Cooperatives (Republic Act No. 9520 a.k.a. vii.

Concern for Community – Cooperatives work for the

Philippine Cooperative Code of 2008) sustainable development of their communities
through policies approved by their members.
A. Cooperative Principles - Every cooperative shall conduct
its affairs in accordance with Filipino culture and B. Definitions of Terms
experience and the universally accepted principles of i. Member includes a person either natural or juridical
cooperation which include, but are not limited to, the who adhering to the principles set forth in this Code
following: (Kinds of Cooperative Principles) and in the Articles of Cooperative, has been admitted
i. Voluntary and Open Membership – Cooperative are by the cooperative as member;
voluntary organization, open to all persons able to ii. General Assembly shall mean the full membership of
use their services and willing to accept the the cooperative duly assembled for the purpose of
responsibilities of membership, without gender, exercising all the rights and performing all the
social, racial, cultural, political, or religious obligations pertaining to cooperatives, as provided
discrimination. by this Code, its articles of cooperation and bylaws:
ii. Democratic Member Control - Cooperatives are Provided, That for cooperatives with numerous and
democratic organizations that are controlled by their dispersed membership, the general assembly may be
members who actively participate in setting their composed of delegates elected by each sector,
policies and making decisions. Men and women chapter or district of the cooperative in accordance
serving as elected representatives, directors, or with the rules and regulations of the Cooperative
officers are accountable to the membership. In Development Authority;
primary cooperatives, members have equal voting iii. Board of Directors shall mean that body entrusted
rights on a one-member, one-vote. Cooperatives at with the management of the affairs of the
other levels are organized in the same democratic cooperative under its articles of cooperation and
manner. bylaws;
iii. Member Economic Participation – Members iv. Committee shall refer to any body entrusted with
contribute equitably to, and democratically control, specific functions and responsibilities under the
the capital of their cooperatives. They shall receive bylaws or resolution of the general assembly or the
limited compensation or limited interest, if any, on board of directors;
capital subscribed and paid as a condition of v. Articles of Cooperation means the articles of
membership. Members allocate surpluses for any or cooperation registered under this Code and includes
all of the following purposes: developing the a registered amendment thereof;
cooperative by setting up reserves, part of which vi. Bylaws means the bylaws registered under this Code
should at least be indivisible; benefitting members in and includes any registered amendment thereof;
proportion to their patronage of the cooperative’s vii. Registration means the operative act granting
business; and supporting other activities approved by juridical personality to a proposed cooperative and is
the membership. evidenced by a certificate of registration;
iv. Autonomy and Independence – Cooperatives are viii. Cooperative Development Authority refers to the
autonomous, self-help organizations controlled by government agency in charge of the registration and
their members. If they enter into agreements with regulation of cooperatives as such hereinafter
other organizations, including government, or raise referred to the Authority;
capital from external sources, they shall do so on ix. Universally Accepted Principles means that body of
terms that ensure democratic control of their cooperative principles adhered to worldwide by
members and maintain their cooperative autonomy. cooperatives;
v. Education, training and Information – Cooperatives x. Representative Assembly means the full
shall provide education and training for their membership of a body of representatives elected by
members, elected and appointed representatives, each of the sectors, chapter or district o the
managers, and employees, so that they can cooperative duly assembled for the purpose of
contribute effectively and efficiently to the exercising such powers lawfully delegated unto them
development of their cooperatives. by the general assembly in accordance with its
vi. Cooperation Among Cooperatives – Cooperatives bylaws;
serve their members most effectively and strengthen xi. Officers of the Cooperative shall include the
the cooperative movement by working together members of the board of directors, members of the
through local, national, regional and international different committee created by the general
structures. assembly, general manager or chief executive officer,

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 secretary, treasurer and members holding other x. To coordinate and facilitate the activities of
positions as may be provided for in their bylaws; cooperatives;
xii. Social Audit is a procedure wherein the cooperative xi. To advocate for the cause of the cooperative
assesses its social impact and ethical performance movements;
vis-Ã -vis its stated mission, vision, goals and code of xii. To ensure the viability of cooperatives through the
social responsibility for cooperatives to be utilization of new technologies;
established by the Authority in consultation with the xiii. To encourage and promote self-help or self-
cooperative sector. It enables the cooperative to employment as an engine for economic growth and
develop a process whereby it can account for its poverty alleviation; and
social performance and evaluate its impact in the xiv. To undertake any and all other activities for the
community and be accountable for its decisions and effective and efficient implementation of the
actions to its regular members; provisions of this Code.
