- any aggrieved party or the cooperative has the option to go after
any member of the Board or all the members for the performance of an undertaking or for
damages incurred in connection thereto.
Meetings of the Board
The Board of Directors shall meet after 10 days of their election to elect among
themselves a Chairman and Vice-Chairman.
Treasurer and Secretary are not members of the Board
The Board shall designate said officers and fix their tenure & compensation
Term of office for Chairman & Vice-Chairman is 2 years, until their successors are
elected and qualified and unless sooner removed for cause
Board shall meet at least once a month. However special meetings may be called by the
chairman.
Quorum at, and notice of, Board meetings
Regular or special- one-half plus one of the entire membership. Unless dispensed with by
the Board, regular and special meetings shall be served by the secretary at least 5 days before
each meeting.
Vacancies
When a vacancy occurs by reason of death, incapacity, removal or resignation, the
remaining members of the Board constituting a quorum shall fill such vacancy. The successor
shall serve the unexpired portion of term. If the remaining members do not constitute a quorum,
the CDA, shall designate the successor.
Removal of the director
Members of the Board may be removed for cause by a majority vote of the members in
good standing present at a regular or special general assembly called for the purpose.
The democratic character of cooperatives demands that no member shall be disenfranchised in
his cooperative without due process of law

On the other hand, officers appointed or elected by the Board or the committee, may be removed
for cause by the Board or the committee concerned by a majority vote of all its members after
giving the director or committee member sought to be removed and an opportunity to be heard.
Committees of Cooperatives
The By-laws shall provide for the creation of the following committees:
1.Audit committee - elected by GA
2.Election committee - elected by GA
3.Mediation and Conciliation committee appointed by BOD
4.Ethics committee - appointed by BOD
5.Education committee - appointed by BOD
6.Other committees as may be necessary for the conduct of the affairs of the cooperative (ex.
Credit committee)
Election Committee
Formulate election rules and guidelines and recommend to the General/Representative
Assembly for approval
Implement election rules and guidelines duly approved by the General/Representative
Assembly
Recommend necessary amendments to the election rules and guidelines, in consultation
with the Board of Directors, for the General/Representative Assemblys approval
Supervise the conduct, manner and procedure of election and other election related
activities and act on the changes thereto
Canvass and certify the results of the election
Proclaim the winning candidates
Decide election and other election related cases except those involving the Election
Committee or its members
Perform such other functions as prescribed in the By-laws or authorized by the
General/Representative Assembly
AUDIT COMMITTEE
Monitor the adequacy and effectiveness of the cooperatives management and control
system
Audit the performance of the cooperative and its various responsibility center
Perform such other functions as may be prescribed in the By-laws or authorized by the
General/Representative Assembly
Review continuously and periodically the books of account and other financial records to
ensure that these are in accordance with the cooperative principles and generally accepted
accounting procedures
Submit reports on the result of the internal audit and recommend necessary changes on
policies and other related matters on operation to the Board of Directors and
General/Representative Assembly
MEDIATION AND CONCILIATION COMMITTEE
Formulate and develop the Conciliation-Mediation Program and ensure that it is properly
implemented
Monitor Conciliation-Mediation programs and processes
Submit semi-annual reports of cooperative cases to the Authority within fifteen (15) days
after the end of every semester
Accept and file Evaluation Reports
Submit recommendations for improvements to the Board of Directors
Recommend to the Board of Directors any member of the cooperative for ConciliationMediation Training as Cooperative Conciliator-Mediator
Issue the Certificate of Non-Settlement (CNS)
Perform such other functions as may be prescribed in the By-laws or authorized by the
General/Representative Assembly

