LESSON 6: HOW TO ORGANIZE A COOPERATIVE

l. INTRODUCTION
Forming a cooperative entails developing a business model where ownership and decision-making are distributed among all
members instead of being held by a few individuals or shareholders. This involves outlining the cooperative’s goals, setting up a clear structure
and governance framework, and ensuring legal compliance. Essential steps include attracting dedicated members, creating a cooperative
business plan, and securing the required funding or resources. Proper organization fosters collaboration, transparency, and mutual advantage,
distinguishing cooperatives as a unique and robust type of enterprise.

Creating a cooperative can be both hard and simple. It requires an awareness of the fundamental needs of potential cooperative
members. It requires patience from the organizer, who must ensure that the cooperative’s long-term goals and objectives, as well as its vision,
become a reality in the lives of its members. However, it can be overly simple because the Cooperative Development Authority has outlined very
specific measures for cooperative organizers and members.

ll. OBJECTIVES
To be able to know and understand the following:

 What is a cooperative?
 What are the steps in organizing a cooperative?
 Where do we register a cooperative?

lll. DISCUSSION
What is a cooperative?

According to RA 9520, a cooperative is an autonomous and duly registered association of persons, with a common bond of interest,
who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by making equitable contributions to
the capital required, patronizing their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance
with universally accepted cooperative principles. According to Article 10 of RA 9520 it requires at least fifteen (15) natural individuals who are
Filipino citizens and of legal age to create and register a cooperative. They must also share a shared interest and live or work in the chosen area
of operation. Any natural person who is a Philippine citizen of legal age, or a juridical person such as a cooperative or non-profit organization, is
eligible to become a member of a cooperative, provided that the person meets the qualifications specified in the bylaws of the cooperative to
which he or she wishes to belong (Article 26, RA 6938).

There are nine (9) steps in organizing a cooperative according to the Cooperative Development Authority.

FIRST. Get organized. A cooperative must have at least 15 members to do that. Determine the common problems you would want
solved and the basic needs you would want provided for through a cooperative. You may want to include increasing your production, marketing
your produce, credit assistance, power generation, banking or insurance and other similar needs. Determining your problems and needs will
also help you classify the kind of cooperative you will be organizing. Even before a cooperative is set up, a dedicated core group people who will
do all the organizational and paper works is a must. From this core group, working communities may be formed to set things moving. These
committees may include membership, finance, executive, secretariat to name a few. SECOND. Reserve your proposed cooperative name.
Secure and fill up Cooperative Name Reservation Request Form (CNRRF). This must be submitted to CDA Central Office or any of its Extension
Office. A reservation fee shall apply. The Cooperative Name Reservation Request Form is used to request the reservation of a specific name for a
cooperative entity. This form helps ensure that the desired name for the cooperative is not already in use or reserved by another entity. THIRD.
Prepare a general statement called an Economic Survey. Economic Survey is a general statement describing, among others, the structure and
purposes of the proposed cooperative. The structure and actual staffing pattern shall include a bookkeeper. This should indicate the area of
operation, the size of membership and other pertinent data in a format provided by the authority. FOURTH. Prepare the cooperative’s bylaws.
The by-laws contain the rules and regulations governing the operation of the cooperative. Cooperative bylaws are vital for they establish the
governance structure, operational procedures, and member rights, ensuring effective management, legal compliance, and stability. They provide
a clear framework for decision-making and conflict resolution, promoting fairness and transparency within the cooperative.

FIFTH. Prepare the articles of cooperation. Mandatory contents of the articles of cooperation are the following: (a) the name of the
cooperative, which must include the word “cooperative”; (b) the purpose or purposes and scope of business for which the cooperative is to be
registered; (c)the term of existence of cooperative; (d) the area of operation and the postal address of its principal office; €the names,
nationality and the postal addresses of the registrants; (f) the common bond of membership; (g) The list of names of the directors who shall
manage the cooperative; and (h)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. 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
officer(s). 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. SEVENTH. Execute Treasurer’s 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). You may contact the Regional or Extension Office which has
jurisdiction over your proposed cooperative for technical assistance. NINTH. Register your cooperative with the Cooperative Development
Authority (CDA). Submit the following required documents in four (4) copies: 1. Economic Survey; 2. Articles of Cooperation and By-Laws; 3.
Surety bond of accountable officers; 4. Treasurer’s Affidavit; 5. Approved Cooperative Name Reservation Slip; 6. Certificate of PMES;

Where do we register a cooperative?

What is meant by registration of a cooperative?

Article 5, para. 7, RA 9520 defines cooperative registration as an operative act that confers juridical identity to a proposed
cooperative and is proved by a registration certificate.