xiii. Performance Audit shall refer to an audit on the
efficiency and effectiveness of the cooperative as a D. Objectives and Goals of a Cooperative
whole; its management and officers; and its various i. Provide goods and services to its members to enable
responsibility centers as basis for improving them to attain increased income, savings,
individual team or overall performance and for investments, productivity, and purchasing power,
objectively informing the general membership on and promote among themselves equitable
such performance; distribution of net surplus through maximum
xiv. Single-Line or Single-Purpose Cooperative shall utilization of economies of scale, cost-sharing and
include cooperative undertaking activities which are risk-sharing;
related to its main line of business or purpose; ii. Provide optimum social and economic benefits to its
xv. Service Cooperatives are those which provide any members;
type of service to its members, including but not iii. Teach them efficient ways of doing things in a
limited to, transport, information and cooperative manner;
communication, insurance, housing, electric, health iv. Propagate cooperative practices and new ideas in
services, education, banking, and savings and credit; business and management;
xvi. Subsidiary Cooperative refers to three or more v. Allow the lower income and less privileged groups to
primary cooperatives, doing the same line of increase their ownership in the wealth of the nation;
business, organized at the municipal, provincial, city, and
special metropolitan political subdivision, or vi. Cooperate with the government, other cooperatives
economic zones created by law, registered with the and people-oriented organizations to further the
Authority to undertake business activities in support attainment of any of the foregoing objectives.
of its member-cooperatives.
E. Cooperatives Not in Restraint of Trade - No cooperative
C. Purposes of Cooperatives or method or act thereof which complies with this Code
i. To encourage thrift and savings mobilization among shall be deemed a conspiracy or combination in restraint
the members; of trade or an illegal monopoly, or an attempt to lessen
ii. To generate funds and extend credit to the members competition or fix prices arbitrarily in violation of any
for productive and provident purposes; laws of the Philippines.
iii. To encourage among member’s systematic F. Organizing a Primary Cooperative
production and marketing; i. Fifteen (15) or more natural persons who are Filipino
iv. To provide goods and services and other citizens, of legal age, having a common bond of
requirements to the members; interest and are actually residing or working in the
v. To develop expertise and skills among its members; intended area of operation, may organize a primary
vi. To acquire lands and provide housing benefits for the cooperative under this Code: Provided, That a
members; prospective member of a primary cooperative must
vii. To insure against losses of the members; have completed a Pre-Membership Education
viii. To promote and advance the economic, social and Seminar (PMES).
educational status of the members; ii. Any newly organized primary cooperative may be
ix. To establish, own, lease or operate cooperative registered as multipurpose cooperative only after
banks, cooperative wholesale and retail complexes, compliance with the minimum requirements for
insurance and agricultural/industrial processing multipurpose cooperatives to be set by the
enterprises, and public markets; Authority. A single-purpose cooperative may
transform into a multipurpose or may create
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 subsidiaries only after at least two (2) years of J. Juridical Personality of Cooperative - A cooperative
operations. formed and organized under this Code acquires juridical
personality from the date the Authority issues a
G. Liability of Cooperative duly registered under this Code certificate of registration under its official seal. All
- A cooperative duly registered under this Code shall applications for registration shall be finally disposed of
have limited liability. by the Authority within a period of sixty (60) days from
the filing thereof, otherwise the application is deemed
H. Term of Cooperative - A cooperative shall exist for a approved, unless the cause of the delay is attributable to
period not exceeding fifty (50) years from the date of the applicant: Provided, That in case of a denial of the
registration unless sooner dissolve or unless said period application for registration, an appeal shall lie with the
is extended. The cooperative term, as originally stated in Office of the President within ninety (90) days from
the articles of cooperation, may be extended for periods receipt of notice of such denial: Provided, further, That
not exceeding fifty (50) years in any single instance by an failure of the Office of the President to act on the appeal
amendment of the articles of cooperation, in accordance within ninety (90) days from the filing thereof shall
with this Code: Provided, That no extension can be mean approval of said application.