ETHICS COMMITTEE
Develop Code of Governance and Ethical Standards to be observed by the members,
officers and employees of the cooperative subject to the approval of the Board of
Directors and ratification of the General/Representative Assembly
Disseminate, promote and implement the approved Code of Governance and Ethical
standards
Monitor compliance with the Code of Governance and Ethical Standards and recommend
to the Board of Directors measures to address the gap, if any
Conduct initial investigation or inquiry upon receipt of a complaint involving Code of
Governance and Ethical Standards and submit report to the Board of Directors together
with the appropriate sanctions
Recommend ethical rules and policy to the Board of Directors
Perform such other functions as may be prescribed in the By-laws or authorized by the
General/Representative Assembly
OTHER COMMITTEES
Other Committees that may be created shall assist in the formulation of policies and rules
and in the implementation of the service of the cooperative. Their powers, functions, and
responsibilities shall be defined in the By-laws.
Officers of the Cooperative
Chairman
1. Shall preside over all meetings of the cooperative and the Board of Directors.
2. Perform any and all duties usually performed by a presiding officer
3. Sign all stock certificates, revolving fund certificates, and such other papers of the cooperative
4. Perform such other duties as the Board of Directors may prescribe.
Vice-chairman
1. Shall perform the duties of the chairman in the absence or disability of the latter. In the event
of death, resignation, removal of the chairman, the board may elect a successor.
2. Act as ex-officio chairperson of the Education and Training Committee; And
3. Perform such other duties as may be delegated by the Board of Directors
Treasurer
1. Take custody of all money, securities, and papers of the cooperative
2. Keep complete record of its cash transactions for the establishment and proof of his cash
position at any given time and date
3. Pay upon the recommendation of the manager or as authorized by the Board of Directors, all
money transactions certify to the correctness of the cash position of the cooperative in all
financial statements and reports submitted to the Board of Directors
4. Turn over all money, securities, papers, books, and other property belonging to the cooperative
that he may have in his possession upon election or appointment of his successor
5. Post an adequate bond, the expenses of which shall be paid by the cooperative, to assure the
faithful performance of his duties, and
6. Perform the duties of the secretary in the latters absence or inability to perform his duties.
Secretary
1. Keep complete list of all members and maintain a correct record of all meetings of the Board
of Directors and general assembly;
2. Give notices of all meetings called;
3. Keep and maintain the stock transfer book and serve as custodian of the corporate seal of the
Kilusang Bayan (cooperative)
4. Turn over to his successor all bonds and other properties in his possession belonging to the
cooperative;
5. Perform the duties of the treasurer in case the latters absence or inability to perform his duties

Management Staff
Appointed by the Board
Headed by a General Manager
In charge of day to day affairs of the cooperative entrusted to them
Implement the policies of the Board and the membership assembly to attain the
objectives of the coop
Members of the management staff are the policy implementers of the cooperative, and as
such, they shall be responsible to the Board for the performance of their functions.
GENERAL MANAGER
Duties of the General Manager
The manager, under policies set by the Board of Directors, shall have general charge of
all the phases of the business operations of the cooperative. Upon the appointment of his
successor, he shall turn over to him all money property and other assets belonging to the
cooperative which he has in his possessions or over his control.
He shall maintain his records and accounts in such manner that the true and correct
condition of the business of the cooperative may be ascertained there from at any time. He shall
render annual reports in the form and in the manner prescribed by the Board of Directors, and
shall preserve the books, documents, correspondence, and records of whatever kind pertaining to
the business which may come into his possession. Subject to the policies that may be
promulgated by the Board of Directors, he may employ, supervise, and dismiss any agent and
employee in the management force.
ACCOUNTANT
No
person
shall
be
appointed
to
the
position
of
accountant
unless he possesses the following qualifications:
Bachelor Degree in Accountancy
Must have at least 2 years experience in cooperative business
Must be honest and must have a deep sense of responsibility
Must not engaged directly or indirectly in any business similar to that handled by
Kilusang Bayan
Must not be facing or have been convicted of any administrative or criminal case
involving moral turpitude, gross negligence, or grave misconduct in the performance of
his duties.
He must not be addicted to any form of gambling or immoral or vicious habits.
He must be willing to undergo pre-service and /or in-service training.
Duties of the Accountant
He shall install adequate and effective accounting system in the cooperative.
He shall render monthly/annual (as may require) reports to the Board of Directors on the
financial condition and operation.
He shall coordinate with the manager and the audit and inventory committee in assisting
the Board in the preparation of annual budgets.
He shall assist the chairman in preservation of the books of accounts, documents,
vouchers, contracts, and records of whatever kind pertaining to the business of the
cooperative which may come into his possession.
Compensation
Subject to the approval of the general assembly, the members of the Board and
Committees may, in addition to per diems for actual attendance to board and committee
meetings, and reimbursement of actual and necessary expenses while performing functions in
behalf of the cooperative, be given regular compensation; Provided, further, that the directors
and officers shall not be entitled to any per diem when, if in the preceding calendar year, the
cooperative reported a net loss or had a dividend rate less than the official inflation rate for the
same year.

Written
Report
In
Cooperative
Management
Submitted by: Russel D. Metran
BSBA 4

Submitted to: Mrs. Caridad Flores