The Cooperative Development Authority (CDA) is the sole government agency mandated to register all types of cooperatives. Its
main office is located at 827 Aurora Blvd., Immaculate Conception, Quezon City. For registration of primary cooperatives, this power has been
delegated to the Regional or Extension Offices. To improve the flow of its services, extension offices have been set up. These Regional or
Extension Offices are located in:

 CAR – Baguio City

 NCR – Quezon City
 Region l – Dagupan City
 Region ll – Tuguegarao City
 Region lll – San Fernando, Pampanga
 Region lV-A – Calamba City
 Region lV-B – Oriental Mindoro
 Region V – Naga City
 Region Vl – Iloilo City
 Region Vll – Cebu City
 Region VIII – Tacloban City
 Region IX – Pagadian City
 Region X – Cagayan De Oro City
 Region Xl – Davao City
 Region Xll – Kidapawan City
 Region Xlll – Butuan City
 ARMM – Cotabato City

lV. CONCLUSION
In conclusion, building a cooperative entails several critical phases, including identifying the cooperative’s goal, recruiting and
engaging members, establishing a clear governing structure, and obtaining essential resources. Effective communication and transparent
decision-making are critical for increasing collaboration and ensuring the cooperative's success. By focusing on these qualities, founders can
create a strong, unified organization that serves its members’ needs and achieves its common goals.
V. SUMMARY
A cooperative is a member-owned and operated organization that aims to achieve common needs and goals by pooling resources,
making decisions, and providing rewards. To create and register a cooperative, at least fifteen (15) natural persons must be Filipino citizens of
legal age. According to the Cooperative Development Authority (CDA), there are nine (9) steps in organizing a cooperative: (1) get organized; (2)
reserve your proposed cooperative name; (3) prepare a general statement called an Economic Survey; (4) prepare the cooperative’s bylaws; (5)
prepare the articles of cooperation; (6) secure bond of accountable officer(s); (7) execute Treasurer’s Affidavit; (8) complete the Pre-
Membership Education Seminar (PMES); and (9) register your cooperative. The Cooperative Development Authority (CDA) is the primary
government organization responsible for registering all sorts of cooperatives. Prospective cooperatives can register by submitting an application
to the CDA Extension Office where the cooperative’s major office is situated. In Misamis Oriental, the extension office is in Cagayan De Oro City.

Vl. ASSESSMENT
1. It is a general statement describing, among others, the structure and purposes of the proposed cooperative.
a. Economic Survey
b. CNRRF
c. CDA
d. Cooperative
2. This laws are vital for they establish the governance structure, operational procedures, and member rights, ensuring effective
management, legal compliance, and stability.
a. CNRRF
b. Economic Survey
c. Cooperative’s bylaws
d. CDA
3. Under this step is the preparation of the mandatory contents of the articles of cooperation.
a. First: Get organized.
b. Fifth: Prepare the articles of cooperation.
c. Fourth: Prepare the cooperative’s bylaws.
d. Seventh: Execute Treasurer’s Affidavit.
4. According to RA 9520, it is an autonomous and duly registered association of persons, with a common bond of interest, who have
voluntarily joined together to achieve their social, economic, and cultural needs and aspirations.
a. Cooperative
b. CNRRF
c. CDA
d. Economic Survey
5. It is a form used to request the reservation of a specific name for a cooperative entity.
a. Cooperative Development Authority (CDA)
b. Economic Survey
c. Cooperative Name Reservation Request Form (CNRRF)
d. Cooperative’s bylaws
6. It contain the rules and regulations governing the operation of the cooperative.
a. Economic Survey
b. CDA
c. CNRRF
d. Cooperative’s bylaws
7. In this step, a surety bond should be secured from a duly registered insurance or bonding company.
a. Sixth: Secure bond of accountable officer(s).
b. First: Get organized.
c. Fifth: Prepare the articles of cooperation.
d. Fourth: Prepare the cooperative’s bylaws.
8. In this step, you need to determine the common problems you would want solved and the basic needs you would want provided for
through a cooperative.
a. Fifth: Prepare the articles of cooperation.
b. First: Get organized.
c. Fourth: Prepare the cooperative’s bylaws.
d. Seventh: Execute Treasurer’s Affidavit.
9. It requires not less than fifteen (15) natural persons, who are Filipino citizens, and of legal age to organize and register this one.
a. CDA
 b. Economic Survey
c. Cooperative
d. CNRRF
10. It is the sole government agency mandated to register all types of cooperatives.
a. Cooperative Development Authority (CDA)
b. Economic Survey
c. Cooperative Name Reservation Request Form (CNRRF)
d. Cooperative’s bylaws

ANSWER KEYS:

1. a. Economic Survey
2. c. cooperatives’s bylaws
3. b. Fifth: Prepare the articles of cooperation.
4. a. cooperative
5. c. Cooperative Name Reservation Request Form (CNRRF)
6. d. Cooperative’s bylaws
7. a. Sixth: Secure bond of accountable officer(s).
8. b. First: Get organized.
9. c. Cooperative
10. a. Cooperative Development Authority (CDA)

Vll. REFERENCES
Primer on Cooperatives

Submitted by :

FERNANDEZ, ARCHIE

CAONES, CEDRICK

DAA, SHEILA MAE

BSBA 3 GROUP 5