made earlier than five (5) years prior to the original or
subsequent expiry date/dates unless there are justifiable K. Evidence of juridical personality of cooperative - A
reasons for an earlier extension as may be determined certificate of registration issued by the Authority under
by the Authority. its official seal shall be conclusive evidence that the
cooperative therein mentioned is duly registered unless
I. Articles of Cooperation - All cooperatives applying for it is proved that the registration thereof has been
registration shall file with the Authority the articles of cancelled.
cooperation which shall be signed by each of the
organizers and acknowledged by them if natural L. Amendments of Articles of Cooperation and By-laws -
persons, and by the chairpersons or secretaries, if Unless otherwise prescribed by this Code and for
juridical persons, before a notary public. legitimate purposes, any provision or matter stated in
i. Contents of Articles of Cooperation the articles of cooperation and by laws may be amended
1. The name of the cooperative which shall include by two-thirds (2/3) vote of all the members with voting
the word cooperative; rights, without prejudice to the right of the dissenting
2. The purpose or purposes and scope of business members to exercise their right to withdraw their
for which the cooperative is to be registered; membership under Article 30.
3. The term of existence of the cooperative;
4. The area of operation and the postal addresses of M. Types of Membership in cooperatives
its principal office; i. A regular member is one who has complied with all
5. The names, nationality, and the postal addresses the membership requirements and entitled to all the
of the registrants; rights and privileges of membership.
6. The common bond of membership; ii. An associate member is one who has no right to vote
7. The list of names of the directors who shall nor be voted upon and shall be entitled only to such
manage the cooperative; and rights and privileges as the bylaws may provide:
8. The amount of its share capital, the names and Provided, That an associate who meets the minimum
residences of its contributors and a statement of requirements of regular membership, continues to
whether the cooperative is primary, secondary or patronize the cooperative for two (2) years, and
tertiary in accordance with Article 23 hereof. signifies his/her intention to remain a member shall
ii. Requirement for Registration with CDA be considered a regular member.
No cooperative, other than a cooperative union as
described under Article 25 hereof, shall be registered unless N. Liability of Members - A member shall be liable for the
the articles of cooperation is accompanied with the bonds of debts of the cooperative to the extent of his
the accountable officers and a sworn statements of the contribution to the share capital of the cooperative.
treasurer elected by the subscribers showing that at least
twenty-five per centum (25%) of the authorized share capital O. Termination of Membership
has been subscribed and at least twenty-five per centum i. A member of a cooperative may, for any valid
(25%) of the total subscription has been paid: Provided, That reason, withdraw his membership from the
in no case shall the paid-up share capital be less than Fifteen cooperative by giving a sixty (60) day notice to the
thousand pesos (P15,000.00). board of directors. Subject to the bylaws of the
cooperative, the withdrawing member shall be
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 entitled to a refund of his share capital contribution Q. Administration of Cooperative
and all other interests in the cooperative: Provided, i. Composition of the General Assembly - The general
That such fund shall not be made if upon such assembly shall be composed of such members who are
payment the value of the assets of the cooperative entitled to vote under the articles of cooperation and
would be less than the aggregate amount of its debts bylaws of the cooperative.
and liabilities exclusive of his share capital ii. Powers of the General Assembly - The general assembly
contribution. shall be composed of such members who are entitled to
ii. The death or insanity of a member in a primary vote under the articles of cooperation and bylaws of
cooperative, and the insolvency or dissolution of a the cooperative.
member in a secondary or tertiary cooperative may iii. Powers of the General Assembly. The general assembly
be considered valid grounds for termination of shall be the highest policy-making body of the
membership: Provided, That in case of death or cooperative and shall exercise such powers as are
insanity of an agrarian reform beneficiary-member of stated in this Code, in the articles of cooperation and in
a cooperative, the next-of-kin may assume the duties the bylaws of the cooperative. The general assembly
and responsibilities of the original member shall have the following exclusive powers which cannot
iii. Membership in the cooperative may be terminated be delegate (Non-delegable Powers of General
by a vote of the majority of all the members of the Assembly):
board of directors for any of the following causes: 1. To determine and approve amendments to the
1. When a member has not patronized any of the articles of cooperation and bylaws;
services of the cooperative for an unreasonable 2. To elect or appoint the members of the board of
period of time as may be previously determined directors, and to remove them for cause.
by the board of directors; However, in the case of the electric cooperatives
2. When a member has continuously failed to registered under this Code, election of the
comply with his obligations; members of the board shall be held in accordance
3. When a member has acted in violation of the with its bylaws or election guideline of such
bylaws and the rules of the cooperative; and electric cooperative; and
4. For any act or omission injurious or prejudicial to 3. To approve developmental plans of the
the interest or the welfare of the cooperative. cooperative.
5. A member whose membership the board of 4. Subject to such other provisions of this Code and
directors may wish to terminate shall be informed only for purposes of prompt and intelligent
of such intended action in writing and shall be decision-making, the general assembly may be a
given an opportunity to be heard before the said three-fourths (3/4) vote of all its members with
board makes its decision. The decision of the voting rights, present and constituting a quorum,
board shall be in writing and shall be delegate some of its powers to a smaller body of
communicated in person or by registered mail to the cooperative. These powers shall be
said member and shall be appealable within thirty enumerated under the bylaws of the cooperative.
(30) days from receipt thereof to the general iv. Cooperative Meetings - A regular meeting shall be held
assembly whose decision shall be final. The annually by the general assembly on a date fixed in the
general assembly may create an appeal and bylaws, or if not so fixed, on any dated within ninety
grievance committee whose members shall serve (90) days after the close of each fiscal year: Provided,
for a period of one (1) year and shall decide That notice of regular meetings shall be sent in writing,
appeals on membership termination. The by posting or publication, or through other electronic
committee is given thirty (30) days from receipt means to all members of record.
thereof to decide on the appeal. Failure to decide 1. Whenever necessary, a special meeting of the
within the prescribed period, the appeal is general assembly may be called at any time by a
deemed approved in favor of the member. majority vote of the board of directors or as
Pending a decision by the general assembly, the provided for in the bylaws: Provided, That a
membership remains in force. notice in writing shall be sent one (1) week prior
to the meeting to all members who are entitled
P. Refund of Interests - All sums computed in accordance to vote. However, a special meeting shall be
with the bylaws to be due from a cooperative to a called by the board of directors after compliance
former member shall be paid to him either by the with the required notice within from at least ten
cooperative or by the approved transferee, as the case per centum (10%) of the total members who re
may be, in accordance with this Code. entitled to vote to transact specific business
covered by the call.
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 2. If the board fails to call a regular or a special none of the disqualifications provided in the laws
meeting within the given period, the Authority, or bylaws shall be eligible for election as director.
upon petition of ten per centum (10%) of all the 2. The cooperative may, by resolution of its board
members of the cooperative who are entitled to of directors, admit as directors, or committee
vote, and for good cause shown, shall issue an member one appointed by any financing
order to the petitioners directing them to call a institution from which the cooperative received
meeting of the general assembly by giving proper financial assistance solely to provide technical
notice as required in this Code or in the bylaws; knowledge not available within its membership.
3. In the case of a newly approved cooperative, a Such director or committee member not be a
special general assembly shall be called, as far as member of the cooperative and shall have no
practicable, within ninety (90) days from such powers, rights, nor responsibilities except to
approval; provided technical assistance as required by the
4. The Authority may call a special meeting of the cooperative.
cooperative for the purpose of reporting to the 3. The members of the board of directors shall not
members the result of any examination or other hold any other position directly involved in the
investigation of the cooperative affairs; and day to day operation and management of the
5. Notice of any meeting may be waived, expressly cooperative.
or impliedly, by any member. 4. Any person engaged in a business similar to that
v. Quorum in General Assembly - A quorum shall consist of the cooperative or who in any way has a
of at least twenty-five per centum (25%) of all the conflict of interest with it, is disqualified from
members entitled to vote. In the case of cooperative election as a director of said cooperative.
banks, the quorum shall be as provided in Article 99 of x. Meeting of the Board and Quorum Requirement
this Code. In the case of electric cooperatives registered 1. In the case of primary cooperatives, regular
under this Code, a quorum, unless otherwise provided meetings of the board of directors shall be held
in the bylaws, shall consist of five per centum (5%) of all at least once a month.
the members entitled to vote. 2. Special meetings of the board of directors may
vi. Voting System. Each member of a primary cooperative be held at any time upon the call of the
shall have only one (1) vote. In the case of members of chairperson or a majority of the members of the
secondary or tertiary cooperatives, they shall have one board: Provided, That written notices of the
(1) basic vote and as many incentive votes as provided meeting specifying the agenda of the special
for in the bylaws but not exceed five (5) votes. The meeting shall be given to all members of the
votes cast by the delegates shall be deemed as votes board at least one (1) week before the said
cast by the members thereof. meeting.
However, the bylaws of a cooperative other than a 3. A majority of the members of the Board shall
primary may provide for voting by proxy. Voting by constitute a quorum or the conduct of business,
proxy means allowing a delegate of a cooperative to unless the bylaws proved otherwise.
represent or vote in behalf of another delegate of the 4. Directors cannot attend or vote by proxy at
same cooperative. board meetings.
vii. Composition and Term of the Board of Directors - xi. Vacancy in the Board of Directors - Any vacancy in the
Unless otherwise provided in the bylaws, the direction board of directors, other than by expiration of term,
and management of the affairs of a cooperative shall be may be filled by the vote of at least a majority of the
vested in a board of directors which shall be composed remaining directors, if still constituting a quorum;
of not less that five (5) nor more than fifteen (15) otherwise, the vacancy must be filled by the general
members elected by the general assembly for a term of assembly in a regular or special meeting called for the
two (2) years and shall hold office until their successors purpose. A director so elected to fill a vacancy shall
are duly elected an qualified, or until duly removed for serve only the unexpired term of his predecessor in
caused. office.
viii. Powers of the Board of Directors - The board of xii. Officers of the Cooperative - The board of directors
directors shall be responsible for the strategic planning, shall elect from among themselves the chairperson and
direction-setting and policy-formulation activities of the vice-chairperson, and elect or appoint other officers of
cooperatives. the cooperative from outside of the board in
ix. Directors (Qualifications of Directors in a Cooperative) accordance with their bylaws. All officers shall serve
1. Any member of a cooperative who under the during good behavior and shall not be removed except
bylaws of the cooperative, has the right to vote for cause after due hearing. Loss of confidence shall not
and who possesses all the qualifications and be a valid ground for removal unless evidenced by acts
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 or omission causing loss of confidence in the honesty confidence, he shall, as a trustee for the cooperative,
and integrity of such officer. No two (2) or more be liable for damages and shall be accountable for
persons with relationships up to the third civil degree of double the profits which otherwise would have accrued
consanguinity or affinity nor shall any person engaged to the cooperative.
in a business similar to that of the cooperative nor who xvi. Compensation pf Directors of Cooperative
in any other manner has interests in conflict with the 1. In the absence of any provisions in the bylaws
cooperative shall serve as an appointive officer. fixing their compensation, the directors shall not
xiii. Committees of Cooperatives receive any compensation except for reasonable
1. The bylaws may create an executive committee per diems: Provided however, That the directors
to be appointed by the board of directors with and officers shall not be entitled to any per diem
such powers and duties as may be delegated to it when, in the preceding calendar year, the
in the bylaws or by a majority vote of all the cooperative reported a net loss or had a dividend
members of the board of directors. rate less than the official inflation rate for the
2. The bylaws shall provide for the creation of an same year. Any compensation other than per
audit, election, mediation and conciliation, diems may be granted to directors by a majority
ethics, and such other committees as may be vote of the members with voting rights at a
necessary for the conduct of the affairs of the regular or special general assembly meeting
cooperative. The members of both the audit and specifically called for the purpose: Provided, That
election committee shall be elected by the no additional compensation other than per
general assembly and the rest shall be appointed diems shall be paid during the first year of
by the board. The audit committee shall be existence of any cooperative.
directly accountable and responsible to the 2. The compensation of officers of the cooperative
general assembly. It shall have the power and as well as the members of the committee as well
duty to continuously monitor the adequacy and as the members of the committees created
effectiveness of the cooperative's management pursuant to this Code or its bylaws may be fixed
control system and audit the performance of the in the bylaws.
cooperative and its various responsibility 3. Unless already fixed in the bylaws, the
centers. compensation of all other employee shall be
3. Unless otherwise provided in the bylaws, the determined by the board of directors.
board, in case of a vacancy in the committees, xvii. Dealings of Directors, Officers, or Committee Members
may call an election to fill the vacancy or appoint - A contract entered into by the cooperative with one
a person to fill the same subject to the provision (1) or more of its directors, officers, and committee
that the person elected or appointed shall serve members is voidable, at the option of the cooperative,
only for the unexpired portion of the term. unless all the following conditions are present.
xiv. Functions, Responsibilities and Training Requirements 1. That the presence of such director in the board
of Directors, Officers and Committee Members - the meeting wherein contract was approved was not
functions and responsibilities of directors, officers and necessary to constitute a quorum for such
committee members, as well as their training meeting;
requirements, shall be in accordance with the rules and 2. That the vote of such director was not necessary
regulations issued by the Authority. for the approval of the contract;
xv. Liability of Directors, Officers and Committee 3. That the contract is fair and reasonable under
Members - Directors, officers and committee members, the circumstances; and
who are willfully and knowingly vote for or assent to 4. That in the case of an officer or committee
patently unlawful acts or who are guilty of gross member, the contract with the officer or
negligence or bad faith in directing the affairs of the committee member has been previously
cooperative or acquire any personal or pecuniary authorized by the general assembly or by the
interest in conflict with their duty as such directors, board of directors.
officers or committee members shall be liable jointly 5. Where any of the first two conditions set forth in
and severally for all damages or profits resulting the preceding paragraph is absent, in the case of
therefrom to the cooperative, members, and other a contract with a director, such contract may be
persons. ratified by a three-fourths (3/4) vote of all the
When a director, officer or committee member members with voting rights, present and
attempts to acquire or acquires, in violation of his duty, constituting a quorum in a meeting called for the
any interest or equity adverse to the cooperative in purpose: Provided, That full disclosure of the
respect to any matter which has been reposed in him in adverse interest of the directors involved is made
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 at such meeting, and that the contract is fair and with nonmembers shall enjoy the following tax
reasonable under the circumstances. exemptions:
xviii. Disloyalty of a Director - A director who, by virtue of his 1. Cooperatives with accumulated reserves and
office, acquires for himself an opportunity which should undivided net savings of not more than Ten
belong to the cooperative shall be liable for damages million pesos (P10,000,000.00) shall be exempt
and must account for double the profits that otherwise from all national, city, provincial, municipal or
would have accrued to the cooperative by refunding barangay taxes of whatever name and nature.
the same, unless his act has been ratified by a three- Such cooperatives shall be exempt from customs
fourths (3/4) vote of all the members with voting rights, duties, advance sales or compensating taxes on
present and constituting a quorum. This provision shall their importation of machineries, equipment and
be applicable, notwithstanding the fact that the spare parts used by them and which are not
director used his own funds in the venture. available locally a certified by the department of
xix. Illegal Use of Confidential Information - A director or trade and industry (DTI). All tax free importations
officer, or an associate of a director or officer, who, for shall not be sold nor the beneficial ownership
his benefit or advantage or that of an associate, makes thereof be transferred to any person until after
use of confidential information that, if generally known, five (5) years, otherwise, the cooperative and the
might reasonably be expected to adversely affect the transferee or assignee shall be solidarily liable to
operation and viability of the cooperative, shall be held: pay twice the amount of the imposed tax and /
1. Liable to compensate the cooperative for the or duties.
direct losses suffered by the cooperative as a 2. Cooperatives with accumulated reserves and
result of the illegal use of information; and divided net savings of more than Ten million
2. Accountable to the cooperative for any direct pesos (P10,000,000.00) shall fee the following
benefit or advantage received or yet to be taxes at the full rate:
received by him or his associate, as a result of a. Income Tax - On the amount allocated for
the transaction. interest on capitals: Provided, That the same
3. The cooperative shall take the necessary steps to tax is not consequently imposed on interest
enforce the liabilities described in subsection (a) individually received by members: Provided,
xx. Removal of Elected Officer or Director - All complaints further, That cooperatives regardless of
for the removal of any elected officer shall be filed with classification, are exempt income tax from
the board of directors. Such officer shall be given the the date of registration with the Authority;
opportunity to be heard. Majority of the board of b. Value-Added Tax On transactions with non-
directors may place the officer concerned under members: Provided, however, That
preventive suspension pending the resolution of the cooperatives duly registered with the
investigation. Upon finding of a prima facie evidence of Authority; are exempt from the payment of
guilt, the board shall present its recommendation for value-added tax; subject to Sec. 109, sub-
removal to the general assembly. sections L, M and N of Republic Act No.
9337, the National Internal Revenue Code,
R. Privileges of Cooperative from Taxes as amended: Provided, That the exempt
i. Tax Treatment of Cooperative. - Duly registered transaction under Sec. 109 (L) shall include
cooperatives under this Code which do not transact sales made by cooperatives duly registered
any business with non-members or the general with the Authority organized and operated
public shall not be subject to any taxes and fees by its member to undertake the production
imposed under the internal revenue laws and other and processing of raw materials or of goods
tax laws. Cooperatives not falling under this article produced by its members into finished or
shall be governed by the succeeding section. process products for sale by the cooperative
ii. Tax and Other Exemptions. Cooperatives transacting to its members and non-members: Provided,
business with both members and non-members shall further, That any processed product or its
not be subjected to tax on their transactions with derivative arising from the raw materials
members. In relation to this, the transactions of produced by its members, sold in then name
members with the cooperative shall not be subject to and for the account of the cooperative:
any taxes and fees, including not limited to final Provided , finally, That at least twenty-five
taxes on members' deposits and documentary tax. per centum (25%) of the net income of the
Notwithstanding the provisions of any law or cooperatives is returned to the members in
regulation to the contrary, such cooperatives dealing the form of interest and/or patronage
refunds;
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 c. All other taxes unless otherwise provided net assets of the cooperative are in excess of the
herein; and amount of the bond required by the court in
d. Donations to charitable, research and similar cases shall be accepted by the court as a
educational institutions and reinvestment to sufficient bond.
socioeconomic projects within the area of Any security issued by cooperatives shall be exempt from
operation of the cooperative may be tax the provisions of the Securities Act provided such security
deductible. shall not be speculative.
3. All cooperatives, regardless of the amount of
accumulated reserves and undivided net savings
shall be exempt from payment of local taxes and
taxes on transactions with banks and insurance
companies: Provided, That all sales or services
rendered for non-members shall be subject to
the applicable percentage taxes sales made by
producers, marketing or service cooperatives:
Provided further, That nothing in this article shall
preclude the examination of the books of
accounts or other accounting records of the
cooperative by duly authorized internal revenue
officers for internal revenue tax purposes only,
after previous authorization by the Authority.
4. In areas where there are no available notaries
public, the judge, exercising his ex officio
capacity as notary public, shall render service,
free of charge, to any person or group of persons
requiring the administration of oath or the
acknowledgment of articles of cooperation and
instruments of loan from cooperatives not
exceeding Five Hundred Thousand Pesos
(P500,000.00).
5. Any register of deeds shall accept for
registration, free of charge, any instrument
relative to a loan made under this Code which
does not exceed Two Hundred Fifty Thousand
Pesos (P250,000.00) 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.
6. Cooperatives shall be exempt from the payment
of all court and sheriff's fees payable to the
Philippine Government for and in connection
with all actions brought under this Code, or
where such actions is brought by the Authority
before the court, to enforce the payment of
obligations contracted in favor of the
cooperative.
7. All cooperatives shall be exempt from putting up
a bond for bringing an appeal against the
decision of an inferior court or for seeking to set
aside any third party claim: Provided, That a
certification of the Authority showing that the
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